★ Macroeconomic Dynamics ★

Two Departments: Child-rearing Subsidies Exempt from Personal Income Tax According to Regulations The Ministry of Finance and State Administration of Taxation issued the "Announcement on Personal Income Tax Policies Related to Child-rearing Subsidies," clarifying that child-rearing subsidies distributed according to subsidy system regulations are exempt from personal income tax.

Financial Regulatory Commission Seeks Comments: Commercial Banks' Total M&A Loan Balance Should Not Exceed 50% of Tier-1 Capital The National Financial Regulatory Administration publicly solicited opinions on the "Commercial Bank M&A Loan Management Measures (Draft for Comments)." The draft states that commercial banks' total M&A loan balance should not exceed 50% of the bank's Tier-1 net capital during the same period. Equity participation M&A loan balance should not exceed 30% of the bank's total M&A loan balance. Commercial banks should establish corresponding limit control systems for M&A loan concentration by individual borrower, group customers, industry categories, and countries or regions according to their M&A loan business development strategies. Commercial banks' M&A loan balance to individual borrowers should not exceed 5% of the bank's Tier-1 net capital during the same period.

China Academy of ICT: June Domestic Mobile Phone Shipments 22.598 Million Units, Down 9.3% YoY China Academy of ICT data shows that in June 2025, domestic market mobile phone shipments reached 22.598 million units, down 9.3% year-over-year, including 18.436 million 5G phones, down 16.7% year-over-year, accounting for 81.6% of total mobile phone shipments. From January to June 2025, domestic market mobile phone shipments totaled 141 million units, down 3.9% year-over-year, including 121 million 5G phones, down 3.0% year-over-year, accounting for 85.5% of total mobile phone shipments.

Guangxi to Provide Free HPV Vaccination for Age-Eligible Girls Multiple departments in Guangxi Zhuang Autonomous Region jointly issued the "Implementation Plan for Free HPV Vaccination Project for Age-Eligible Girls in Guangxi," officially launching the free HPV vaccination project. According to the plan, over the three years from 2025-2027, nearly 960,000 age-eligible girls will receive free vaccination. The plan specifies that all in-school junior high school girls aged 13 and under 14 who have not received HPV vaccination can receive free domestic bivalent HPV vaccines based on informed consent and free vaccination principles.

Guangzhou Issues "Commercial-to-Public Loan" Processing Guidelines Guangzhou Housing Provident Fund Management Center issued implementation measures for converting commercial personal housing loans to housing provident fund personal housing loans. Applications must meet Guangzhou housing provident fund loan regulations and additional conditions including: original commercial loans for self-occupied housing within Guangzhou administrative area, loans outstanding for over 3 years, applicants are original borrowers and property owners, properties have obtained real estate certificates, and no overdue records in the past 12 months.

★ Financial Institutions ★

Guangzhou Rural Commercial Bank Capital Increase to 14.41 Billion Yuan, Up About 26% According to Tianyancha business information, Guangzhou Rural Commercial Bank recently underwent business changes, with registered capital increasing from approximately 11.45 billion yuan to approximately 14.41 billion yuan, an increase of about 26%.

★ Market Data ★

Market Close: Shanghai Composite Up 1.04%, Shenzhen Component Up 0.89% On August 20, A-share indices collectively closed higher. Shanghai Composite rose 1.04%, Shenzhen Component rose 0.89%, ChiNext rose 0.23%; Beijing Stock Exchange 50 rose 1.16%. Combined Shanghai-Shenzhen trading volume was approximately 2,408.234 billion yuan, down about 180.135 billion yuan from the previous trading day. Market-wide, 3,676 stocks rose and 1,587 fell, with 102 hitting daily limits and 14 hitting daily declines.

By sector, PTA, liquid metals, smart speakers, minor metals, semiconductors, and optoelectronics led gains; innovative drugs, tumor treatment, assisted reproduction, cinema chains, chemical pharmaceuticals, and biologics led declines.

Combined Margin Trading Balance Increased 28.982 Billion Yuan As of August 19, Shanghai Stock Exchange margin trading balance was 1,073.793 billion yuan, up 16.612 billion yuan from the previous trading day; Shenzhen Stock Exchange margin trading balance was 1,036.301 billion yuan, up 12.37 billion yuan; combined total 2,110.094 billion yuan, up 28.982 billion yuan from the previous trading day.

Hong Kong Market Close: Hang Seng Index Up 0.17%, Hang Seng Tech Index Down 0.01% On August 20, Hong Kong stocks closed with Hang Seng Index up 0.17% and Hang Seng Tech Index down 0.01%. New consumer sector strengthened, with POP MART up over 12% hitting new highs, LAOPU GOLD up nearly 9%, and Mixue Group up over 5%.

★ Company Dynamics ★

Muyuan Foodstuff: First Half Net Profit Up Nearly 1170% YoY On August 20, Muyuan Foodstuff (002714) released its 2025 semi-annual report, showing first half revenue of 76.463 billion yuan, up 34.46% year-over-year; net profit attributable to shareholders of 10.53 billion yuan, up 1169.77% year-over-year. The company proposes cash dividends of 9.32 yuan per 10 shares (including tax), with total dividends of 5.002 billion yuan (including tax).

Baidu: Q2 Total Revenue 32.7 Billion Yuan, Core Net Profit Up 35% Exceeding Expectations On August 20, Baidu released Q2 2025 financial results showing quarterly total revenue of 32.7 billion yuan and net profit attributable to Baidu Core of 7.4 billion yuan, up 35% year-over-year, exceeding market expectations. Driven by AI, new AI business revenue including smart cloud exceeded 10 billion yuan for the first time, up 34% year-over-year. During the quarter, Apollo Go global ride services exceeded 2.2 million trips, up 148% year-over-year, with cumulative rides exceeding 14 million, ranking first globally.

LAOPU GOLD: First Half Adjusted Net Profit 2.35 Billion Yuan, Up 290.6% YoY On August 20 afternoon, LAOPU GOLD announced on the Hong Kong Stock Exchange that for the first half of 2025, group revenue was approximately 12.35 billion yuan, up 251.0% year-over-year. Non-IFRS adjusted net profit was 2.35 billion yuan, up 290.6% year-over-year.

POP MART's Wang Ning: Mini LABUBU to be Released This Week On August 20, POP MART founder Wang Ning stated at the earnings meeting that this year's LABUBU new products have been relatively restrained without over-consuming the IP, with current demand very high and great future value. Wang Ning also announced that mini LABUBU will be released this week and is expected to become a super hit.

Game Science Established Black Myth Company Early This Year According to Daxiang News, at the Gamescom Opening Night Live held at 2 AM on August 20, Game Science officially announced the new title "Black Myth: Wukong" with a CG trailer. Currently, Game Science's "Black Myth: Wukong" official account has been renamed to "Black Myth" with updated profile and certification to "Official account for Black Myth series games." Tianyancha business information shows that Hangzhou Black Myth Culture Co., Ltd. was established in January this year with legal representative Yang Qi, registered capital of 10 million yuan, and business scope including organizing cultural and artistic exchange activities and digital creative product exhibitions.

First Domestic Cat Anti-Stress Prescription Drug Launched According to Interface News on August 20, the first domestic cat anti-stress prescription drug (trade name: Miaoneining®) was officially launched by Maohezi Animal Health (Guangdong) Co., Ltd. in partnership with Zhongrui Supply Chain Company. The product is the first cat gabapentin prescription product in China's Ministry of Agriculture and Rural Affairs new veterinary drug registration directory, priced at 69.8 yuan (3 tablets) or 124.8 yuan (6 tablets).