Group 1 - The core viewpoint is that the convertible bond market is experiencing a bull market driven by policy support, supply-demand imbalance, and capital allocation needs, with the China Securities Convertible Bond Index reaching a new high since June 2015 [1] - Since September 24, 2024, the China Securities Convertible Bond Index has accumulated over a 20% increase, entering a technical bull market phase [1] - The supply-demand imbalance is a key driver of the bull market, with the market's outstanding scale shrinking from over 870 billion yuan at the beginning of 2024 to below 680 billion yuan currently [1] Group 2 - The median conversion premium rate in the convertible bond market is close to 30%, with some bonds exceeding 100%, indicating a high valuation state driven by supply-demand imbalance and capital [2] - Investors may not continue to allocate convertible bonds at high premiums if the equity market is extremely weak, as both conversion and holding to maturity could lead to losses [2] - The ongoing bull market in convertible bonds raises the risk of forced redemption, as companies often include redemption clauses that can be triggered under certain conditions [2] Group 3 - Overall, the valuation compression space for convertible bonds is limited under the current institutional capital allocation and supply contraction backdrop, while investors need to be cautious of forced redemption risks [3] - It is advisable to select convertible bonds with good credit quality and avoid those with potential rating downgrades [3] - Despite a noticeable decrease in the number of delistings in the convertible bond market this year, caution is still warranted for bonds with weak credit quality [3]