国泰海通证券研究·2025-10-22 11:04Core Viewpoint - The convertible bond market is experiencing significant short-term valuation compression, but given the resilience of the equity market, convertible bonds still present investment opportunities, particularly through a low premium strategy [1][2]. Group 1: Market Performance - The Shanghai Composite Index declined by 1.47% last week, while the China Convertible Bond Index fell by 2.35%, indicating a notable compression in convertible bond valuations [1]. - Institutional profit-taking is a major factor influencing short-term valuations in the convertible bond market, although long-term trends remain positive as long as the equity market continues its upward trajectory [1][2]. Group 2: Valuation and Risks - As of October 17, the average parity of convertible bonds was 97.34 yuan, with an average conversion premium rate of 39.99%. High premium convertible bonds have seen significant compression in their conversion premium rates due to increased expectations of forced redemptions [1]. - Large-scale convertible bonds, such as those from Liugong and Hengbang, have experienced rapid compression in premium rates following market speculation about forced redemptions, highlighting the risks associated with high premium and large-scale convertible bonds [1]. Group 3: Investment Strategy - Despite external disturbances, the equity market's upward trend is expected to continue, providing a favorable environment for convertible bonds, which exhibit relative resilience and investment value [2]. - In a sustained bull market, a low premium strategy is recommended as it allows for better participation in the upside of underlying stocks while minimizing valuation compression risks [2]. - The technology sector, particularly semiconductor stocks and TMT industries benefiting from increased overseas AI capital expenditure, is identified as a key investment focus, alongside a balanced approach to cyclical and financial sectors [2].