Group 1 - The issuance of exchangeable bonds in the Hong Kong stock market has been active this year, with zero-coupon exchangeable bonds frequently emerging, exemplified by Alibaba's issuance of HKD 12.023 billion on July 9 [1] - As of July 20, the total issuance of exchangeable bonds in the Hong Kong stock market has exceeded HKD 47.2 billion, driven by strong demand from international long-term institutional investors [1] - Exchangeable bonds allow holders to convert them into shares of the issuing company's subsidiaries, parent companies, or affiliated enterprises, thus providing a dual nature of debt and equity [1] Group 2 - The appeal of exchangeable bonds is attributed to the increasing global preference for the Hong Kong market, especially as competition for IPO subscription quotas intensifies [1] - Exchangeable bonds serve as a tool linked to high-quality stock assets, becoming a channel for international capital to allocate investments in premium Hong Kong stocks [1] Group 3 - The conditions for conversion of exchangeable bonds are typically predetermined, allowing bondholders to benefit significantly if the underlying stock price rises [2] - For instance, Alibaba's zero-coupon exchangeable bond allows holders to exchange it for shares of Alibaba Health at an initial exchange price of HKD 6.23, representing a 48% premium over the hedged placement price of HKD 4.21 [2] Group 4 - The liquidity in the Hong Kong stock market has improved significantly, with the total market capitalization reaching HKD 42.7 trillion as of June 30, 2025, a 33% increase from the previous year [3] - The average daily trading volume in the first half of 2025 was HKD 240.2 billion, up 118% year-on-year, contributing to favorable conditions for the conversion of exchangeable bonds [3] - Nearly 40% of Hong Kong-listed companies have seen their stock prices rise over 20% this year, with some companies like Pop Mart experiencing increases over 170% [3] Group 5 - Exchangeable bonds have emerged as an alternative channel for international capital to invest in high-quality Hong Kong assets, especially amid a competitive IPO market [4] - As of July 18, the total amount raised through Hong Kong IPOs reached HKD 124.006 billion, with 42% of this amount contributed by cornerstone investors, two-thirds of whom are overseas investors [4] - The ongoing optimization of the Hong Kong market mechanisms and the enhanced international competitiveness of quality enterprises are expected to lead to increased adoption of exchangeable bonds by more premium companies [4]