1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The conflict between the US and Iran has disturbed the domestic risk appetite, causing the equity and convertible bond markets to decline simultaneously. However, the market shows some resilience due to the policy expectations of the Two Sessions. The convertible bond market focuses on new bond valuations and call risks. After last week's active valuation compression of high - parity convertible bonds, the decline in the valuation of high - parity convertible bonds has significantly narrowed this week, and the difference in valuation changes in the term distribution is more obvious. The valuations of new and sub - new bonds with a remaining term of more than 5 years have decreased significantly. Looking forward, the policy is positive, and the domestic equity market is expected to rise, but attention should be paid to avoiding call and near - maturity convertible bond risks [3][6]. 3. Summary by Directory 3.1 Week's Viewpoint and Outlook - The conflict between the US and Iran has affected the domestic risk appetite, leading to a decline in the equity and convertible bond markets. But the market shows resilience due to the Two Sessions' policy expectations. The convertible bond market focuses on new bond valuations and call risks. After last week's valuation compression of high - parity convertible bonds, the decline in their valuation has narrowed this week. The valuations of new and sub - new bonds with a remaining term of more than 5 years have decreased significantly. One reason is the unexpected call of Anji Convertible Bond and the general entry of sub - new bonds into the second round of call progress, increasing the expected call probability. The other is the poor performance of the equity market and the large retracement of the technology sector, which has led to a convergence of optimistic sentiment about the underlying stocks, causing the valuations of new and sub - new bonds to decline in line with the underlying stocks. The decline of new and sub - new bonds is greater than that of the whole market this week. In the future, the policy is positive, and the domestic equity market is expected to rise, with a focus on avoiding call and near - maturity convertible bond risks [3][6]. 3.2 Convertible Bond Valuation - The domestic equity and convertible bond markets are greatly affected by news. The risk appetite is still impacted by the US - Iran conflict, but the market shows some resilience due to the Two Sessions' policy expectations. The convertible bond valuation shows a weak and volatile performance. After removing outliers, the 100 - yuan premium rate has decreased by 0.4% to 32.3%, which is significantly lower than the 2 - standard - deviation level. - This week, the convertible bond valuation continues to show a structural compression feature, with more obvious differences in the term distribution. The valuations of new and sub - new bonds with a term of more than 5 years are still significantly compressed. The conversion premium rates in each parity range have generally decreased month - on - month. The valuation in the parity range above 140 yuan has decreased by 2.7%, and the decline has narrowed compared with last week, but the valuation compression of new and sub - new bonds is still large, with the valuation of new bonds with a term of more than 5.5 years compressed by more than 5%. - From the perspective of individual bonds, the valuations of new and sub - new bonds with a remaining term of more than 5 years have generally decreased. The bonds with a large month - on - month decline in valuation, such as Tianzhun, Weidao, Kaizhong, Shangtai, and Jin 25, have a decline of more than 10%, which is mostly related to the significant decline of the underlying stocks. In addition to new and sub - new bonds, the convertible bonds with a large month - on - month decline in valuation in the parity range above 120 yuan are mostly affected by call expectations, such as Liyang, Zhenhua, Zhongchong Zhuan 2, and Yong 02, and their latest conversion premium rates have been compressed to less than 10%, implying a strong call expectation. - As of the latest, in terms of parity, the valuation of the 90 - 110 yuan parity range is resilient, and the quantile is still close to 100%. The quantiles of other parity ranges have loosened significantly. In terms of term, the valuation quantiles of the 1 - 2 - year and 3 - 4 - year term ranges are close to 100%, while those of the 2 - 3 - year and less - than - 1 - year term ranges are relatively low [5][7][11]. 3.3 Clause Tracking 3.3.1 Redemption - This week, 3 convertible bonds, including Anji, Hengyi, and Zhonghuan Zhuan 2, announced redemptions, and 0 announced non - redemptions, with a call rate of 100%. Currently, there are 26 convertible bonds that have issued call or maturity redemption announcements but have not been delisted. Among the non - delisted convertible bonds, the potential conversion or maturity balance of call and maturity convertible bonds is 10.9 billion yuan. - Currently, there are 52 convertible bonds in the redemption progress. 17 are expected to meet the redemption conditions next week, and 18 are expected to issue announcements of potential redemption triggers. In addition, 10 convertible bonds are expected to enter the call counting period within the next month [21][22][25]. 3.3.2 Downward Revision - This week, 3 convertible bonds, including Wentai and Qiaoyin, proposed downward revisions, and Bairun Convertible Bond announced the downward revision result, with the revision reaching the bottom. As of the latest, 81 convertible bonds are in the non - downward - revision interval, 19 cannot be downward - revised due to net asset constraints, 0 have triggered the downward - revision condition but the stock price is still lower than the trigger price and no announcement has been made, 21 are accumulating downward - revision days, and 5 have issued downward - revision board plans but have not held a general meeting of shareholders [26]. 3.3.3 Put Option - No convertible bond issued a conditional put option announcement this week. As of the latest, 1 convertible bond has issued a put option announcement, and 3 are accumulating put - option trigger days, among which 1 is also accumulating downward - revision days, and 2 are in the non - downward - revision interval [29]. 3.4 Primary Issuance - As of the latest, there are 4 convertible bonds in the approval - registration progress, with a to - be - issued scale of 3.6 billion yuan; there are 9 convertible bonds in the listing - committee - approval process, with a to - be - issued scale of 8.8 billion yuan [31].

1. Report Industry Investment Rating - The document does not mention the industry investment rating. 2. Core View of the Report - The increase in the margin ratio for margin trading may suppress the short - term sentiment of convertible bonds. With the market premium rate approaching the previous high, there is a need to be vigilant about the risk of a correction. Structurally, medium - and large - cap convertible bonds have led the valuation increase after the new year, the valuation of low - rated varieties has increased, while the valuation of small - cap and high - rated varieties is relatively underestimated. In a high - valuation market, it is necessary to prevent the premium compression caused by forced redemptions. [2][4] - The A - share market was volatile and differentiated during the week, with the mid - cap and science and technology innovation indices outperforming. Sectors such as media and computer in the technology growth direction led the gains, and the congestion degree was differentiated. [2][4] - The convertible bond market strengthened, with small - and medium - cap convertible bonds outperforming large - cap ones. The valuation generally stretched, the implied volatility and the median market price remained at a high level, and some high - price and high - premium targets led the gains. [2][4] - The primary market issuance was relatively stable with sufficient reserves. Clause games remained the focus, with a weak willingness to lower the conversion price and intensified redemption games. Attention should be paid to the forced redemption risk of large - scale high - rated varieties. [2][4] 3. Summary According to the Directory 3.1 Policy Signals and Convertible Bond Valuation - Historically, the convertible bond market has been more cautious about adjustments to the margin ratio for margin trading. On January 14, 2026, the Shanghai, Shenzhen, and Beijing Stock Exchanges announced an increase in the minimum margin ratio for margin trading from 80% to 100%. In the past, the convertible bond market was generally cautious in the short - term regarding such adjustments, with only a rise on the first trading day after the margin ratio was lowered in September 2023. [15] - The market - wide par - value premium rate has approached the previous high. In 2026, it has widened again, indicating that the overall valuation of the convertible bond market is at a relatively high level. [16] - Currently, the valuation of small - cap and high - rated convertible bonds is relatively low. Medium - and large - cap convertible bonds (over 500 million) have been the main force driving the market valuation up in 2026, with their premium rates significantly widening and remaining above 30%. The valuation of small - cap convertible bonds has been compressed to around 20%. In terms of credit ratings, the market risk appetite has increased, the valuation of low - credit - rated convertible bonds has risen significantly, while the premium rate of high - rated varieties is relatively low. [19] - In the current high - valuation context, the market is more sensitive to forced - redemption - counting varieties. The significant compression of the premium rate often occurs in the last five trading days of convertible bonds with forced - redemption counting. [22] 3.2 Market Theme Weekly Review - From January 11 to January 17, 2026, the equity market strengthened overall. Themes in the Internet and computer directions performed strongly, while those in the commercial aerospace direction, such as the large - aircraft index, aerospace technology index, and aerospace science and industry index, were under pressure. [24] 3.3 Market Weekly Tracking 3.3.1 Main Index Differentiation, Strong Performance of Science and Technology Innovation and Mid - cap Indices - The main A - share indices strengthened during the week. The Shenzhen Component Index and the ChiNext Index oscillated upwards, while the Shanghai Composite Index rose first and then fell. In terms of style, the CSI 500 Index and the Science and Technology Innovation 50 Index outperformed other major scale indices. [27] - In terms of capital, the average daily trading volume of the market increased significantly, and the net outflow of main funds expanded slightly. [27] - The technology - growth sectors in the A - share market were strong during the week. Sectors such as media, computer, electronics, and machinery and equipment led the gains, while banks, agriculture, forestry, animal husbandry, and fishery, and non - bank finance performed weakly. The trading volume was mainly concentrated in the computer, electronics, and power equipment sectors, with the electronics sector accounting for over 15% of the average daily trading volume. [30] - The market sector congestion degree was still significantly differentiated. The congestion degree in the media, computer, communication, and social service directions rebounded, while that in manufacturing sectors such as automobiles, basic chemicals, and petroleum and petrochemicals declined. [33] 3.3.2 The Convertible Bond Market Strengthened Overall, with the Small - Cap Index Performing Strongly - From January 11 to January 17, 2026, the convertible bond market strengthened. The CSI Convertible Bond Index rose, with the small - cap convertible bond index performing relatively strongly and the large - cap convertible bond index under some pressure. The trading volume expanded, and the average daily trading volume exceeded 10 billion. [36] - In terms of valuation, the convertible bond market valuation stretched overall. By par - value range, the conversion premium rates in the 120 - 130 yuan and 140 - 150 yuan par - value ranges were compressed, and those in the ranges below 90 yuan and above 150 yuan were significantly compressed. By market - price range, the conversion premium rates in the 110 - 120 yuan and 130 - 140 yuan market - price ranges were compressed, while those in the 100 - 110 yuan and over 150 yuan ranges stretched significantly. [39] - The weighted implied volatility of the convertible bond market balance oscillated weakly and remained at a historically high level. The median market price of convertible bonds oscillated upwards and reached a previous high. [42][43] - Convertible bonds in technology - growth sectors were more elastic. Sectors such as communication, computer, media, machinery and equipment, and electronics led the gains. The trading volume was mainly concentrated in the electronics, pharmaceutical biology, and power equipment sectors, with the combined trading volume of these three sectors accounting for over 30%. [47] - Most individual convertible bonds recovered during the week. The number of convertible bonds with a range increase of 0 or more was 294, accounting for 76.0% of the total number of outstanding convertible bonds in the market. The top five convertible bonds in terms of cross - week gains were Huayi Convertible Bond, Shengxun Convertible Bond, Weice Convertible Bond, Haohan Convertible Bond, and Zhenhua Convertible Bond. The top five in terms of cross - week losses were Saili Convertible Bond, Songsheng Convertible Bond, Guanglian Convertible Bond, Tianjian Convertible Bond, and Zai 22 Convertible Bond. The top five gainers generally had the characteristics of high market price and high conversion premium rate. [49] 3.4 Convertible Bond Issuance and Clause Tracking 3.4.1 Primary Market Issuance Plan - From January 11 to January 17, 2026, 3 convertible bonds were listed (Jin 05 Convertible Bond, Aohong Convertible Bond, and Shuangle Convertible Bond), and 2 were available for subscription (Naipu Zhuan 2 and Shangtai Convertible Bond). [53] - A total of 15 listed companies updated their convertible bond issuance plans during the week, including 4 in the approved - for - registration stage, 4 in the exchange - acceptance stage, 3 in the shareholders' - meeting - passed stage, and 4 in the board - of - directors' - plan stage. The total scale of projects in the exchange - acceptance and subsequent stages has reached 8.1 billion yuan. [54][55] 3.4.2 Clause - Related Announcements - **Lower - conversion - price announcements**: 6 convertible bonds announced that they were expected to trigger a lower conversion price, with a market - value - weighted average PB of the underlying stocks of 2.2; 4 announced that they would not lower the conversion price, with a market - value - weighted average PB of 5.4; 1 proposed to lower the conversion price, with a PB of the underlying stock of 2.0. [59][60][61] - **Redemption - related announcements**: 7 convertible bonds announced that they were expected to trigger redemption; 4 announced that they would not redeem in advance; 4 announced early redemption. [64][65][67]

Report Industry Investment Rating - Not mentioned in the provided content Core Viewpoints - At the beginning of the year, the equity market had a good start. Coupled with a decline in call risk and an increase in unexpected non - call cases, convertible bonds (CBs) simultaneously boosted their valuations. This week, CBs outperformed their underlying stocks, with high - price and long - duration CBs leading the gains. The 100 - yuan premium rate and the median CB price reached new highs since 2017. In the future, considering the high - expected profit - loss ratio of the asset side and the trading - oriented mindset of the liability side, the volatility of the CB market will increase, and the risk of "missing out" is higher. Therefore, investment strategies should de - emphasize timing and abandon position differences [5][6]. Summary by Directory 1. Weekly Viewpoint and Outlook - The equity market had a good start at the beginning of the year. With reduced call risk and more unexpected non - call cases, CBs' valuations were boosted. This week, CBs outperformed underlying stocks, and high - price and long - duration CBs led the rise. The 100 - yuan premium rate and the median CB price reached new highs since 2017. In the future, the CB market's volatility will increase, and the "missing out" risk is higher. Investment strategies should de - emphasize position timing [5][6]. 2. CB Valuations - This week, the market rose significantly, and the 100 - yuan premium rate increased by 2.0% to 33.0%, a new high since 2017. After excluding outliers, the full - market 100 - yuan premium rate was 33.0%, up 2.0% week - on - week, at the 100.0% percentile since 2017 [5][7]. - Valuations in all parity ranges increased significantly this week. The valuation increase in the equity - biased and bond - biased areas was greater than that in the balanced area. The rise in the equity market led to an increase in the parity of bond - biased CBs and their valuations. The increase in unexpected non - call CBs and the strong upward momentum of underlying stocks also drove up the valuations of equity - biased CBs [5][12]. - From an individual bond perspective, in the high - parity area, most CBs with large valuation increases were non - call ones, such as Dinglong, Borui, and Yanggu. The conversion premium rates of Dianhua and Wankai CBs dropped below 10%, implying a certain call expectation. In the balanced and bond - biased areas, valuations mostly increased, mainly driven by the rapid rise of underlying stocks, such as Shenxun, Weixin, Rundong, and Yaoji [12][13]. - As of now, from the perspective of conversion premium rate, the weighted conversion premium rate percentiles of the parity range above 50 yuan are close to 100%, while the historical percentiles of the 80 - 90 yuan and 110 - 120 yuan parity ranges are relatively low. From the perspective of the bottom - support premium rate, the weighted bottom - support premium rate percentiles of the parity range above 100 yuan are close to 100%, and the historical percentiles of the 70 - 90 yuan parity range are relatively low [15][16]. 3. Clause Tracking 3.1 Redemption - This week, Huanxu and Huarui CBs announced redemptions, and 5 CBs announced non - redemptions, with a call rate of 29%. Currently, there are 31 CBs in the redemption process. Next week, 9 CBs are expected to meet the redemption conditions, and 8 are expected to issue announcements of potential call triggers. In addition, 21 CBs are expected to enter the call counting period within the next month [20][22]. 3.2 Downward Revision - This week, Fangyuan and Lanfan CBs proposed downward revisions. As of now, 103 CBs are in the non - downward - revision period, 19 CBs cannot be downward - revised due to net asset constraints, 1 CB has triggered the condition but the stock price is still below the downward - revision trigger price without an announcement, 23 CBs are accumulating downward - revision days, and 4 CBs have issued downward - revision board proposals but have not yet gone to the general meeting of shareholders [27]. 3.3 Put Option - This week, no CB issued a conditional put option announcement. As of now, 5 CBs are accumulating put - option trigger days, among which 3 are also accumulating downward - revision days, and 2 are in the non - downward - revision period [29]. 4. Primary Issuance - As of now, there are 9 CBs in the approved - registration progress, with a total issuance scale of 1.1 billion yuan, and 5 CBs in the listing - committee - approved progress, with a total issuance scale of 290 million yuan [31].

Core Viewpoint - The convertible bond market is experiencing a "stock-bond resonance" trend alongside the A-share market's upward movement, with the China Convertible Bond Index rising 1.08% in the past week and approximately 4.9% in the past month, despite underlying risks such as forced redemptions and compressed conversion premiums [1][3]. Group 1: Market Performance - The China Convertible Bond Index closed at 472.93 points on August 13, with a single-day increase of 0.68%, continuing a strong performance with a total trading volume of 1000.41 billion yuan [1]. - The index has seen a cumulative increase of 3.62% in August and approximately 9.84% over the past three months, driven primarily by the upward movement of underlying stocks [3]. Group 2: Investor Behavior - Investors are increasingly favoring underperforming individual bonds while also directing significant funds into index products, with convertible bond ETFs seeing a surge of nearly 12 billion yuan in the past month, bringing the total scale to over 55.1 billion yuan [4]. - The market is witnessing a divergence in fund flows, with the convertible bond ETF experiencing a net inflow of 5.71 billion yuan on August 12, while the Shanghai Convertible Bond ETF saw a net outflow of 3.83 billion yuan, indicating mixed market expectations [4]. Group 3: Redemption Risks - As of August 13, 17 convertible bonds have triggered forced redemption clauses without announcements, and 41 bonds are trading above 90% of the redemption trigger price of 130 yuan, highlighting ongoing redemption risks [4]. - The recent delisting of "Jinko Convertible Bond" resulted in some investors facing over 20% redemption losses due to not converting in time, emphasizing the rigid risks associated with forced redemptions [4]. Group 4: Downward Adjustment Strategies - Since July, nine listed companies have proposed to lower their conversion prices, but market reactions have varied significantly, with some bonds experiencing substantial price drops due to perceived insincerity in the adjustment proposals [7]. - The success of downward adjustments is highly dependent on the performance of underlying stocks and the remaining time until maturity, creating a betting scenario between issuers and bondholders [7]. Group 5: Investment Strategies - Given high valuations and hidden risks, institutional strategies are shifting towards "refined selection" of bonds, focusing on avoiding bonds with prices exceeding 85% of the redemption trigger price and a premium rate above 15% [7]. - A balanced strategy is recommended, selecting bonds with a conversion premium rate within 30%, a return on equity exceeding industry averages, and a balance exceeding 1 billion yuan, which have outperformed the index by 4.1% in the past month [7].