1. Report's Industry Investment Rating - No industry investment rating is provided in the report. 2. Core Viewpoints of the Report - The CSI Convertible Bond Index rose 2.92% last week. Despite some equity broad - based indices experiencing fluctuations due to ETF fund outflows, convertible bonds showed strong optimism as they were not affected by such factors. Key asset characteristic indicators in the convertible bond market rapidly increased [3][11]. - The short - term overheating indicators have not been triggered yet, but if the market remains strong in the first half of this week, these indicators may appear in the second half [12][18]. - The call provision remains the main short - term valuation game point. It has a disturbing impact on the pricing of equity - like convertible bonds. Historically, call provisions have generally put pressure on the subsequent trends of convertible bonds [20]. - For the underlying stocks, the call is not just an event - based shock. Converting bonds to stocks for "extending the life" of call - announced convertible bonds does not significantly increase returns. The price recovery of underlying stocks is not a high - probability event after conversion and extended holding [21]. - A set of screening criteria for convertible bond conversion investment to achieve effective "extension of life" has been established. From 2019 to now, convertible bonds meeting these criteria have an arithmetic average return of 3.56%, a median return of 2.13%, and a positive return probability of 72%. For convertible bonds meeting these criteria, it is recommended to actively convert at a negative premium rate at the end of the bond's life and hold for 10 trading days [24]. 3. Summary According to the Table of Contents Section 1: Is There a "Second Chance" for Convertible Bonds after Forced Redemption? - **Market Performance**: The CSI Convertible Bond Index rose 2.92% last week. The weighted average price of the entire market's convertible bonds reached 146 yuan, a record high. The number of convertible bond issues with a price > 130 yuan and a conversion premium rate > 20% reached 222, accounting for 58.58% of the entire market. The conversion premium rate of convertible bonds with a parity between 110 - 130 yuan increased rapidly [11]. - **Overheating Indicators**: The short - term trading signal indicators mainly include the implied 3 - month yield and the moving - average overheating indicator. As of January 23, neither had been triggered, but if the market remains strong in the first half of this week, overheating indicators may appear in the second half [12][18]. - **Impact of Call Provisions**: Call provisions are the main short - term valuation game point, disturbing the pricing of equity - like convertible bonds. From 2019 to now, the arithmetic average return of 441 call - redeemed convertible bonds from the call announcement date to the last trading day was - 4.78%, the median return was - 4.88%, and the positive return probability was only 32.2% [20]. - **Effect of Conversion and Extended Holding**: For underlying stocks, converting call - announced convertible bonds to stocks and extending the holding period does not significantly increase returns. From 2019 to now, the arithmetic average return during the test period was - 0.50%, the median return was - 1.31%, and the positive return probability was 44.93% [21]. - **Screening Criteria for Conversion Investment**: The screening criteria are: on the trading day before the call announcement, the conversion value is between 120 yuan and 135 yuan; the remaining term of the convertible bond is between 1.5 and 4.5 years; the convertible bond's price change from the call announcement date to the last trading day is between - 5% and 10%. From 2019 to now, 25 convertible bonds meet these criteria, with an arithmetic average return of 3.56%, a median return of 2.13%, and a positive return probability of 72% [24].

Core Viewpoint - The last trading day for Ruida Convertible Bonds is January 13, with significant price differences leading to potential losses for investors who do not act in time [1][2][4]. Group 1: Ruida Convertible Bonds - Ruida Convertible Bonds will stop trading after January 13, and the last conversion day is January 16, after which unconverted bonds will be redeemed at 101.12 yuan per bond [2][4]. - As of January 13, the market price of Ruida Convertible Bonds is 127.7 yuan, indicating a potential loss of 20.81% for investors who fail to convert or sell [1][4]. - The unconverted proportion of Ruida Convertible Bonds is 22.15%, with a remaining balance of 179 million yuan [4]. Group 2: Other Convertible Bonds - Other convertible bonds such as Jinzong, Zai22, Bo23, and HuGong are also facing forced redemption, with last trading days ranging from January 14 to January 16 and redemption prices varying [5]. - Investors holding these convertible bonds may face losses of 38.16%, 66.59%, 35.31%, and 32.02% respectively if they do not act promptly [5]. - The market for convertible bonds is experiencing a contraction, with predictions indicating a potential reduction in the market size to approximately 160 billion yuan by 2026 under neutral conditions [6].

Investment Rating - The investment rating for the banking sector is "Positive" and is maintained [12]. Core Insights - In the first week of 2026, the banking sector continued to adjust, with a cumulative decline of 1.9% in the banking index, significantly underperforming the CSI 300 and ChiNext indices by -4.7% and -5.8% respectively. Despite this, the fundamental expectations for the sector remain unchanged, and the market's risk appetite has notably increased [2][6][19]. - The main banks are expected to maintain stable growth in performance throughout 2026. Following recent adjustments, the PB-ROE valuation attractiveness of bank stocks has further increased, suggesting a favorable timing for allocation [2][6][19]. Summary by Sections Market Performance - The banking sector's performance in the first week of 2026 showed a cumulative decline of 1.9%, with significant negative excess returns compared to the CSI 300 and ChiNext indices [6][19]. - Individual stocks such as Chongqing Rural Commercial Bank saw price recovery after management uncertainties were resolved, while stable performers like Hangzhou Bank led the city commercial bank sector [2][6][19]. Fundamental Analysis - The banking sector's performance has been influenced by structural concerns, particularly regarding real estate and retail asset quality. Despite these concerns, overall performance remains stable with steady growth [8][37]. - The LTV (Loan-to-Value) ratios for major banks are stable at 40%-50%, providing a safety margin despite rising asset quality pressures in mortgage loans [8][37]. Trading Dynamics - The increase in market risk appetite has continued to suppress bank stock valuations. Historically, January has seen excess returns for bank stocks, but this year, the rapid recovery in market sentiment has led to underperformance [9][38]. - The report recommends focusing on high-quality city commercial banks such as Hangzhou Bank, Nanjing Bank, and Jiangsu Bank, as well as dividend-oriented assets like Bank of Communications and China Merchants Bank [9][38]. Convertible Bonds - The prices of convertible bonds linked to bank stocks have generally followed the sector's adjustment, with the distance to mandatory conversion prices widening. The report highlights potential trading opportunities in convertible bonds for banks like Changshu Bank and Shanghai Bank, which have stable fundamental performance expectations [7][32].

1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - 2026 Q1 may see an increase in convertible bond calls, but high - parity convertible bond valuations are at historical highs. High valuations do not guarantee post - call valuation maintenance, and the pressure on convertible bond prices before and after the call is relatively large. It is recommended to take profit before the call or stop loss in a timely manner after the call based on market conditions [3][7]. - The overall trend of convertible bond valuations is likely to be high - level oscillations, with a possibility of short - term foaming. In January 2026, institutional demand for configuration will support valuations, and if the equity market performs better than expected, valuations may foam [28]. - In December 2025, the convertible bond market oscillated upward, with both convertible bonds and underlying stocks performing strongly, and valuations oscillated and increased. The trading volume of the convertible bond and equity markets decreased, but margin trading funds showed a strengthening trend [48][56]. - The issuance of new convertible bonds slightly increased in December 2025, and the number of new issuance plans continued to rise. The overall scale of holders in the Shanghai and Shenzhen Stock Exchanges decreased, with obvious reductions by insurance funds [3][62]. 3. Summary According to Relevant Catalogs 3.1 Historical Facts and Changes before and after Convertible Bond Calls - **Before the Call Announcement** - High market valuations do not guarantee post - call valuation maintenance. After the call, the valuation compresses to near 0%, and the compression process is basically completed before the call announcement [3][8]. - The strength of the underlying stock before the call can partially offset the compression of convertible bond valuations, but when valuations are high, the pressure on convertible bond prices before the call is still relatively large [3]. - The decline before the call mainly occurs within T - 10 days, and the day of the highest price is advancing [3][16]. - **After the Call Announcement** - In most months, convertible bond prices continue to decline after the call announcement, but in some months with a strong equity market, prices rebound [3][20]. - There is generally a decline of varying degrees on T - day, and the months with price rebounds mainly show strength from T + 1 to T + 15 days [3][21]. - The stronger the equity market, the more delayed the appearance of the highest price [3][25]. 3.2 Valuation Outlook - The overall trend is high - level oscillations, with a possibility of short - term foaming. In December 2025, valuations oscillated upward. As of December 31, 2025, the 100 - yuan par - value fitted conversion premium rate was 34.04%, up 2.50 pct from the end of November, reaching the highest level since 2019 [28]. 3.3 Key Focused Convertible Bonds - From December 1 to December 31, 2025, the convertible bond portfolio rose 3.84%, outperforming the benchmark index by 1.70 pct. Huayi and Xingqiu had obvious increases [41]. - The "Huachuang Convertible Bond" January key - focused portfolio is adjusted to include Xingqiu, Mingli, Yirui, Huachen, Huayi, Yifeng, Ziyin, Qingnong, Zhongyin, and Xingye [43]. 3.4 Market Review - **Market Performance** - In December 2025, the convertible bond market oscillated upward, with a strong performance in the second half of the month. Most sectors of the convertible bond market rose, and technology - related concepts declined. The science and technology and manufacturing sectors showed significant increases, and the cyclical sector also performed well [48][50]. - **Fund Performance** - The trading volume of the convertible bond and equity markets decreased slightly. From December 1 to December 31, 2025, the average daily trading volume of CSI Convertible Bonds was 63.803 billion yuan, a 1.27% decrease from November, and the average daily trading volume of Wind All - A was 1.880842 trillion yuan, a 1.76% decrease from November [56]. - Margin trading funds oscillated and strengthened. As of December 31, 2025, the balance of margin trading in the Shanghai and Shenzhen Stock Exchanges was approximately 2.53 trillion yuan, an increase of 66.664 billion yuan from the end of November. Most industries received net margin purchases [60]. 3.5 Supply and Demand Situation - **New Bond Issuance and Listing** - In December 2025, 7 convertible bonds were issued, with a total scale of 5.494 billion yuan, and 5 new convertible bonds were listed, with a total scale of 3.005 billion yuan. The online new - bond issuance subscription scale increased, with an average effective subscription amount of 8.85 trillion yuan, a 2.61% increase month - on - month [62]. - **Expected Issuance Scale and New Plans** - The total expected issuance scale is approximately 122.663 billion yuan. As of December 31, 2025, 7 listed companies obtained convertible bond issuance approvals, with a planned issuance scale of 8.583 billion yuan; 6 companies' convertible bond issuances passed the review committee, waiting for approvals, with a total scale of 3.361 billion yuan. In December, 6 new board plans were added, with a total scale of approximately 77.9 billion yuan [65]. - **Holder Scale Changes** - The overall scale of holders in the Shanghai and Shenzhen Stock Exchanges decreased. In December 2025, the total par value of convertible bonds held by the two exchanges was 552.692 billion yuan, a decrease of 6.144 billion yuan from November, a 1.10% decline. The scale of public funds increased, while the scale of enterprise annuities decreased [83][87].

Core Viewpoint - A significant number of convertible bonds are approaching their last trading day, with over 10 expected in December, leading to potential price suppression and risks related to forced redemption for investors [1][2][4]. Group 1: Convertible Bonds Overview - Multiple convertible bonds are set to reach their last trading day, including Hongfa Convertible Bond, Mingdian Convertible Bond 02, and Guocheng Convertible Bond on December 8, followed by others like Ying 19 Convertible Bond and Ceihui Convertible Bond on December 9 [2]. - As of December, the total number of convertible bonds entering their last trading day has increased significantly, with more than 10 expected [2]. - After the last trading day, there are several days available for conversion; unconverted bonds will be forcibly redeemed at a specified price [2][3]. Group 2: Redemption and Market Performance - Convertible bonds are categorized into two scenarios: early redemption due to conditional redemption clauses and maturity for repayment and delisting [3]. - Many convertible bonds have experienced price declines as they approach their last trading day, with some, like Guocheng Convertible Bond and Limin Convertible Bond, seeing cumulative declines exceeding 10% in December [4]. - The average price change for the convertible bonds entering their last trading day in December is -0.12%, with a median change of -0.65%, underperforming the overall market represented by the Zhongzheng Convertible Bond Index, which rose by 0.48% during the same period [4]. Group 3: Investor Considerations - Forced redemption remains a primary exit strategy for convertible bonds, relieving companies from interest and principal repayment pressures [4]. - Investors must be cautious as failure to convert or sell before the deadline can lead to significant losses, particularly for those who purchased bonds at a high premium [4][5]. - For instance, the current price of Guocheng Convertible Bond is 180.151 yuan per share, with a redemption price of 100.82 yuan per share, indicating a potential loss exceeding 40% for investors who do not convert before the deadline [5].

Core Viewpoint - A significant number of convertible bonds are approaching their last trading day, with over 10 bonds expected to reach this milestone in December, leading to potential price suppression and risks related to forced redemption for investors [1][2][4]. Group 1: Convertible Bonds Overview - Multiple convertible bonds are entering their last trading day, including Hongfa Convertible Bond, Mingdian Convertible Bond 02, and Guocheng Convertible Bond on December 8, followed by others like Ying 19 Convertible Bond and Ceihui Convertible Bond on December 9 [2]. - The increase in convertible bonds reaching their last trading day is notable, with over 10 bonds expected to be affected in December [2]. Group 2: Redemption and Trading Dynamics - Convertible bonds may experience price suppression as they approach their last trading day, with many showing declines; for instance, Guocheng Convertible Bond and Limin Convertible Bond have seen cumulative declines exceeding 10% in December [4]. - The average price change for the convertible bonds entering their last trading day in December is -0.12%, with a median change of -0.65%, underperforming the overall market represented by the Zhongzheng Convertible Bond Index, which rose by 0.48% during the same period [4]. Group 3: Forced Redemption Risks - Forced redemption remains a primary exit strategy for convertible bonds, allowing companies to alleviate the burden of interest and principal repayment by encouraging bondholders to convert their bonds into shares [4]. - Investors must be cautious, as failure to convert or sell their bonds before the designated deadline may result in forced redemption at a price significantly lower than the market value, leading to potential losses exceeding 40% for those who purchased at a high premium [5].

Core Viewpoint - A significant number of convertible bonds are approaching their last trading day, with over 10 bonds expected to reach this milestone in December, leading to potential price suppression and risks related to forced redemption for investors [1][4][6]. Group 1: Convertible Bonds Approaching Last Trading Day - Multiple convertible bonds are set to enter their last trading day, including Hongfa Convertible Bond, Mingdian Convertible Bond 02, and Guocheng Convertible Bond on December 8, followed by others like Ying 19 Convertible Bond and Ceihui Convertible Bond on December 9 [3][4]. - The total number of convertible bonds entering their last trading day in December is projected to exceed 10, indicating a trend of increased activity in this segment [4]. Group 2: Market Performance and Risks - Many convertible bonds have experienced price declines as they approach their last trading day, with Guocheng Convertible Bond and Limin Convertible Bond seeing cumulative declines of over 10% in December [6]. - The average price change for the convertible bonds entering their last trading day in December is -0.12%, with a median change of -0.65%, underperforming the overall market represented by the Zhongzheng Convertible Bond Index, which rose by 0.48% during the same period [6]. - Investors need to be cautious of forced redemption risks, as companies may opt for this route to alleviate the burden of interest and principal repayment, potentially leading to significant losses for those who do not act in time [6][7].

Summary of Key Points Core Viewpoint - The company held a performance briefing for Q3 2025 to discuss its operational results and financial status with investors, addressing various concerns raised during the session [1]. Group 1: Inventory and Receivables - The company reported a significant increase in inventory, with a notable rise in stock levels due to unsold finished products and materials for new overseas projects, indicating no impairment risks [2]. - Accounts receivable increased by 12.29% year-on-year to 2.57 billion, while prepayments surged by 103% to 288 million, primarily driven by increased main business revenue and new resource projects [2]. Group 2: Long-term Borrowings and Financial Strategy - Long-term borrowings rose from 730 million at the end of 2024 to 1.57 billion by Q3 2025, marking a 94.27% increase, mainly for financing infrastructure projects in Colombia and other areas [3]. - The company aims to maintain a reasonable debt structure while optimizing its financial costs through operational efficiency in mining services and resource projects [3]. Group 3: Market Performance and Investor Relations - The company acknowledged fluctuations in its stock price compared to peers, emphasizing its commitment to protecting investor interests and focusing on stable operational management [4]. - Concerns regarding the controlling shareholder's past share reductions were addressed, clarifying that the reductions were primarily for personal financial needs and not indicative of the company's financial health [5][6]. Group 4: Project Updates and Future Strategy - The company is progressing with the Lubambe copper mine's operational management and is negotiating the transfer of a 10% stake, with overall progress aligning with technical improvement plans [8]. - The slowdown in the mining service segment is attributed to internal management changes and external factors affecting operations, with a strategic focus on developing both mining services and resource development as core business areas [7].

Core Viewpoint - Two convertible bonds, Zhongchen Convertible Bond and Lushan Convertible Bond, are facing forced redemption at prices significantly lower than their current market prices, leading to potential losses for investors if they do not act promptly [2][4][5]. Summary by Sections Zhongchen Convertible Bond - The last trading day for Zhongchen Convertible Bond is October 14, with a closing price of 141.29 yuan on October 13. If investors do not sell or convert their bonds by the deadline, they will face a forced redemption price of 100.58 yuan, resulting in a potential loss of 28.81% [2][5]. Lushan Convertible Bond - Lushan Convertible Bond also has its last trading day on October 14. The bond closed at 139.536 yuan on October 13, and if not sold or converted, it will be redeemed at a price of 100.6805 yuan, leading to a potential loss of 27.85% for investors [4][5]. General Market Context - The trend of forced redemptions is not limited to Zhongchen and Lushan bonds. Other convertible bonds, such as Keda, Jingxing, Tianlu, and Pudong Development Bank bonds, are also approaching their last trading days and may result in significant losses for investors who fail to act in time. For instance, Tianlu Convertible Bond, priced at 310.527 yuan, will be redeemed at 110 yuan at the end of October, indicating a potential loss exceeding 60% if not managed properly [7].

Group 1: Company Strategy and Goals - The company aims to achieve a revenue target of 60 billion yuan by 2030, with over 60% of this coming from international sales and a net profit margin of no less than 8% [3] - Key initiatives to reach these goals include developing three growth curves, enhancing regional capabilities, and improving product competitiveness and operational efficiency [3][4] Group 2: Market Expansion and Competition - The company plans to focus on seven strategic markets and eight key markets for overseas expansion, leveraging electric and intelligent products to create competitive advantages [4][5] - In response to domestic competition, the company will adopt a differentiated strategy targeting mid-sized open-pit mining customers and providing solutions like electrification and automation [5] Group 3: Financial and Stock Market Considerations - The company is considering a potential listing in Hong Kong, influenced by over 60 A-share companies applying for listings and the favorable market conditions expected in the next two years [6] - The major shareholder is committed to increasing their stake in the company, reinforcing confidence in its long-term development [8] Group 4: Internal Management and Incentives - Following the board restructuring, the company has maintained a stable core management team and continues to implement a flexible and effective incentive mechanism [9] - The company emphasizes long-term value creation and rejects chaotic price competition, focusing instead on technological innovation and comprehensive solutions [11] Group 5: Challenges and Risk Management - The tower crane business has faced significant impairment due to the downturn in the domestic real estate market, leading to increased credit impairment provisions [12] - The company is actively assessing the impact of this impairment and enhancing credit asset management to prevent systemic risks [12]