1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The issuance of replacement bonds is tapering off, and the urban investment bond market continues to experience a narrow - scale contraction. In August 2025, the net repayment of urban investment bonds was 840 million yuan, with the scale narrowing compared to the previous month and the same period last year. The issuance and maturity scales both decreased year - on - year. There may still be an unreleased early repayment pressure from special refinancing bonds, and the risk of early discounted redemption should be noted [2][13][17]. - The financing of municipal - level entities has turned positive, and the proportion of short - duration bond issuance has increased in the volatile market. The net financing of municipal - level entities has recovered, mainly due to the marginal improvement in the financing environment of some strong municipal - level entities. The 3 - year - plus bonds remain the main issuance term, but the scale of 1 - year bonds has significantly increased [2][13]. - The overall subscription sentiment has declined, while short - duration varieties have seen an inverse increase. In August, the average subscription multiple of urban investment bonds was 2.88 times, a decrease from the previous month. The subscription multiples of municipal - level entities have marginally increased, while those of other levels have decreased. The demand for bonds within 1 year has increased, while that for bonds over 5 years has decreased [3][14]. - The credit bond market has been continuously volatile, and the market favors short - end varieties. Since August, the credit bond market has shown a volatile upward trend, and the market tends to choose short - end credit assets to avoid risks. The yields of bonds at all terms and levels have generally increased, with short - duration bonds performing relatively stably. The spreads of short - end bonds have been compressed [3][15]. 3. Summary According to the Directory 3.1 Replacement Bonds Issuance Tapering Off, Urban Investment Continues Narrow - Scale Contraction 3.1.1 Issuance and Repayment: Six - Month Consecutive Net Repayment of Urban Investment Financing - As of August 31, 2025, 3,797 urban investment entities under the HA caliber issued 51.74 billion yuan in bonds and repaid 52.58 billion yuan, resulting in a net repayment of 840 million yuan. The net repayment scale decreased compared to the previous month and the same period last year. The financing structure has further differentiated, with municipal - level entities ending five consecutive months of net repayment, while low - level entities such as district - level entities continue to contract [17]. - From an administrative perspective, the net financing of municipal - level entities was 1.25 billion yuan, and that of provincial - level entities was 860 million yuan in August. District - level and park - level entities had net repayments of 1.73 billion yuan and 1.24 billion yuan respectively [17]. - From a rating perspective, only AAA - rated entities had net inflows of 2.63 billion yuan in August, while other rated entities had net repayments, with AA + entities having the highest at 1.98 billion yuan [18]. - From a variety perspective, MTN had the highest net financing of 3.88 billion yuan, while enterprise bonds had the highest net repayment of 2.47 billion yuan [18]. - From a term perspective, bonds with a term of over 3 years had the highest net financing of 11.03 billion yuan, while 2 - year bonds had the highest net repayment of 9.59 billion yuan [18]. - From a regional perspective, Zhejiang had the highest net financing of 1.03 billion yuan, while Jiangsu had the highest net repayment of 1.56 billion yuan. Compared with the previous month, Zhejiang, Jiangsu, and Beijing had increases, while Shanghai, Sichuan, and Henan had decreases [19]. - From a subject perspective, 344 entities had net inflows in August, with Shaanxi Xixian New Area Development Group Co., Ltd. having the highest net financing of 450 million yuan [19]. 3.1.2 Maturity Pressure: Approximately 6.5 trillion yuan will mature before the end of 2026 - As of August 31, 2025, the maturity pressure of 3,797 urban investment bonds under the HA caliber before the end of 2026 is about 6.47 trillion yuan, with 1.81 trillion yuan in 2025 and 4.66 trillion yuan in 2026. The remaining maturity pressure by the end of 2025 is about 180.86 billion yuan, with the peak in September at 55.64 billion yuan [39]. - The top 5 provinces in terms of remaining maturity amount by the end of 2025 are Jiangsu, Shandong, Zhejiang, Sichuan, and Hubei [40]. - The top 5 cities are Qingdao, Nanjing, Suzhou, Chengdu, and Xi'an [41]. - The top 5 districts are Jiangning District of Nanjing, Huangdao District of Qingdao, Huangpu District of Guangzhou, Shapingba District of Chongqing, and Jimo District of Qingdao [41]. - The top 5 parks are Guangzhou Economic and Technological Development Zone, Xi'an High - tech Industrial Development Zone, Taizhou Medical High - tech Industrial Development Zone, Wuzhong Economic and Technological Development Zone, and Suzhou High - tech Industrial Development Zone [41]. - The top 5 entities are Shudao Investment Group Co., Ltd., Jiangsu Communications Holding Co., Ltd., Hunan Expressway Group Co., Ltd., Shandong Hi - Speed Group Co., Ltd., and Qingdao Urban Construction Investment (Group) Co., Ltd. [41]. 3.1.3 Primary Subscription: The average subscription multiple is 2.88 times, and short - duration bonds are favored - In August, among the issued urban investment bonds, 27.28 billion yuan of bonds disclosed bidding data, with a cumulative bidding scale of 78.56 billion yuan and an average subscription multiple of 2.88 times, a decrease from the previous month [44]. - In terms of administrative levels, the subscription multiples of municipal - level entities have marginally increased. The average subscription multiple of provincial - level entities was 2.20 times, a decrease from the previous month; that of municipal - level entities was 3.35 times, an increase; that of district - level entities was 2.87 times, a decrease; and that of park - level entities was 2.86 times, a decrease [46]. - In terms of bond ratings, the overall subscription sentiment of all rated entities has cooled down, and the subscription of AA - rated bonds has significantly declined. The average subscription multiples of AAA, AA +, AA, AA(2), and AA - rated bonds have changed to varying degrees compared to the previous month [46]. - In terms of bond terms, short - and long - duration bonds have shown different performances, and the demand for bonds within 1 year has increased. The average subscription multiple of bonds within 1 year was 2.43 times, an increase from the previous month; that of 1 - 2 - year bonds was 3.41 times, a slight increase; that of 2 - 3 - year bonds was 3.19 times, a decrease; that of 3 - 5 - year bonds was 3.24 times, a slight decrease; and that of bonds over 5 years was 2.61 times, a significant decrease [47]. 3.2 The Credit Bond Market is Continuously Volatile, and the Market Favors Short - End Varieties 3.2.1 Valuation Spread: Credit Volatility Weakens, Triggering Redemption Concerns - Since August, the credit bond market has shown a volatile upward trend. The market tends to choose short - end credit assets to avoid risks. At the beginning of the month, the market stabilized due to factors such as loose liquidity and the resumption of VAT on treasury bonds. In the middle and late months, the equity market affected the bond market, and there was a large - scale net capital withdrawal. The yields and spreads of credit bonds increased rapidly, deviating from the trend of interest - rate bonds, triggering concerns about a redemption wave. By the end of the month, the market stopped falling again and returned to a narrow - range volatile market [54]. - The yields of bonds at all terms and levels have generally increased, with short - duration bonds performing relatively stably. For example, the yields of 1 - year AAA, AA +, AA, and AA(2) bonds have increased by 0.2bp, 0.2bp, 0.7bp, and 0.2bp respectively; those of 3 - year bonds have increased by 5.5bp, 6.0bp, 7.0bp, and 11.5bp respectively; and those of 5 - year bonds have increased by 7.1bp, 9.0bp, 16.1bp, and 16.1bp respectively [55]. - The spreads of short - and long - end bonds have shown different performances, and the spreads of bonds within 1 year have been compressed. For example, the spreads of 1 - year AAA, AA +, AA, and AA(2) bonds have narrowed by 3.3bp, 3.3bp, 2.8bp, and 3.3bp respectively; those of 3 - year bonds have changed to varying degrees; and those of 5 - year bonds have also shown different trends [56][59]. 3.2.2 Secondary Transaction: Activity Continues to Decline, and Risk - Aversion Sentiment Increases - The trading activity of urban investment bonds has declined, and the trading enthusiasm has significantly decreased. In August 2025, the sample trading records of urban investment bonds were about 14,000 transactions, with an average daily trading volume of about 665 transactions, a 11.0% decrease from the previous month. The daily average trading volume has declined for three consecutive months. The proportion of taken transactions was 70%, a 1 - percentage - point decrease from the previous month, and the long - short ratio has also slightly decreased [66]. - Driven by risk - aversion sentiment, the trading proportion of medium - and short - duration urban investment bonds has significantly increased. In terms of bond ratings, the trading proportion of AAA - rated bonds has decreased, while that of AA +, AA, and AA(2) bonds has increased, and that of AA - rated bonds has decreased. In terms of terms, the trading proportion of bonds within 1 year and 1 - 3 years has increased, while that of bonds over 3 years has decreased [67].