1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints of the Report - The equity market is expected to continue the pattern of index fluctuations and internal theme rotations. The convertible bond market shows good resilience in the volatile equity market, and its valuation is still supported. Recently, non - bank convertible bond targets have successively proposed downward revisions, reflecting a strong willingness to promote conversion of near - maturity convertible bonds. It is recommended to focus on the downward revision game opportunities of near - maturity convertible bonds and select bonds from three aspects: performance - driven, event - catalyzed, and dividend and defensive [2][3][19][20]. 3. Summary by Relevant Catalogs Market Focus Last Week (June 16 - 20, 2025) Stock Market - The equity market fluctuated and declined last week. Affected by the end of the "618" promotion and media public opinion, the consumer sector was weak, while the bank and technology sectors performed well. Most Shenwan primary industries closed down, with only banking, communication, and electronics closing up [9][10]. - Specific daily performance: On Monday, the three major A - share indexes rose collectively; on Tuesday and Thursday, they fell collectively; on Wednesday, they rose collectively; on Friday, they fell collectively [9]. Bond Market - The capital market remained relatively loose last week. Events such as the release of May economic data and the Lujiazui Financial Forum did not have a significant impact on the bond market, which continued to fluctuate throughout the week. The 10 - year Treasury bond yield closed at 1.64% on Friday, down 0.44bp from the previous week [10]. Convertible Bond Market - Most convertible bond issues closed down last week. The CSI Convertible Bond Index fell 0.17% for the whole week, the median price fell 0.48%, and the calculated arithmetic average parity fell 2.08%. The overall market conversion premium rate increased by 2.39% compared with the previous week [10]. - In terms of industries, non - bank finance, banking, public utilities, and electronics performed well, while social services, media, building decoration, and beauty care performed poorly [13]. - At the individual bond level, Jingrui, Liande, Tianchuang, Xuerong, and Shouhua convertible bonds led the gains, while Jinling, Zhite, Jindan, and Dongshi convertible bonds led the losses [14]. - The total trading volume of the convertible bond market last week was 30.6524 billion yuan, with an average daily trading volume of 6.1305 billion yuan, a decrease from the previous week [18]. Views and Strategies (June 23 - 27, 2025) - The economic data in May showed differentiation, with strong consumption but a decline in investment and export growth. The market hotspots rotated rapidly, and the popular themes of innovative drugs and new consumption declined. The equity market is expected to continue the pattern of index fluctuations and internal theme rotations [2][19]. - The issuance of convertible bonds has accelerated slightly in the past two weeks. With low bond market interest rates, the demand for convertible bond allocation is strong, and the valuation of convertible bonds is still supported. Although some large - scale convertible bond issues have had their ratings downgraded, the overall impact on the market is relatively controllable [2][19]. - Ruida and Caitong convertible bonds have proposed downward revisions, reflecting the strong willingness of near - maturity convertible bonds to promote conversion. It is recommended to focus on the downward revision game opportunities of near - maturity convertible bonds and pay more attention to convertible bonds with negative YTM and good underlying stock credit quality [3][20]. - When selecting bonds, take advantage of the inconsistent driving factors of the dividend and technology sectors to reduce portfolio fluctuations, and select targets with performance support or valuation drivers from three aspects: performance - driven, event - catalyzed, and dividend and defensive [3][20]. Valuation Overview - As of June 20, 2025, for equity - biased convertible bonds, the average conversion premium rates for different parity ranges are as follows: 39.12% for 80 - 90 yuan, 28.66% for 90 - 100 yuan, 18.06% for 100 - 110 yuan, 13.67% for 110 - 120 yuan, 9.87% for 120 - 130 yuan, and 4.18% for over 130 yuan, at the 79%/56%, 76%/55%, 61%/29%, 68%/44%, 66%/46%, and 63%/26% percentile values since 2010/2021 respectively [21]. - For bond - biased convertible bonds, the average YTM for convertible bonds with a parity below 70 yuan is 0.4%, at the 11%/3% percentile values since 2010/2021 [21]. - The average implied volatility of all convertible bonds is 31.17%, at the 54%/31% percentile values since 2010/2021. The difference between the implied volatility of convertible bonds and the long - term actual volatility of the underlying stocks is - 16.67%, at the 14%/21% percentile values since 2010/2021 [21]. Primary Market Tracking - Last week (June 16 - 20, 2025), Xizhen and Huachen convertible bonds announced their issuance, and Hengshuai convertible bonds were listed [30][31][32]. - As of the announcements on June 20, there are no convertible bonds announced for issuance or listing in the next week (June 23 - 27, 2025) [33]. - Last week, the exchanges accepted applications from 2 companies (Naipu Mining Machinery and Jingda Co., Ltd.), and the general meetings of shareholders approved the plans of 2 companies (Benchuan Intelligent and Maiwei Co., Ltd.). There are no new companies approved for registration by the exchanges, passed by the listing committees, or with board - proposed plans. As of now, there are 78 convertible bonds to be issued, with a total scale of 125.18 billion yuan, including 6 approved for registration with a total scale of 13.45 billion yuan and 4 passed by the listing committee with a total scale of 2.93 billion yuan [34].

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The equity market is expected to continue the pattern of index fluctuations and internal theme rotation, with the convertible bond market showing good resilience [2][19] - Recently, Ruidah and Caitong convertible bonds have proposed downward revisions, reflecting the strong willingness of near - maturity convertible bonds to promote conversion. It is recommended to pay attention to the downward - revision game opportunities of near - maturity convertible bonds and those with good underlying stock credit quality [3][20] - When selecting bonds, in a stage of high macro uncertainty, one can use the inconsistent driving factors of dividend and technology sectors to reduce portfolio volatility and select targets from three aspects: performance - driven, event - catalyzed, and dividend and defensive [3][20] Summary by Relevant Catalogs Market Trends (2025/6/16 - 2025/6/20) Stock Market - The equity market fluctuated and declined last week. The consumer sector was weak, while the bank and technology sectors performed well. The A - share market showed different trends on each trading day, with significant changes in trading volume and sector performance [9] - Most Shenwan primary industries closed down, with beauty care, textile and apparel, and pharmaceutical biology among the top decliners, while only the bank, communication, and electronics sectors closed up [10] Bond Market - The capital market remained relatively loose last week. Events such as the release of May economic data and the Lujiazui Financial Forum did not have a major impact on the bond market, which continued to fluctuate. The 10 - year Treasury bond yield closed at 1.64% on Friday, down 0.44bp from the previous week [10] Convertible Bond Market - Most convertible bond issues closed down last week. The CSI Convertible Bond Index fell 0.17% for the whole week, the median price dropped 0.48%, and the calculated arithmetic average parity dropped 2.08%. The overall market conversion premium rate increased by 2.39% compared with the previous week [10] - Most industries in the convertible bond market closed down. Non - bank finance, banks, public utilities, and electronics performed well, while social services, media, building decoration, and beauty care performed poorly [13] - The top - rising convertible bonds included Jingrui, Liande, Tianchuang, Xuerong, and Shouhua, while the top - falling ones were Jinling, Zhite, Jindan, and Dongshi [14] - The total trading volume of the convertible bond market last week was 30.6524 billion yuan, with an average daily trading volume of 6.1305 billion yuan, a decrease from the previous week [18] Valuation Overview - As of June 20, 2025, for equity - biased convertible bonds, the average conversion premium rates in different price ranges were at different percentile levels since 2010 and 2021 [21] - For debt - biased convertible bonds, the average YTM of those with a parity below 70 yuan was 0.4%, at the 11%/3% percentile since 2010/2021 [21] - The average implied volatility of all convertible bonds was 31.17%, at the 54%/31% percentile since 2010/2021. The difference between the implied volatility of convertible bonds and the long - term actual volatility of the underlying stocks was - 16.67%, at the 14%/21% percentile since 2010/2021 [21] Primary Market Tracking Last Week (2025/6/16 - 2025/6/20) - Xizhen Convertible Bond and Huachen Convertible Bond announced their issuance, and Hengshuai Convertible Bond was listed. Information about the underlying stocks, business, financial performance, production capacity, issuance scale, and use of funds of these three convertible bonds was provided [30][31][32] - The exchanges accepted applications from 2 companies (Naipu Mining Machinery and Jingda Co., Ltd.), and the general meetings of shareholders approved the applications of 2 companies (Benchuan Intelligence and Maiwei Co., Ltd.). There were no new companies approved for registration by the exchanges, passed by the listing committee, or with board proposals [34] - As of now, there are 78 convertible bonds awaiting issuance, with a total scale of 125.18 billion yuan. Among them, 6 have been approved for registration, with a total scale of 13.45 billion yuan, and 4 have passed the listing committee, with a total scale of 2.93 billion yuan [34] Future Week (2025/6/23 - 2025/6/27) - As of the announcement on June 20, there are no convertible bonds announced for issuance or listing in the coming week [33]