Core Viewpoint - The equity market is under pressure due to ongoing geopolitical conflicts, tightening global liquidity expectations, and high oil prices, leading to a decline in risk appetite for equity assets [1][18] Weekly Review of Convertible Bond Market - During the week of March 16-20, the Shanghai Composite Index fell 3.38% to 3957.1 points, while the China Convertible Bond Index dropped 3.15% to 492.6 points [1][5] - Major indices experienced more declines than gains, with only the ChiNext Index rising by 1.3% [1][5] - The trading volume in the convertible bond market decreased, with the total daily trading volume for the entire A-share market falling by 11.5% to 2.21 trillion yuan [10][11] Market Outlook - The current adjustment in the convertible bond market may continue for another 20-50 days, with a potential decline of 10%-20% expected [2][19] - The People's Bank of China has indicated a commitment to maintaining stability in financial markets, which may provide liquidity support to the equity market [2][19] - The focus is shifting towards fundamental pricing as the market approaches the annual report disclosure period, with physical assets being favored over virtual assets [3][25] Sector Performance - The majority of sectors saw declines, with only the telecommunications and banking sectors showing positive performance [1][7] - Convertible bonds across all sectors fell, with financial convertible bonds showing relative resilience [1][7] Trading Activity - The number of convertible bonds subject to forced redemption decreased, with four bonds totaling 1.061 billion yuan announced for forced redemption, down by 2.852 billion yuan from the previous week [15][26] - The average price of convertible bonds fell by 5.69 yuan to 101.92 yuan, indicating a continued decline in valuation [10][11] Investment Strategy - Investors are advised to maintain strict control over positions and focus on low-priced convertible bonds for defensive strategies [3][25] - There may be opportunities for rebound in strong stocks during market fluctuations, with a cautious approach recommended for speculative participation [3][25]

Group 1: Report Industry Investment Rating - No information provided Group 2: Core Views of the Report - Since January 29, the convertible bond market has been significantly adjusted for 3 consecutive trading days, with a cumulative decline of 4.75%. The recent adjustment is mainly due to the emotional valuation adjustment caused by the combination of early spring rally over - anticipation, high valuation, unexpected redemptions of convertible bonds approaching forced redemption, and external shocks [4][7]. - The polarization of valuation increases market vulnerability, and this round of adjustment is concentrated in "double - high" varieties. The price adjustment of "double - high" convertible bonds is relatively large, and the short - term risks focus on terms, valuation, and liquidity [4]. - Since September 24, 2024, there have been 4 times when the daily decline of the CSI Convertible Bond Index exceeded 2%. This round of adjustment may be approaching the bottom. It does not mean the end of the slow - bull market but rather the release of the vulnerability accumulated in the short - term rapid rise. After the precious metal volatility stabilizes, convertible bonds may follow the equity market to repair and present a structured differentiation market [4][14][16]. Group 3: Summary by Relevant Catalog 1. Characteristics of the Current Adjustment - On January 30, the hawkish remarks of the nominee for the Fed Chairman triggered global interest rate and precious metal fluctuations. The A - share index declined, and the convertible bond market adjusted significantly for 3 consecutive trading days from January 29, with a cumulative decline of 4.75%. On February 2, the decline of the CSI Convertible Bond Index was larger than that of the CSI 300 [4][7]. - The adjustment is mainly due to the emotional valuation adjustment caused by the combination of spring rally over - anticipation, high valuation, unexpected redemptions of convertible bonds approaching forced redemption, and external shocks, rather than a systematic credit or liquidity crisis [4][11]. - The adjustment is concentrated in "double - high" varieties. The price adjustment of convertible bonds with high price and high premium is large, and the adjustment range of equity - like convertible bonds > balanced > debt - like. The short - term risks focus on terms, valuation, and liquidity [4][11]. 2. How Did the Historical Reference Market Evolve? - The first adjustment occurred on October 9, 2024. After the market's 6 - day consecutive rise from September 24 to October 8, 2024, with a CSI Convertible Bond Index increase of 10.29% during the period, profit - taking pressure led to an emotional reversal. The daily decline on October 9 was 3.75%, and the decline from October 9 - 11 was 4.63% [4][14]. - The second adjustment on April 7, 2025, was due to the unexpected implementation of the US "reciprocal tariffs" on China. The index declined by 4.05%. After the adjustment, the market had a strong recovery. However, this adjustment was mainly due to external shocks, and its reference value for the recent adjustment is relatively weak [4][15]. - The third adjustment on August 27, 2025, was also due to the increased market vulnerability during the upward trend. The "net redemption of secondary bond funds" at the end of August triggered a valuation disturbance. The daily decline on August 27 was 2.82%, and the decline from August 27 - September 4 was 4.47% [4][15]. - The decline from January 29 to February 2, 2026, has exceeded the previous three declines. This adjustment is likely the release of short - term vulnerability, and the downward adjustment space may be limited. After the precious metal volatility stabilizes, convertible bonds may follow the equity market to repair [16].

Market Overview - The China convertible bond index experienced a decline of -1.78% during the week of November 17 to November 21, 2025, compared to a previous increase of +0.52% [6] - The overall index for the China stock market fell by -5.05%, following a prior decrease of -0.53% [6] - Year-to-date, the convertible bond index has risen by +16.50%, while the overall stock index has increased by +17.36% [6] Rating Performance - The performance of bonds by rating category showed declines across the board: AAA rated bonds fell by -0.82%, AA+ by -1.41%, AA by -2.31%, AA- by -2.07%, and bonds rated AA- and below by -1.92%, with the AA rated bonds experiencing the largest drop [6] Size Performance - In terms of bond size, large convertible bonds (over 2 billion) decreased by -1.33%, medium-large (1.5 to 2 billion) by -2.21%, medium (1 to 1.5 billion) by -3.95%, medium-small (0.5 to 1 billion) by -1.08%, and small bonds (under 0.5 billion) by -2.56%, with medium-sized bonds showing the largest decline [6] Price and Valuation Metrics - The average price of convertible bonds is 131.61 yuan, down from 133.30 yuan the previous week, with a percentile rank of 96.56% [8] - The average conversion price is 101.20 yuan, down from 105.52 yuan, with a percentile rank of 88.67% [8] - The average conversion premium stands at 31.88%, up from 27.12%, with a percentile rank of 38.31% [8] Market Sentiment and Strategy - Both the convertible bond market and the equity market have seen declines this week, although both markets have been on an upward trend since the beginning of 2025 [9] - The remaining duration of existing convertible bonds is shortening, and there is a decrease in high-quality individual bonds, leading to potential adjustment pressures on high-priced and high-valuation convertible bonds [9] - It is recommended to conduct a detailed selection of bonds based on their terms and the underlying stock situation, while also paying attention to new bond opportunities in industries with high economic prospects [9]