Group 1: Report Investment Rating - No investment rating information provided in the report. Group 2: Core Views - The convertible bond ratings are expected to be fully announced by June 30, 2025. The recovery of conversion ability supports the performance of the convertible bond market. Most convertible bonds are priced based on the equity nature of the underlying stocks, and the market is unlikely to be disturbed by rating adjustments. However, during the rating announcement period from May to June, market sentiment will be affected, and the valuation center will continue to decline [1]. - The convertible bonds with rating adjustments in 2025 are mostly not the mainstream bonds of institutions, so the impact on the market is relatively limited. The market is in an upward phase, and although rating adjustments impact the performance of convertible bonds on the day of adjustment, the decline amplitude is relatively small [7]. - The recovery of conversion ability is the core reason for the limited credit risk disturbance in 2025. As of now, each rating index has not shown significant adjustments, and low - rated small - cap stocks have greater elasticity. In May - June, the market has a learning effect, and the convertible bond premium rate has significantly decreased. After April 7, small - cap stocks have been in an upward oscillation phase, and the Treasury bond yield has first risen and then fallen. The conversion parity of the convertible bond market is around 90, and the conversion ability has significantly improved [9]. - After the easing of the Middle - East situation, the equity market has seen an improvement in sentiment and has risen above key points. The convertible bond market has performed well driven by the equity market in the past week. The ratings of several key targets of convertible bonds in the photovoltaic industry, which investors are most concerned about, have remained unchanged, and the rating risk has basically landed, with limited impact on the market. In the third quarter, the valuation center of balanced convertible bonds is expected to return to the upward repair channel, and attention should be paid to the refinement of rhythm and target selection. The allocation strategy is recommended to focus on three main lines: strengthening band - trading on a neutral position to improve position flexibility; selecting high - rated, large - cap, bond - biased convertible bonds to build a defensive bottom - position and combining low - priced balanced individual bonds to obtain elastic returns; closely monitoring the windows of redemption, downward adjustment and other clauses and credit rating changes to strengthen the ability to capture clause - game and event - driven returns [10][12]. Group 3: Summary by Directory 1 Market Observation - As of June 27, 2025, 433 convertible bonds have disclosed their 2025 annual ratings, accounting for over 90%. Among them, 32 convertible bonds have had their ratings downgraded, accounting for 7.4%, and the rating adjustment ratio is slightly lower than that in 2024. Another 5 convertible bonds had their ratings downgraded before May, and their ratings remained unchanged in this annual review. Only 5 of these convertible bonds with rating adjustments have a bond balance greater than 1 billion, and their initial ratings are mostly A+ and below, so they are not mainstream bonds of institutions, and the impact on the market is relatively limited [7]. - Taking Wenti Convertible Bond as an example, on June 18, it opened with a decline of over 4%, and its pricing credit rating was downgraded from AA to AA-. Then it repaired upwards. Due to the good overall market sentiment this week, it recovered to above 110, only falling 1 yuan compared to before the rating adjustment. Most convertible bonds with rating adjustments are priced above 115 and are priced based on equity nature, so the decline in the bond floor caused by rating downgrades does not affect the convertible bond price [7]. 2 Convertible Bond Market Tracking 2.1 Convertible Bond Market Trends - The report provides the performance data of various convertible bond indexes in different time periods (near - week, near - two - week, since March, near - one - month, near - two - months, near - half - year, near - one - year), such as the WanDe Convertible Bond Energy Index, WanDe Convertible Bond Materials Index, etc. [16]. 2.2 Individual Convertible Bonds - Information on the top five and bottom five individual convertible bonds in terms of price increase and decrease in the near - week is presented [17][19]. 2.3 Convertible Bond Valuation - Valuation trend charts of bond - nature, balanced, and equity - nature convertible bonds, as well as the conversion premium rate valuation trend charts of convertible bonds with different parities (90 - 100, 100 - 110, 110 - 120) are provided [21][23][29]. 2.4 Convertible Bond Prices - Charts showing the proportion trends of high - priced bonds, low - priced bonds, bonds breaking below the bond floor, and the median price trend of the convertible bond market are provided [32][35][38].

Core Viewpoint - The credit ratings of multiple convertible bonds have been downgraded, with 19 bonds experiencing downgrades this year, surpassing the 14 downgrades recorded for the entire year of 2024 [1][3]. Group 1: Credit Rating Adjustments - As of June 2023, 10 convertible bonds have had their ratings downgraded, with notable mentions including Dongfeng Convertible Bond, Bohui Convertible Bond, and Shengxun Convertible Bond being placed on a credit watch list [3]. - The downgrades are primarily influenced by factors such as performance losses, debt pressures, and industry policy impacts [3][4]. - The majority of the downgraded bonds previously held ratings of A+, with some, like Wentai Convertible Bond and Jinneng Convertible Bond, rated as high as AA [4]. Group 2: Market Response and Outlook - Despite the downgrades, the overall performance of the convertible bond market remains strong, with limited impact on bond prices observed [5][6]. - Analysts suggest that the risks associated with these bonds have been largely anticipated, leading to lower institutional holdings and minimal market shock from the downgrades [6]. - The market is expected to see a more optimistic outlook for credit ratings in 2025, supported by economic recovery and policy measures aimed at expanding domestic demand and managing debt [6][7].

Core Viewpoint - The peak period for credit rating disclosures has arrived, with multiple convertible bond issuers experiencing downgrades in their credit ratings [1][2]. Group 1: Credit Rating Downgrades - As of now, 19 convertible bonds have had their credit ratings downgraded this year, surpassing the 14 downgrades recorded for the entire year of 2024 [2][5]. - The downgrades are primarily influenced by factors such as performance losses, debt pressures, and industry policy impacts [5]. - In June alone, 10 convertible bonds saw their ratings lowered, with several others placed on credit watch or given negative outlooks [4]. Group 2: Specific Company Cases - Fangyuan Co. announced a downgrade to a "BBB" credit rating due to declining market share in the ternary lithium battery sector, increased competition, and significant customer order reductions, leading to substantial losses over the past two years [4]. - Wenta Technology's credit rating was adjusted to "AA-" with a stable outlook, while Jinneng Technology also faced a downgrade to "AA-" [6]. Group 3: Market Impact and Future Outlook - Despite the downgrades, the overall performance of the convertible bond market remains strong, with analysts noting that the risks associated with downgraded bonds have already been priced in [9]. - The market is expected to see a relatively optimistic outlook for credit rating adjustments in 2025, supported by economic recovery and policy measures aimed at debt reduction [9]. - The current market conditions, including reduced supply of convertible bonds and low pure bond yields, have contributed to increased market resilience, suggesting potential opportunities for investors [9][10].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In 2025, rating adjustments for convertible bonds may be relatively optimistic. With the expectation of economic recovery and policy support such as expanding domestic demand and debt resolution, credit risks are relatively controllable, but industry differentiation and tail risks still need attention [12]. - The A - share market valuation has recovered but remains at a relatively low level in the long - term. The risk premium shows good allocation value. The convertible bond supply is shrinking, and the demand side has certain support. The overall valuation of convertible bonds is in a reasonable range, and the valuation center is expected to fluctuate moderately in the future [15]. - Attention should be paid to popular themes, domestic demand - oriented sectors, high - dividend sectors under the Chinese - characteristic valuation system, and the military industry [15]. 3. Summary of Each Section 3.1. Convertible Bond Weekly Special Topic and Outlook 3.1.1. Recent Rating Adjustments - As of Friday, 237 convertible bonds have disclosed their 2025 annual follow - up rating announcements, accounting for 50.3% of the total number of convertible bonds in the market. Among the updated - rating convertible bonds, 14 have had their ratings downgraded, and the adjustment ratio of medium - and high - rated convertible bonds is significantly lower than in previous years [10]. - Rating downgrades have a short - term negative impact on convertible bonds, but the overall market impact may be relatively controllable. The prices of convertible bonds with high institutional holdings and rating downgrades have relatively large adjustments, while those with low institutional holdings and relatively low original ratings are less affected [10]. 3.1.2. Weekly Review and Market Outlook - This week, the market showed daily fluctuations and a weekly overall correction. The A - share market's three major indexes rose on Monday, adjusted on Tuesday, rose slightly on Wednesday, fell on Thursday, and adjusted with volume contraction on Friday [14]. - The A - share market valuation has recovered but is still at a relatively low level. The export order rebound has led to a narrow improvement in the May PMI. The convertible bond supply is shrinking, and the demand side has support. The convertible bond valuation is expected to fluctuate moderately in the future. Attention should be paid to different sectors [15]. 3.2. Convertible Bond Market Weekly Tracking 3.2.1. Equity Market Declined, and Pro - cyclical Sectors such as Banks Strengthened - This week, the main equity market indexes declined. Among them, the Wind All - A Index fell 1.07%, the Shanghai Composite Index fell 0.51%, the Shenzhen Component Index fell 1.16%, and the ChiNext Index fell 1.66%. The market style was more inclined to large - cap growth [18]. - Three Shenwan industry indexes rose, and 28 declined. The banking, communication, and electronics industries rose, with increases of 2.63%, 1.58%, and 0.95% respectively [21]. 3.2.2. Convertible Bond Market Declined, and the 100 - yuan Premium Rate Decreased - This week, the convertible bond market declined. The CSI Convertible Bond Index fell 0.17%, the Shanghai Convertible Bond Index rose 0.11%, and the Shenzhen Convertible Bond Index fell 0.59%. The average daily trading volume of convertible bonds decreased [23]. - Five convertible bond industries rose, and 24 declined. The non - bank finance, public utilities, and banking industries led the gains, while the media, beauty care, and social services industries led the losses [27]. - Most individual convertible bonds declined. The top five weekly gainers were Jingrui Convertible Bond, Liande Convertible Bond, Tianchuang Convertible Bond, Xuerong Convertible Bond, and Shouhua Convertible Bond. The top five weekly losers were Jinling Convertible Bond, Zhite Convertible Bond, Jindan Convertible Bond, Dongshi Convertible Bond, and Zhongchong Zhuan 2 Convertible Bond [29]. - The weighted conversion value of the whole market increased, and the premium rate rose. The weighted conversion premium rate of the whole market was 48.62%, up 1.02 pct from last weekend. The 100 - yuan parity premium rate was 18.89%, down 1.74 pct from last weekend [34]. 3.2.3. High - Frequency Tracking of Different Types of Convertible Bonds 3.2.3.1. Classification Valuation Changes - This week, the valuations of various types of convertible bonds declined. The valuations of convertible bonds with a parity of 80 - 90 yuan and 100 - 110 yuan declined, while most others increased. The valuations of AAA - rated convertible bonds increased, while those of other ratings decreased. The valuations of large - cap convertible bonds increased, while those of other scale segments decreased [42]. - Since the beginning of 2024, the conversion premium rates of equity - biased and balanced convertible bonds have rebounded from the bottom. As of Friday, the conversion premium rate of equity - biased convertible bonds was below the 35th percentile since 2017, and that of balanced convertible bonds was below the 50th percentile [42]. 3.2.3.2. Market Index Performance - This week, AAA - rated convertible bonds rose, while those of other ratings declined. The AAA convertible bonds rose 0.43%, and AA + convertible bonds fell 0.12% [55]. - This week, large - cap convertible bonds rose, while those of other scales declined. The small - cap convertible bonds fell 0.75%, and the medium - small - cap convertible bonds fell 0.46% [57]. 3.3. Convertible Bond Supply and Clause Tracking 3.3.1. This Week's Primary Plan Issuance - One new convertible bond was listed this week (Hengshuai Convertible Bond), and five issued but unlisted convertible bonds are pending (Luwei Convertible Bond, Dianhua Convertible Bond, Anke Convertible Bond, Xizhen Convertible Bond, and Huachen Convertible Bond). One primary approval was obtained this week, and Maiwei Co., Ltd. (1.967 billion yuan) passed the shareholders' meeting [62]. - From the beginning of 2023 to June 20, 2025, the total number of planned convertible bonds was 92, with a total scale of 146.099 billion yuan [63]. 3.3.2. Downward Revision and Redemption Clauses - This week, 9 convertible bonds announced that they were expected to trigger downward revisions, 15 announced no downward revisions, 5 proposed downward revisions, and 1 actually had a downward revision [66][67]. - Six convertible bonds announced that they were expected to trigger redemptions, 5 announced no early redemptions, and 1 announced an early redemption. As of the end of this week, 4 convertible bonds were still in the put - option declaration period, and 35 were in the company's capital - reduction settlement declaration period [71][73].