Group 1 - Jiangsu Huachen Transformer Co., Ltd. has applied for a patent titled "A Heat Dissipation Duct Structure and Its Adapted Energy Storage Container," with publication number CN120413872A, filed on April 2025 [1] - The patent relates to energy storage equipment technology, specifically a heat dissipation duct structure that includes a main duct capable of transporting refrigerants, an air inlet, multiple outlets, and several wind deflectors to ensure balanced airflow and prevent local overheating [1] - The design features multiple wind deflectors of increasing length within the duct to regulate outlet opening lengths, ensuring effective cooling and preventing airflow reduction [1] Group 2 - Jiangsu Huachen Transformer Co., Ltd. was established in 2007 and is located in Xuzhou, primarily engaged in the manufacturing of computers, communications, and other electronic devices [2] - The company has a registered capital of 164.435 million RMB and has made investments in three enterprises, participated in 1,746 bidding projects, and holds 179 patents along with 10 trademark registrations [2] - Additionally, the company possesses 21 administrative licenses, indicating a robust operational framework and engagement in various business activities [2]

Market Overview - The Shanghai Composite Index closed at 3519.65 points, above the annual line, with a change of 0.27% [1] - The total trading volume of A-shares reached 14809.22 billion yuan [1] Stocks Breaking Annual Line - A total of 46 A-shares have surpassed the annual line today, with notable stocks including: - Siyuan Electric (002028) with a deviation rate of 7.62% - Huaming Equipment (002270) with a deviation rate of 2.75% - Tongyi Co., Ltd. (300538) with a deviation rate of 2.63% [1] Deviation Rate Rankings - The top stocks with the highest deviation rates from the annual line include: - Siyuan Electric: 10.00% increase, latest price 76.99 yuan, deviation rate 7.62% - Huaming Equipment: 3.25% increase, latest price 16.85 yuan, deviation rate 2.75% - Tongyi Co., Ltd.: 2.63% increase, latest price 16.02 yuan, deviation rate 2.63% [1] Additional Stocks with Minor Deviations - Stocks with smaller deviation rates that have just crossed the annual line include: - Daqin Railway and *ST Haiyuan with minimal deviation rates [1]

Market Overview - The Shanghai Composite Index closed at 3525.40 points, above the annual line, with a change of 0.43% [1] - The total trading volume of A-shares reached 987.43 billion yuan [1] Stocks Breaking Annual Line - A total of 41 A-shares have surpassed the annual line today, with notable stocks including: - Siyuan Electric (002028) with a deviation rate of 7.62% - Tongyi Co., Ltd. (300538) with a deviation rate of 2.51% - Ruisheng Technology (688090) with a deviation rate of 2.05% [1] Stocks with Significant Deviation Rates - The stocks with the highest deviation rates from the annual line include: - Siyuan Electric: 10.00% increase, trading at 76.99 yuan - Tongyi Co., Ltd.: 2.50% increase, trading at 16.00 yuan - Ruisheng Technology: 3.24% increase, trading at 35.10 yuan [1] Additional Stocks with Minor Deviations - Other stocks that have just crossed the annual line with smaller deviation rates include: - Qianjiang Motorcycle, Jiuquan Technology, and Huadian International, which have just reached the annual line [1]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - Last week, the equity market had a volume - driven rally. The real estate, steel, and building materials sectors were strong, while the banking sector declined. The bond market adjusted, and the 10 - year Treasury bond rate closed at 1.67% on Friday, up 2.2bp from the previous week. The convertible bond market mostly rose, with the CSI Convertible Bond Index up 0.76% for the week [1][8][9]. - In the short term, convertible bond supply may significantly shrink. The follow - up momentum of the convertible bond market has weakened, and valuations have been further compressed. It is recommended to focus on balanced convertible bonds or high - price, low - premium and non - redeemable in the short - term equity - biased varieties. For those with high requirements for drawdown, consider reducing positions [2][17]. - With the disclosure of mid - year report performance forecasts, attention should be paid to sectors such as consumer goods, technology, power grid equipment, and innovation drugs. Also, be cautious about bonds with a high proportion of exports to the US [3][18]. Summary by Relevant Catalogs Market Trends (2025/7/7 - 2025/7/11) - **Stock Market**: The equity market rose with volume. Real estate, steel, and building materials sectors performed well due to policy expectations and "anti - involution" themes. The non - banking sector was strong driven by the stablecoin theme, while the banking sector declined. Different sectors showed different performances on each trading day [8]. - **Bond Market**: The bond market adjusted. Factors such as the postponement of Trump's equal - tariff effective date, the Shanghai Composite Index breaking through 3500, and real estate policy rumors suppressed bond market sentiment. The 10 - year Treasury bond rate closed at 1.67% on Friday, up 2.2bp from the previous week [1][9]. - **Convertible Bond Market**: Most convertible bond issues rose. The CSI Convertible Bond Index increased by 0.76% for the week, the median price rose by 0.95%, and the calculated arithmetic average parity increased by 2.07%. The overall market conversion premium rate decreased by 1.29% compared with the previous week. Sectors like non - banking finance, coal, and computer in the convertible bond market led the gains, while social services, banking, and automotive sectors lagged. The total trading volume of the convertible bond market last week was 3405.76 billion yuan, with an average daily trading volume of 681.15 billion yuan, an increase from the previous week [9][12][15]. Viewpoints and Strategies (2025/7/14 - 2025/7/18) - **Supply Outlook**: Convertible bond supply may significantly shrink in the short term. The approval of the "potential new bond" Fudan Microelectronics expired, and there are only 5 issues in the pending - issuance list that have passed the listing committee, with a total scale of less than 5 billion yuan. Also, the delisting of existing bonds is accelerating [2][17]. - **Investment Suggestions**: Due to the intensified supply - demand contradiction, it is recommended to focus on balanced convertible bonds that can quickly consume the premium rate with high - volatility underlying stocks or high - price, low - premium and non - redeemable in the short - term equity - biased varieties. Consider reducing positions for those with high drawdown requirements [2][17]. - **Sector Focus**: Pay attention to sectors such as consumer goods (appliances, auto parts, two - wheeled vehicles), technology (PCB, copper - clad laminates, data center power supplies), power grid equipment, sea - wind power, energy storage, innovation drugs, and chemical pharmaceuticals. Be cautious about bonds with a high proportion of exports to the US [3][18]. Valuation Overview - As of July 11, 2025, for equity - biased convertible bonds, the average conversion premium rates in different parity intervals are at different percentile levels since 2010 and 2021. For debt - biased convertible bonds, the average YTM of bonds with a parity below 70 yuan is - 1.04%, at the 4%/0% percentile since 2010/2021. The average implied volatility of all convertible bonds is 33.92%, at the 64%/45% percentile since 2010/2021, and the difference between the implied volatility of convertible bonds and the long - term actual volatility of the underlying stocks is - 13.38%, at the 27%/32% percentile since 2010/2021 [19]. Primary Market Tracking - **Last Week (2025/7/7 - 2025/7/11)**: Guanghe Convertible Bond announced its issuance, and Luwei and Huachen Convertible Bonds were listed. Guanghe Convertible Bond, with an issuance scale of 4.9 billion yuan, is for the Guangdong Lufeng Nuclear Power Plant Project. Luwei Convertible Bond, with an issuance scale of 615 million yuan, is mainly for semiconductor and high - precision flat - panel display mask expansion projects. Huachen Convertible Bond, with an issuance scale of 460 million yuan, is for new - energy power equipment manufacturing and digital factory construction projects [27][28][29]. - **Next Week (2025/7/14 - 2025/7/18)**: Xizhen and Yongxi Convertible Bonds will be listed. Xizhen Convertible Bond, with an issuance scale of 520 million yuan, is for the Langfang Zhenhua Automobile Parts Project. Yongxi Convertible Bond, with an issuance scale of 1.165 billion yuan, is for multi - dimensional heterogeneous advanced packaging technology R & D and industrialization projects [30][31]. - **Overall Pending Issuance**: As of July 11, there are 75 convertible bonds to be issued, with a total scale of 116.32 billion yuan, including 2 issues approved for registration (total scale of 2.11 billion yuan) and 3 issues passed by the listing committee (total scale of 2.62 billion yuan) [32].

Core Viewpoint - The electric power industry is undergoing significant transformation driven by carbon neutrality goals, creating vast market potential and growth opportunities [3][4]. Group 1: Company Overview - Jiangsu Huachen is a national-level specialized "little giant" enterprise engaged in the research, production, and sales of transformers and other power distribution and control equipment since its establishment in 2007 [2]. - The company adheres to the development philosophy of "integrity as the root, innovation as the soul," and has gradually grown into a major player in the transformer industry [2][8]. Group 2: Market Potential - The installed capacity of wind and solar power in China reached 1.05 billion kilowatts in 2023, a 38.16% increase from 760 million kilowatts at the end of 2022, accounting for 36% of the total installed capacity [4]. - The demand for transformers is increasing due to the broader application scenarios in renewable energy, particularly in wind and solar power, which require more transformers compared to traditional power sources [4]. Group 3: Competitive Landscape - The electric power market is becoming increasingly competitive, with many participants drawn to the promising market, necessitating continuous technological investment for profitability [5][6]. - Jiangsu Huachen is responding to this competition by embracing innovation and increasing R&D expenditures, having obtained 158 patents, including 16 invention patents [6]. Group 4: Strategic Initiatives - The company is constructing a smart manufacturing base and a digital factory, aiming for high levels of automation and information application to achieve significant scale effects and market share growth [6]. - Jiangsu Huachen is also expanding its product offerings to include specialized transformers for hydrogen production and offshore wind power, while planning to enter high and ultra-high voltage products [7]. Group 5: Market Expansion - The company is focused on expanding into overseas markets, identifying them as a "blue ocean" opportunity, particularly as many foreign power equipment are outdated and in need of replacement [8][9]. - Jiangsu Huachen plans to enhance its international competitiveness through market research, participation in influential international exhibitions, and strategic partnerships with overseas clients [9].

Core Points - The legal opinion letter confirms that the procedures for convening and holding the second extraordinary general meeting of Jiangsu Huachen Transformer Co., Ltd. comply with relevant Chinese laws and regulations as well as the company's articles of association [1][3][6] - The meeting utilized a combination of on-site and online voting methods, with a total of 432 shareholders participating, representing 121,054,277 shares, which is 72.9772% of the total voting shares [4][5] - The meeting's resolutions included the cancellation of the supervisory board and amendments to the company's internal management system, with the special resolutions passing with over two-thirds of the voting shares in favor [5][6] Summary by Sections Meeting Procedures - The meeting was convened by the board of directors, and the notice was announced more than fifteen days prior to the meeting date, meeting legal requirements [3][4] - The voting took place both on-site and through the Shanghai Stock Exchange's online voting system during specified trading hours [4] Voting Participation - A total of 7 shareholders participated in the on-site voting, representing 120,000,000 shares, while the combined results from on-site and online voting were verified by the Shanghai Stock Exchange Information Network Co., Ltd. [5] Voting Results - The meeting passed several resolutions, including the cancellation of the supervisory board and amendments to the articles of association, with the required majority achieved for both ordinary and special resolutions [6]

Meeting Details - The shareholders' meeting of Jiangsu Huachen Transformer Co., Ltd. was held on July 10, 2025, at the company's office in Xuzhou, Jiangsu Province [1] - The meeting was attended by shareholders holding 73.6183% of the total shares [1] - The meeting was conducted in accordance with the Company Law and the company's articles of association, with a combination of on-site and online voting [1] Voting Results - All proposed resolutions were approved with high support from shareholders, with the following voting results: - Resolution 1: 99.8474% in favor, 0.1298% against, 0.0228% abstained [1] - Resolution 2: 99.8627% in favor, 0.1169% against, 0.0204% abstained [1] - Resolution 3: 99.8653% in favor, 0.1132% against, 0.0215% abstained [1] - Resolution 4: 99.8650% in favor, 0.1131% against, 0.0219% abstained [1] - Resolution 5: 99.8480% in favor, 0.1310% against, 0.0210% abstained [1] - Additional resolutions also received similar overwhelming support, with percentages consistently above 99% in favor [2] Legal Compliance - The meeting's procedures were verified by lawyers, confirming compliance with relevant Chinese laws and regulations, as well as the company's articles of association [3] - The qualifications of the participants and the legitimacy of the voting process were affirmed as valid and effective [3]

Core Points - Jiangsu Huachen Transformer Co., Ltd. has elected Mr. Geng Defei as the employee director of the third board of directors, with a term aligned with the board's duration [1][2] - The company has canceled its supervisory board and revised its articles of association in accordance with relevant laws and regulations [1] - Mr. Geng Defei holds 275,000 shares of the company and has no disqualifications or conflicts of interest as per the Company Law and the company's articles of association [2][4] Summary by Sections - **Company Governance**: The company held its 19th meeting of the third board of directors on June 17, 2025, and a temporary shareholders' meeting on July 10, 2025, to approve the cancellation of the supervisory board and the revision of the articles of association [1] - **Election of Employee Director**: An employee representative meeting was convened to democratically elect Mr. Geng Defei as the employee director, ensuring compliance with the revised articles of association [1] - **Profile of Mr. Geng Defei**: Mr. Geng, born in April 1973, has a college diploma and extensive experience in various engineering and managerial roles within the company and related firms. He is not associated with any major shareholders or executives and has not faced any regulatory penalties [4]

Core Viewpoint - Jiangsu Huachen Transformer Co., Ltd. has established an associated transaction management system to ensure the fairness and reasonableness of transactions with related parties, in compliance with relevant laws and regulations [2][3]. Group 1: General Principles - The system is binding on the company's shareholders, directors, and management, who must adhere to its provisions [2]. - The company must take effective measures to prevent shareholders and their related parties from improperly occupying or transferring the company's funds, assets, and other resources [2] [3]. Group 2: Identification of Related Parties - Related parties include both legal entities and natural persons that have a specific relationship with the company, such as those who control or hold significant shares [4][5]. - The company must maintain an updated list of related parties and ensure its accuracy and completeness [4][5]. Group 3: Associated Transactions - Associated transactions refer to the transfer or potential transfer of resources or obligations between the company and its related parties, including various types of financial and operational activities [6][7]. - The company must adhere to principles of fairness, honesty, and full disclosure when determining the pricing of associated transactions [6][7]. Group 4: Approval Procedures - All proposals related to associated transactions must first be reviewed by the board of directors, which will determine if they constitute associated transactions [8][9]. - Transactions exceeding certain monetary thresholds require independent director approval and must be disclosed in a timely manner [8][9]. Group 5: Execution of Associated Transactions - The board of directors and management must organize the implementation of approved associated transactions [14][15]. - Any significant changes or termination of associated transaction agreements must be approved by the original approving body [14][15].

Core Viewpoint - The company has established a working system for independent directors to enhance corporate governance, strengthen supervision over internal directors and management, and protect the interests of minority shareholders and stakeholders [1][2]. Group 1: Independent Director System - The independent director is defined as a director who does not hold any other position in the company and has no direct or indirect interests that could affect their independent judgment [1]. - Independent directors have a duty of loyalty and diligence to the company and all shareholders, and they must perform their responsibilities independently without influence from the company or its major shareholders [2][3]. - The company must elect suitable individuals as independent directors, including at least one accounting professional with relevant qualifications [2][3]. Group 2: Qualifications and Independence - Independent directors must meet specific qualifications, including legal eligibility, independence, knowledge of company operations, and relevant work experience [2][3]. - Certain individuals are prohibited from serving as independent directors, including those with significant relationships with the company or its major shareholders [3][4]. Group 3: Nomination and Election Process - The nomination and election of independent directors must be conducted legally and in accordance with regulations, with candidates proposed by the board or shareholders holding more than 1% of shares [5][6]. - Independent directors serve a term aligned with other board members, with a maximum consecutive term of six years [5][6]. Group 4: Responsibilities and Rights - Independent directors are entitled to equal access to information and must be notified in advance of board decisions, with the right to request additional information if necessary [7][8]. - The company must provide necessary conditions and support for independent directors to fulfill their duties effectively [8]. Group 5: Reporting and Compliance - Independent directors must document their dissenting opinions on board resolutions and report any violations of laws or regulations to the board [9][10]. - They are also responsible for monitoring the execution of board resolutions and can report to regulatory authorities if necessary [10][11]. Group 6: Miscellaneous Provisions - The working system will be effective upon approval by the shareholders' meeting and will be interpreted by the board [10][16].