Group 1 - The A-share banking sector has transitioned from being the "most resilient" to the "most profitable," with a year-to-date increase of over 13% despite a recent drop of 3% [1][3] - The China Securities Banking Index has surpassed 8000 points for the first time since 2007, with the total market capitalization of A-share banks exceeding 10 trillion yuan, marking an increase of 1.54 trillion yuan since the beginning of the year [3] - Nearly 30 banking stocks have risen over 10%, with 10 stocks increasing over 20%, and some like Shanghai Pudong Development Bank and Qingdao Bank seeing gains over 30% [3] Group 2 - The strong performance of bank stocks has triggered a wave of "strong redemption" for convertible bonds, with several banks indicating potential redemptions due to rising stock prices [3] - The A/H share premium for banks has narrowed to 25%, a decrease of 35 percentage points since the beginning of the year, indicating improved performance in Hong Kong-listed bank stocks [3] - High dividend yields have become a significant support for bank stocks, with the median dividend yield for A-share banks exceeding 4% as of June 30, leading to discussions about the attractiveness of bank stocks over traditional savings [3] Group 3 - Institutional buying has contributed to the rise in bank stocks, with insurance companies making significant investments in the sector, and regulatory changes potentially favoring equity funds towards large-cap stocks [4] - Despite recent declines in bank stocks, there is a belief that long-term investment value remains, supported by stable fundamentals and high dividend yields [4] - Analysts caution against irrational speculation, highlighting risks such as narrowing net interest margins and rising retail non-performing loans, suggesting a focus on profitability and stability when selecting stocks [4]

Core Viewpoint - The rapid conversion of convertible bonds into common stock by Xinda Investment in Shanghai Pudong Development Bank (SPDB) reflects a new trend in managing convertible bond maturity pressures, similar to the "Everbright model" [10][11]. Group 1: Convertible Bond Conversion - On June 27, Xinda Investment converted nearly 118 million SPDB convertible bonds into approximately 912 million shares of common stock [1][3]. - The total share capital of SPDB increased to approximately 30.264 billion shares, with Xinda Investment holding about 3.01% of the total shares, entering the top ten shareholders [2][7]. - The conversion process took only three days, highlighting the efficiency of the transaction [2][3]. Group 2: Background of Convertible Bonds - SPDB issued 500 billion yuan worth of convertible bonds in October 2019, with a maturity of six years [5]. - As of March 2023, only 144,000 yuan worth of SPDB convertible bonds had been converted, indicating a conversion rate of only 0.0029% [6]. Group 3: Market Context and Trends - The "Everbright model" involves strategic shareholders converting bonds to alleviate maturity repayment pressures, especially when the underlying stock performs poorly [10]. - Previous cases, such as Everbright Bank's bond conversion by China Huarong, demonstrate the effectiveness of this strategy in reducing repayment burdens and enhancing core capital [11][13]. - The current market conditions show a high demand for bank convertible bonds due to their strong credit quality and risk resistance, despite a stagnation in new issuances since 2023 [17].

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 13.29 [8][11]. Core Views - The company has triggered the conditional redemption clause for its convertible bonds, which is expected to enhance its capital strength and support further business expansion [2][4]. - The company is rooted in a high-quality region in Jiangsu, showing steady profit growth and maintaining a high dividend payout ratio, making it a potential growth and dividend stock [1][3]. - The stock has underperformed compared to peers since the beginning of the year, indicating potential for valuation recovery [1][3]. Summary by Sections Convertible Bonds - The company announced that from May 13, 2025, to June 9, 2025, the closing price of its convertible bonds has been above 130% of the conversion price, triggering the conditional redemption clause [2]. - As of the end of Q1 2025, the unconverted balance of the convertible bonds was RMB 10.5 billion, which will improve the capital adequacy ratio by 0.57 percentage points to 9.46% upon conversion [2]. Earnings and Dividends - As of June 9, 2025, the unconverted balance of the convertible bonds was approximately RMB 5.2 billion, accounting for about 4% of the company's total market value [3]. - The dilution effect on earnings per share (EPS) for 2025 is estimated to be around 10%, but the impact on dividend yield and return on equity (ROE) is manageable [3]. - The company is expected to maintain a competitive position in terms of profitability and dividend yield, with a projected dividend yield of 5.21% and a price-to-book (PB) ratio of 0.78x for 2025 [3]. Performance and Shareholder Confidence - The company has a clear strategic goal and has shown steady growth in performance, with revenue and net profit increasing by 6.5% and 7.1% year-on-year in Q1 2025, respectively [4]. - Major shareholders have increased their holdings significantly, with over RMB 7 billion in purchases, reflecting strong confidence in the company's future [4]. Profit Forecast and Valuation - The profit forecast remains unchanged, with projected EPS for 2025, 2026, and 2027 at RMB 1.86, RMB 2.02, and RMB 2.23, respectively [5]. - The target PB ratio is set at 0.90x, with a target price of RMB 13.29, indicating a favorable valuation compared to peers [5].

证券研究报告 杭州银行 (600926 CH) 转债夯实资本，助力业务拓张 | 华泰研究 | | | 动态点评 | | --- | --- | --- | --- | | 2025 年 | 5 月 | 26 日│中国内地 | 区域性银行 | 2025 年 5 月 26 日，杭州银行公告称已触发 "杭银转债"有条件赎回条款。 杭州银行植根优质区域，扩表保持强劲力度，盈利能力领先，资产质量优异。 25Q1 各项经营指标均保持上市银行第一梯队，彰显优异成长性。转债完成 强赎后，将进一步夯实公司资本，支撑业务扩张，维持增持评级。 转债触发强赎，夯实公司资本 公司公告称自 2025 年 4 月 29 日至 2025 年 5 月 26 日期间，已有 15 个交 易日收盘价不低于"杭银转债"当期转股价格 11.35 元/股的 130%（含 130%），已触发"杭银转债"的有条件赎回条款。本次可转债提前赎回完成 后，将进一步增强公司的资本实力，为扩表提供支撑。公司 25Q1 末未转股 余额 106 亿元，以 25Q1 末风险加权资产规模测算，将提升核心一级资本充 足率 0.83pct 至 9.84%。 股本摊薄有限，盈利能力 ...

Core Viewpoint - The convertible bond market is experiencing a significant increase in early redemption rates, driven by a recovering equity market and favorable policies, with the strong redemption rate approaching 70% in 2024. Group 1: Market Trends - Since the fourth quarter of 2024, the equity market has shown a warming trend, leading to changes in the exit paths of convertible bonds [1] - In the first half of 2024, 52.94% of convertible bonds exited through strong redemption, which increased to 64% in the second half due to rising stock prices and favorable policies [1] - As of now, the strong redemption rate has further increased to nearly 70% [1] Group 2: Redemption Statistics - As of May 8, 2024, 49 convertible bonds have been delisted from exchanges, with 34 of them (69.39%) exiting through strong redemption [2] - In 2020, 95.89% of the 73 convertible bonds that exited the market did so via strong redemption, while this percentage has decreased in subsequent years [4] - In 2024, only 50 out of 84 convertible bonds exited through strong redemption, indicating a shift in redemption methods [4] Group 3: Factors Influencing Redemption - The increase in strong redemption probability is attributed to the overall positive sentiment in the equity market, which has been bolstered by economic policies since September 2023 [4][5] - Companies are motivated to redeem convertible bonds to convert debt into equity, thereby reducing future financial costs and debt pressure [5][6] Group 4: Market Size and Supply - The convertible bond market is experiencing a contraction in its stock size, with fewer than 500 convertible bonds and a total scale of less than 7000 billion yuan, down from over 8700 billion yuan at the end of 2023 [8] - The shrinking market size implies a reduction in investable assets, which may influence investors' strategies [8] - The decrease in AAA-rated convertible bonds has been particularly notable, with their scale dropping from nearly 4200 billion yuan at the end of 2022 to 2624.46 billion yuan as of May 12, 2024 [9] Group 5: Investment Opportunities - The convertible bond market has outperformed the broader market, with the convertible bond index rising 3.86% compared to a 0.69% increase in the Shanghai Composite Index since the beginning of the year [11] - The unique risk-return profile of convertible bonds, characterized by unlimited upside potential and downside protection, makes them attractive in the current market environment [11][12] - The strong redemption process is expected to create opportunities for valuation increases and attract more capital into the convertible bond market [12]

2024年四季度以来，权益市场整体呈现回暖走势，可转债市场的退出路径出现新的变化。 据证券时报记者统计，2024年上半年，由于市场行情比较低迷，以强赎方式退出的转债占比为52.94%，2024年下半年，在正股价格攀升、政策利好叠加的推动下， 转债强赎退出比例提升至64%。今年以来，转债强赎退出比例进一步提升，截至目前已接近70%。 多位受访人士指出，今年以来，A股市场持续保持稳定走势，是可转债市场提前赎回现象增多的重要背景，也为存量可转债估值提升和活力改善创造有利条件。可 转债强赎案例增多，将进一步提升转债市场的吸引力，吸引更多资金流入转债市场。 强赎占比提升至70% 5月8日，博杰转债发布公告称，根据中国结算的数据，截至赎回登记日收市后，博杰转债尚有8445张未转股，赎回价格为100.70元/张，共计支付赎回款85.04万元。 赎回完成后，博杰转债将不再流通或交易，并自5月8日起在深圳证券交易所摘牌。 记者注意到，今年以来，已有49只转债从交易所摘牌。从转债退出方式来看，今年以来，转债市场以强赎方式退出的占比明显提升。数据显示，在目前已从交易所 摘牌的可转债中，有34只可转债因触发提前赎回条款退出了转债市场 ...

Core Viewpoint - The significant decline in Feikai Convertible Bond and Huaxiang Convertible Bond is primarily due to the announcement of early redemption by both companies, leading to a negative conversion premium in the current market environment [1][4][5]. Group 1: Market Reaction - Feikai Convertible Bond dropped by 10.18%, closing at 113.534 CNY per bond, while Huaxiang Convertible Bond fell by 6.97%, closing at 122.764 CNY per bond [2]. - Both convertible bonds experienced a negative conversion premium, indicating a rapid decrease in their time value due to the early redemption announcements [1][4]. Group 2: Company Announcements - Feikai announced that from March 27 to April 25, its stock price had met the condition for early redemption, with 15 trading days closing above 120% of the conversion price of 15.30 CNY per share [4][5]. - Huaxiang similarly triggered its early redemption clause, with its stock price closing above 130% of the conversion price of 11.65 CNY per share for 15 out of 25 trading days [5]. Group 3: Implications of Early Redemption - The early redemption of convertible bonds reduces their time value, compressing the conversion premium to near zero, which negatively impacts bond prices [6]. - Investors are advised to closely analyze the terms of the bonds and adjust their positions to mitigate potential losses from the early redemption [1][6]. Group 4: Broader Market Concerns - Investors should also be aware of the potential delisting risks associated with convertible bonds, particularly as some underperforming companies may trigger delisting scenarios [7][8]. - The case of Puli Pharmaceutical illustrates the risks, as its stock and convertible bonds faced significant declines due to impending delisting, with the convertible bond dropping by 18.13% [8][10].

Core Viewpoint - Several convertible bonds have announced plans for early redemption, with current secondary market prices significantly higher than the redemption prices, potentially leading to substantial losses for investors if they hold until forced redemption [1][7]. Group 1: Early Redemption Announcements - Kewah Data announced the early redemption of "Keshuzhuan Bond," stating that the stock price has met the conditions for redemption, with a forced redemption price of 100.32 yuan per bond [4]. - Nanshan Zhishang also announced the early redemption of "Zhishang Bond," with a forced redemption price of 100.38 yuan per bond [5]. - Zhongfu Bond has also triggered its conditional redemption clause, with a forced redemption price of 100.19 yuan per bond [5]. Group 2: Market Performance Context - The recent increase in early redemptions is a reflection of the strong performance of the convertible bond market over the past few months [6][10]. - The CSI Convertible Bond Index has risen for six consecutive months from September 2024 to February 2025, with an additional increase of 1.25% since March 2025 [11]. - Over 440 convertible bonds have risen in value since the beginning of 2025, with more than 80% of them experiencing price increases, including several bonds with gains exceeding 50% [12]. Group 3: Investor Considerations - Investors are advised to convert their bonds or sell them at an appropriate time to avoid losses due to forced redemption, as the current market prices for these bonds are significantly higher than the redemption prices [1][7][8]. - As of March 6, the secondary market prices for Keshuzhuan Bond, Zhishang Bond, and Zhongfu Bond were 189.1 yuan, 200.489 yuan, and 133.4 yuan per bond, respectively, indicating potential losses of 46.95%, 49.93%, and 24.90% if held until forced redemption [7].