Core Viewpoint - The stock of *ST Baoying experienced abnormal fluctuations with a cumulative closing price increase deviation exceeding 12% over three consecutive trading days from November 4 to 6 [1] Financial Performance - For the first three quarters of 2025, the company reported revenue of 515.08 million yuan, a year-on-year decrease of 65.79% [1] - The net profit for the same period was -33.75 million yuan, reflecting a year-on-year reduction in losses of 92.21% [1] - The owner's equity stood at -31.90 million yuan, a decrease of 4.21 million yuan compared to the end of the previous year [1] Listing Risk - If the owner's equity does not turn positive by year-end, the company's stock will face delisting [1] Control Change and Business Development - There are significant uncertainties regarding the implementation of control change matters [1] - The plan to establish a subsidiary in the high-end optocoupler field is still in the preparatory stage, presenting various risks [1]

Market Performance - On July 1, the major stock indices in Shanghai and Shenzhen opened mixed, with the Shanghai Composite Index slightly higher and the Shenzhen Component and ChiNext Index also opening with minor gains. The Shanghai Composite Index showed a fluctuating upward trend throughout the day, closing at 3457.75 points, up 0.39%, marking a new year-to-date closing high [1] - The Shenzhen Component Index closed at 10476.29 points, up 0.11%, while the ChiNext Index closed at 2147.92 points, down 0.24%. The total trading volume for the Shanghai market was approximately 553.6 billion yuan, and for the Shenzhen market, it was about 912.5 billion yuan [1] Sector Performance - The pharmaceutical sector led the gains, with significant increases in various sub-sectors such as immunotherapy, innovative drugs, recombinant proteins, generic drugs, weight loss drugs, hepatitis concepts, and hair medical treatments. Other sectors that saw notable increases included shipbuilding, industrial gases, photolithography machines, banking, and superconducting concepts [1] - Conversely, digital currency stocks experienced significant declines, along with substantial adjustments in sectors like electronic identification, cross-border payments, and Web3 concepts [1] Institutional Insights - According to institutional views, the market is expected to experience fluctuations, with a historical 60% probability of the Shanghai Composite Index rising in July. Investors are advised to focus on defensive sectors in the early part of the month and shift attention to mid-year performance reports and policy movements later on. Key sectors to watch include technology (semiconductors, AI), military industry, and high-growth areas in mid-year reports [2] - Another institution emphasized the importance of focusing on performance-driven sectors and stable assets as the earnings season approaches, with expected growth in industries such as steel, computers, and defense [2] Policy Developments - The National Healthcare Security Administration announced that a draft for the commercial insurance innovative drug directory and the medical insurance directory will be released soon. This initiative aims to streamline the application process for companies and ensure that both directories are aligned in their adjustments [4] - The State-owned Assets Supervision and Administration Commission is accelerating the development of the new energy vehicle industry, focusing on enhancing the capabilities of young talents in intelligent development and digital marketing [5]

Core Viewpoint - The convertible bond market is experiencing a marginal improvement in supply and demand dynamics, leading to a downward trend in valuation centrality as the number of early redemptions decreases and issuance increases [1][3][4]. Group 1: Market Dynamics - The central valuation of convertible bonds has declined since mid-March when the China Securities Convertible Bond Index reached a nearly 10-year high [3]. - The median price of convertible bonds has dropped from above 120 yuan to below 120 yuan, with the index showing a cumulative decline of nearly 4% since its peak [3][4]. - The increase in issuance of convertible bonds, with 12 bonds issued this year totaling 170.96 billion yuan, has alleviated previous supply-demand imbalances [3][4]. Group 2: Factors Influencing Valuation - The easing of supply-demand conflicts is attributed to increased issuance and a reduction in the number of early redemptions, particularly after a peak in March and April [3][4]. - Market analysts suggest that the previous high valuations were driven by scarcity premiums due to supply-demand imbalances, and the market is now returning to a more rational valuation [4]. Group 3: Investor Behavior and Risks - Investors are currently focused on avoiding performance risks, especially with the upcoming 2024 financial reports and the implementation of new regulations [6][10]. - The market is likely to favor fundamental performance over growth expectations, with potential downgrades in ratings for certain convertible bonds following the financial disclosures [6][10]. - The risk of performance-related declines in stock prices is significant, as convertible bond prices are closely tied to the underlying stock performance [7][10]. Group 4: Investment Strategies - Institutions recommend focusing on structural opportunities, particularly in sectors benefiting from domestic demand, high dividends, and self-sufficiency [10]. - Investors are advised to prioritize convertible bonds from companies with strong operational fundamentals and to diversify investments to mitigate risks associated with poor performance [8][10].