Report Summary 1. Industry Investment Rating - Not provided in the given content. 2. Core Viewpoints - As of August 8, the duration strategy was neutral, with medium - long - term duration portfolios performing slightly better than dumbbell - shaped ones. Long - term allocation sentiment was low, as the excess returns of ultra - long - term strategies were generally negative, and the willingness to extend duration was not strong [2][12]. - The trading duration of mainstream varieties was marginally shortened. As of August 10, the weighted trading durations of urban investment bonds and industrial bonds decreased, and some financial bonds were at low historical levels [3][16]. - As of August 11, 2025, the valuation yields and spreads of private enterprise industrial bonds and real - estate bonds were generally higher than other varieties. Most non - financial and non - real - estate industrial bond yields declined compared to the previous week, and more than half of financial bond yields decreased [4][20]. - The number of ultra - long - term credit bond transactions significantly declined. From August 4 - 8, 2025, the combined number of transactions of urban investment bonds and industrial bonds with a term of 7 years and above dropped from 515 to 389. The yields of some bonds were changing, with the yield spread between the most active 7 - 10 - year industrial bonds and 20 - 30 - year treasury bonds narrowing [5][24]. - The increase of local government bond indices was less than that of treasury bonds of the same term. Last week, the 7 - 10 - year and over - 10 - year local government bond indices rose 0.09% and 0.01% respectively, underperforming treasury bonds of the same term but outperforming ultra - long - term credit bonds [6][27]. 3. Summary by Directory 3.1 Quantified Credit Strategy - As of August 8, the duration strategy was neutral. Medium - long - term duration portfolios had better performance, with return deviations from the benchmark within 4bp. The short - end sinking strategy of urban investment bonds had a negative deviation of over 5bp, and the excess returns of urban investment duration and dumbbell - shaped strategies were only 1.2bp and 0.2bp respectively. Ultra - long - term strategies had negative excess returns, especially for industrial and secondary ultra - long - term combinations, with readings below - 10bp [2][12]. 3.2 Variety Duration Tracking - As of August 10, the weighted trading durations of urban investment bonds and industrial bonds were 2.00 years and 2.60 years respectively. Among commercial bank bonds, the weighted average trading durations of secondary capital bonds, bank perpetual bonds, and general commercial financial bonds were 4.20 years, 3.48 years, and 3.13 years respectively, with bank perpetual bonds at a low historical level. Among other financial bonds, the durations of securities company bonds, securities sub - bonds, insurance company bonds, and leasing company bonds were 1.54 years, 2.17 years, 2.71 years, and 1.37 years respectively, with some at low historical quantiles and leasing company bonds at a high historical quantile [3][16]. 3.3 Coupon Asset Heat Map - As of August 11, 2025, private enterprise industrial bonds and real - estate bonds had higher valuation yields and spreads. Non - financial and non - real - estate industrial bond yields mostly declined compared to the previous week. Among financial bonds, leasing company bonds, urban and rural commercial bank capital replenishment tools, and securities sub - bonds had higher valuation yields and spreads. More than half of financial bond yields decreased. The interest rates of general commercial financial bonds fluctuated within a narrow range (no more than 1.5BP), and the yields of some 1 - year - within urban and rural commercial bank perpetual bonds decreased significantly, with the yield of 1 - year - within urban commercial bank perpetual bonds dropping by more than 5BP [4][20]. 3.4 Ultra - long - term Credit Bond Micro - tracking - Since July, the lack of floating profits in ultra - long - term credit bonds and the difficulty in controlling drawdowns led to a significant decrease in trading demand. From August 4 - 8, 2025, the combined number of transactions of urban investment bonds and industrial bonds with a term of 7 years and above decreased from 515 to 389. The average trading yield of the most active 7 - 10 - year industrial bonds was marginally repaired, and the spread with 20 - 30 - year treasury bonds narrowed to 22bp, but the yields of over - 10 - year general credit bonds were still rising [5][24]. 3.5 Local Government Bond Supply and Trading Tracking - Last week, the 7 - 10 - year and over - 10 - year local government bond indices rose 0.09% and 0.01% respectively, less than the increase of treasury bonds of the same term but better than the overall decline of ultra - long - term credit bonds [6][27].

Investment Rating for the Reported Industry - There is no information provided about the industry investment rating in the given content. Core Viewpoints of the Report - As of July 4, the heavy - position strategy for secondary capital bonds has significantly recovered, with the weekly returns of the bullet - type and industrial ultra - long - term strategies for secondary bonds approaching their highest levels in the past three months[2][12]. - The average return of the heavy - position strategy for ultra - long - term bonds has rebounded by about 38bp, and the cumulative returns of the industrial and secondary ultra - long - term strategies in the second quarter were lower than that of the urban investment ultra - long - term strategy, but this week's returns are almost at the highest level in the past three months[2][12]. - The duration of general commercial financial bonds has rapidly lengthened from 2.1 years last week to 3.3 years this week, approaching the historical high[3][14]. - As of July 7, 2025, compared with last week, the yields of non - financial and non - real - estate industrial bonds have all declined, with short - term varieties experiencing a larger decline in returns. Real - estate bond yields also mainly declined, especially private - enterprise bonds within 2 years[4][18]. - The activity of ultra - long - term credit bonds has basically remained stable, with high trading enthusiasm this week. The weekly trading volume of industrial bonds with a term of 7 years and above is basically the same as last week, and the weekly trading volume of urban investment bonds with a term of 7 - 10 years has returned to over 100 transactions[5][22]. - In July, the supply rhythm of local government bonds in each province has accelerated. For example, the planned issuance scale of Hunan and Sichuan is over 10 billion. Local government bonds have high coupon rates and long - term configuration value in the current low - interest - rate environment[6][25]. Summary by Relevant Catalogs Quantified Credit Strategy - As of July 4, the heavy - position strategy for secondary capital bonds has significantly recovered, with the average return of the credit - style secondary capital bond heavy - position portfolio rising by 28bp to around 0.27%. The ultra - long - term strategy's excess return has rebounded to the level in early June, and the duration strategy has rotated from urban investment bonds to industrial and secondary bonds[2][12]. Variety Duration Tracking - As of July 4, the weighted average trading terms of urban investment bonds and industrial bonds are 2.27 years and 3.27 years respectively, both at over 90% quantile levels since March 2021. Among commercial bank bonds, the weighted average trading terms of secondary capital bonds, bank perpetual bonds, and general commercial financial bonds are 4.28 years, 3.73 years, and 3.27 years respectively. Among other financial bonds, the durations of securities company bonds, securities sub - bonds, insurance company bonds, and leasing company bonds are 1.52 years, 1.69 years, 3.33 years, and 1.37 years respectively[3][14]. Coupon Asset Heat Map - As of July 7, 2025, compared with last week, the yields of non - financial and non - real - estate industrial bonds have declined, with short - term private - enterprise non - perpetual bonds showing significant declines (19.6BP for 1 - 2 - year public bonds and 14.2BP for private bonds within 1 year). Real - estate bond yields also declined, and private - enterprise bonds within 2 years were more popular. Among financial bonds, the yield decline of commercial financial bonds was within 8BP, and 1 - 2 - year varieties performed better. Short - duration bank sub - bonds had a strong performance, with the yield of 1 - year joint - stock bank's perpetual and secondary bonds declining by nearly 13BP[4][18]. Ultra - long - term Credit Bond Micro - tracking - The activity of ultra - long - term credit bonds has basically remained stable. The weekly trading volume of industrial bonds with a term of 7 years and above is basically the same as last week, and the weekly trading volume of urban investment bonds with a term of 7 - 10 years has returned to over 100 transactions. The spread between the weekly average trading return of industrial bonds with a term of 7 years and above and the 20 - 30 - year treasury bonds has narrowed to about 25BP, lower than the lowest value in the long - bond market at the beginning of this year[5][22]. Local Government Bond Supply and Trading Tracking - In July, the supply rhythm of local government bonds in each province has accelerated. Hunan and Sichuan plan to issue over 10 billion each. Many provinces have issued new special bonds to support infrastructure, land storage, and payment of corporate accounts payable. The accelerated supply of local government bonds echoes the policy of front - loading fiscal efforts, fulfilling the dual tasks of stabilizing growth and debt reduction, and highlighting the high - coupon and long - duration configuration value in the current low - interest - rate environment[6][25].

Group 1: Quantitative Credit Strategy - The recent performance of perpetual bonds and broker bonds strategies has shown a high success rate as of May 9 [2] - Short-term strategies yielded limited excess returns, while mid to long-term strategies, excluding city investment duration and barbell strategies, showed positive excess returns [2][12] - Financial bonds and non-financial credit heavy strategies have widened the gap in cumulative excess returns over the past four weeks, particularly with increased yield elasticity in financial bond duration strategies [2][12] Group 2: Duration Tracking of Various Bonds - As of May 9, the weighted average transaction duration for city investment bonds and industrial bonds reached 2.09 years and 2.51 years respectively, both above the 90th percentile since March 2021 [3][15] - The weighted average transaction durations for secondary capital bonds, perpetual bonds, and general commercial bank bonds are 4.19 years, 3.59 years, and 2.30 years respectively [3][15] - Other financial bonds such as securities company bonds and insurance company bonds have varying durations, with some at historically low levels and others at high levels [3][15] Group 3: Yield Heatmap of Credit Assets - As of May 12, the valuation yield and spread of private enterprise real estate bonds are higher than other types of bonds [4][17] - Non-financial, non-real estate industrial bonds saw a yield decline of around 10 basis points, particularly in the one-year category [4][18] - Financial bonds with high valuation yields include leasing company bonds and securities subordinate bonds, with significant yield declines noted in certain categories [4][18] Group 4: Long-term Credit Bond Insights - The market shows weak willingness to increase long-duration credit bonds, despite the approaching low yields of government bonds and short-term assets [5][20] - Transaction volumes for mainstream long-duration industrial bonds have increased but remain below levels seen in late March, indicating insufficient trading sentiment to support long-term bond markets [5][20] - The recent week saw a decline in the transaction share of long-term credit bonds, falling below 70% [5][20] Group 5: Local Government Bond Supply and Trading Insights - The average coupon rates for 10-year, 20-year, and 30-year local government bonds are 1.79%, 2.07%, and 2.05% respectively, with varying spreads [6][23] - The liquidity in the interbank market remains reasonably ample, with moderate issuance volumes of local bonds, leading to stable supply pressure [6][23] - Long-term spreads continue to widen, but adjustments have led to a more stable outlook [6][23]