HZBank(SH:600926) Zheng Quan Ri Bao·2025-05-26 16:42Core Viewpoint - Hangzhou Bank's convertible bonds have triggered mandatory redemption conditions due to the stock price exceeding the specified threshold, indicating strong performance in the A-share banking sector and a significant increase in the bank's stock price and convertible bond trading [1][2]. Group 1: Convertible Bonds and Redemption - Hangzhou Bank issued 150 billion RMB worth of convertible bonds in March 2021, with a conversion price adjusted to 11.35 RMB per share starting November 6, 2024 [1]. - The bank's stock price has remained above 130% of the conversion price for 15 trading days, leading to the decision to exercise early redemption of the bonds [1]. - The bonds will be redeemed at face value plus accrued interest, reflecting the bank's proactive capital management strategy [1]. Group 2: Stock Performance and Financial Results - Hangzhou Bank's stock price has increased over 6% year-to-date, contributing to a rise in the trading price of its convertible bonds, which are currently around 135 RMB [2]. - The conversion rate of the bonds has significantly increased from less than 10% at the beginning of 2025 to over 70% by May 23, 2025 [2]. - In Q1 2023, the bank reported a revenue increase of 2.22% to 9.978 billion RMB and a net profit increase of 17.30% to 6.021 billion RMB, with a stable non-performing loan ratio of 0.76% [2]. Group 3: Market Trends and Challenges - The overall conversion rate of bank convertible bonds is low, with only 4 out of 10 bonds having a conversion rate below 1%, primarily due to banks' stock prices being below their net asset values [3]. - Factors affecting conversion rates include the conversion premium, which must be negative to attract investors, and the general performance of the banks [3]. - The market for convertible bonds is expected to shift from being bank-dominated to a more diversified industry-driven structure due to a decrease in issuance and the retirement of existing bonds [4].