Group 1 - The willingness to adjust convertible bonds is decreasing, with only 10% of proposed adjustments in October compared to 21% in September, indicating a shrinking adjustment space [1][13][19] - The proportion of convertible bonds with a price in the (0,80] range has decreased from 40.7% at the beginning of the year to 20.0%, reflecting a continuous reduction in potential adjustment space [1][19] - The market is seeing a shift from adjustment strategies to focusing on the underlying stocks, with an emphasis on opportunities related to undervalued stocks in the context of optimistic market expectations [2][22] Group 2 - The convertible bond market has shown positive performance, with the China Securities Convertible Bond Index rising by 0.86% this week, alongside an increase in average daily trading volume to 685.26 billion [3][31] - A total of 17 industries saw gains, with the retail, coal, and steel sectors leading the market, while the computer, media, and electronics sectors experienced declines [3][30][38] - The weighted average conversion value of the market has increased to 104.67 yuan, with a corresponding decrease in the premium rate to 37.68% [4][48] Group 3 - The supply of convertible bonds is tightening, with two new bonds issued this week and several announcements regarding potential adjustments and redemptions [5][24] - The market is advised to focus on convertible bonds nearing their adjustment periods, considering factors such as remaining term and financial pressure to identify potential adjustment candidates [1][19][24] - The report highlights the importance of monitoring structural opportunities in sectors like technology, consumer goods, and cyclical industries, particularly in the context of economic recovery [2][22][24]

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].