AI industry sector continued outperforming with US strong economic and market liquidity. While China market was sluggish. Property sales, consumer and investment were all below market expectation, despite exports remained strong. Also, we noticed that fiscal and monetary policies support to the economy was lower than expected. Dividend strategy continued to outperform the market as a defense-oriented strategy.

Our investment strategy focuses on these aspects: Firstly, we think small-and-mid-cap stocks that lack solid earning performance have little chance, large market cap leaders with stable growth and consistent dividend payout will be revalued. Secondly, technology will be the only sector for China's next phase of capital leverage, especially for new quality productivity such as semiconductors. Thirdly, AI is a mega trend. We expect AI applications will gradually appear in the next few years. China has a huge advantage in application and hardware manufacturing. For our portfolio, we have added apple and apple industry chain in June. We believe stocks in these sectors will outperform the market with high probability.

For the coming July, we think China market will rebound with currently low valuation, low sentiment and low expectation for reform policies. We still pay close attention to the upcoming Third Plenum and new production relations around the new quality productivity.