1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints - Recently, convertible bonds have shown a "negative convexity" characteristic, with returns and drawdowns significantly worse than the underlying stocks. The compression of convertible bond valuations started in the first week after the Spring Festival. Although the equity market performed well during this period, there was an obvious structural shift, and the technology sector was weak. Additionally, non - callable convertible bonds generally entered the second round of call - counting periods. Despite the decent performance of the underlying stocks, high - parity convertible bonds, new bonds, and sub - new bonds actively compressed their valuations due to poor expectations. Subsequently, the conflict between the US and Iran impacted global risk appetite, causing a surge in oil prices and a weak and volatile domestic equity market. The compression of convertible bond valuations spread comprehensively, and the valuations in the debt - biased and balanced intervals also declined significantly. From a rolling perspective, the 100 - yuan premium rate has returned to around the +1 standard deviation level, and the central value has significantly shifted down from the previous high. In the short term, convertible bond valuations have compressed to a stage - low. With the expectation of a mid - term slow - bull equity market, the convertible bond market has shown a certain cost - effectiveness, and opportunities for individual bonds with certain cost - effectiveness in valuation can be actively explored [1][5]. 3. Summary by Directory 3.1 Weekly Viewpoint and Outlook - Convertible bonds have a "negative convexity" feature, performing worse than underlying stocks. The valuation compression started after the Spring Festival, affected by market structure shift, call - counting periods, and the US - Iran conflict. Currently, the 100 - yuan premium rate is around +1 standard deviation, and the convertible bond market has cost - effectiveness [1][5]. 3.2 Convertible Bond Valuation - Due to the surge in oil prices caused by the US - Iran conflict and the new round of Sino - US economic and trade consultations, the domestic equity market stabilized compared to last week, with small and micro - cap stocks relatively weak. Convertible bonds continued to digest valuations this week. After removing outliers, the 100 - yuan premium rate decreased by 0.5% to 31.8%, roughly equal to the +1 standard deviation level. This week, the valuation compression spread from high - parity and long - duration bonds to other intervals, showing a universal full - interval compression. The compression in the debt - biased and balanced convertible bonds was generally over 1%. From a term perspective, the valuation compression of new bonds over 5.5 years was close to 4%, and the compression in the 2 - 4 - year interval was also relatively large. In terms of individual bonds, high - parity bonds above 140 yuan with large valuation compression were mostly those in the call progress or about to enter the call - counting period, with obvious pre - emptive characteristics, and the valuation compression due to call expectations was about 10%. Other bonds with large valuation compression in the balanced and debt - biased intervals were mostly new bonds that had not entered the conversion period. Bonds around 3 years, such as Yake and Daimei, also had relatively large valuation compression due to the downward trend of the underlying stocks. In addition, the valuations in the extremely low - parity area below 60 yuan were generally compressed [4][6][9]. 3.3 Clause Tracking 3.3.1 Redemption - This week, 9 convertible bonds, including Fenggong and Liyang, announced redemptions, and 4 announced non - redemptions, with a call rate of 69%. Currently, there are 31 convertible bonds that have issued call or maturity redemption announcements but have not delisted. Among the non - delisted bonds, the potential conversion or maturity balance of call and maturity bonds is 12.2 billion yuan. There are currently 47 convertible bonds in the redemption progress. 12 are expected to meet the redemption conditions next week, and 11 are expected to issue announcements of potential redemption triggers. In addition, 13 convertible bonds are expected to enter the call - counting period within the next month [23][27]. 3.3.2 Downward Revision - This week, Weining Convertible Bond proposed a downward revision, and no convertible bond announced the result of the downward revision. As of now, 79 convertible bonds are in the non - downward - revision interval, 18 cannot be revised downward due to net asset constraints, 0 have triggered the condition and the stock price is still below the downward - revision trigger price but have not issued an announcement, 21 are accumulating days for downward revision, and 6 have issued the board of directors' pre - plan for downward revision but have not gone to the shareholders' meeting [31]. 3.3.3 Put Option - This week, no convertible bond issued a conditional put option announcement. As of now, 4 convertible bonds are accumulating days to trigger the put option, among which 1 is also accumulating days for downward revision, and 3 are in the non - downward - revision interval [33]. 3.4 Primary Issuance - As of now, there are 6 convertible bonds in the approval - registration progress, with a to - be - issued scale of 5.3 billion yuan; there are 9 convertible bonds in the process of passing the listing committee, with a to - be - issued scale of 8.2 billion yuan [35].

1. Report Industry Investment Rating No relevant information provided. 2. Report's Core View - The A - share market had a good start at the beginning of the year, but convertible bonds ended slightly lower. The poor performance of convertible bonds compared to their underlying stocks was mainly due to the significant valuation compression of high - parity convertible bonds. This compression was widespread, with the largest compression in bonds with strong - redemption potential, new and sub - new bonds, possibly related to poor expectations for the technology sector and expectations of increased convertible bond supply. Although short - term negative factors may impact high - parity convertible bonds, the cost - effectiveness of convertible bonds is expected to emerge after the active valuation compression [1][5]. 3. Summary by Relevant Catalogs 3.1 Week's View and Outlook - The A - share market had a good start in the new year, but convertible bonds ended slightly lower, underperforming their underlying stocks. The large - scale valuation compression of high - parity convertible bonds was the main cause. In the parity range above 140 yuan, there were two main types of significant valuation compression: one was due to the progress of strong redemption, such as Huicheng, Ruichuang, etc.; the other was the active valuation compression of new and sub - new bonds, such as Dinglong, Luwei, etc. Other high - parity convertible bonds also generally saw valuation compression, with only a few bonds that unexpectedly did not trigger strong redemption seeing a valuation increase. This compression may be related to poor technology sector expectations and increased supply expectations. Short - term negative factors may impact high - parity convertible bonds, but the cost - effectiveness of convertible bonds may appear after valuation compression [1][5]. 3.2 Convertible Bond Valuation - In the first week of the new year, the A - share market had a good start, with the main line switching to the "price - increase" cycle sector, while the technology sector performed poorly. The conversion premium rate of high - parity convertible bonds was actively compressed. With outliers retained, the 100 - yuan premium rate declined by over 3 percentage points. After excluding outliers, the 100 - yuan premium rate dropped 0.2% to 32.7%. Without excluding outliers, the 100 - yuan premium rate declined 3.3% [6]. - This week, convertible bond valuations were significantly compressed, with convertible bonds underperforming their underlying stocks. The conversion premium rate of convertible bonds with a parity above 140 yuan was compressed by nearly 5%. The conversion premium rates in each parity range generally declined, with the most significant compression in the high - parity range above 140 yuan, including new, sub - new, and high - parity convertible bonds. The conversion premium rate in the medium - and low - parity ranges declined by about 1% [8]. - From an individual bond perspective, in the parity range above 140 yuan, there were two main types of significant valuation compression: due to strong - redemption progress (e.g., Huicheng, Ruichuang) and active compression of new and sub - new bonds (e.g., Dinglong, Luwei). Other high - parity convertible bonds also generally saw valuation compression. In other parity ranges, new, sub - new, and near - maturity bonds had relatively weak valuation performance [9]. - As of the latest data, the quantile of the conversion premium rate in each parity range generally declined. The quantiles in the high - parity range above 110 yuan showed significant changes, while those in the medium - and low - parity ranges remained close to 100% [13]. 3.3 Clause Tracking 3.3.1 Redemption - This week, 4 convertible bonds (Jiayuan, Songlin, Hongbai, Haiyou) announced redemption, and 8 announced non - redemption, with a strong - redemption rate of 33%. Currently, there are 22 convertible bonds that have announced early redemption or maturity redemption but have not yet delisted, with a potential conversion or maturity balance of 11.9 billion yuan for these non - delisted bonds [18]. - There are currently 49 convertible bonds in the redemption process. Next week, 10 are expected to meet the redemption conditions, and 21 are expected to issue announcements of potential redemption triggers. In addition, 12 convertible bonds are expected to enter the strong - redemption counting period within the next month [20]. 3.3.2 Downward Revision - This week, Lanfan and Baolai convertible bonds proposed downward revisions, and Honglu convertible bond announced the result of a downward revision to the lowest level. As of the latest, 89 convertible bonds are in the non - downward - revision period, 20 cannot be downward - revised due to net - asset constraints, 0 have triggered the condition but the stock price is still below the downward - revision trigger price without an announcement, 16 are accumulating downward - revision days, and 3 have issued board proposals for downward revision but have not yet gone to the general meeting of shareholders [24]. 3.3.3 Put Option - This week, no convertible bonds issued conditional put - option announcements. As of the latest, 1 convertible bond has issued a put - option announcement, and 3 are accumulating put - option trigger days, among which 2 are also accumulating downward - revision days and 1 is in the non - downward - revision period [26]. 3.4 Issuance - As of the latest, there are 5 convertible bonds in the approved - registration process, with a to - be - issued scale of 4.4 billion yuan; 7 convertible bonds have passed the listing committee process, with a to - be - issued scale of 7 billion yuan [29].

Group 1 - The company issued 9.5 million convertible bonds with a total value of 950 million yuan, which began trading on August 7, 2020 [1] - The convertible bonds, named "Longda Convertible Bonds," have a conversion period from January 18, 2021, to July 12, 2026 [1] - The stock price of the company has been below 70% of the conversion price of 9.30 yuan per share for 30 consecutive trading days, triggering the conditional redemption clause of the convertible bonds [2] Group 2 - The redemption period for the convertible bonds will be from July 15 to July 21, 2025, during which the conversion of the bonds will be suspended [2] - The conversion of the bonds will resume on July 22, 2025, after the redemption application period ends [2] - The company emphasizes the importance of this announcement for the bondholders [2]

Group 1 - The core viewpoint of the article highlights the robust performance of the convertible bond market, with the China Securities Convertible Bond Index achieving a year-to-date increase of 7.94%, outperforming major broad-based indices [2][3] - The recent surge in the market is attributed to the resilience of the A-share market, with notable performances from sectors such as banking and active mergers and acquisitions driving the convertible bond market upward [2][4] - The emergence of high-priced convertible bonds, such as Huicheng Convertible Bond, which has seen significant price increases, reflects both market enthusiasm and strong company fundamentals [7] Group 2 - The convertible bond market has shown a strong upward trend, with the index reaching a high of 449.36 points on July 4, marking a significant recovery from earlier adjustments [3][4] - The small-cap convertible bond index has led the market with an increase of 11.17%, while healthcare, consumer goods, industrials, materials, and financial sectors have all seen gains exceeding 7.7% [5] - The design characteristics of the index, including the exit of bank convertible bonds and limited new issuances, have contributed to the rising prices of convertible bonds [6] Group 3 - The traditional mechanisms of early redemption, price adjustment, and repurchase clauses are crucial in the convertible bond market, with early redemption becoming a prevalent strategy this year [8][9] - The market has seen a tightening supply-demand relationship, with a notable increase in the number of convertible bonds triggering early redemption clauses [9] - The upcoming maturity of major convertible bonds, such as the Pudong Development Bank Convertible Bond, has intensified market dynamics and price increases [10] Group 4 - Recent market trends indicate a cautious sentiment following a peak in the index, with investors advised to be mindful of high valuations [11] - The median price of convertible bonds has surpassed 123 yuan, reflecting a general increase in market prices [12] - Analysts suggest focusing on companies with strong mid-year performance as a strategy for future investments in the convertible bond market [13]