1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The scale of science - innovation bond ETFs has been fluctuating around 250 billion yuan in the past three weeks, with the latest scale on October 17th being 246.9 billion yuan, and 15 out of 24 ETFs having a scale of over 10 billion yuan [1]. - The weekly issuance of science - innovation bonds has picked up, but the trading volume remains low. The net issuance reached its peak in the first week of July and then declined. The net issuance from October 13th - 17th was 45.9 billion yuan, an increase of 32.8 billion yuan compared to the previous week before the holiday [1]. - This week, science - innovation bond ETFs continued to increase their holdings of new bonds issued in September 2025, mainly in the power, energy, and brokerage sectors, with maturities concentrated between 2 - 3 years. The bonds with relatively large reductions in holdings are from diverse industries, and the reduction behavior is more dispersed [2]. - The buying power of science - innovation bond ETFs has created a spread between non - component bonds and component bonds of the same issuer. As of October 17th, the central spread was 10.9bp, slightly down 0.4bp from October 10th. Attention should be paid to bonds with relatively high or low spreads [3]. 3. Summary by Related Content Science - innovation Bond ETF Scale and Issuance - As of October 17th, the total scale of science - innovation bond ETFs was 246.9 billion yuan, a decrease of 5.2 billion yuan from last Friday. Among the two batches of 24 science - innovation bond ETFs, 15 had a scale of over 10 billion yuan [1][13]. - The net issuance of science - innovation bonds reached its peak in the first week of July and then fluctuated downward. From October 13th - 17th, the net issuance was 45.9 billion yuan, an increase of 32.8 billion yuan compared to the previous week before the holiday, mainly due to the concentrated bond issuance of central enterprises [1]. Science - innovation Bond ETF Trading Volume - The trading volume of science - innovation bonds reached its peak in July and then cooled down. The trading volume this week was relatively low but still higher than before the listing of science - innovation bond ETFs. In the first week of the ETF listing (July 14th - 18th), the trading volume of science - innovation bonds and the trading volume of component bonds of science - innovation bond ETFs accounted for 18% and 14% of credit bonds respectively, and in the past three weeks, they have fluctuated around 10% and 5% [1]. Science - innovation Bond ETF Holdings Adjustment - This week, the increase in holdings of science - innovation bond ETFs continued the pattern of the previous week before the holiday, mainly focusing on new bonds issued in September 2025, involving industries such as power, energy, and brokerage, with maturities concentrated between 2 - 3 years. Among the top 15 component bonds with increased holdings this week, 9 were new bonds issued in September 2025, and 2 were new bonds issued in August 2025 [2]. - The component bonds with relatively large reductions in holdings are from diverse industries such as industrial investment, ports, brokerage, automobiles, and construction, with maturities concentrated between 2 - 3 years. The reduction behavior is more dispersed compared to the increase in holdings [2]. Spread between Non - component Bonds and Component Bonds - The buying power of science - innovation bond ETFs has led to a spread between non - component bonds and component bonds of the same issuer. As of October 17th, the central spread was 10.9bp, slightly down 0.4bp from October 10th. The spread was not obvious before the issuance of the first batch of science - innovation bond ETFs (end of June), only 0 - 2bp, and then increased to 10.0bp after listing (July 18th), narrowed to 9bp at the end of July, and increased again to 9.9bp when the second batch of ETFs started the application process (August 8th), and has since fluctuated around 10bp [3]. - In terms of the term difference of the spread, the spreads for bonds with maturities of 0 - 1 year and over 5 years are relatively low, with a central spread of around 8bp, while the spreads for bonds with maturities of 1 - 5 years are relatively high, ranging from 10 - 13bp [3]. - In terms of individual bond strategies, attention should be paid to bonds with relatively high or low spreads between non - component bonds and component bonds. As of October 17th, 7 issuers had spreads higher than 20bp, indicating that their component bonds were over - bought and the cost - effectiveness of non - component bonds increased. 4 issuers had spreads lower than 8.5bp, suggesting that the valuation of component bonds may still have room for compression [3][4].

Group 1: Market Trends - The net issuance of Sci-Tech bonds peaked in July 2025 and has since declined, with a net issuance of only 14.1 billion yuan from September 22-28, down 28.2 billion yuan week-on-week[1] - The total scale of Sci-Tech bond ETFs reached 247.4 billion yuan by September 26, 2025, with a weekly increase of 80.7 billion yuan, primarily driven by the second batch of ETFs[1][2] Group 2: Trading Activity - During the first week of the Sci-Tech bond ETF launch (July 14-18), trading volume reached a peak, with transaction counts for Sci-Tech bonds and their ETFs accounting for 18% and 14% of credit bonds, respectively[1] - Recent trading activity has stabilized, with transaction counts for Sci-Tech bonds and their ETFs fluctuating around 10% and 6% over the past five weeks[1][2] Group 3: Bond Composition Changes - The first batch of 10 Sci-Tech bond ETFs saw a growth of 9.8 billion yuan this week, with significant increases in the bonds issued by central enterprises in sectors like brokerage, electricity, and energy[2] - The bonds that were reduced in holdings are primarily from the coal, building materials, and electricity sectors, with a more dispersed maturity distribution[2] Group 4: Yield Spread Analysis - The "non-component bond - component bond" yield spread was at 10.8 basis points on September 26, 2025, reflecting a slight increase of 0.7 basis points from the previous week[3] - The yield spread has shown variations based on maturity, with lower spreads for bonds maturing in 0-1 year and over 5 years, averaging around 8 basis points, while 1-5 year bonds have higher spreads of 10-13 basis points[3] Group 5: Investment Strategy Insights - Investors should focus on bonds with significant yield spread differences, as a higher spread indicates that component bonds may be overbought, while non-component bonds offer better value[4] - As of September 26, 2025, seven entities had yield spreads exceeding 20 basis points, suggesting their component bonds are overbought, while four entities had spreads below 8 basis points, indicating potential for further compression in component bond valuations[4]