Core Viewpoint - The issuance of convertible bonds in the A-share market has significantly increased since August, with 32 companies announcing or updating their issuance plans, indicating a potential easing of supply-demand imbalances in the market [1][2]. Group 1: Issuance Trends - Since August, 32 listed companies have announced or updated their convertible bond issuance plans, with a total planned issuance of 377.36 billion yuan [2][3]. - Notable issuances include TBEA Co., Ltd. planning to raise up to 8 billion yuan and Qingdao Bank planning to raise up to 4.8 billion yuan [2]. - The majority of the recent issuances are from companies listed on the Sci-Tech Innovation Board and the Growth Enterprise Market, which now account for 62.5% of the total [3]. Group 2: Market Structure Issues - Despite the increase in issuance, structural issues remain, particularly the scarcity of large-cap convertible bonds as bank convertible bonds have exited the market [4][5]. - The total market size of convertible bonds has decreased from 733.73 billion yuan at the end of 2024 to 593.15 billion yuan as of October 16, 2023, a reduction of over 140 billion yuan [4]. Group 3: Market Resilience - The convertible bond market has shown strong resilience amid recent fluctuations in the A-share market, with a significant reduction in supply leading to a demand for fund reallocation [6]. - The current median price of convertible bonds is around 130 yuan, indicating a historically high valuation level [7].

Core Insights - The new policy allows companies listed on the Hong Kong Stock Exchange (HKEX) in the Greater Bay Area to return to the Shenzhen Stock Exchange (SZSE), marking a significant shift in China's capital market dynamics [1][2] Group 1: Policy Impact - The policy aims to address the dual dilemma faced by companies choosing between HKEX and A-shares, allowing them to leverage both international pricing and liquidity from the SZSE [1][3] - Approximately 120 companies from the Greater Bay Area, particularly in sectors like biomedicine and high-end manufacturing, will benefit from this dual listing opportunity, potentially reducing the historical A/H premium that has been around 40% [3] Group 2: Market Dynamics - The policy coincides with a peak in the HKEX IPO market, which raised $10.4 billion in 2024, surpassing the Shanghai Stock Exchange and indicating strong interest from mainland companies [2] - The relationship between HKEX and SZSE is expected to evolve from competition to collaboration, with both exchanges focusing on their respective strengths to cultivate world-class enterprises [3] Group 3: Challenges Ahead - Regulatory cooperation will be crucial, as there are significant differences in listing rules and financial disclosure standards between the two exchanges, which could lead to compliance burdens for companies [4] - Capital flow controls remain a challenge, as strict regulations on cross-border fund movement may hinder the operational flexibility of dual-listed companies [4] Group 4: Strategic Considerations - The choice of investors is becoming increasingly important for companies, as quality industrial investment institutions can provide essential support during critical development phases [5] - The next three years are seen as a pivotal period for the implementation of this policy, with the potential to reshape the landscape of China's capital market [6]