1. Report Industry Investment Rating No information provided regarding the industry investment rating. 2. Core Viewpoints of the Report - The recent adjustment in the convertible bond market is a short - term emotional correction rather than a reversal. It is an advance adjustment ahead of the equity market, providing a buffer for potential equity market fluctuations and offering elasticity for convertible bonds to follow the rise of the underlying stocks in the future. The short - term callback presents more opportunities than risks, with trading opportunities potentially greater than allocation opportunities [6][9][10]. - In the long run, a moderate increase in supply is beneficial for the sustainable and healthy development of the convertible bond market. The future trend of the convertible bond market mainly depends on the performance of the underlying stocks. Given the unchanged slow - bull expectation and the unbroken logic of the allocation demand for fixed - income plus products, the risk of continuous and significant valuation reduction in the convertible bond market is low [6][9]. - In the context of global risk evaluation differentiation, the stable domestic and volatile overseas environment is favorable for domestic assets. The main trend remains sideways oscillation with a slight upward trend, and the slow - bull pattern remains unchanged. Mid - cap blue - chip stocks will become the mainstay in the future, and sectors such as non - ferrous metals, chemicals, and agriculture are promising, with incremental demand concentrated in upstream industrial products [6][10]. 3. Summary by Relevant Catalogs 3.1 Convertible Bond Views: Convertible Bonds Retreated Against the Trend, It's an Adjustment Rather Than a Reversal - Last week, the convertible bond market experienced a significant adjustment, with the median conversion premium rate dropping by 5.5 percentage points and the 100 - yuan premium rate also dropping by about 2 percentage points. Market speculations about the reasons include negative factors in the capital market, profit - taking after short - term gains, and concerns about the supply pressure potentially brought by refinancing policies. However, the report believes that the decline is mainly due to market concerns about the significant deviation of the valuation of some high - parity convertible bonds from the fundamentals [6][9]. - In the long run, a moderate increase in supply is beneficial for the sustainable and healthy development of the convertible bond market. The future trend of the convertible bond market depends on the performance of the underlying stocks. With the unchanged slow - bull expectation and the unbroken logic of the allocation demand for fixed - income plus products, the risk of continuous and significant valuation reduction in the convertible bond market is low [6][9]. - The adjustment is regarded as a short - term emotional callback, providing a buffer for potential equity market fluctuations and offering elasticity for convertible bonds to follow the rise of the underlying stocks. The short - term callback presents more opportunities than risks, with trading opportunities potentially greater than allocation opportunities [6][10]. - In the first week after the Spring Festival, the equity index oscillated upward with increased trading volume. The sectors showed differentiation, with cyclical resources leading the rise and consumer and growth sectors showing mixed performance. The factors driving the market include the escalation of the international situation, rising commodity prices, the approaching Two Sessions leading to increased expectations of stable - growth policies, the start of spring construction and spring plowing demand, and the relaxation of real - estate policies [6][10]. 3.2 Convertible Bond Review: Convertible Bond Trading Volume Declined and Valuation Significantly Decreased 3.2.1 Market Overall Performance: Most Equity Indexes Rose and Trading Volume Increased - Last week, the equity market oscillated upward, with small and mid - cap stocks performing strongly. The Shanghai Composite Index rose 1.98%, the Shenzhen Component Index rose 2.80%, the CSI 500 rose 4.32%, the CSI 1000 rose 4.34%, the SSE 50 rose 0.17%, the ChiNext Index rose 1.05%, the STAR Market 50 rose 1.20%, the North Exchange 50 rose 0.48%, and the CSI 2000 rose 3.94%. In terms of industries, steel, non - ferrous metals, and basic chemicals led the rise, while media, commercial retail, and food and beverage sectors led the decline. The average daily trading volume increased by 331.078 billion yuan to 2.44 trillion yuan [14]. - The top ten convertible bonds in terms of gains last week were Youcai Convertible Bond, Shuangliang Convertible Bond, Guanglian Convertible Bond, Dazhong Convertible Bond, Guanzhong Convertible Bond, Xingfa Convertible Bond, Yitian Convertible Bond, Julong Convertible Bond, Ruike Convertible Bond, and Huaya Convertible Bond. In terms of trading volume, Baichuan Convertible Bond 2, Shuangliang Convertible Bond, Dazhong Convertible Bond, Guanglian Convertible Bond, Fengyu Convertible Bond, Shanbo Convertible Bond, Aofei Convertible Bond, Weidao Convertible Bond, Zhenhua Convertible Bond, and Jiaze Convertible Bond were relatively active [14]. 3.2.2 Convertible Bond Trading Volume Declined, and High - Price and Large - Cap Convertible Bonds Had Larger Declines - Last week, convertible bonds were significantly adjusted, with the valuation of high - parity convertible bonds dropping significantly. The average daily trading volume decreased to 68.138 billion yuan. The CSI Convertible Bond Index dropped 0.23%, the median parity rose 3.3% to 111.0 yuan, and the median conversion premium rate dropped 5.5 percentage points to 29.3%. In terms of style, mid - and low - rated convertible bonds performed better last week, while high - price and large - cap convertible bonds performed weakly [20].

Group 1 - The convertible bond market has recently experienced a significant downward adjustment after a strong performance earlier in the year, with over 90% of convertible bonds declining in the last seven trading days [1][2][3] - The China Securities Index for convertible bonds began its decline on August 26, with a notable drop of 2.82% on August 27, followed by three consecutive days of decline [3][5] - More than 400 convertible bonds have seen a decline, with around 230 bonds dropping over 5%, and over 50 bonds experiencing declines exceeding 10% [5][8] Group 2 - Specific convertible bonds such as Tianyuan Convertible Bond and Borui Convertible Bond have shown significant declines, with Tianyuan dropping over 20% from above 240 yuan to 191.7 yuan [5][7] - The overall market adjustment is believed to be influenced by the weak performance of the underlying stocks, as the A-share market has also seen a decline, with over 4,300 stocks dropping in the last seven trading days [8][9] - The average decline of the underlying stocks corresponding to convertible bonds that fell over 10% is more than 10%, indicating a strong correlation between the performance of convertible bonds and their underlying stocks [8][9] Group 3 - Research from Guojin Securities suggests that while the equity market is expected to maintain an upward trend, there is a short-term impulse for profit-taking in convertible bonds, with two convertible bond ETFs accounting for nearly 10% of the market [11] - The current market volatility may lead to increased trading activity, and the potential for further downward adjustment in convertible bond valuations is limited [11][13]

Summary of Key Points Core Viewpoint - The convertible bond market, which had shown strong performance earlier in the year, has recently entered a phase of continuous adjustment, with over 90% of convertible bonds experiencing declines in the last seven trading days [1][2]. Market Performance - Since reaching a peak on August 25, the convertible bond market has seen a downturn, with the China Convertible Bond Index entering a correction phase starting August 26, including a significant drop of 2.82% on August 27 [1][2]. - In the last seven trading days, more than 400 convertible bonds have declined, representing over 90% of the total, with nearly 230 bonds falling more than 5% and over 50 bonds dropping more than 10% [2][3]. Specific Bond Performance - Notable convertible bonds such as Tianyuan Convertible Bond have seen a price drop from over 240 yuan to 191.700 yuan, marking a cumulative decline of over 20% [3]. - The Borui Convertible Bond has also faced a decline, dropping from over 320 yuan to 260.457 yuan, with a cumulative decrease of 18.84% [5]. Market Influences - The recent adjustment in the convertible bond market is believed to be influenced by the weak performance of the underlying stocks. The Shanghai Composite Index has shown a slowdown, with a cumulative decline of 1.80% over the past seven trading days [7]. - The average decline of the underlying stocks corresponding to convertible bonds that fell over 10% is more than 10%, indicating a significant underperformance compared to the broader market [7][8]. Future Outlook - According to research from Guojin Securities, the overall probability of continued upward movement in the equity market remains high, but there is a short-term impulse for profit-taking in convertible bonds. The market is expected to experience increased trading activity and volatility [10][11].

Core Viewpoint - The convertible bond market, which had shown strong performance earlier in the year, has recently entered a phase of continuous adjustment, with over 90% of convertible bonds experiencing declines in the past seven trading days [1][2][3]. Market Performance - In the last seven trading days, more than 400 convertible bonds have declined, accounting for over 90% of the total convertible bonds available. Approximately 230 of these bonds have seen declines exceeding 5%, and over 50 bonds have dropped more than 10% [6]. - The China Securities Convertible Bond Index began its adjustment on August 26, with a significant drop of 2.82% on August 27. Although there was a slight increase of 0.26% on September 3, the market remains volatile and uncertain [4]. Individual Bond Performance - Specific convertible bonds have shown significant declines, such as: - Tianyuan Convertible Bond: Price dropped from over 240 yuan to 191.7 yuan, a decline of over 20% [6]. - Borui Convertible Bond: Price fell from over 320 yuan to 260.457 yuan, a cumulative decline of 18.84% [8]. - Other notable declines include: - Jinxian Convertible Bond: -18.83% - Outon Convertible Bond: -18.82% - Huamao Convertible Bond: -16.29% [12]. Reasons for Adjustment - The recent adjustment in the convertible bond market is believed to be influenced by the weak performance of the underlying stocks. The Shanghai Composite Index has seen a slowdown since August 26, with a cumulative decline of 1.80% over the past seven trading days [11]. - The average decline of the underlying stocks corresponding to convertible bonds that have dropped over 10% is also more than 10%, indicating a strong correlation between the performance of convertible bonds and their underlying stocks [11]. Market Outlook - According to recent research, the overall probability of the equity market maintaining an upward trend remains high. However, there is a short-term impulse for profit-taking in the convertible bond market. Two convertible bond ETF products now account for nearly 10% of the market, suggesting increased trading activity and potential for greater market volatility [12]. - The expectation is that the valuation of equity-oriented convertible bonds will have limited downward space, and if the market returns to the levels seen at the beginning of July, it could present a new opportunity for systematic accumulation [12].