Core Viewpoint - The implementation of the new "National Nine Articles" and accompanying delisting regulations has tightened financial delisting indicators, creating significant pressure for underperforming companies in the A-share market [1][5]. Group 1: Delisting Risk Warnings - As of April 28, 2024, a total of 41 companies will be subject to risk warnings due to financial non-compliance and internal control deficiencies, with their stock being suspended for one day on April 29 and renamed starting April 30 [2][3]. - Since the beginning of the year, 99 companies have been subjected to risk warnings, with 74 facing delisting risk due to market capitalization and 25 receiving other risk warnings [2]. - Companies like Guohua Network Security reported negative profits and revenues below 300 million yuan, triggering delisting risk warnings under the Shenzhen Stock Exchange rules [2][3]. Group 2: New Delisting Regulations - The new delisting regulations, effective from 2024, include stricter financial, trading, compliance, and major violation indicators for delisting risk warnings [5][6]. - The revenue threshold for main board companies has been raised from 10 million yuan to 30 million yuan, increasing the elimination of underperforming companies [6]. - The market capitalization delisting threshold for main board A-shares has been increased from 300 million yuan to 500 million yuan, while thresholds for the Sci-Tech Innovation Board and Growth Enterprise Market remain unchanged at 300 million yuan [6]. Group 3: Market Impact and Investor Protection - The new delisting regulations aim to enhance the overall quality of listed companies by increasing delisting standards and reducing the value of "shell" resources, effectively driving out underperforming entities [7]. - The regulations also emphasize deterrence against financial fraud and governance issues, making it more challenging to engage in shell trading [7]. - The implementation of these regulations is expected to accelerate the market's cleansing process, with a higher likelihood of companies being forcibly delisted due to financial misconduct [7].

Core Viewpoint - Five A-share companies will be subject to delisting risk warnings starting April 29, indicating a potential increase in companies facing performance-related risks as financial reports are disclosed [1][2]. Group 1: Delisting Risk Warnings - Five companies, including Lihang Technology and Gengxing Co., announced their stocks will be suspended for one day on April 28 and will receive delisting risk warnings from April 29 [1][2]. - The upcoming busy period for annual and quarterly report disclosures may lead to more companies reporting underperformance or losses, raising the likelihood of delisting risk warnings [2][4]. Group 2: Regulatory Changes - The "new delisting regulations" introduced stricter standards for mandatory delisting, including raising the revenue threshold for loss-making companies on the main board from 100 million to 300 million [2][3]. - The market capitalization delisting threshold has been increased from below 300 million to below 500 million, and the criteria for significant violations leading to delisting have been lowered [2][3]. Group 3: Impact on Market Dynamics - The introduction of dividend risk warnings aims to improve the dividend behavior of listed companies, which is expected to enhance investor returns and promote a positive investment cycle [4]. - The ongoing emphasis by the China Securities Regulatory Commission on solidifying the delisting mechanism is crucial for the healthy development of the capital market [4].

1. Report Industry Investment Rating There is no information provided in the text about the industry investment rating. 2. Core Views of the Report - The weak expectation of the 2024 annual report performance may gradually materialize, with negative category performance forecasts significantly increasing compared to the previous two years. However, the sentiment in 2025 may be relatively controllable, and the over - selling of low - and medium - rated convertible bonds during the performance disclosure period is not significant [9][10]. - The new "Nine - Point Plan" has tightened the requirements for dividends. The performance disclosure in April will determine whether some underlying stocks of convertible bonds will face ST/*ST [10]. - The divergence between convertible bonds and underlying stocks may indicate the pressure of inventory liquidation. Attention should be paid to the annual report performance of underlying stocks, especially those with poor subsequent hematopoietic ability, and the potential disturbances caused by institutional inventory liquidation [18][19]. - Last week, the convertible bond market declined, and the conversion premium rates of convertible bonds of various ratings and scales were compressed [22][30]. - Last week, Huisheng and Daowen convertible bonds announced redemptions, and Shouhua convertible bonds proposed a downward revision. The approval situation of the China Securities Regulatory Commission for convertible bonds is fair, with a pending issuance scale of about 15.6 billion yuan [48][51]. 3. Summary According to the Catalog 3.1. How to Identify Risks as the Financial Report Disclosure Enters the Acceleration Phase - *ST Puli will enter the delisting consolidation period on April 28, 2025, and Puli convertible bonds will become the fifth convertible bonds to delist with the underlying stock [1][9]. - As of January 31, among the 254 convertible bond issuers that disclosed their 2024 performance forecasts, the proportion of negative category performance forecasts increased by nearly 10 pcts to 66.93% compared to the previous two years, with the frequency and probability of first - losses and continued losses increasing [9]. - As of April 18, 2025, among the 177 underlying stocks of convertible bonds that announced their 2024 annual performance, 96 achieved a year - on - year positive increase in net profit attributable to the parent, while 79 had a decrease/turn - negative/expanded loss. Low - and medium - rated convertible bonds did not experience significant over - selling during the performance disclosure period [10]. - The "New Nine - Point Plan" has tightened the requirements for dividends. Currently, no disclosed underlying stocks of convertible bonds meet the delisting risk warning criteria. *ST Puli and *ST Tianchuang are under delisting warning, and ST Zhongzhuang and ST Dongshi are under other risk warnings [15][16]. - To avoid inventory liquidation risks or spread losses, forward - looking indicators such as the price trends of stocks and convertible bonds, and negative public opinion events should be considered. Stocks with characteristics such as net profit losses, significant net profit decreases, weak solvency, and private enterprises should be focused on [18][19]. 3.2. Market Review: Weekly Decline and Valuation Compression of Convertible Bonds 3.2.1. Weekly Market Conditions - Last week, the major stock indices showed differentiation, and the convertible bond market declined. There are 481 issued but unexpired convertible bonds with a balance of 700.761 billion yuan. Qingyuan, Anji, Weice, and Dinglong convertible bonds have not been listed for trading, and there are no convertible bonds to be issued [22]. - In the equity market, sectors such as banking, real estate, and media led the gains, while machinery, automobiles, and computers led the losses. In the convertible bond market, sectors such as building materials and petroleum and petrochemicals led the gains, while communication, power equipment, and agriculture led the losses [24]. - Among popular concepts, radio frequency and antennas, first - tier real estate developers, etc. led the gains, while optical chips, consumer electronics OEM, etc. led the losses [24]. 3.2.2. Valuation Performance - The weighted average closing price of convertible bonds was 116.33 yuan, a 0.65% decrease from the previous Friday. The closing prices of equity - biased, debt - biased, and balanced convertible bonds all decreased [30]. - The conversion premium rate of convertible bonds of various ratings and scales was compressed. The AAA - rated convertible bonds decreased by 3.81 pcts, and the convertible bonds with a scale of over 5 billion yuan decreased by 3.75 pcts. The conversion premium rate of convertible bonds with a par value below 80 yuan (inclusive) increased by 4.72 pcts [30]. 3.3. Terms and Supply: Huisheng and Daowen Convertible Bonds Announced Redemptions, and the Approval of the CSRC for Convertible Bonds is Fair 3.3.1. Terms - As of April 18, Huisheng and Daowen convertible bonds announced redemptions, and Nuotai convertible bonds announced redemption arrangements. Zhongqi, Tianlu, and Fuxin convertible bonds announced no early redemptions. No convertible bonds announced expected fulfillment of redemption conditions [48]. - As of April 18, Shouhua convertible bonds' board of directors proposed a downward revision, and Bohui convertible bonds announced the result of the downward revision, which was basically at the bottom. Thirteen convertible bonds announced no downward revisions, and 41 convertible bonds announced expected triggers for downward revisions [48]. 3.3.2. Primary Market - Last week, Taineng convertible bonds were newly listed with a scale of 2.95 billion yuan, and there were no new issuances of convertible bonds [50]. - Last week, there were no new board proposals, 5 new shareholder meeting approvals, no new approvals from the issuance review committee, and no new approvals from the CSRC. As of April 18, 6 listed companies obtained approval for convertible bond issuances with a proposed issuance scale of 12.966 billion yuan, and 4 companies passed the issuance review committee with a total scale of 2.632 billion yuan [51][55].

Group 1: Policy and Market Changes - The new "National Nine Articles" and "1+N" policy framework has systematically reshaped the capital market's foundational systems and regulatory logic since 2024, leading to significant positive changes in the market[4] - Over 50 regulatory rules have been formulated or revised by the CSRC since the introduction of the new "National Nine Articles," enhancing the regulatory system and effectiveness[4] - The total dividend amount in the market reached a historical record in 2024, with dividend repurchases far exceeding the total scale of IPO refinancing and reductions[4] Group 2: Support for Innovation and Long-term Capital - The government emphasizes the need for self-innovation and the integration of technological and industrial innovation, with the CSRC providing tools to support the listing and financing of innovative technology companies[4] - The CSRC has introduced multiple channels to broaden funding sources and diversify exit channels, promoting a virtuous cycle of fundraising, investment, management, and exit[4] - The push for long-term capital to enter the market has seen significant progress, with insurance funds and various pension funds entering the market, stabilizing it effectively[4] Group 3: Economic Transition and Market Stability - The capital market plays a crucial role in optimizing resource allocation towards strategic areas like technological innovation and green economy during China's transition from high-speed to high-quality growth[4] - The importance of capital market stability is increasingly highlighted amid ongoing financial market developments and changes, with expectations for more long-term capital inflows under the new policy framework[4] - Risks include geopolitical changes affecting market risk appetite and potential pressures from U.S. policies towards China, which could impact market confidence[4]

Group 1: Capital Market Development - High-quality development of the capital market can drive industrial upgrades and increase social wealth effects, supported by the continuous improvement of the "1+N" policy system since last year[3] - Direct financing in China is still low, with only 16% of non-financial corporate financing coming from direct methods compared to 60% in the US, indicating significant room for growth[24] - The new "National Nine Articles" focuses on establishing a sound regulatory system and promoting long-term capital inflow, which is expected to accelerate the improvement of the capital market policy this year[17] Group 2: Support for Innovation and Technology - The proportion of R&D investment in strategic emerging industries is 6.5%, significantly higher than the overall A-share average of 2.7%, highlighting the need for direct financing support for tech companies[23] - The capital market is expected to enhance support for technology enterprises through improved stock market systems and innovative financial products[26] - The market's technology sector's market capitalization has increased from 4.7% in 2010 to approximately 22% currently, but still lags behind the US at 36%[26] Group 3: Market Stability and Long-term Investment - A-shares exhibit higher volatility, with the average amplitude of the CSI 300 at 43% compared to 31% for US stocks, indicating a need for more stable long-term capital[32] - Institutional investors account for only 18% of the A-share market, compared to 55% in the US, suggesting a significant opportunity for increasing long-term investment[33] - Policies are expected to encourage the entry of long-term funds into the market, including accelerating the second and third pillars of pension funds, which currently only have a 10% market entry rate compared to 49% and 51% in the US[40]