Report's Investment Rating for the Industry - No information regarding the industry investment rating is provided in the report. Core Views - The bond market sentiment was generally positive last week due to factors such as the central bank's resumption of treasury bond trading, loose cross - month funds, the stock market decline after the Sino - US summit, and weak PMI data. The 10 - year treasury bond yield closed at 1.80% on Friday, down 5.32bp from the previous week [1][7][8]. - The equity market rose first and then fell last week. With positive factors like Sino - US trade negotiations, the release of the "15th Five - Year Plan" draft, and the Fed's interest - rate cut expectation, the A - share market was strong in the first half of the week, with the Shanghai Composite Index hitting a new high above 4000. However, it declined in the second half as positive news materialized and the demand for profit - taking increased. The technology hardware sector, which had a high increase previously, led the decline [1][7]. - Most convertible bond issues rose last week. The CSI Convertible Bond Index increased by 0.79% for the whole week, the median price rose by 0.63%, and the calculated arithmetic average parity increased by 0.64%. The overall conversion premium rate increased by 0.10% compared with the previous week [1][8]. - Convertible bonds are still restricted by high prices, high premiums, and frequent redemptions. The overall opportunity is hard to find as the median convertible bond price remains above 130 yuan. For different types of convertible bonds, there are different challenges, such as limited capacity and return space for low - price strategies in debt - biased convertible bonds, over - anticipation of underlying stock price increases in balanced convertible bonds, and the risk of double - killing of valuation and parity in high - quality "core stocks" of non - redeemable equity - biased convertible bonds during market fluctuations [2][17]. - Given the strong bullish atmosphere in the equity market, it is difficult to make decisions on increasing or decreasing positions. The overall assets should be treated with a trading - band mindset. When selecting bonds, it is advisable to allocate evenly across industries. For balanced convertible bonds, choose those with high - volatility underlying stocks that can quickly digest the high convertible bond premiums, and for equity - biased convertible bonds, focus on low - premium targets [2][17]. Summary by Relevant Catalogs Market Trends (2025/10/27 - 2025/10/31) Stock Market - The equity market showed a volatile trend. The Shanghai Composite Index had different daily changes: up 1.18% on Monday, down 0.22% on Tuesday, up 0.7% on Wednesday, down 0.73% on Thursday, and down 0.81% on Friday. Different sectors had varying performances each day [7]. - Most Shenwan primary industries rose last week. The top - performing industries were power equipment (4.29%), non - ferrous metals (2.56%), steel (2.55%), basic chemicals (2.50%), and comprehensive (2.26%), while communication (-3.59%), beauty care (-2.21%), banking (-2.16%), and electronics (-1.65%) performed poorly [8]. Bond Market - The bond market sentiment was good. The 10 - year treasury bond yield closed at 1.80% on Friday, down 5.32bp from the previous week, influenced by factors such as the central bank's actions, fund conditions, stock market movements, and PMI data [1][7][8]. Convertible Bond Market - Most convertible bond issues rose. The CSI Convertible Bond Index increased by 0.79% for the whole week, the median price rose by 0.63%, and the arithmetic average parity increased by 0.64%. The overall conversion premium rate increased by 0.10% compared with the previous week. The arithmetic average conversion premium rates of convertible bonds in different parity ranges also changed [1][8]. - In terms of industries, most convertible bond industries rose. The top - performing industries were steel (+3.04%), machinery and equipment (+2.15%), national defense and military industry (+1.75%), and automobile (+1.16%), while communication (-3.18%), beauty care (-3.17%), building materials (-0.75%), and media (-0.48%) performed poorly [11]. - At the individual bond level, Titan (solid - state battery concept), Dazhong (lithium mine), Zhenhua (chromium salt), Zhonghuan Zhuan 2 (innovative drugs), and Yunji (belt conveyor) convertible bonds led the increase, while Tongguang (optical fiber cable), Shuiyang (skin care products), Jingda (controllable nuclear fusion), Huayi (semiconductor clean room), and Wujin (stainless steel) convertible bonds led the decline [1][12]. - The total trading volume of the convertible bond market last week was 310.731 billion yuan, with an average daily trading volume of 62.146 billion yuan, which was higher than the previous week [15]. Valuation Overview - As of October 31, 2025, for equity - biased convertible bonds, the average conversion premium rates in different parity intervals were at different percentile levels since 2010 and 2021. For debt - biased convertible bonds, the average YTM of those with a parity below 70 yuan was -5.3%, at the 0%/1% percentile levels since 2010/2021. The average implied volatility of all convertible bonds was 40.84%, and the difference between the convertible bond implied volatility and the long - term actual volatility of the underlying stocks was -1.34%, both at certain percentile levels [18]. Primary Market Tracking Last Week (2025/10/27 - 2025/10/31) - Qizhong Convertible Bond announced its issuance, and Jin 25 and Funeng Convertible Bonds were listed. Qizhong Convertible Bond has a scale of 850 million yuan, Jin 25 Convertible Bond has a scale of 2 billion yuan, and Funeng Convertible Bond has a scale of 3.802 billion yuan. Each bond's underlying company has its own business characteristics, financial performance, and planned use of funds after deducting issuance fees [26][27][29]. - One company (Ruikeda) got new approval for registration, one company (Shuangle Co., Ltd.) passed the listing committee review, 13 companies' applications were accepted by the exchange, one company (Mankun Technology) passed the shareholders' meeting, and 4 companies announced board proposals [31]. Future Week (2025/11/3 - 2025/11/7) - As of the announcement on October 31, there is no convertible bond announced for issuance, and Jinlang Zhuan 02 is expected to be listed. It has a scale of 1.677 billion yuan, and its underlying company has specific business operations, financial data, and planned use of funds [30]. - Currently, there are 94 convertible bonds waiting to be issued, with a total scale of 143.51 billion yuan. Among them, 5 have been approved for registration with a total scale of 4.15 billion yuan, and 6 have passed the listing committee review with a total scale of 3.38 billion yuan [31].

Core Insights - The report predicts that the old-caliber M1 year-on-year growth will decline from 6.2% in September to approximately 3.4% by the end of the year, while M2 is expected to decrease from 8.4% in September to around 8.0% by year-end [1][10] - The analysis framework for M1 and M2 growth is based on the formula: old-caliber M1 = M2 - other currencies, where M2 is derived from various leverage factors across different sectors [4][14] M1 and M2 Growth Analysis - The report outlines five key factors influencing M2 growth: corporate leverage, household leverage, foreign exchange derivation, government leverage, and other factors, with a projected M2 year-on-year decline of 900 billion [6][20] - The anticipated decline in M1 growth is attributed to a combination of factors, including a decrease in corporate loans by 300 billion and a reduction in household deposits by 6200 billion [7][33] - Historical data indicates that changes in M1 correlate with shifts in PPI and industrial inventory levels, suggesting that M1 serves as a leading indicator for these economic metrics [2][13] Investment Themes - The report emphasizes the importance of understanding the dynamics of M1 and M2 in relation to asset allocation, highlighting that M1's growth is closely tied to the performance of equity markets and corporate profitability [9][33] - The analysis suggests that a stable equity market environment could lead to a shift in household deposits towards investment assets, thereby impacting M1 growth positively [34][40] Future Projections - The report forecasts that M1 growth will be approximately 2.3 trillion, with M2 growth around 25 trillion, reflecting a broader economic context where monetary policy and market conditions play crucial roles [51][53] - The anticipated government bond issuance is expected to decrease, which may further influence M2 growth dynamics in the upcoming quarters [27][30]

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - The short - term market is mainly volatile. Traders should pay attention to the impact of the capital market and equity market fluctuations on the bond market [2]. 3. Summary by Related Catalogs 3.1 Market Influencing Factors - **L利多因素**: The central bank increased the volume of MLF to maintain abundant liquidity, and the loose capital market supported the bond market sentiment. The basic consensus reached in the Sino - US economic and trade consultations led to a phased increase in market risk appetite [2]. - **利空因素**: The strengthening of the equity market suppressed the bond market sentiment, with a significant stock - bond seesaw effect. The yield of 10 - year treasury bonds increased, and the adjustment of spot bonds dragged down the performance of futures [2]. 3.2 Market Data - **国债到期收益率**: Data on 2Y, 5Y, 10Y, 30Y, and 7Y treasury bond yields from April 2024 to August 2025 are presented [3]. - **资金利率**: Data on deposit - type institutional pledged repurchase weighted interest rates (1 - day and 7 - day) and 7 - day reverse repurchase rates from December 2023 to June 2025 are shown [3]. - **国债期限利差**: Data on the term spreads of 7Y - 2Y and 30Y - 7Y from April 2024 to August 2025 are provided [4][5]. - **国债期货持仓**: Data on the positions of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures from December 2015 to December 2023 are given [8]. - **国债期货成交**: Data on the trading volumes of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures from April 2024 to August 2025 are presented [9]. - **国债期货基差**: Data on the basis of the current - quarter contracts of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures are provided, with different time ranges for each [10][11][12][14]. - **国债期货跨期价差**: Data on the current - quarter minus next - quarter spreads of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures are given, with different time ranges for each [18][20]. - **跨品种价差**: Data on the TS*4 - T and T*3 - TL cross - variety spreads are provided, with different time ranges for each [21][22].

Group 1 - As of October 29, public fund reports for the third quarter have been fully disclosed, with bond funds experiencing over 500 billion units of net redemptions, marking the highest net redemption among fund types [1][2] - The total scale of bond funds at the end of the third quarter was 10.58 trillion yuan, a slight decrease from 10.82 trillion yuan at the end of the second quarter [2] - Over 55% of bond funds recorded net redemptions, with more than 2,100 funds experiencing this trend, including 292 funds with net redemptions exceeding 1 billion units [2] Group 2 - Despite the overall negative performance of bond funds, certain convertible bond funds achieved significant returns, with some exceeding 20% in yield due to favorable equity market conditions [1][5] - The yield of bond funds was under pressure, with over 3,128 bond funds yielding less than 1%, and more than 1,000 funds recording negative returns [4][5] - The yield on government bonds increased, with 1-year, 3-year, 5-year, and 10-year government bond yields rising by 12 basis points, 20 basis points, 22 basis points, and 35 basis points respectively compared to the end of the second quarter [4] Group 3 - Looking ahead, the bond market is expected to be influenced by both bullish and bearish factors, with the central bank's operations likely to support the market [6][7] - The current economic growth level remains weak, suggesting that long-term interest rates do not have a solid foundation for sustained and significant increases [6][7] - The bond market is anticipated to return to being driven by economic fundamentals and monetary policy after the release of pressure on the liability side [6][7]

Group 1 - As of October 29, public fund reports for the third quarter have been fully disclosed, with bond funds experiencing over 500 billion units of net redemptions, marking the highest net redemption among fund types [1][3] - The total scale of bond funds at the end of the third quarter was 10.58 trillion yuan, a slight decrease from 10.82 trillion yuan at the end of the second quarter [3] - Over 2,100 bond funds recorded net redemptions in the third quarter, accounting for nearly 55% of the total, with 292 funds having net redemptions exceeding 1 billion units [3] Group 2 - The overall yield of bond funds was suppressed in the third quarter, with many funds showing yields below 1%, and over 1,000 funds recording negative returns [6][7] - The yield on government bonds increased, with the one-year, three-year, five-year, and ten-year government bond yields rising by 12 basis points, 20 basis points, 22 basis points, and 35 basis points respectively compared to the end of the second quarter [6] - Convertible bond funds performed well, with some achieving returns exceeding 20%, benefiting from a strong equity market [7] Group 3 - Looking ahead, the bond market is influenced by both bullish and bearish factors, with expectations of a supportive central bank and reduced selling pressure due to lower fund durations [9][10] - The current rise in long-term interest rates is seen as a normal response to changes in fundamental expectations, but a significant and sustained increase is not anticipated due to weak economic growth [9] - The bond market is expected to return to being driven by economic fundamentals and monetary policy after the release of pressure on the liability side [10]

Group 1 - The core viewpoint of the article emphasizes the importance of monitoring the timing and implementation of the People's Bank of China's (PBOC) resumption of government bond trading, as it reflects a reasonable yield point from a short-term central bank perspective [4][13] - The article discusses the potential impact of the PBOC's actions on liquidity management, particularly in relation to the scale of re-lending during the period of government bond purchases [4][14] - It highlights the significance of banks' government bond purchases during the PBOC's operations, indicating that increased purchases could positively affect overall liquidity, while reduced purchases may have a limited impact [4][15] Group 2 - The article presents two considerations regarding the provision of liquidity to non-bank institutions, noting the correlation between non-bank deposits and equity market transaction volumes [6][19] - It suggests that the reduction in volatility of equity assets this year has improved their risk-adjusted returns, enhancing the attractiveness of equity asset allocation [6][21] Group 3 - The article outlines three thoughts on future monetary policy, indicating that the necessity for a short-term reserve requirement ratio (RRR) cut is low due to the current economic context [7][24] - It also states that the probability of a short-term policy interest rate cut is low, as it could accelerate the outflow of household deposits into financial markets [7][26] - The possibility of a reduction in the five-year Loan Prime Rate (LPR) is noted, as it could help lower household debt costs and improve the downward trend in housing prices [7][26] Group 4 - The article analyzes the impact of current policies on capital markets, stating that the strength of the equity market this year is attributed to reduced volatility and drawdown [8][27] - It mentions that the PBOC's resumption of government bond trading sets a framework for short-term interest rates, but the actual rates will still depend on supply and demand dynamics [8][27] - Historical experience suggests that a simultaneous bull market in both stocks and bonds requires sustained liquidity injections from the central bank, with the potential for rapid asset price increases due to shifts in non-bank deposits [8][30]

Core Insights - The financial market is experiencing a significant shift, with traditional low-risk investment products like R1-level wealth management products seeing a decline in annualized returns from 2.1% to 1.9% in a short period, indicating a broader trend of decreasing yields in the market [2] - The majority of wealth management products (over 98%) are now net value-based, meaning they can no longer guarantee fixed returns, reflecting a transition in the industry towards market-driven performance [2] - The bond market's volatility is impacting the returns of seemingly safe fixed-income products, leading to instances where investors have experienced losses in principal [2] Industry Dynamics - Wealth management companies are increasingly dominating the market, while traditional banks are seeing a reduction in their share of wealth management products, influenced by regulatory pressures on smaller banks to decrease their wealth management scale [3] - The industry is shifting towards equity markets to enhance returns, with products like "fixed income plus" and index-based products becoming more prevalent, which complicates investment decisions for average consumers who prefer stability [3] - Investor education initiatives are being implemented to help consumers understand net value fluctuations, but many still prefer the security of fixed returns, highlighting a disconnect between industry trends and consumer preferences [3][4] Market Outlook - Experts predict that the market may improve by 2025, but this outlook feels distant for current investors who are reluctant to take on high risks while facing diminishing returns [4] - New wealth management products being marketed as "stable low volatility" are offering expected returns around 2.3%, but without guarantees, leaving investors uncertain about their choices [4]

Investment Rating - The report suggests a positive outlook for the securities sector, highlighting a significant mismatch between high profitability and low valuations, indicating a favorable investment opportunity [2][3]. Core Insights - The securities sector is expected to continue its high growth trajectory, driven by increased market trading volumes and rising major indices, with a recommendation to focus on brokerage firms with high investment ratios and low valuations [3][4]. - The insurance sector has shown impressive performance in equity investments, with major companies like China Life expected to report substantial profit increases due to favorable market conditions [4][5]. - The report emphasizes the potential for mergers and acquisitions within the securities sector, particularly for high-quality brokerage firms and companies in the biotechnology space [3][5]. Summary by Sections Securities Sector - The third-quarter reports from brokerages indicate a strong performance, with CITIC Securities reporting a total revenue of 55.815 billion yuan, a year-on-year increase of 32.7%, and a net profit of 23.159 billion yuan, up 37.86% [2]. - The average daily stock trading volume in the third quarter reached 2.11 trillion yuan, a 211% increase year-on-year, contributing to the positive outlook for brokerage firms [2][3]. Insurance Sector - China Life's net profit for the first three quarters is projected to be between 156.785 billion and 177.689 billion yuan, reflecting a year-on-year growth of approximately 50% to 70% [4][5]. - The report notes that the insurance sector is likely to see a recovery in stock performance, driven by strong equity market conditions and increased investment in equities [5]. Investment Recommendations - The report recommends focusing on three main lines: brokerage firms with high trading volumes, companies in the biotechnology sector, and diversified financial firms like Hong Kong Exchanges that are expected to benefit from increased market activity [3][5]. - Specific recommendations include strong beta stocks in the insurance sector, undervalued companies like China Taiping, and leading insurance firms with solid business fundamentals [5].

Report Industry Investment Rating No information provided in the content. Core Viewpoints of the Report - Policy support has significantly boosted the equity and convertible bond markets. The Shanghai Composite Index and the Wind Micro - cap Stock Index have reached new phased highs, but the style rotation is fast, with the technology and dividend sectors taking turns. Amid the intertwining of Sino - US tariff issues and domestic policy expectations, the equity market is highly volatile, but its downside risk is generally controllable. The convertible bond market is trending optimistically. In the short term, the impetus for the convertible bond market comes from the liability side, with the return of net inflows into convertible bond ETFs and the potential increased demand from the upcoming stock - bond constant ETFs. After a period of retracement and consolidation, a new round of market upswing is expected to start. [3][5] Section Summaries 1. Weekly Outlook - Policy support has strongly influenced the equity and convertible bond markets. The Shanghai Composite Index and the Wind Micro - cap Stock Index have hit new phased highs. The equity market is highly volatile due to Sino - US tariff and domestic policy expectations, but its downside risk is controllable. The convertible bond market is optimistic, and its short - term momentum comes from the liability side, such as the return of net inflows into convertible bond ETFs and potential demand from stock - bond constant ETFs. [3][5] 2. Convertible Bond Valuation - During the Fourth Plenary Session of the 20th CPC Central Committee, risk appetite was resilient, and the 100 - yuan valuation rose to around 36%. High - rated large - cap convertible bonds showed stronger valuation performance. The overall market's 100 - yuan premium rate was 35.7%, up 0.6% from the previous week, and its percentile since 2017 was 93.9%. High - rated convertible bonds had a larger increase in valuation than low - rated ones. - The conversion premium rate and the bottom - line premium rate increased across most parity ranges. The low - parity range below 80 yuan and the 110 - 120 yuan parity range showed relatively strong valuation performance, while the high - parity range above 140 yuan saw a slight decline. - The median price of convertible bonds was 131.80 yuan, up 2.07 yuan from the previous week, and the yield to maturity was - 6.47%, down 0.01%. Their percentile levels since 2017 were 99.20 and 0.60 respectively. [4][6][10] 3. Clause Statistics 3.1 Redemption - This week, Tongcheng Convertible Bond announced redemption, while Fuchun, Youfa, and Zhonghuan Zhuan 2 Convertible Bonds announced non - redemption, with a forced - redemption rate of 25%. There are currently 18 convertible bonds that have announced forced or maturity redemptions but have not yet delisted, with a potential conversion or maturity balance of 4.9 billion yuan. There are 34 convertible bonds currently in the redemption process, and 12 are expected to meet the redemption conditions next week. [4][13][16] 3.2 Downward Revision - This week, Lanfan Convertible Bond proposed a downward revision. As of now, 107 convertible bonds are in the non - downward - revision period, 23 cannot be downward - revised due to net - asset constraints, 2 have triggered the downward - revision condition but the stock price is still below the trigger price and no announcement has been made, 32 are accumulating days for downward revision, and 1 has issued a board - meeting proposal for downward revision but has not yet held a shareholders' meeting. [4][18] 3.3 Put Option - This week, Baocai Convertible Bond issued a conditional put - option announcement. As of now, 2 convertible bonds have issued put - option announcements, and 5 are accumulating days to trigger the put - option. Among them, 1 proposed a downward revision, 1 has triggered the downward - revision condition, 1 is accumulating days for downward revision, and 2 are in the non - downward - revision period. [4][22] 4. Primary Market Issuance - There were no new convertible bond issuances this week. Jin 25, Funeng, and Jinlang Zhuan 02 Convertible Bonds have been issued but not yet listed. Jin 25 Convertible Bond is scheduled to list on October 27, 2025. As of now, there are 7 convertible bonds awaiting registration, with a total issuance scale of 6.7 billion yuan, and 6 awaiting listing - committee approval, with a total issuance scale of 3.6 billion yuan. [4][26] 5. Appendix - The CSI Convertible Bond Index rose 1.47% this week. The technology and advanced manufacturing sectors showed significant recovery. Most industries saw gains, with the national defense and military industry, electronics, and computer sectors leading the way. [28][33]

Core Viewpoint - The report highlights the growth of equity investments in sectors such as electronics, communications, innovative pharmaceuticals, and military industries, while emphasizing the importance of a balanced growth investment strategy in the current market environment [1][2]. Group 1: Investment Strategy - The newly launched fund, 景顺长城衡益, is managed by Guo Lin, who adopts a balanced growth investment approach, focusing on TMT (Technology, Media, Telecommunications) and other growth sectors like military, pharmaceuticals, manufacturing, and new consumption [1]. - Guo Lin's investment philosophy is centered on identifying companies with long-term growth potential within sub-sectors that exhibit favorable industry conditions, avoiding bets on single sectors or industry rotations [1][2]. Group 2: Market Analysis - The Hong Kong stock market, despite its volatility, presents solid long-term investment logic, supported by the Federal Reserve's recent interest rate cuts, which may enhance liquidity in the market [2]. - The Hang Seng Index currently has a price-to-earnings ratio of 11.94, which is lower than that of other major indices like the Nikkei 225 (22.53) and S&P 500 (29.57), indicating significant potential for price recovery [2]. Group 3: Performance Metrics - Under Guo Lin's management, the 景顺长城科技创新三年定开 fund has achieved a net value growth rate of 40.57% this year, outperforming its benchmark (26.49%) and the mixed equity fund index (30.97%) [2]. - The fund's portfolio has consistently included significant holdings in growth sectors such as electronics, media, pharmaceuticals, and military, with over 30% of its net value in Hong Kong stocks across the last four reporting periods, showcasing Guo Lin's extensive experience in the Hong Kong market [2]. Group 4: Future Outlook - Guo Lin maintains a relatively optimistic outlook for the equity market, anticipating a potential rebound in risk appetite driven by developments in US-China negotiations and economic data influencing policy expectations [2]. - The new fund will continue to focus on a balanced growth strategy to navigate structural market conditions, with particular attention to sectors like gaming, media, consumer electronics, domestic computing power, pharmaceuticals, military, energy storage, and resources, while favoring technology consumption leaders represented by the Hang Seng Tech Index [2]. Group 5: Fund Structure - The 景顺长城衡益 fund is an initiated fund, requiring the fund manager to invest at least 10 million yuan of their own capital and maintain this investment for no less than three years, reflecting confidence in their strategy and management capabilities [3].