1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints - Recently, convertible bonds have shown a "negative convexity" characteristic, with returns and drawdowns significantly worse than the underlying stocks. The compression of convertible bond valuations started in the first week after the Spring Festival. Although the equity market performed well during this period, there was an obvious structural shift, and the technology sector was weak. Additionally, non - callable convertible bonds generally entered the second round of call - counting periods. Despite the decent performance of the underlying stocks, high - parity convertible bonds, new bonds, and sub - new bonds actively compressed their valuations due to poor expectations. Subsequently, the conflict between the US and Iran impacted global risk appetite, causing a surge in oil prices and a weak and volatile domestic equity market. The compression of convertible bond valuations spread comprehensively, and the valuations in the debt - biased and balanced intervals also declined significantly. From a rolling perspective, the 100 - yuan premium rate has returned to around the +1 standard deviation level, and the central value has significantly shifted down from the previous high. In the short term, convertible bond valuations have compressed to a stage - low. With the expectation of a mid - term slow - bull equity market, the convertible bond market has shown a certain cost - effectiveness, and opportunities for individual bonds with certain cost - effectiveness in valuation can be actively explored [1][5]. 3. Summary by Directory 3.1 Weekly Viewpoint and Outlook - Convertible bonds have a "negative convexity" feature, performing worse than underlying stocks. The valuation compression started after the Spring Festival, affected by market structure shift, call - counting periods, and the US - Iran conflict. Currently, the 100 - yuan premium rate is around +1 standard deviation, and the convertible bond market has cost - effectiveness [1][5]. 3.2 Convertible Bond Valuation - Due to the surge in oil prices caused by the US - Iran conflict and the new round of Sino - US economic and trade consultations, the domestic equity market stabilized compared to last week, with small and micro - cap stocks relatively weak. Convertible bonds continued to digest valuations this week. After removing outliers, the 100 - yuan premium rate decreased by 0.5% to 31.8%, roughly equal to the +1 standard deviation level. This week, the valuation compression spread from high - parity and long - duration bonds to other intervals, showing a universal full - interval compression. The compression in the debt - biased and balanced convertible bonds was generally over 1%. From a term perspective, the valuation compression of new bonds over 5.5 years was close to 4%, and the compression in the 2 - 4 - year interval was also relatively large. In terms of individual bonds, high - parity bonds above 140 yuan with large valuation compression were mostly those in the call progress or about to enter the call - counting period, with obvious pre - emptive characteristics, and the valuation compression due to call expectations was about 10%. Other bonds with large valuation compression in the balanced and debt - biased intervals were mostly new bonds that had not entered the conversion period. Bonds around 3 years, such as Yake and Daimei, also had relatively large valuation compression due to the downward trend of the underlying stocks. In addition, the valuations in the extremely low - parity area below 60 yuan were generally compressed [4][6][9]. 3.3 Clause Tracking 3.3.1 Redemption - This week, 9 convertible bonds, including Fenggong and Liyang, announced redemptions, and 4 announced non - redemptions, with a call rate of 69%. Currently, there are 31 convertible bonds that have issued call or maturity redemption announcements but have not delisted. Among the non - delisted bonds, the potential conversion or maturity balance of call and maturity bonds is 12.2 billion yuan. There are currently 47 convertible bonds in the redemption progress. 12 are expected to meet the redemption conditions next week, and 11 are expected to issue announcements of potential redemption triggers. In addition, 13 convertible bonds are expected to enter the call - counting period within the next month [23][27]. 3.3.2 Downward Revision - This week, Weining Convertible Bond proposed a downward revision, and no convertible bond announced the result of the downward revision. As of now, 79 convertible bonds are in the non - downward - revision interval, 18 cannot be revised downward due to net asset constraints, 0 have triggered the condition and the stock price is still below the downward - revision trigger price but have not issued an announcement, 21 are accumulating days for downward revision, and 6 have issued the board of directors' pre - plan for downward revision but have not gone to the shareholders' meeting [31]. 3.3.3 Put Option - This week, no convertible bond issued a conditional put option announcement. As of now, 4 convertible bonds are accumulating days to trigger the put option, among which 1 is also accumulating days for downward revision, and 3 are in the non - downward - revision interval [33]. 3.4 Primary Issuance - As of now, there are 6 convertible bonds in the approval - registration progress, with a to - be - issued scale of 5.3 billion yuan; there are 9 convertible bonds in the process of passing the listing committee, with a to - be - issued scale of 8.2 billion yuan [35].

1. Report Industry Investment Rating No relevant information provided. 2. Report's Core View - The A - share market had a good start at the beginning of the year, but convertible bonds ended slightly lower. The poor performance of convertible bonds compared to their underlying stocks was mainly due to the significant valuation compression of high - parity convertible bonds. This compression was widespread, with the largest compression in bonds with strong - redemption potential, new and sub - new bonds, possibly related to poor expectations for the technology sector and expectations of increased convertible bond supply. Although short - term negative factors may impact high - parity convertible bonds, the cost - effectiveness of convertible bonds is expected to emerge after the active valuation compression [1][5]. 3. Summary by Relevant Catalogs 3.1 Week's View and Outlook - The A - share market had a good start in the new year, but convertible bonds ended slightly lower, underperforming their underlying stocks. The large - scale valuation compression of high - parity convertible bonds was the main cause. In the parity range above 140 yuan, there were two main types of significant valuation compression: one was due to the progress of strong redemption, such as Huicheng, Ruichuang, etc.; the other was the active valuation compression of new and sub - new bonds, such as Dinglong, Luwei, etc. Other high - parity convertible bonds also generally saw valuation compression, with only a few bonds that unexpectedly did not trigger strong redemption seeing a valuation increase. This compression may be related to poor technology sector expectations and increased supply expectations. Short - term negative factors may impact high - parity convertible bonds, but the cost - effectiveness of convertible bonds may appear after valuation compression [1][5]. 3.2 Convertible Bond Valuation - In the first week of the new year, the A - share market had a good start, with the main line switching to the "price - increase" cycle sector, while the technology sector performed poorly. The conversion premium rate of high - parity convertible bonds was actively compressed. With outliers retained, the 100 - yuan premium rate declined by over 3 percentage points. After excluding outliers, the 100 - yuan premium rate dropped 0.2% to 32.7%. Without excluding outliers, the 100 - yuan premium rate declined 3.3% [6]. - This week, convertible bond valuations were significantly compressed, with convertible bonds underperforming their underlying stocks. The conversion premium rate of convertible bonds with a parity above 140 yuan was compressed by nearly 5%. The conversion premium rates in each parity range generally declined, with the most significant compression in the high - parity range above 140 yuan, including new, sub - new, and high - parity convertible bonds. The conversion premium rate in the medium - and low - parity ranges declined by about 1% [8]. - From an individual bond perspective, in the parity range above 140 yuan, there were two main types of significant valuation compression: due to strong - redemption progress (e.g., Huicheng, Ruichuang) and active compression of new and sub - new bonds (e.g., Dinglong, Luwei). Other high - parity convertible bonds also generally saw valuation compression. In other parity ranges, new, sub - new, and near - maturity bonds had relatively weak valuation performance [9]. - As of the latest data, the quantile of the conversion premium rate in each parity range generally declined. The quantiles in the high - parity range above 110 yuan showed significant changes, while those in the medium - and low - parity ranges remained close to 100% [13]. 3.3 Clause Tracking 3.3.1 Redemption - This week, 4 convertible bonds (Jiayuan, Songlin, Hongbai, Haiyou) announced redemption, and 8 announced non - redemption, with a strong - redemption rate of 33%. Currently, there are 22 convertible bonds that have announced early redemption or maturity redemption but have not yet delisted, with a potential conversion or maturity balance of 11.9 billion yuan for these non - delisted bonds [18]. - There are currently 49 convertible bonds in the redemption process. Next week, 10 are expected to meet the redemption conditions, and 21 are expected to issue announcements of potential redemption triggers. In addition, 12 convertible bonds are expected to enter the strong - redemption counting period within the next month [20]. 3.3.2 Downward Revision - This week, Lanfan and Baolai convertible bonds proposed downward revisions, and Honglu convertible bond announced the result of a downward revision to the lowest level. As of the latest, 89 convertible bonds are in the non - downward - revision period, 20 cannot be downward - revised due to net - asset constraints, 0 have triggered the condition but the stock price is still below the downward - revision trigger price without an announcement, 16 are accumulating downward - revision days, and 3 have issued board proposals for downward revision but have not yet gone to the general meeting of shareholders [24]. 3.3.3 Put Option - This week, no convertible bonds issued conditional put - option announcements. As of the latest, 1 convertible bond has issued a put - option announcement, and 3 are accumulating put - option trigger days, among which 2 are also accumulating downward - revision days and 1 is in the non - downward - revision period [26]. 3.4 Issuance - As of the latest, there are 5 convertible bonds in the approved - registration process, with a to - be - issued scale of 4.4 billion yuan; 7 convertible bonds have passed the listing committee process, with a to - be - issued scale of 7 billion yuan [29].

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - This week, micro - cap stocks recovered. Convertible bonds rose following the underlying stocks. High - priced convertible bonds performed weakly. Low - priced convertible bonds performed strongly due to factors such as an increase in downward revision cases and the rise of underlying stocks. The increase of convertible bonds was significantly lower than that of underlying stocks due to the drag of high - priced convertible bonds [2][3]. - There are two structural characteristics. Firstly, the valuation of near - maturity convertible bonds is under great valuation attenuation pressure, especially non - financial convertible bonds with high previous valuations. Secondly, the call risk remains at a high level. Convertible bonds that were not called before have successively re - entered the call period, and the change in call expectations also leads to price pressure [2][3]. - In the case of a positive expectation for the equity market, there are still beta opportunities in the convertible bond market, but the valuation attenuation of near - maturity convertible bonds and call risks need to be focused on [2][3]. 3. Summary of Each Section 3.1 Weekly Viewpoint and Outlook - Micro - cap stocks recovered this week. Convertible bonds followed the underlying stocks to rise. High - priced convertible bonds were weak, while low - priced convertible bonds were strong. The increase of convertible bonds was significantly lower than that of underlying stocks [2][3]. - The valuation of near - maturity convertible bonds, especially non - financial ones, faced great attenuation pressure. The call risk remained high, and the change in call expectations led to price pressure [2][3]. - There are beta opportunities in the convertible bond market, but near - maturity valuation attenuation and call risks need attention [2][3]. 3.2 Convertible Bond Valuation - This week, the underlying stocks and convertible bonds recovered. The 100 - yuan premium rate slightly increased by 0.4% and returned above 30%. After excluding outliers, the 100 - yuan premium rate of the whole market's convertible bonds was 30.2%, up 0.4% week - on - week, and the latest quantile was at the 99.5% percentile since 2017 [2][4][5]. - The valuation structure changed. The valuation of the bond - biased area was better than that of the stock - biased area. The bond - biased area's valuation improved due to more downward revision cases and rising parity. The stock - biased area's valuation was weak due to call risks, and the conversion premium rate of the 130 - 140 yuan parity range increased significantly [2][9]. - In terms of individual bonds, among balanced and bond - biased convertible bonds, those with a large decline in valuation were mainly near - maturity ones like Hua'an, Guotou, and Jianyou Convertible Bonds. Among stock - biased convertible bonds, those with a rapid convergence of valuation due to call expectations were Hengshuai, Borui, and Jingzhuang Convertible Bonds [2][14]. - The median price of convertible bonds was reported at 132.04 yuan, up 1.14 yuan from last week, and the yield to maturity was - 6.81%, down 0.25% from last week. Their current quantiles were at the 98.60 and 0.70 percentiles since 2017 respectively [2][18]. 3.3 Clause Tracking 3.3.1 Redemption - This week, Bo 23 and Furong Convertible Bonds announced redemption, and Huayi Convertible Bond announced non - redemption, with a call rate of 67%. There are currently 18 convertible bonds that have issued call or maturity redemption announcements but have not delisted, and the potential conversion or maturity balance of call and maturity convertible bonds is 5.2 billion yuan [2][21]. - There are 26 convertible bonds currently in the redemption progress. 9 are expected to meet the redemption conditions next week, and 7 are expected to issue announcements that they are likely to trigger redemption. In addition, 9 convertible bonds are expected to enter the call counting period within the next month [2][26]. 3.3.2 Downward Revision - This week, Yuxing Convertible Bond proposed a downward revision, and Lanfan and Tianneng Convertible Bonds announced the downward revision results, both of which did not revise to the bottom. As of now, 114 convertible bonds are in the non - downward - revision period, 20 cannot be downward - revised due to net asset constraints, 1 has triggered the condition but has not issued an announcement, 24 are accumulating downward - revision days, and 4 have issued board proposals for downward revision but have not gone to the general meeting of shareholders [2][29]. 3.3.3 Put Option - This week, Huahai Convertible Bond issued a conditional put option announcement. As of now, 4 convertible bonds are accumulating put - option trigger days, among which 1 is also accumulating downward - revision days, and 3 are in the non - downward - revision period [2][31]. 3.4 Primary Issuance - Dingjie Convertible Bond was issued this week, and there will be no convertible bond issuance next week. As of now, Aohong, Shenyu, and Tianzhun Convertible Bonds have been issued but not yet listed, and Puxun Convertible Bond will be listed on December 22, 2025 [33]. - There are currently 7 convertible bonds in the approved - registration progress, with a pending issuance scale of 8.6 billion yuan; 10 convertible bonds are in the listing - committee - approved progress, with a pending issuance scale of 8.5 billion yuan [33].

Report Summary 1. Investment Rating of the Reported Industry The provided content does not mention the investment rating of the industry. 2. Core Viewpoints of the Report - At the beginning of the week, the convertible bond market experienced a significant pullback, but sentiment quickly recovered. The convertible bond index reached a new high, and the YTM hit a new low. Small - cap sectors such as technology and innovative drugs led the gains, while bank and photovoltaic convertible bonds were volatile, with bank convertible bonds that had performed well retreating. After a phased adjustment, there may be repair opportunities for bank convertible bonds. The convertible bond market is generally expensive, and after the YTM, the 100 - yuan valuation also broke through strongly this week. There may be short - term upward momentum, but potential adjustment risks need to be guarded against [1][4]. 3. Summaries Based on Relevant Catalogs 3.1 Convertible Bond Valuation - This week, both equities and convertible bonds continued to rise slightly. Convertible bonds had a strong ability to follow the rise of underlying stocks, and the 100 - yuan valuation increased. The market - wide convertible bond 100 - yuan premium rate was 31%, up 0.33% from the previous week, and the latest quantile was at the 86.10% percentile since 2017. There was a slight differentiation in the valuations of high - and low - rated convertible bonds, with low - rated ones being slightly stronger [3][5]. - This week, convertible bonds continued to rise slightly following the underlying stocks. The yield to maturity was approaching a historical low, at - 4.39%. As of the latest data, the conversion premium rate index, pure bond premium rate index, and yield to maturity were 43.25%, 34.04%, and - 4.39% respectively, with changes of - 0.73%, + 1.66%, and - 0.39% from the previous week. Their current quantile levels were at the 63.50, 55.10, and 0.80 percentiles since 2017 [3][10]. 3.2 Clause Tracking 3.2.1 Redemption - This week, Guangda, Beilu, Feilu, Yong'an, Liande convertible bonds, etc. issued early redemption announcements. Currently, there are 21 convertible bonds that have issued early redemption or maturity redemption announcements but have not delisted, and the potential conversion or maturity balance of these bonds is 5.3 billion yuan. There are 43 convertible bonds currently in the redemption process, and 9 are expected to meet the redemption conditions next week. Three convertible bonds issued non - redemption announcements this week [3][15][17]. 3.2.2 Downgrade - This week, Lingkang convertible bond proposed a downgrade, and Shanshi convertible bond announced a downgrade, approaching the maximum downgrade. As of the latest, 152 convertible bonds are in the non - downgrade period, 25 cannot be downgraded due to net asset constraints, 2 have triggered the condition but the stock price is still below the downgrade trigger price without an announcement, 36 are accumulating downgrade days, and 2 have issued board - proposed downgrade plans but have not yet gone to the general meeting of shareholders [3][21]. 3.2.3 Put - back - This week, Longda convertible bond issued a put - back announcement. As of the latest, 2 convertible bonds have issued put - back announcements, and 7 are accumulating put - back trigger days, including 5 in the non - downgrade period and 2 accumulating downgrade days [3][24]. 3.3 Primary Issuance - There were no announcements of convertible bond issuances this week. Next week, Libo convertible bond is scheduled to be listed on July 22, 2025. As of the latest, there are 5 convertible bonds in the approved - registration progress, with a total issuance scale of 5.9 billion yuan, and 2 in the listing - committee - approved progress, with a total issuance scale of 1.5 billion yuan [3][26].