1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - In September, convertible bonds underperformed underlying stocks overall, but there was significant differentiation among sectors. High - price convertible bonds continued their strong performance, and the high - price convertible bond index led the gains. The technology sector's rise slightly declined, while the financial sector was under pressure. Under the expectation of a bull market in the equity market, the double - low strategy continued to underperform the high - price and low - premium strategy [1][2][3]. - Although high - price convertible bonds have stronger equity characteristics, the double - low strategy still has the advantage of being offensive and defensive. Actively screening sectors and individual stocks according to market trends can help obtain excess returns. In the context of the continuous rise of convertible bonds, the valuation has reached a relatively high historical level, and the number of individual bonds triggering forced redemptions is increasing [3]. 3. Summary by Relevant Catalogs 3.1 Convertible Bond Monthly Market Tracking - Overall performance: In September (from September 1st to 30th), the CSI Convertible Bond Index rose 1.97%, while the CSI All - Share Index rose 2.65%. Year - to - date (as of September 30th), the CSI Convertible Bond Index and the CSI All - Share Index rose 17.11% and 23.68% respectively. The convertible bonds underperformed underlying stocks, but there was obvious differentiation among sectors. The CSI Convertible Bond Index underperformed the CSI 300 and CSI 500 indexes by 1 pct and 3 pct respectively, but outperformed the CSI 2000 index by 2 pct [11]. - Classification by price: In September, the Wind high - price convertible bond index rose 5.92%, with the growth rate narrowing compared to August, but still significantly leading the low - price (+3.14%) and medium - price (+3.26%) convertible bonds. Since May, high - price convertible bonds have continuously outperformed medium - and low - price ones. Year - to - date (as of September 30th), the high - price convertible bond index has accumulated a 27.47% increase, especially significantly outperforming medium - and low - price indexes in the third quarter [12]. - Classification by outstanding scale: In September, the Wind small - cap (+2.73%) and medium - cap (+2.89%) convertible bond indexes led the gains, significantly outperforming the large - cap convertible bonds (+0.14%). Year - to - date (as of September 30th), the small - cap convertible bond index rose 23.93%, far ahead of the large - cap (+10.56%) and medium - cap (+17.35%) convertible bonds [16]. - Classification by credit rating: In September, the AAA high - rating convertible bond index fell 1.36%, while the AA - and below convertible bond index rose 3.15%, underperforming the AA + (+3.75%) and AA (+4.23%) convertible bond indexes. Throughout the year, low - rating convertible bonds still significantly outperformed high - rating ones, reflecting a relatively high market risk appetite [18]. - Sector performance: In September, the technology sector's rise slightly declined, and the financial sector was under pressure. The information technology and industrial convertible bond indexes rose 4.28% and 4.11% respectively, with the information technology sector still being the best - performing one. Except for information technology, industrial, and material convertible bonds, the performance of convertible bonds in other sectors was stronger than that of underlying stocks. The convertible bonds and underlying stocks in the financial sector both declined in September [22]. 3.2 Convertible Bond Monthly Investment Recommendations 3.2.1 Strategy Recommendation: Select High - Growth Industries from Low - Price Convertible Bonds - September double - low portfolio performance: The double - low portfolio constructed in September selected the bottom 10% of individual bonds in terms of double - low values. After active screening, 10 individual bonds were obtained, mainly concentrated in the light manufacturing and non - ferrous metals industries. From September 1st to 30th, the portfolio's return rate was 5.92%, outperforming the CSI Convertible Bond Index by about 4 pct. Cumulatively, since its construction in June, the portfolio's cumulative return rate was 19.12%, outperforming the CSI Convertible Bond Index by 5.3 pct [31]. - October double - low portfolio recommendation: In the context of the continuous rise of convertible bonds, individual bonds with low double - low values face higher risks of delisting and forced redemption, and the number of eligible individual bonds has decreased. This month, 10 individual bonds were selected from the bottom 10% of double - low value rankings. These recommended individual bonds are mainly concentrated in non - ferrous metals, basic chemicals, and power equipment industries, with an average convertible bond price of 133 yuan, conversion value of 122 yuan, and conversion premium rate of 9% [35]. 3.2.2 Allocation Recommendation: Focus on Technology Growth and "Anti - involution" - Related Sectors - Convertible bonds have entered a high - valuation range. At this stage, more attention should be paid to the safety margin. Under the unbroken expectation of a bull market, sectors at a low level with the expectation of a catch - up can be focused on. It is recommended to pay attention to "anti - involution" - related sectors with long - term logic, such as photovoltaic, lithium battery, engineering machinery, and chemical industries, as well as the callback layout opportunities of high - growth sectors such as robotics, semiconductors, AI computing power, and innovative drugs [37].

Macro - In the first half of the year, listed companies achieved operating income of 35.01 trillion yuan, a year-on-year increase of 0.16%; net profit reached 3 trillion yuan, with a year-on-year growth of 2.54%, an increase of 4.76 percentage points compared to the previous year's full-year growth [3][4] - In August, the manufacturing PMI was 49.4%, up 0.1 percentage points month-on-month; the non-manufacturing business activity index was 50.3%, up 0.2 percentage points month-on-month; the composite PMI output index was 50.5%, up 0.3 percentage points month-on-month [3] - Several banks indicated that they continued to support the stabilization of the real estate market in the first half of the year by increasing mortgage loan issuance, with the second-hand housing loan issuance increasing by over 20% year-on-year [4] Convertible Bonds - In August, the convertible bond market continued to be active, with the convertible bond index rising by 4.32%, underperforming the overall market index which rose by 10.74% [6] - The high-priced convertible bond index outperformed low-priced and mid-priced indices, with an increase of 8.92% in August, indicating stronger performance in a rising equity market [6][9] - The dual-low strategy underperformed in a strong market, with only a 2.48% increase in August, while the high-priced low-premium strategy rose by 7.07% [9] Traditional Chinese Medicine Industry - Shouxiangu reported a 16.51% decrease in operating income to 300 million yuan in the first half of 2025, with a net profit decline of 33.99% to 65.56 million yuan [14] - The company expects performance to improve in the third quarter, as July saw a return to positive growth in revenue [15] - The company is expanding its online channels, with internet sales increasing by 15.14% year-on-year, while traditional sales channels are being enhanced through strategic partnerships [16] Innovative Drug Industry - Sanofi's half-year report showed a revenue of 4.36 billion yuan, a slight decrease of 0.8%, while net profit increased by 24.6% to 1.36 billion yuan [20] - The company is focusing on innovative therapies, with several products in clinical trials, including SSGJ-707, which has potential for significant market value [21] - Existing products are performing steadily, with a notable increase in sales in the hair loss segment, while other segments are experiencing slight fluctuations [22] Medical Equipment - Ruimait's half-year performance was strong, with a revenue of 544 million yuan, a year-on-year increase of 42.30%, and a net profit of 131 million yuan, also up 42.19% [25] - The company has improved its expense ratios significantly, with a sales expense ratio of 10.43%, down 2.24 percentage points year-on-year [26] - The rebranding to "Ruimait" is expected to enhance brand value and market penetration, aligning the company's identity with its core products [28]

Group 1 - The convertible bond market underperformed the underlying stocks in August, with the China Convertible Bond Index rising by 4.32% compared to a 10.74% increase in the China All Share Index. Year-to-date, the respective increases are 14.85% and 20.49% [3][14]. - High-priced convertible bonds showed a significant increase of 8.92% in August, outperforming low-priced (3.14%) and mid-priced (3.26%) indices, indicating stronger performance in a rising equity market [3][16]. - The technology sector continued to perform strongly, with the information technology convertible bond index rising by 6.62% in August, benefiting from a 23% increase in the underlying technology stocks [4][27]. Group 2 - The dual-low strategy index increased by only 2.48% in August, while the high-priced low-premium strategy rose by 7.07%, highlighting the latter's stronger stock-like characteristics in a bullish market [5][32]. - The dual-low combination generated a return of 8.52% in August, outperforming the China Convertible Bond Index by 4.2 percentage points, and a cumulative return of 12.45% since June [6][35]. - For September, the dual-low strategy will focus on a reduced selection of bonds due to increased risks of delisting, with a final selection of 10 bonds primarily from the non-ferrous metals and light manufacturing sectors [6][38]. Group 3 - The report suggests maintaining a focus on growth sectors such as robotics and AI hardware, while also considering the military industry, which is expected to show improving fundamentals in September [8][40]. - The convertible bond market is likely to remain in a high valuation state if market activity continues, with high-priced low-premium convertible bonds expected to yield more returns when the underlying stocks are anticipated to rise [8][40].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Views of the Report - In July, the equity market rose significantly, but convertible bonds underperformed the underlying stocks. The CSI Convertible Bond Index rose 3.83%, while the CSI All-Share Index rose 5.8%. Year-to-date, the CSI Convertible Bond Index and the CSI All-Share Index rose 11.11% and 10.33% respectively [2][11]. - The healthcare sector was strong, and convertible bonds followed the upward trend but still underperformed the underlying stocks. The healthcare and information technology convertible bond indices had the best performance in July, with increases of 7.82% and 7.13% respectively [3][21]. - The double-low strategy should pay more attention to the valuation elasticity of the underlying stocks. It is recommended to focus on the more growth-oriented AI and robotics sectors [4]. Group 3: Summary According to the Directory 1. Convertible Bond Monthly Market Tracking - In terms of price classification, in July, the Wande High-Price Convertible Bond Index rose 5.84%, significantly leading the low-price (+4.27%) and medium-price indices (+2.72%). Year-to-date, the cumulative increases of low-price and high-price convertible bonds were basically the same, both higher than that of medium-price convertible bonds [2][13]. - By convertible bond issue size, in July, the small-cap and mid-cap convertible bond indices performed strongly, with increases of 4.47% and 4.02% respectively, higher than the large-cap convertible bond index (+3.11%). Year-to-date, the small-cap index had a significant lead [16]. - By credit rating, in July, the AA+ and AA convertible bond indices had relatively large increases. Throughout the year, low-rated convertible bonds still significantly outperformed high-rated ones [17]. - In terms of sectors, in July, the healthcare and information technology convertible bond indices performed best. The financial convertible bond index only rose 0.47% this month, while the underlying stocks rose 3.69% [3][21]. - Driven by the sharp rise of the underlying stocks, in July, the double-low strategy significantly underperformed the high-price low-premium strategy. The double-low strategy index rose only 2.36% in July, while the high-price low-premium strategy rose 7.29% [26]. 2. Convertible Bond Monthly Investment Recommendations 2.1 Strategy Recommendation: The Double-Low Strategy Should Focus on the Valuation Elasticity of the Underlying Stocks - The double-low portfolio constructed in July had 22 targets. From July 1st to 30th, the portfolio return was 1.78%, underperforming the CSI Convertible Bond Index by 2 pct [29]. - In August, 15 individual bonds were selected. The average convertible bond price, conversion value, and conversion premium rate of the portfolio were 124 yuan, 117 yuan, and 7% respectively [32]. 2.2 Allocation Recommendation: Focus on the More Growth-Oriented AI and Robotics Sectors - The current market risk appetite has significantly recovered. Using high-price low-premium convertible bonds to replace the underlying stocks can better obtain the returns from the rise of the underlying stocks. It is recommended to focus on the technology sector, especially AI and robotics [34].