Report Summary 1) Report Industry Investment Rating No relevant content provided. 2) Core Viewpoints of the Report - The scarcity of Xingye Convertible Bonds is becoming more prominent, and there is potential to trigger a forced redemption. The bonds are a high - quality target for low - risk preference funds [1][5]. - With policy support, improved asset quality, and continuous decline in interest rates, the PB of Industrial Bank still has room for improvement [5]. 3) Summary by Relevant Catalogs Information of Xingye Convertible Bonds - The Xingye Convertible Bonds (113052.SH) are rated AAA. As of June 9, 2025, the bond balance is 41.353 billion yuan, the remaining term is 2.55 years, the closing price is 122.62 yuan, the conversion premium rate is 14.63%, and the pure bond premium rate is 13.73% [1]. Information of the Underlying Stock (Industrial Bank) - The latest total market capitalization of Industrial Bank (601166.SH) is 494.4 billion yuan, with a PE TTM of 6.45x and a PB LF of 0.63x. It was established in 1988 and is a core enterprise under the Fujian Provincial Department of Finance, being one of the first batch of joint - stock banks in China, with financial licenses such as trust, financial leasing, funds, and asset management [3]. - The bank has a flexible mechanism, focusing on the "commercial bank + investment bank" layout and building a comprehensive financial service system of "equity, debt, and loans". Its on - and off - balance - sheet businesses are balanced, and its ROE has always been among the top in the joint - stock banks. From the end of 2020 to the end of 2024, its total assets increased from 7.89 trillion yuan to 10.51 trillion yuan, with a CAGR of 7.41% [4]. - In Q1 2025, affected by the narrowing of the net interest margin and fluctuations in non - interest income, the operating income was 55.7 billion yuan, a year - on - year decrease of 3.58%; the net profit attributable to the parent company was 23.8 billion yuan, a year - on - year decrease of 2.22%. The net interest margin in Q1 2025 was 1.80%, a decrease of 7 bps compared to 2024, but significantly better than the industry average (the overall net interest margin of commercial banks was 1.43% during the same period). At the end of Q1 2025, the non - performing loan rate was 1.08%, and the provision coverage ratio was 233%, with overall stable asset quality [4]. Valuation of Xingye Convertible Bonds - Based on the Shanxi Securities convertible bond valuation model, assuming the stock price remains unchanged and without considering forced redemption and downward revision, the reasonable valuation of Xingye Convertible Bonds is between 127 - 129 yuan [6].