1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - The bond market adjusted until late September, and the cost - effectiveness of coupon assets continued to increase. A repair market started around the National Day holiday, but there was a significant term differentiation, with short - duration assets being more favored [5][10][34]. - The current proportion of ordinary credit bonds with valuations in the 2.2% - 2.6% range is relatively high, offering a wide selection [5][34]. - The strategy should prioritize liquidity. There are some opportunities to participate in 3 - 5 - year bank secondary capital bonds after adjustment. Also, considering the curve steepness, it is advisable to continue participating in the sinking of weak - quality urban investment bonds with a 1 - 3 - year term. For ultra - long - term bonds, although the yield cost - effectiveness has increased after adjustment, the recent market is highly uncertain, and the ultra - long - duration strategy may only be suitable for some allocation investors [5][34]. 3. Summary According to Related Catalogs 3.1 Bond Market Performance - **Overall Repair and Term Differentiation**: The bond market experienced continuous adjustment in September, and the repair market started around the National Day holiday. The short - end of credit bonds had a stronger repair, while ultra - long - term credit bonds had a weaker repair, with some varieties still adjusting and performing worse than the same - term interest - rate bonds [10][12][34]. - **Yield Changes**: From September 28 to October 11, 2025, the yields of 1Y, 2Y, 3Y, 4Y, and 5Y national bonds decreased by 1.3BP, 3.0BP, 3.7BP, 4.0BP, and 4.4BP respectively. The yields of the same - term AAA medium - term notes decreased by 7.7BP, 5.7BP, 4.2BP, 3.0BP, and 4.4BP respectively, and the yields of AA + medium - term notes decreased by 5.7BP, 2.7BP, 2.2BP, 1.0BP, and 1.4BP respectively [10][11]. - **Curve Shape**: The steepness of the 1 - 2 - year and 2 - 3 - year periods for all ratings was the highest, and the steepness of the 3 - 5 - year period for low - rated bonds was also relatively high, showing a certain bear - steepening characteristic [14]. - **Historical Quantiles**: Currently, 2 - 3Y, especially around 3Y, coupon assets have certain cost - effectiveness after adjustment. The valuation yields to maturity of 1Y - AAA, 3Y - AAA, 5Y - AAA, 1Y - AA +, 3Y - AA +, 5Y - AA +, 1Y - AA, and 3Y - AA ChinaBond medium - short - term notes from September 28 to October 11, 2025, were at the 23.87%, 40.54%, 49.54%, 25.22%, 39.63%, 46.84%, 28.15%, and 38.73% levels since 2024. The historical quantiles of the 1Y - AAA, 3Y - AAA, 5Y - AAA, 1Y - AA +, 3Y - AA +, 5Y - AA +, 1Y - AA, and 3Y - AA credit spreads were 1.12%, 34.98%, 74.04%, 2.25%, 31.37%, 56.43%, 13.54%, and 29.79% respectively, indicating that the cost - effectiveness around 3Y was relatively high [16]. 3.2 Perpetual and Subordinated Bonds (Er Yong Bonds) - **Market Characteristics**: The market of Er Yong bonds was strongly synchronized, with an obvious "volatility amplifier" characteristic. The repair degree of 1Y - 5Y was higher than that of ordinary credit bonds, but the market for ultra - long - term bonds was poor and continued to weaken [3][18]. - **Yield Changes**: The yields of 1 - 5 - year, 7 - year, and 10 - year AAA - bank secondary capital bonds decreased by 7.89BP, 10.18BP, 10.93BP, 11.20BP, 7.25BP, 3.84BP, and increased by 6.69BP respectively. Currently, the part of the curve above 3 years was still 30BP - 62BP away from the lowest yield point since 2025. Compared with the sharp decline at the end of July, the yield points above 3 years had broken through new highs, and the adjustment amplitude was higher than that of the sharp decline at the end of July [18]. 3.3 Institutional Behavior - **Trading and Allocation**: Public funds and other trading desks continued to sell credit bonds, while wealth management, insurance, and other allocation desks moderately bought on dips, but the incremental purchases were limited, and the overall demand was weak [4][26]. - **Public Funds**: Since mid - August, public funds have sold 3 - 5 - year secondary capital bonds worth 47 billion yuan, with a much higher selling intensity than in previous years [4][27]. - **Wealth Management**: Since August, the weekly net purchase scale of ordinary credit bonds by bank wealth management has remained stable, and the weekly change in the stock scale of wealth management has also been small, indicating that the liability side of wealth management has been relatively stable during this adjustment, but the incremental allocation demand is also weak [4][27]. - **Insurance Funds**: Since August, insurance funds have continued to buy on dips, with a relatively high increase in ordinary credit bonds, reaching 70.8 billion yuan from August to the present. However, since it is not the peak allocation period, and the strengthening of equity assets has also suppressed the preference of insurance funds for fixed - income assets to some extent, the overall allocation demand is not strong [4][27]. - **Credit Bond ETFs**: The performance of credit bond ETFs has been below expectations. The scale and net value of credit market - making ETFs have declined significantly. For science - innovation ETFs, the listing of the second batch of products in late September provided a short - term boost to the overall market, but the sustainability was weak [4][28].

Group 1: Report Industry Investment Rating - Not provided in the given content Group 2: Core Viewpoints of the Report - The ultra - long credit bond market continues. Some investors prefer to extend the duration to earn excess returns as the yield of medium - and short - duration credit bonds is close to the annual low, and there is a constraint on the subsequent downward range [2][13] - The subscription sentiment for new ultra - long credit bonds has recovered, but the average issuance interest rate has fluctuated greatly. The coupon increase has promoted the recovery of the subscription sentiment, which has returned to around the 50% percentile since 2024 [3][22] - The performance of ultra - long credit bonds is stable, but the trading sentiment has cooled down in June. The trading rhythm of industrial bonds over 7 years has slowed down, and the pricing of 5 - 7 - year long bonds has become extreme. The ultra - long - duration strategy is still recommended to be cautious [4][5] Group 3: Summary by Directory 1. Stock Market Characteristics - The ultra - long credit bond market persists. The number of outstanding ultra - long credit bonds with a yield below 2.2% has increased to 336 compared with last week [2][13] 2. Primary Issuance Situation - Two special bonds for stable growth and expanded investment were issued in large quantities this week, with a total issuance scale of 39.5 billion, driving a significant increase in the supply of new ultra - long credit bonds. The average issuance interest rate has fluctuated greatly, and the coupon rate of new ultra - long industrial bonds has risen to 2.42%. The subscription sentiment for new ultra - long credit bonds has recovered to around the 50% percentile since 2024 [3][22] 3. Secondary Trading Performance - The performance of ultra - long credit bonds is stable. The index of AA + credit bonds over 10 years has increased by 0.36%. The trading rhythm of industrial bonds over 7 years has slowed down, with 140 fewer trading volumes compared with the previous week. Although the trading sentiment has cooled down in June, the TKN trading proportion of credit bonds over 7 years still shows a relatively high buying interest, and the deviation between trading yield and valuation has not fluctuated significantly. Public funds and wealth management have significantly reduced their increase in the scale of general credit bonds with a duration of 5 - 10 years. Insurance has become the main buyer of 15 - 30 - year bonds again, but its stability in buying long - term bonds this year is not as good as last year [4][31][42]