1. Report Industry Investment Rating No information provided in the given content. 2. Core Views of the Report - During the period from March 9th to March 15th, most of the issuance guidance rates announced by the National Association of Financial Market Institutional Investors (NAFMII) declined, with an overall change range of -4 BP to 0 BP. The issuance scale of credit bonds increased month - on - month, with enterprise bonds remaining at zero issuance and the issuance amounts of other varieties increasing. The net financing of credit bonds increased month - on - month, with the net financing of corporate bonds and commercial paper decreasing, and the net financing of other varieties increasing. The net financing of enterprise bonds was negative, while that of other varieties was positive [1][54]. - In the secondary market, the trading volume of credit bonds decreased month - on - month. The trading volumes of enterprise bonds, medium - term notes, and private placement notes increased, while those of corporate bonds and commercial paper decreased. The yields of credit bonds showed differentiation, with short - term yields declining and long - term yields rising. Most credit spreads widened. In terms of quantiles, most spreads were at historical lows, and the 7 - year variety had a relatively higher quantile [1][54]. - From the perspective of absolute return, the relatively strong allocation demand will drive the credit bond market to continue its recovery. Although fluctuations and adjustments are inevitable under the influence of multiple factors, the conditions for a full - scale bear market in credit bonds are still insufficient. In the long run, yields are still in a downward channel, and the idea of increasing allocation during adjustments is still feasible. From the perspective of relative return, the compression space of credit spreads at all tenors is insufficient at present, and the cost - effectiveness of most varieties for allocation is not high. The coupon strategy in the current allocation should be cautious, while the trading strategy can be moderately optimistic. The key to bond selection is to focus on the trend of interest - rate bonds and the coupon value of individual bonds. It is necessary to coordinate and transform allocation and trading strategies according to the market trend. In the future, attention should be paid to the effectiveness of growth - stabilizing policies, the impact of the equity market on the bond market, and the influence of changes in the capital market and supply - demand pattern on market sentiment [1][54]. - The central and local governments continue to optimize real - estate policies, which have played a positive role in stabilizing the real - estate market. The "Government Work Report" signals that the new real - estate development model has entered a new stage of institutional and systematic implementation. For real - estate bonds, the sales recovery process will have a significant impact on bond valuations. Investors with higher risk tolerance can consider early layout, focusing on enterprises with outstanding new financing and sales recovery. The focus of allocation should be on central and local state - owned enterprises with stable historical valuations and excellent performance, as well as high - quality private enterprise bonds with strong guarantees. Longer durations can be used to increase returns, and trading opportunities from the valuation repair of oversold real - estate enterprise bonds can also be appropriately explored [2][59]. - For urban investment bonds, under the principle of coordinating development and security, the probability of default is very low, and they can still be a key allocation variety for credit bonds. The debt resolution has achieved remarkable results, and the reform and transformation of financing platforms are in the final stage. It is expected that financing platforms will fully withdraw by the end of June 2026. The next step is to focus on resolving their operating debt risks, and credit qualifications will return to fundamental pricing. During this process, opportunities for the reform and transformation of "entity - type" financing platforms can be focused on [3][60]. 3. Summary by Directory 3.1 Primary Market Situation 3.1.1 Issuance and Maturity Scale - From March 9th to March 15th, a total of 422 credit bonds of enterprise bonds, corporate bonds, medium - term notes, commercial paper, and private placement notes were issued, with a total issuance amount of 336.988 billion yuan, a month - on - month increase of 28.09%. The net financing of credit bonds was 81.327 billion yuan, a month - on - month increase of 1.933 billion yuan [12]. - By variety, enterprise bonds had zero issuance, with a net financing of - 10.782 billion yuan, a month - on - month increase of 2.067 billion yuan. Corporate bonds had 155 issuances, with an issuance amount of 115.893 billion yuan, a month - on - month increase of 13.94%, and a net financing of 16.641 billion yuan, a month - on - month decrease of 30.029 billion yuan. Medium - term notes had 145 issuances, with an issuance amount of 120.004 billion yuan, a month - on - month increase of 60.58%, and a net financing of 59.982 billion yuan, a month - on - month increase of 48.147 billion yuan. Commercial paper had 91 issuances, with an issuance amount of 81.307 billion yuan, a month - on - month increase of 18.79%, and a net financing of 10.187 billion yuan, a month - on - month decrease of 18.833 billion yuan. Private placement notes had 31 issuances, with an issuance amount of 19.784 billion yuan, a month - on - month increase of 8.76%, and a net financing of 5.299 billion yuan, a month - on - month increase of 0.581 billion yuan [13]. 3.1.2 Issuance Interest Rate - Most of the issuance guidance rates announced by the NAFMII declined, with an overall change range of -4 BP to 0 BP. By tenor, the 1 - year variety had an interest rate change range of -4 BP to 0 BP, the 3 - year variety had a change range of -3 BP to -1 BP, the 5 - year variety had a change range of -4 BP to 0 BP, and the 7 - year variety had a change range of -2 BP to 0 BP. By rating, the key AAA - rated and AAA - rated varieties had an interest rate change range of -2 BP to 0 BP, the AA + - rated variety had a change range of -4 BP to -1 BP, the AA - rated variety had a change range of -4 BP to -1 BP, and the AA - - rated variety had a change range of -4 BP to 0 BP [15]. 3.2 Secondary Market Situation 3.2.1 Market Trading Volume - From March 9th to March 15th, the total trading volume of credit bonds was 890.25 billion yuan, a month - on - month decrease of 2.81%. The trading volumes of enterprise bonds, corporate bonds, medium - term notes, commercial paper, and private placement notes were 18.385 billion yuan, 360.755 billion yuan, 333.627 billion yuan, 122.159 billion yuan, and 55.324 billion yuan respectively. The trading volume of credit bonds decreased month - on - month, with the trading volumes of enterprise bonds, medium - term notes, and private placement notes increasing, and those of corporate bonds and commercial paper decreasing [17]. 3.2.2 Credit Spreads - In medium - and short - term notes, most credit spreads widened. Specifically, the 1 - year credit spread narrowed, while the 3 - year and 5 - year credit spreads widened. For the 7 - year variety, the AAA - rated credit spread widened, and the AA + - rated spread narrowed [20]. - In enterprise bonds, most credit spreads widened. Specifically, the 1 - year AA - rated and below varieties had narrowing credit spreads, while the rest had widening spreads [27]. - In urban investment bonds, all credit spreads widened [35]. 3.2.3 Term Spreads and Rating Spreads - For AA + medium - and short - term notes, the 3Y - 1Y term spread widened by 1.71 BP, the 5Y - 3Y spread widened by 1.81 BP, and the 7Y - 3Y spread narrowed by 0.58 BP. Currently, the 3Y - 1Y spread is at a relatively low historical quantile (24.1%), the 5Y - 3Y spread is at 24.3%, and the 7Y - 3Y spread is at 32.4%. In terms of rating spreads, the 3 - year (AA - )-(AAA) spread narrowed by 1.00 BP, the (AA)-(AAA) spread narrowed by 2.00 BP, and the (AA + )-(AAA) spread narrowed by 1.00 BP. Currently, the (AA - )-(AAA) spread is at a historical low (1.4%), the (AA)-(AAA) spread is at 7.3%, and the (AA + )-(AAA) spread is at 1.5% [39]. - For AA + enterprise bonds, the 3Y - 1Y term spread widened by 1.55 BP, the 5Y - 3Y spread widened by 2.67 BP, and the 7Y - 3Y spread widened by 1.08 BP. Currently, the 3Y - 1Y spread is at 25.8%, the 5Y - 3Y spread is at 18.9%, and the 7Y - 3Y spread is at 27.6%. In terms of rating spreads, the 3 - year (AA - )-(AAA) spread widened by 1.00 BP, the (AA)-(AAA) spread remained unchanged, and the (AA + )-(AAA) spread widened by 1.00 BP. Currently, the (AA - )-(AAA) spread is at 0.3%, the (AA)-(AAA) spread is at 7.5%, and the (AA + )-(AAA) spread is at 7.9% [44]. - For AA + urban investment bonds, the 3Y - 1Y term spread widened by 1.15 BP, the 5Y - 3Y spread widened by 2.03 BP, and the 7Y - 3Y spread widened by 1.32 BP. Currently, the 3Y - 1Y spread is at 22.4%, the 5Y - 3Y spread is at 15.0%, and the 7Y - 3Y spread is at 37.5%. In terms of rating spreads, the 3 - year (AA - )-(AAA) spread narrowed by 1.00 BP, the (AA)-(AAA) spread widened by 1.00 BP, and the (AA + )-(AAA) spread remained unchanged. Currently, the (AA - )-(AAA) spread is at 3.1%, the (AA)-(AAA) spread is at 4.3%, and the (AA + )-(AAA) spread is at 2.3% [47]. 3.3 Credit Rating Adjustment and Default Bond Statistics 3.3.1 Credit Rating Adjustment Statistics - From March 9th to March 15th, a total of 2 companies had their ratings (including outlooks) adjusted, with 1 downgrade and 1 upgrade [50]. 3.3.2 Default and Extension Bond Statistics - From March 9th to March 15th, there were no defaults or extensions of credit bonds issued by any issuer [53]. 3.4 Investment Views - The views are consistent with the core views mentioned above, emphasizing the market trends of credit bonds, real - estate bonds, and urban investment bonds, as well as corresponding investment strategies and points to watch [1][54].

Group 1 - The report indicates that the short to medium-term credit valuation remains resilient despite market fluctuations, with a focus on short-term interest-bearing instruments due to a lack of clear opportunities in the medium to long-term [6][9][11] - The credit bond market is experiencing pressure from potential financial product rebalancing as the end of the first quarter approaches, which may weaken demand for medium to long-term bonds [6][9] - The report suggests a defensive strategy, recommending a focus on bonds with maturities within 3 years, anticipating that growth in financial product scales post-quarter will strengthen short-term demand [6][9] Group 2 - The weekly review shows that credit bond issuance remains high, with a net financing amount of 77.4 billion yuan, despite an increase in repayment amounts [16][17] - The average coupon rates for AAA and AA+ rated bonds decreased by 18 basis points and 19 basis points respectively, indicating a downward trend in financing costs [17][19] - The secondary market saw narrow fluctuations in credit bond valuations, with short-term credit spreads remaining stable while medium to long-term spreads widened [21][23] Group 3 - The report highlights that the average credit spread for local government bonds widened by 1 basis point, with Heilongjiang showing a significant increase of 2 basis points [27][29] - In the real estate sector, credit spreads widened by 8 basis points, indicating increased risk perception in this industry [29]

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - Continue to be optimistic about short - to medium - term credit and focus on opportunities in industrial bond exploration. In March 2026, it is difficult for bond market interest rates to break through and decline, and the interest rate trading space is limited. Attention is expected to focus on short - to medium - term coupon - bearing bonds with stronger certainty [5][8]. 3. Summary According to the Directory 3.1 Credit Bond Weekly View - **Investment Strategy**: - **Urban Investment Bonds**: In February, the fundamentals across the country changed little, with few舆情 disturbances but some undercurrents in certain areas. The mainstream market participation range was relatively stable, and there was no obvious contraction in trading. It is recommended to maintain the configuration of about 3 - year bonds [5][8]. - **Industrial Bonds**: In February, commodity prices rose significantly, especially in the chemical sector, and the hype in the traditional energy markets such as coal increased at the end of the month. In bond investment, the non - ferrous sector has consistently low valuations, and Shandong Hongqiao in the aluminum sector is one of the few remaining medium - valuation entities. The market's acceptance of high - quality private enterprises has increased. High - coupon bonds in the chemical sector are mainly concentrated in private enterprises, and private large - scale refining may benefit. The traditional energy markets such as coal have attracted more attention, but previous exploration is relatively sufficient, and it is not recommended to further expand the scope of sinking for medium - to high - valuation entities. Some new perpetual bonds with a spread of over 30bp and relatively strong qualifications are suitable for institutions with stable liability ends [5][8]. 3.2 Credit Bond Weekly Review 3.2.1 Negative Information Monitoring - There were no bond defaults, overdue payments, downgrades of corporate or bond ratings, or overseas rating downgrades from March 2, 2026, to March 8, 2026. However, there were significant negative events involving several companies, including China Fortune Land Development Co., Ltd., Shanghai Shimao Co., Ltd., and others, mainly related to debt repayment issues, regulatory warnings, and information disclosure violations [10][11][12]. 3.2.2 Primary Issuance - The primary issuance rhythm of credit bonds last week returned to the pre - holiday average level, with a net inflow of 9.72 billion yuan. From March 2 to March 8, 2026, the primary issuance of credit bonds was 270.6 billion yuan, and the total repayment was 173.4 billion yuan. The financing cost of each rating increased significantly compared to the previous week, with the average coupon rates of AAA and AA+ grades rising by 27bp and 45bp respectively, slightly higher than the pre - holiday level. No bonds were cancelled or postponed for issuance last week [13][14]. 3.2.3 Secondary Trading - The valuations of credit bonds of all ratings and tenors decreased by 3bp last week. The risk - free interest rate showed a bullish steepening trend, with the short - end credit spreads widening passively and the long - end narrowing slightly. The 3Y - 1Y and 5Y - 1Y term spreads of each rating were basically flat, except for the 5Y - 1Y spread of the AA+/AA grades, which narrowed by 1bp. The AA - AAA grade spread was flat, except for the 5Y spread, which narrowed by 1bp. The average credit spreads of urban investment bonds in each province widened by 1bp, and the median spreads of some medium - to high - valuation provinces widened by 3bp. The credit spreads of industrial bonds in each industry also generally widened by 1bp, except for the real estate industry, where the spread widened by 16bp. The weekly turnover rate increased by 0.89pct to 1.86%. The issuers of credit bonds with a discount of over 10% in trading last week were Country Garden and Vanke. Among individual entities, the urban investment bonds with the largest changes in spreads were scattered, and among the industrial bonds, the top five entities with the largest spread - widening were mainly real estate enterprises, including Rongqiao, Greenland, CIFI, and Xinyuan [16][21][24][25][27].

Fixed Income Research - The overall yield of credit bonds has decreased, with most issuance guidance rates down by 6 to 1 basis points. The issuance scale of credit bonds in February decreased month-on-month due to holiday factors, with net financing amounts varying across different types of bonds [3] - In the secondary market, the transaction scale of credit bonds also saw a month-on-month decline, but the average yield of credit bonds improved, indicating a potential recovery trend despite some fluctuations expected [3] - The report suggests that the insufficient supply and relatively strong demand for allocation will continue to support the recovery of credit bonds, with a long-term downward trend in yields anticipated [3] Real Estate Policy - The Shanghai government has implemented new policies to optimize the real estate market, including easing purchase restrictions and increasing public housing loan limits, effective from February 26, 2026. These measures aim to promote a stable and healthy development of the real estate market [4][5] - The ongoing optimization of real estate policies is expected to support the recovery of the market, with a focus on balancing risk and return in investment strategies, particularly in real estate bonds [5] Company Research: Zhongtung High-tech (000657) - Zhongtung High-tech, a subsidiary of China Minmetals, is set to benefit from the injection of high-quality tungsten resources starting in 2024, which is expected to significantly enhance its profit scale and profitability [10] - The tungsten industry is characterized by strong supply rigidity and supported demand, with China holding over 80% of global tungsten supply. The report highlights the strategic importance of tungsten in high-tech and defense sectors, indicating a positive outlook for the industry [10] - The company is also expanding its production capacity in PCB micro-drills, with significant growth expected due to the increasing demand driven by AI advancements [11]

Group 1: Macro Insights - By 2025, China's outbound direct investment is expected to increase, with more small and medium-sized enterprises venturing abroad. The light manufacturing and home appliance sectors are projected to have a high proportion of overseas revenue [2] - Industries with high exposure to foreign markets, such as light manufacturing and automotive, are expected to perform better in terms of stock prices. The correlation between overseas gross margins and revenue structure indicates that rising overseas gross margins will drive business expansion [2] - Early-stage industries for going abroad include machinery, basic chemicals, and power equipment/home appliances, while industries accelerating their overseas expansion include electronics, light manufacturing, and automotive [2] Group 2: Company Research - Qualcomm's FY26Q1 performance met expectations, but the guidance for FY26Q2 fell short due to memory shortages and price increases negatively impacting downstream demand. The forecast for GAAP net profit for FY2026-2028 is $11.5 billion, $12.5 billion, and $13 billion, respectively, with corresponding PE ratios of 14X, 13X, and 12X [4] - Chao Hong Ji has focused on product research and innovation, transitioning from a channel-driven to a product-driven approach. The company is expected to achieve net profits of 483 million, 700 million, and 838 million yuan from 2025 to 2027, with EPS of 0.54, 0.79, and 0.94 yuan, respectively, and a target price of 16.77 yuan [5] - Yum China reported Q4 2025 revenue of $2.823 billion, a year-on-year increase of 9%, and operating profit of $187 million, up 25%. The same-store sales growth accelerated, and the company has revised its net profit forecasts for 2026-2027 to $1.027 billion and $1.109 billion, respectively [6]

Core Viewpoint - The credit bond market has shown a strong trend since January 2026, characterized by declining yields, significant compression of spreads, and a preference for medium to long-term bonds. However, as February approaches, the market is expected to transition from a strong upward trend to a more complex environment influenced by both bullish and bearish factors [1][4]. Group 1: Market Performance - Since January 2026, the credit bond market has experienced a robust performance with a total issuance of 445 credit bonds amounting to 470.37 billion yuan, reflecting a 21.90% increase compared to the previous period [2]. - The average issuance coupon rate for credit bonds has decreased to 2.09%, with specific rates for industrial bonds at 2.01%, urban investment bonds at 2.23%, and financial bonds at 1.83%, indicating a continued easing in the primary market financing environment [2]. - In the secondary market, yields have generally declined, and spreads have significantly compressed, with the 5-year credit spreads narrowing to their lowest levels since 2025 [2]. Group 2: Influencing Factors - The strong performance of the credit bond market is attributed to multiple factors, including a supportive liquidity environment, institutional behavior, and favorable policies. The overall liquidity remains ample, bolstered by the central bank's clear stance on maintaining liquidity [2][3]. - The demand for credit bonds is expected to remain strong in the first quarter of 2026, driven by the large scale of open-ended bond funds and the "opening red" of wealth management products, which will likely support credit bond configurations [3]. Group 3: Future Outlook - As February 2026 approaches, the credit bond market is anticipated to face a more complex environment with both bullish and bearish factors at play. The liquidity support, ongoing demand, and seasonal factors are expected to provide a favorable backdrop for the market [4][5]. - However, potential bearish factors include supply pressures, equity market disturbances, and limited room for further compression of credit spreads, which could lead to valuation adjustments, particularly for lower-rated credit bonds [5][6]. Group 4: Investment Strategy - The investment strategy for February 2026 should focus on maintaining a neutral and prudent stance, controlling risks associated with market fluctuations, and avoiding excessive chasing of high prices [6][7]. - It is recommended to extend the duration slightly, focusing on 3 to 5-year bonds, while being cautious of overly long-duration bonds to mitigate valuation risks from interest rate fluctuations [6][7]. - Investors should seek structural opportunities by identifying high-value segments such as perpetual bonds, broker bonds, and innovation bonds, while also considering the demand for high-rated bonds supported by open-ended bond funds [7].

Core Insights - The 2026 investment outlook presented by Xingyin Fund highlights a landscape of opportunities and challenges, emphasizing a structural differentiation that nurtures long-term value [1] Equity Market - The equity market in 2026 is characterized by both opportunities and challenges, with global high volatility and domestic transitions between old and new driving forces [2] - Key investment themes include the extension of AI investments from TMT to broader sectors like power equipment, non-ferrous metals, and intelligent driving, alongside emerging areas like commercial aerospace [2] - The consumer healthcare sector has reached an attractive valuation after a prolonged adjustment, and Hong Kong stocks may see valuation recovery amid expectations of U.S. Federal Reserve rate cuts [2] - Investment principles emphasized include maintaining a "cyclical mindset, competitive advantage, safety margin, and priority on odds" to identify high-cost performance assets in a complex market [2] Consumer Sector - The consumer sector has entered a new era characterized by "total pressure and deep structural differentiation," driven by new demographics and demands [3] - Key trends are defined by three consumer groups: Generation Z, the elderly, and the new middle class, leading to three main investment lines: the experience economy focused on "emotional value," growth in "health and aging," and the integration of "AI and consumption" [3] - The previous consumer cycle has ended, with future leading companies emerging from current structural waves [3] Technology Investment - Technology development continues to evolve around three core directions: enhancing efficiency, improving life quality, and ensuring safety [4] - AI remains a central driving force for 2026, but investors are encouraged to identify truly capable companies beyond AI, focusing on areas like nuclear fusion, photolithography, brain-machine interfaces, quantum technology, and commercial aerospace [4] - Genuine investment opportunities lie with companies that address fundamental human needs and achieve key technological breakthroughs [4] Fixed Income Market - The fixed income market outlook for 2026 is optimistic, contrasting with the "weak operation and structural differentiation" of 2025 [5] - Market pricing has returned to rationality, with excessive rate cut expectations being digested, and a positive shift in supply-demand dynamics is anticipated [5] - Credit bonds are highlighted as a favored direction for 2026, supported by a trend of shrinking supply in urban investment bonds and the expansion of credit bond ETFs [5] - A strategic framework of "credit bonds as a shield and interest rate bonds as a spear" is recommended, focusing on mid-to-high-grade credit bonds for stable yields while leveraging interest rate bonds for trading opportunities [5] Overall Market Perspective - The 2026 market will unfold amidst complexity and structural opportunities, necessitating a return to fundamentals and in-depth research to identify and seize long-term value opportunities [6] - Xingyin Fund's strategy meeting showcased its investment philosophy based on deep research, diversified layouts, and rational responses to market dynamics, aiming to explore and capture opportunities in the evolving market landscape [6]

1. Report Industry Investment Rating No information about the industry investment rating is provided in the given content. 2. Core Views of the Report - Interest rates have a "range", while credit has no clear anchor, and the coupon is more certain. Compared with the yield lows in the second half of last year, the credit of over 3y has not fully recovered, with Tier 2 and perpetual bonds performing better than urban investment bonds [3]. - Compared with the time when the draft of the new regulations on public - fund sales solicitation was released in early September last year, the recovery of Tier 2 and perpetual bonds, especially those over 3y, has been mediocre. In the previous unclear bond - market outlook, the strategy of extending duration for trading - type bonds was not favored [3]. - The supply pressure is not significant. Due to the Spring Festival factor, the issuance of credit bonds generally slows down in January and February. As of January 23, the issuance of non - financial credit bonds was 891.4 billion yuan, which is not large compared with previous years [3]. - The opening of amortized cost bond funds can still be exploited, which is beneficial for credit bonds with maturities of less than 2y and more than 5y. The amortized cost bond funds opened 257.5 billion yuan in the fourth quarter of last year and 264.5 billion yuan in the first quarter of this year. The products' closed - end periods are mainly over 5y and under 2y, which will continue to create new allocation demand for credit bonds and support the long - position market of credit bonds [3]. 3. Summary According to Relevant Catalogs 3.1 Strong Credit Pattern Continues, High Demand for 3 - 5y and Tier 2/Perpetual Bonds - Since the beginning of the year, the credit spread has been passively compressed, and this situation continued last week. The 3 - 5y maturity performed the best. The yields of 3 - 5Y medium - term notes decreased by about 4 - 7bp; the yields of low - grade 3 - 4Y urban investment bonds decreased by about 5 - 10bp; the yields of 3 - 4Y Tier 2 and perpetual bonds decreased by about 3 - 4bp [9]. - From the trading indicators, the credit - bond market is booming. The average trading duration of credit bonds has slightly increased to 2.54 years, the TKN trading proportion has continuously risen from 54.7% in the second week of this year to around 73.4%, and the low - valuation trading proportion has also risen above 70% [17]. - The trading volume of Tier 2 and perpetual bonds has reached the highest level since September last year, showing higher popularity than urban investment bonds [18]. 3.2 Can the Strong Credit Pattern Continue? 3.2.1 Interest Rates Have a Range, Credit Is More Certain - Compared with interest rates, as interest rates are approaching the "lower limit", the downward rhythm of interest rates may slow down in the short term without other positive catalysts. Credit bonds have no absolute reasonable range, and the market still lacks confidence in long - term interest rates. Therefore, in the absence of a liquidity shock in the bond market, the coupon of credit bonds is more certain [20]. - Comparing with four time points (the end of last year, the yield lows of credit bonds in November and July last year, and the time when the draft of the new regulations on public - fund sales solicitation was released in early September last year), the performance of medium - and long - term credit bonds has been outstanding this year, especially the Tier 2 and perpetual bonds have a clear catch - up market. Compared with the yield lows in November and July, the yields of long - term credit bonds still have room to decline, with Tier 2 and perpetual bonds performing better than urban investment bonds, while the short - end yields are already close to or lower than the corresponding points [21]. 3.2.2 The Impact of the New Regulations on Public - Fund Sales Has Not Been Fully Recovered - After the release of the draft of the new regulations in September last year, the market was generally worried that the funds of institutions such as wealth management and bank self - operation would be affected by the redemption regulations in the future and would no longer participate in Tier 2 and perpetual bonds through public - funds. As a result, the price ratio between 5Y AAA - Tier 2 bonds and medium - term notes widened by nearly 20bp from September to December last year. - The implementation of the new regulations on public - fund sales rates at the beginning of this year was better than expected, and Tier 2 and perpetual bonds had a recovery market. The price ratio between 5Y AAA - Tier 2 bonds and medium - term notes compressed by 2.6bp, and the 3Y variety compressed by about 3.7bp. Overall, the recovery of Tier 2 and perpetual bonds has been mediocre, and they may continue to outperform in the future [23]. 3.2.3 The Supply Disturbance of Credit Is Not Significant - From the perspective of bond supply, the issuance of treasury bonds has increased significantly at the beginning of the year, and the primary supply pressure of the interest - rate bond market is greater than in previous years. To support the early implementation of fiscal policies, the issuance of government bonds may continue to increase in the last week of January and February. For credit bonds, due to the Spring Festival factor, the issuance generally slows down in January and February. As of January 23 this year, the issuance of non - financial credit bonds was 891.4 billion yuan, which is not large compared with previous years. Compared with interest - rate bonds, the supply pressure of credit bonds is smaller, which is likely to form a strong credit pattern [30]. 3.2.4 Exploiting the Opening of Amortized Cost Bond Funds - In the first quarter, a large number of amortized cost bond funds entered the intensive opening period again. Calculated based on the fund scale disclosed in the fourth - quarter report of 2025, the scales entering the opening period in January, February, and March were 81.1 billion yuan, 59.4 billion yuan, and 124 billion yuan respectively, with a total of 264.5 billion yuan (compared with 257.5 billion yuan in the fourth quarter of last year). - After the opening period, the products tend to allocate bonds with remaining maturities close to their closed - end periods. The closed - end periods of the products entering the opening period in the first quarter are mainly over 5y and under 2y, with scales of 129.7 billion yuan and 78.1 billion yuan respectively. - The re - allocation of amortized cost bond funds in the fourth quarter of last year was mainly concentrated in credit bonds, and this trend is expected to continue. On the one hand, it enhances the certainty of short - term credit, and on the other hand, it promotes the yields of long - term credit to continue to decline. Since last year, the long - term interest - rate game has been difficult, and the investment income and holding experience of interest - rate bond funds have been inferior to those of credit - bond funds. Therefore, amortized cost bond funds are likely to overweight credit bonds [34]. 3.3 How to View Institutional Behavior - Last week, insurance institutions increased their purchases of general - credit bonds, with a total net purchase of 7.6 billion yuan, mainly increasing the allocation of general - credit bonds with maturities under 3Y, with a new net purchase of 4 billion yuan. The allocation of Tier 2 and perpetual bonds decreased, but the purchase of 5 - 10Y Tier 2 and perpetual bonds increased [38]. - Funds also increased their allocation of general - credit bonds, with a total net purchase of 42.3 billion yuan last week, a month - on - month increase of 11.3 billion yuan. The purchase duration has been slightly extended, with a slight increase in the allocation of 3 - 5Y varieties, and the net purchase of 5 - 10Y varieties turned positive for the first time this year. In terms of Tier 2 and perpetual bonds, funds increased their holdings by 63.6 billion yuan last week, a month - on - month increase of 32.4 billion yuan, mainly increasing their holdings of 3 - 5Y varieties [40]. - The scale of wealth management increased compared with last week. As of January 18, the scale of bank wealth management was 31.57 trillion yuan, remaining basically flat month - on - month. Wealth management increased its holdings of general - credit bonds by 4.5 billion yuan, but the increase was lower than last week. Wealth management changed from net selling to net buying of Tier 2 and perpetual bonds, mainly increasing the allocation of varieties with maturities under 1Y [42][44]. 3.4 Primary - Market Tracking: Increased Supply of Industrial Bonds and Other Financial Bonds - From January 19 to 25 last week, urban investment bonds still had a net outflow, with a net financing of - 25.4 billion yuan, and the net outflow scale decreased. The supply of industrial bonds increased, with a weekly net financing of 133.7 billion yuan [47]. - By province, the top three regions in terms of net financing of urban investment bonds this year are Jiangsu (10.1 billion yuan), Beijing (6.8 billion yuan), and Guangdong (6.7 billion yuan). The top three regions with net outflows are Tianjin (- 7.1 billion yuan), Chongqing (- 5.3 billion yuan), and Hunan (- 4.7 billion yuan) [49]. - By industry, the top three industries in terms of net financing of industrial bonds this week are Building Decoration (19 billion yuan), Food and Beverage (14.7 billion yuan), and Public Utilities (13.3 billion yuan) [51]. - This month, the weighted average issuance duration of urban investment bonds has extended to 3.57 years, while that of industrial bonds has shortened to 1.86 years, and the issuance proportion of bonds with maturities over 5y has significantly decreased. The primary - market issuance sentiment of urban investment bonds has significantly improved, with the proportion of full - field multiples above 3 times increasing to 56%, a month - on - month increase of 14pct. The proportion of full - field multiples above 3 times in the issuance of industrial bonds increased to 22% [53][54]. - Two industrial bonds were postponed for issuance this week, with a total postponed issuance scale of 900 million yuan [57]. 3.5 Secondary - Market Tracking: Significant Increase in the Trading Proportion of 3 - 5y Tier 2 and Perpetual Bonds - The trading proportion of urban investment bonds with short maturities under 1y increased by 1pct compared with last week, that of industrial bonds increased by 3pct month - on - month, and that of Tier 2 and perpetual bonds decreased by 2pct month - on - month, but the trading proportion of 3 - 5y increased by 11pct month - on - month [60]. - This week, the trading proportion of Tier 2 and perpetual bonds with an implied rating of AA+ continued to increase. The trading proportion of urban investment bonds with a rating of AA(2) and below decreased by 1pct month - on - month compared with last week, that of industrial bonds with a rating of AA and below remained flat month - on - month, and that of Tier 2 and perpetual bonds with a rating of AA+ increased by 5pct month - on - month [60].

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - Last week, long - term bonds in the bond market performed well, with trading sentiment significantly boosted. The main driving factors were central bank fund support and stock market consolidation. The 30 - year bond had an independent market. Medium - and long - term credit bonds continued to generate excess returns. The yield curve showed a bull - flattening trend. Looking forward, the bond market is expected to fluctuate within a range, and long - term bond market continuation requires more catalysts [5][8]. - There is little difference in the short - and medium - term of credit bonds. The short - term can continue with carry trades. The 2 - 3 - year period is the current main focus for funds after liability - side repair, but it's difficult to find returns. In the medium - to long - term, there are some differences. The yield curve steepness of some 3 - 4 - year entities has increased, and there are convex points for some entities. The 5 - year and above ultra - long - term credit bonds are niche products, and institutions with stable liability sides can focus on coupon value [5][8]. - For Tier 2 and perpetual bonds, medium - and long - term ones performed well last week but faced increased profit - taking sentiment. The catch - up market this year may be near the end. There is still some space for 4 - 5 - year bonds, but valuation fluctuations may be large [5][9]. Summary by Related Catalogs 1 Credit Bond Weekly Viewpoint: Potential Convex Points in Medium - Term Credit Bonds - Long - term bonds in the bond market performed well last week. The main driving factors were central bank fund support and stock market consolidation. Medium - and long - term credit bonds continued to generate excess returns. The yield curve showed a bull - flattening trend. The bond market is expected to fluctuate within a range, and long - term bond market continuation requires more catalysts [5][8]. - Short - term credit bonds can continue with carry trades. The 2 - 3 - year period is the main focus for funds after liability - side repair but has limited returns. Some 3 - 4 - year entities have convex points, and 5 - year and above ultra - long - term credit bonds are suitable for institutions with stable liability sides [5][8]. - Medium - and long - term Tier 2 and perpetual bonds performed well last week but faced profit - taking. The catch - up market may end soon. There is space for 4 - 5 - year bonds but with large valuation fluctuations [5][9]. 2 Credit Bond Weekly Review: Comprehensive Credit Repair and Gradual Strengthening 2.1 Negative Information Monitoring - From January 19 to January 25, 2026, Sunshine City Group failed to pay the principal and interest of "H1 Yangcheng 01". Moody's downgraded the ratings of Dalian Wanda Commercial Management Group and related entities. Several companies had negative events such as debt defaults, explosions, and regulatory penalties [12][14][15]. 2.2 Primary Issuance: Net Financing Returns to Over 10 Billion, and Coupon Rates of High - Grade New Bonds Drop Significantly - From January 19 to January 25, 2026, the primary issuance of credit bonds was 331.4 billion yuan, with total repayment of 187.9 billion yuan, and net financing of 143.5 billion yuan. The number of cancelled or postponed bond issuances remained low. The average coupon rates of AAA and AA+ grades decreased by 21bp and increased by 3bp respectively [16][17]. 2.3 Secondary Trading: Positive Sentiment in Medium - and Long - Term Credit Bonds - Last week, the valuations of credit bonds across all grades and terms declined by about 3bp on average. The risk - free rate also decreased but with a smaller margin, and credit spreads narrowed slightly. The 3Y - 1Y and 5Y - 1Y term spreads of all grades narrowed by about 2bp on average, and the AA - AAA grade spread had narrow fluctuations. Provincial credit spreads of urban investment bonds narrowed by about 3bp on average, and industry spreads of industrial bonds also narrowed slightly, except for a 2bp widening in the real estate industry. The weekly turnover rate increased to 2.02%, and the issuers of the top - ten turnover bonds were mostly central and state - owned enterprises. Credit bonds of Country Garden and Vanke had discounts of over 10% in trading [19][24][29].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - During the period from January 12th to January 18th, 2026, the issuance guidance rates announced by the National Association of Financial Market Institutional Investors all declined, with an overall change range of -8 BP to -1 BP. The issuance scale of credit bonds increased month - on - month, but the net financing amount decreased due to the increase in the maturity scale. In the secondary market, the trading volume of credit bonds increased month - on - month, and most of the yields declined. The credit spreads of medium - and short - term notes and urban investment bonds were differentiated, while those of enterprise bonds mostly narrowed. In the long run, the yields of credit bonds are still in a downward channel, but one should be cautious when chasing high, and can increase positions during adjustments. One can implement a coupon strategy through credit sinking and extending the duration, and pay attention to the coordination and transformation of allocation and trading strategies [1][53]. - The central and local governments are continuously optimizing real estate policies, which play a positive role in stabilizing the real estate market. As the market stabilizes, risk - preferring funds can consider early deployment in real estate bonds, focusing on enterprises with outstanding new financing and sales performance. The allocation focus is on central and state - owned enterprises with stable historical valuations and high - quality private enterprise bonds with strong guarantees [2][55]. - Under the principle of coordinating development and security, the probability of urban investment bond default is very low, and it can still be a key allocation variety for credit bonds. One can pay attention to the reform and transformation opportunities of "entity - type" financing platforms, and the allocation strategy can prioritize short - to - medium - term credit sinking, while the trading strategy can choose to extend the duration of medium - and high - grade bonds [3][55]. 3. Summary According to Relevant Catalogs 3.1 Primary Market Situation 3.1.1 Issuance and Maturity Scale - From January 12th to January 18th, 2026, a total of 335 credit bonds were issued, with an issuance amount of 288.193 billion yuan, a month - on - month increase of 7.58%. The net financing amount was 34.34 billion yuan, a month - on - month decrease of 82.176 billion yuan. The issuance amounts of enterprise bonds, corporate bonds, and short - term financing bills increased, while those of medium - term notes and private placement notes decreased. The net financing amounts of all varieties decreased, with negative net financing for enterprise bonds, medium - term notes, and private placement notes, and positive net financing for corporate bonds and short - term financing bills [12]. 3.1.2 Issuance Interest Rates - The issuance guidance rates announced by the National Association of Financial Market Institutional Investors all declined, with an overall change range of -8 BP to -1 BP. By term, the 1 - year variety rate changed from -6 BP to -1 BP, the 3 - year variety from -8 BP to -1 BP, the 5 - year variety from -6 BP to -2 BP, and the 7 - year variety from -6 BP to -1 BP. By rating, the key AAA - grade and AAA - grade variety rates changed from -3 BP to -1 BP, the AA + - grade variety from -5 BP to -3 BP, the AA - grade variety from -6 BP to -3 BP, and the AA - - grade variety from -8 BP to -3 BP [13][15]. 3.2 Secondary Market Situation 3.2.1 Market Trading Volume - From January 12th to January 18th, 2026, the total trading volume of credit bonds was 931.702 billion yuan, a month - on - month increase of 9.52%. The trading volume of short - term financing bills decreased, while that of other varieties increased [16]. 3.2.2 Credit Spreads - For medium - and short - term notes, the credit spreads of each variety were differentiated. For enterprise bonds, most of the credit spreads narrowed. For urban investment bonds, the credit spreads were also differentiated [19][25][28]. 3.2.3 Term Spreads and Rating Spreads - For AA + medium - and short - term notes, the 3Y - 1Y, 5Y - 3Y, and 7Y - 3Y term spreads all narrowed, and most of the 3 - year rating spreads also narrowed. For AA + enterprise bonds, the term spreads mostly narrowed, and the 3 - year rating spreads all narrowed. For AA + urban investment bonds, the 3Y - 1Y and 7Y - 3Y term spreads narrowed, and the 3 - year rating spreads all narrowed [37][42][46]. 3.3 Credit Rating Adjustment and Default Bond Statistics 3.3.1 Credit Rating Adjustment Statistics - From January 12th to January 18th, 2026, there were no company rating (including outlook) adjustments [51]. 3.3.2 Default and Extended - Maturity Bond Statistics - During the same period, there were no defaults or extensions of credit bonds under any issuer [52]. 3.4 Investment Views - The overall view is consistent with the core viewpoints, emphasizing that credit bonds will continue the repair market, and one can implement a coupon strategy through credit sinking and extending the duration, while paying attention to the coordination of strategies and the impacts of policies, the equity market, and the supply - demand pattern [53].