SPD BANK(SH:600000) Hua Xia Shi Bao·2025-10-15 04:59Core Viewpoint - The upcoming expiration of the 50 billion yuan convertible bonds from Shanghai Pudong Development Bank (SPDB) is drawing significant market attention, with a substantial portion yet to be converted into equity, raising concerns about potential cash payouts and capital adequacy [2][4][5]. Group 1: Convertible Bond Conversion - On October 13, SPDB announced that China Mobile converted 56.31 million convertible bonds into 450 million shares, increasing its stake from 17.00% to 18.18% [2]. - As of now, approximately 37% of the convertible bonds, amounting to about 18.6 billion yuan, remain unconverted, with a conversion premium of around 8% [3][4]. - The probability of achieving full conversion before the redemption deadline appears low, given the current stock price and the remaining unconverted bonds [3][4]. Group 2: Market Impact and Stock Performance - SPDB's stock price saw a significant increase, rising 5.66% to 12.51 yuan per share on October 13, followed by a further 2.08% increase to 12.77 yuan on October 14 [3]. - The conversion price of 12.51 yuan aligns with the adjusted conversion price of the convertible bonds, indicating a critical threshold for conversion [3][6]. Group 3: Capital Adequacy Concerns - If the remaining 18.6 billion yuan in convertible bonds are not converted, SPDB will need to make cash payouts, which could negatively impact its capital adequacy ratios [4][5]. - SPDB's core Tier 1 capital adequacy ratio is currently at 8.51%, which is close to regulatory limits, making the conversion of bonds crucial for maintaining capital levels [5]. Group 4: Broader Market Trends - The convertible bond market is experiencing a significant contraction, with 121 bonds successfully delisted since 2025, indicating a trend of diminishing bank-related convertible bonds [7][8]. - Despite the increase in new bond issuance, the overall market size is expected to remain below 600 billion yuan due to the lack of large-scale bank issuances [8][9]. Group 5: Future Issuance Outlook - The issuance of new convertible bonds is expected to stabilize but not accelerate, primarily driven by non-bank enterprises, particularly in high-tech sectors [10]. - Regulatory encouragement for banks to supplement capital through various channels, including convertible bonds, suggests a potential for renewed issuance in the near future [10].