1. Report Industry Investment Rating There is no information regarding the industry investment rating in the provided content. 2. Core Views of the Report - In 2025Q4, the market value of convertible bonds held by public - funds decreased by 2.63% quarter - on - quarter but increased by 7.24% year - on - year. The proportion of convertible bond market value to bond investment market value and net value both decreased. First - and second - tier bond funds increased their positions, while convertible bond funds decreased their positions [2]. - The performance of convertible bond funds in 2025Q4 was worse than the convertible bond index. There was a small - scale net redemption, and the scale decreased. However, the position of convertible bonds increased, and the leverage ratio continued to decline [4]. - In terms of industry allocation, both public - funds and convertible bond funds focused on increasing positions in bank and electronic convertible bonds. Public - funds also increased positions in convertible bonds of industries such as petroleum and petrochemicals and national defense and military industry, while convertible bond funds increased positions in industries such as automobiles and coal [7][8]. 3. Summary According to the Directory 3.1 Public - funds' Position of Convertible Bonds Declined, and Positions in Bank and Electronic Convertible Bonds Increased 3.1.1 The Market Value of Convertible Bonds Held by Public - funds Decreased Quarter - on - Quarter, and the Position Declined - In 2025Q4, the market value of convertible bonds held by public - funds was 308.251 billion yuan, a quarter - on - quarter decrease of 2.63% but a year - on - year increase of 7.24%. The proportion of convertible bond market value to bond investment market value was 1.46%, a decrease of 0.11 pct compared with 25Q3; the proportion to net value was 0.83%, a decrease of 0.04 pct compared with 25Q3 [12]. - The market value of convertible bonds held by different types of funds changed differently. First - and second - tier bond funds increased their positions, while convertible bond funds decreased their positions. The position of convertible bonds of public - funds decreased by 0.04 pct to 0.83%. Among them, the position of convertible bonds of second - tier bond funds was further diluted, while that of convertible bond funds increased [14][23]. 3.1.2 In the Context of Market Contraction, the Positions of Public - funds, Insurance Funds, Enterprise Annuities, and Securities Firms' Proprietary Trading All Decreased - As of the end of 2025Q4, the total face value of convertible bonds held by the Shanghai and Shenzhen Stock Exchanges was 552.692 billion yuan, a quarter - on - quarter decrease of 46.797 billion yuan, or 7.81%. Public - funds, insurance institutions, enterprise annuities, and securities firms' proprietary trading all significantly reduced their positions [32]. - The face value of convertible bonds held by public - funds decreased slightly quarter - on - quarter, but the proportion increased. The scale of convertible bonds held by insurance institutions and enterprise annuities continued to shrink [38]. 3.1.3 The Market Value Increment of Bank and Electronic Convertible Bonds in Public - funds' Positions Ranked High, and There Might Be Profit - Taking in Non - ferrous Metals - In terms of industry layout, banks were still the primary layout sector in 25Q4. The market value of convertible bonds held by public - funds in the bank and power equipment sectors increased. Fourteen industries had positive quarter - on - quarter changes in market value, with petroleum and petrochemicals, national defense and military industry, and steel industries leading in growth. The market value of convertible bonds in industries such as building materials, non - ferrous metals, and communications decreased significantly [41]. 3.1.4 Xingye Convertible Bond Maintained the Position of the First Heavily - Held Bond - Xingye Convertible Bond maintained the position of the first heavily - held bond of public - funds and had a high increment. Among the top ten convertible bonds in terms of market value, three were bank convertible bonds. Excluding bank convertible bonds, there were six and five power equipment convertible bonds in the top ten in terms of the number of holdings and total market value of holdings respectively [47]. 3.2 The Performance of Convertible Bond Funds Was Worse than the Index, the Position of Convertible Bonds Increased, and the Leverage Ratio Declined 3.2.1 The Re - invested Unit Net Value Increased, and There Was a Small - Scale Net Redemption - As of 2025Q4, there were 39 convertible bond funds in the market. The performance of convertible bond funds was worse than the convertible bond index, with a small - scale net redemption and a decrease in scale. The average increase in the re - invested unit net value of 39 convertible bond funds was 0.84%, and the median was 1.09%. The overall net redemption was 2.627 billion yuan, and the net subscription rate was 48.72%, a decrease of 15.38 pct compared with 25Q3 [53]. - The asset allocation of high - performing convertible bond funds changed. Most funds reduced their positions in convertible bonds and increased their positions in stocks [56]. 3.2.2 The Position of Convertible Bonds Increased Quarter - on - Quarter, and the Leverage Ratio Decreased Quarter - on - Quarter - The overall position of 39 convertible bond funds increased, and the leverage ratio decreased quarter - on - quarter. The proportion of convertible bond market value to the net value of convertible bond funds was 84.81%, a quarter - on - quarter increase of 0.63 pct; the median position was 84.39%, a quarter - on - quarter decrease of 1.16 pct. The average leverage ratio was 113.05%, a decrease of 1.08 percentage points quarter - on - quarter [70]. - Twenty convertible bond funds increased their positions in convertible bonds. Fourteen convertible bond funds increased their positions in stocks, and 25 convertible bond funds maintained zero - position in stocks or reduced their positions [75]. 3.2.3 Convertible Bond Funds Focused on Increasing Positions in Bank and Electronic Convertible Bonds, and the Heavily - Held Bonds Were More Diversified - In 25Q4, 39 convertible bond funds focused on increasing positions in the electronic and power equipment sectors. The number of holdings in more than half of the industries increased, with electronics, power equipment, basic chemicals, and automobiles leading in growth. The proportion of banks in the market value of holdings increased by 0.93 pct, and there were 12 industries in total with an increase in the proportion of market value of holdings [79]. - Xingye and Shanghai United Bank convertible bonds were the main allocation bonds, but the allocation was more diversified. The banking industry ranked first among the heavily - held industries, and the funds also focused on allocating power equipment convertible bonds [81].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Views of the Report - The convertible bond market was mainly volatile this week (0908 - 0912), with valuations hovering at high levels. High - priced bonds were better than medium - priced ones, and medium - priced were better than low - priced. Small - cap bonds were better than mid - cap ones, and mid - cap were better than large - cap [1][35] - The opportunities in the current convertible bond market are highly structured, rooted in the highly structured equity market. The technology - themed (core is AI computing power) market has not effectively driven the rotation and supplementary rise of the cyclical sectors due to the relatively lagging marginal improvement of the overall economic fundamentals [1][35] - The market index may show a pattern of grinding at the top and oscillating. The CSI Convertible Bond Index has risen by more than 30% since the low in August 2024, and the parity premium rate has increased by about 8 - 12 pct during the same period. In the short term, the rise of medium - and low - priced cyclical targets is slow and the elasticity is low, and the strong redemption demand of high - priced thematic targets will suppress the further rise of the index. In the long term, the index's oscillation center may move up [1][36] - In the short - term strategy, it is still not recommended to significantly reduce positions, but the structure needs to be adjusted. Reduce high - volatility technology - themed targets and increase the proportion of balanced targets to control drawdowns, and increase the allocation proportion of cyclical sectors such as non - ferrous metals, lithium batteries, and chemicals in the medium - and low - price ranges [1][36] Group 3: Summary According to the Directory 1. Week - on - Week Market Review 1.1 Equity Market Overall Rise, Most Industries Rise - From September 8th to September 12th, the equity market overall rose. The Shanghai Composite Index rose 1.52%, the Shenzhen Component Index rose 2.65%, the ChiNext Index rose 2.10%, and the CSI 300 rose 1.38%. The average daily trading volume of the two markets decreased by about 2708.96 billion yuan to 22986.80 billion yuan compared with last week, a week - on - week decrease of 10.54% [6][9] - Among the 31 Shenwan primary industries, 25 industries closed up, with 11 industries rising more than 2%. Electronics, agriculture, forestry, animal husbandry and fishery, media, non - ferrous metals, and steel led the gains, rising 6.15%, 4.81%, 4.27%, 3.76%, and 3.72% respectively. Banking, petroleum and petrochemicals, pharmaceutical biology, social services, and household appliances led the losses [13] 1.2 Convertible Bond Market Overall Rise, Some Industries Rise - From September 8th to September 12th, the CSI Convertible Bond Index rose 0.43%. Among the 29 Shenwan primary industries, 13 industries closed up, with 3 industries rising more than 2%. Food and beverage, non - ferrous metals, electronics, communications, and agriculture, forestry, animal husbandry and fishery led the gains, rising 5.78%, 3.12%, 2.52%, 1.72%, and 1.51% respectively. Media, petroleum and petrochemicals, non - bank finance, household appliances, and banking led the losses [15] - The average daily trading volume of the convertible bond market this week was 869.91 billion yuan, a significant reduction of 59.05 billion yuan, a week - on - week change of - 6.36%. The top ten convertible bonds in terms of trading volume had an average trading volume of 102.49 billion yuan, and the first - ranked one reached 174.00 billion yuan. About 53.29% of individual bonds rose, about 25.17% of individual bonds rose in the 0 - 1% range, and 18.14% of individual bonds rose more than 2% [15] - The overall market conversion premium rate continued to decline this week, with an average daily conversion premium rate of 36.11%, a decrease of 0.59 pct compared with last week. In terms of price ranges, except for bonds below 90 yuan, the average daily conversion premium rates of bonds in other price ranges widened. In terms of parity ranges, the situation was similar [21] - 20 industries' conversion premium rates widened, with 9 industries widening by more than 2 pcts. Household appliances, media, petroleum and petrochemicals, national defense and military industry, and pharmaceutical biology led the widening. 23 industries' parity increased, with 17 industries increasing by more than 2% [25][29] 1.3 Comparison of Stock and Bond Market Sentiments - This week, the weekly weighted average and median of the convertible bond and underlying stock markets were positive, and the underlying stocks had a larger weekly increase. The trading volume of the underlying stock market increased more significantly and was at a higher quantile level. More underlying stocks closed up, and the individual underlying stocks could achieve higher returns. Overall, the trading sentiment of the underlying stock market was better this week [32] - On different trading days, the trading sentiment of the underlying stock market was better on Monday, Tuesday, and Wednesday, while the trading sentiment of the convertible bond market was better on Thursday and Friday [33] 2. Outlook and Investment Strategy - The convertible bond market may show a pattern of grinding at the top and oscillating in the short term, and the oscillation center may move up in the long term [1][36] - In the short - term strategy, do not significantly reduce positions, but adjust the structure. Reduce high - volatility technology - themed targets and increase the proportion of balanced targets and the allocation of cyclical sectors in the medium - and low - price ranges [1][36] - The top ten convertible bonds with the highest predicted downward - revision probability next week are Lanfan Convertible Bond, Dongshi Convertible Bond, Baolai Convertible Bond, etc. The top ten high - rated, medium - and low - priced convertible bonds with the greatest potential for parity premium rate repair next week are Pufa Convertible Bond, Fenghuo Convertible Bond, Jinneng Convertible Bond, etc. [1][36]