Group 1: Macroeconomic Factors - The macroeconomic environment significantly impacts the Hong Kong stock market, with global economic growth directly affecting trade and finance in Hong Kong [1] - A rising global economy can lead to increased market demand, benefiting companies' revenues and profits, thus driving the overall stock market upward [1] - Local economic policies, including fiscal, monetary, and industrial policies, are crucial variables influencing the stock market [1] Group 2: Industry Development Trends - Different industries exhibit varying performances in the Hong Kong stock market, making it essential for investors to follow industry trends [2] - The emerging technology sector has gained prominence, with innovative companies attracting significant attention due to their growth potential [2] - Traditional industries, such as resources and manufacturing, face constraints from market demand changes and cost fluctuations [2] Group 3: Company Fundamentals - A company's financial health is a core aspect of its fundamentals, requiring analysis of balance sheets, income statements, and cash flow statements [2] - Stable revenue growth, reasonable debt levels, and strong cash flow indicate good operational health and resilience [2] - Governance structures are also important, as effective governance ensures sound decision-making and protects shareholder interests [2] Group 4: Market Valuation Levels - Accurate assessment of market valuation is critical for determining investment value, with common metrics including Price-to-Earnings (PE) and Price-to-Book (PB) ratios [3] - Comparing current valuation metrics with historical data and peer markets helps investors identify whether the market is overvalued, undervalued, or fairly valued [3] - Currency exchange rates, particularly the peg of the Hong Kong dollar to the US dollar, can significantly influence investment returns [3]

Group 1: Market Overview - The bond market experienced fluctuations due to external factors, with long-term bond yields rising, indicating increased sensitivity to negative factors in the real estate and credit sectors [1] - The overall difficulty in bond market operations has increased, with investors' coupon returns being quickly eroded by rising interest rates, leading to weakened investment confidence [2] - The People's Bank of China (PBOC) is expected to focus on the timing of restarting government bond trading, particularly monitoring bond yield levels [3] Group 2: Monetary Policy and Economic Support - The focus of future monetary policy will be on implementing previously announced financial policies and ensuring their effectiveness, with a supportive stance expected to continue [1] - In terms of expanding consumption, monetary policy is anticipated to target three areas: supporting service consumption and elderly loans, broadening financing channels for consumption, and enhancing policy coordination on the demand side [1] Group 3: Company Bond ETF Performance - As of August 18, 2025, the company bond ETF (511030) has seen a slight decline of 0.11%, with a one-year cumulative increase of 1.76% [4] - The latest scale of the company bond ETF reached 22.33 billion, with recent inflows and outflows remaining balanced [5] - The company bond ETF has shown a historical profitability rate of 83.33% and a monthly profitability probability of 79.94% [6]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints No information provided. 3. Summary by Relevant Catalogs Global Asset Market Performance - **10 - Year Treasury Yields**: On August 18, 2025, the 10 - year Treasury yields in the US, UK, France, etc. were 4.334%, 4.737%, 3.447% respectively. The latest changes ranged from - 0.033 (Italy) to 0.041 (UK), weekly changes from - 0.004 (Japan) to 0.173 (UK), monthly changes from - 0.126 (Switzerland) to 0.155 (France), and annual changes from - 0.274 (Japan) to 0.760 (UK) [2]. - **2 - Year Treasury Yields**: On August 18, 2025, the 2 - year Treasury yields in the US, UK, Germany, etc. were 3.740%, 3.959%, 1.956% respectively. The latest changes ranged from - 0.024 (Australia) to 0.070 (US), weekly changes from - 0.200 (US) to 0.186 (Italy), monthly changes from - 0.703 (Italy) to 0.553 (Japan), and annual changes showed various trends [2]. - **Exchange Rates**: On August 18, 2025, the US dollar - to - emerging - economy currency exchange rates such as South African rand, Brazilian real, etc. had different values. The latest changes ranged from - 0.69% (Russian ruble) to 0.65% (South African rand), weekly changes from - 2.35% (South African rand) to 0.38% (South Korean won), monthly changes from - 8.22% (Thai baht) to 0.77% (South Korean won), and annual changes also varied [2]. - **Stock Indices**: On August 18, 2025, major global stock indices like the Dow Jones, S&P 500, etc. had different closing values. The latest changes ranged from - 0.50% (Mexican index) to 0.21% (Nasdaq), weekly changes from - 0.18% (UK index) to 8.70% (Spanish index), monthly changes from 8.78% (Mexican index) to 44.46% (Spanish index), and annual changes also showed different trends [2]. - **Credit Bond Indices**: The latest changes in credit bond indices ranged from - 0.08% to 0.08%, weekly changes from - 0.06% to 0.56%, monthly changes from - 0.13% to 2.43%, and annual changes from 4.84% to 15.88% [2][3] Stock Index Futures Trading Data - **Index Performance**: The closing prices of A - shares, CSI 300, SSE 50, ChiNext, and CSI 500 were 3728.03, 4239.41, 2838.87, 2606.20, and 6668.17 respectively, with daily changes of 0.85%, 0.88%, 0.21%, 2.84%, and 1.52% [4]. - **Valuation**: The PE (TTM) of CSI 300, SSE 50, CSI 500, S&P 500, and German DAX were 13.54, 11.56, 31.94, 27.34, and 20.08 respectively, with环比 changes of 0.08, 0.04, 0.37, 0.00, and - 0.04 [4]. - **Risk Premium**: The 1/PE - 10 - year interest rate of S&P 500 and German DAX were - 0.68 and 2.22 respectively, with环比 changes of - 0.02 and 0.04 [4]. - **Fund Flows**: The latest values of fund flows in A - shares, main board, SME board, ChiNext, and CSI 300 were 78.73, - 179.13, N/A, 216.70, and 110.91 respectively, and the 5 - day average values were - 306.54, - 333.88, N/A, 26.76, and 51.22 [4]. - **Trading Volume**: The latest trading volumes of Shanghai and Shenzhen stock markets, CSI 300, SSE 50, SME board, and ChiNext were 27641.63, 6353.66, 1621.58, 5485.68, and 8295.86 respectively, with环比 changes of 5195.51, 1166.79, 199.53, 1082.87, and 1773.47 [4]. - **Main Contract Basis**: The basis of IF, IH, and IC were - 1.61, 9.53, and - 60.17 respectively, with basis ratios of - 0.04%, 0.34%, and - 0.90% [4] Treasury Bond Futures Trading Data - **Closing Prices**: The closing prices of T00, TF00, T01, and TF01 were 108.015, 105.455, 107.865, and 105.380 respectively, with daily changes of 0.00% [5]. - **Funding Rates**: The R001, R007, and SHIBOR - 3M were 1.5037%, 1.5030%, and 1.5490% respectively, with daily changes of 1.00 BP, 1.00 BP, and 0.00 BP [5]

Core Viewpoint - The bond market has experienced significant weakness, with the 10-year government bond yield rising to 1.7850% and the 30-year yield surpassing 2% for the first time in over four months, indicating a shift in market dynamics influenced by various factors [1] Group 1: Market Dynamics - The bond market is facing headwinds due to a strong equity market and increased risk appetite, leading to a deep correction in bond prices [1] - The People's Bank of China (PBOC) has expressed concerns about preventing fund diversion and has removed references to government bond trading, raising fears of liquidity tightening [1] - The acceleration of government bond issuance in August and tax payment impacts are contributing to the upward trend in long-term yields [1] Group 2: Economic Indicators - Key economic indicators from July suggest a weaker-than-expected economic outlook for the third quarter, with a notable decline in credit demand from both households and enterprises [1] - The Consumer Price Index (CPI) and Producer Price Index (PPI) data indicate limited inflation support, with PPI showing a year-on-year decrease of 3.6% [1] - Retail sales growth has slowed, with July's year-on-year growth rate dropping from 4.8% in June to 3.7%, indicating a contraction on a month-on-month basis [1] Group 3: Investment Strategy - The current yield curve is exhibiting a bear steepening pattern, with the 30-year to 10-year yield spread reaching a near two-year high, suggesting that market sentiment is heavily influencing short-term movements [2] - Historical trends indicate that such short-term disturbances are often not indicative of a long-term reversal, and the bond market is expected to recover quickly under supportive liquidity conditions [2] - The 10-year government bond yield is currently in the range of 1.75% to 1.80%, presenting a gradually emerging investment value, with recommendations for investors to consider low-cost entry into 10-year bond ETFs [2]

8月以来，债券市场经历大幅调整，收益率曲线呈现熊陡特征。与今年一季度债市曲线结构整体上移有 所不同，目前债市调整多是由预期而非资金面变动引发。短端债券走势较为平稳，而长债尤其是超长债 调整幅度较大，30年期期债屡创新低。 债市大幅下跌的原因，我们认为主要有两点： 一是，"反内卷"政策成为市场主线，对债市存在供给收敛、物价回升、风险偏好提升三大利空效应。政 策托底预期升温，市场表现出"强预期"的特征。同时，7月以来股市及商品市场持续上行，股市屡次突 破关键整数点位，市场呈现明显的股债"跷跷板"效应，债市资金分流压力加大。从最新公布的存款数据 可以看出，7月居民端存款减少1.13万亿元，非银存款激增2.16万亿元，居民存款搬家现象明显。 首先，7月的PMI、通胀、金融及经济数据已出炉，表现弱于预期。其中，对债市影响较大的信贷数据7 月呈现负增长，除季节性因素之外，6—7月新增信贷仍同比少增2000亿元。从月内票据利率一度接近零 这一表现看，银行冲量特征明显。 其次，从政策端看，央行日前发布的《2025年第二季度中国货币政策执行报告》（以下简称《报告》） 显示，上半年货币政策逆周期调节效果较为明显，金融总量平稳增长 ...

Group 1 - The market is experiencing a "seesaw" effect, with the bond market declining while the A-share market is rising, indicating a shift in capital flows [1][3] - The bond market previously thrived due to economic slowdown and stock market volatility, but recent policy measures have strengthened expectations for economic recovery, making stock market returns more attractive [3][4] - The recent rise in A-shares is driven by solid sectors such as consumer recovery and leading manufacturing companies, reflecting a fundamental-based investment approach rather than speculative trading [3][4] Group 2 - For long-term investors, understanding the overarching logic of economic recovery and corporate profit improvement is crucial for identifying mid-term opportunities in the stock market [4] - The bond market should not be dismissed entirely; quality bonds can still serve as a stabilizing asset in a diversified portfolio [5] - Investment strategies should adapt to market conditions, balancing between stocks for growth and bonds for stability, while avoiding impulsive decisions based on short-term market fluctuations [5]

Report Industry Investment Rating - Not provided in the content Core Viewpoints - From August 11th to August 17th, local government bonds issued a total of 9.1432 billion yuan, including 4.9356 billion yuan in new bonds (3.0321 billion yuan in new general bonds and 1.9034 billion yuan in new special bonds) and 4.2076 billion yuan in refinancing bonds (2.8632 billion yuan in refinancing general bonds and 1.3445 billion yuan in refinancing special bonds). From August 18th to August 24th, local government bonds are expected to issue 36.915 billion yuan, including 24.8807 billion yuan in new bonds (953.9 million yuan in new general bonds and 23.9268 billion yuan in new special bonds) and 12.0343 billion yuan in refinancing bonds (4.6873 billion yuan in refinancing general bonds and 7.347 billion yuan in refinancing special bonds) [2][4][5] - As of August 17th, the fourth round of special refinancing bonds has a total disclosed amount of 435.5743 billion yuan, with 196.7218 billion yuan disclosed in 2025 and an additional 9.164 billion yuan to be disclosed next week. The top three provinces or municipalities with separate planning in terms of the fourth - round disclosure scale are Jiangsu (56.47 billion yuan), Hunan (27.8732 billion yuan), and Shandong (24.1398 billion yuan). As of August 17th, the special new special bonds in 2025 have a total disclosed amount of 44.0733 billion yuan, and since 2023, a total of 163.1246 billion yuan has been disclosed. The top three in terms of disclosure scale are Jiangsu (21.0235 billion yuan), Hubei (12.8769 billion yuan), and Xinjiang (11.886 billion yuan). The top three provinces or municipalities with separate planning in terms of the 2025 disclosure scale are Jiangsu (9.51 billion yuan), Hebei (3.9143 billion yuan), and Hubei (3.6913 billion yuan) [6] Summary by Directory Local Bond Actual Issuance and Forecast Issuance - From August 11th to August 17th, the net supply of local government bonds was - 1.37 billion yuan; from August 18th to August 24th, the forecast net supply of local government bonds is 20.88 billion yuan [10][15] - A comparison of the planned and actual issuance of local government bonds in July and August is presented, showing differences in the issuance of new bonds, new general bonds, new special bonds, and refinancing bonds [13][17] - The monthly issuance plan, actual issuance, and net financing situation of local government bonds are also shown [21] Local Bond Net Supply - As of August 17th, the issuance progress of new general bonds was 70.47%, and the issuance progress of new special bonds was 64.10% [25] - The cumulative scale of the difference between refinancing bonds and local government bond maturities as of August 17th is presented [25] Special Bond Issuance Details - As of August 17th, the statistics of special refinancing bonds show the issuance amounts in different rounds for various provinces and municipalities [29] - As of August 17th, the statistics of special new special bonds show the issuance amounts from 2023 to 2025 for various provinces and municipalities [31] Local Bond Investment and Trading - The first - and second - level spreads of local government bonds are presented, including the spreads for different maturities and the changes over time [36] - The second - level spreads of local government bonds in different regions are presented, showing the spread changes in different regions from May to August 2025 [39] New Special Bond Investment Directions - The investment directions of new special bonds are presented, with the latest month's statistics only considering the issued new bonds [42]

Summary of Conference Call Records Industry and Company Overview - The discussion primarily revolves around the convertible bond market and its strategies, particularly focusing on high convexity convertible bonds in the context of the Chinese stock market and emerging sectors like AI glasses and the semiconductor industry. Key Points and Arguments 1. **High Convexity Convertible Bonds**: These bonds exhibit higher gains when long-term interest rates decline and lower losses when rates rise, making them suitable for both offensive and defensive investment strategies [1][3][5]. 2. **Market Performance**: As of August 15, 2025, the high convexity strategy has yielded approximately 1% returns, slightly outperforming the CSI 500 index, indicating its effectiveness even in a high valuation environment [1][5]. 3. **Investor Sentiment**: There is a cautious sentiment among fixed-income investors, particularly in first and second-tier bond funds and convertible bond funds, due to concerns about potential market pullbacks [2]. 4. **Stock Market Concentration**: The concentration of stocks in the Chinese market is about 17%, which is lower than that of developed countries, suggesting a more stable market environment with funds dispersed among small and medium-sized stocks [8]. 5. **ETF Inflows**: The convertible bond market has seen strong performance with record inflows into ETFs, driven by asset scarcity and high valuations [9]. 6. **AI Glasses Sector**: Key companies in the AI glasses sector include Jiahua (ODM), Huanshu (components/modules), Lingyi and Weir, and Yirui (display modules), with varying degrees of revenue elasticity [10]. 7. **Semiconductor Industry**: Emerging companies in the semiconductor chain include Weidao and Maolai, which are positioned in critical areas of lithography and chip production [11]. 8. **Active Directions**: Recent active sectors include liquid cooling technology and robotics, with companies like Yinlun, Jiali, and Yonggui showing promise [12]. Additional Important Content 1. **Calculation Methods for Convexity**: Three primary methods for calculating the convexity of convertible bonds are discussed: regression analysis, BS formula optimization, and parity premium rate method, each with its own advantages and challenges [4][6]. 2. **Market Outlook**: The Shanghai Composite Index has reached a 10-year high, and while the outlook remains cautiously optimistic, adjustments to high convexity strategies will be made to adapt to potential market changes [7].

Group 1 - The A-share market saw a significant increase in trading volume, reaching 2.76 trillion yuan on August 18, with margin financing balances exceeding 2 trillion yuan, marking the fourth consecutive trading day of both metrics surpassing 2 trillion yuan [1] - The Shanghai Composite Index rose above 3700 points, achieving its highest level in nearly 10 years, with a year-to-date increase of 11.23% [1] - In July, 1.9636 million new A-share accounts were opened, a 31.72% increase from June, contributing to a total of 14.5613 million new accounts opened in 2024, representing a year-on-year growth of 36.88% compared to 10.6379 million in the same period last year [1] Group 2 - The bond market experienced a sharp decline on August 18, with all government bond futures closing lower; the 30-year main contract fell by 1.33% to 116.090 yuan, marking the largest single-day drop since March 17, 2025, and a new closing low since March 24, 2025 [1] - The 10-year main contract decreased by 0.29% to 108.015 yuan, while the 5-year and 2-year contracts fell by 0.21% to 105.455 yuan and 0.04% to 102.304 yuan, respectively [1] - The 30-year government bond ETF dropped over 1%, closing down 1.26%, marking three consecutive days of decline [1]

Group 1 - A-shares have reached a historic milestone, surpassing a total market capitalization of 100 trillion yuan for the first time, while the bond market is experiencing significant declines [1][2] - The Shanghai Composite Index closed at 3728 points, marking a nearly ten-year high, with over 4000 stocks in the two markets showing gains [2][3] - The bond market saw a notable drop, with the 30-year government bond futures contract falling by 1.33%, the largest decline since March 17 [2][3] Group 2 - The yield on long-term government bonds has risen significantly, with the 30-year bond yield exceeding 2% for the first time in over four months, indicating a shift in market sentiment [2][3] - The trading volume in the A-share market reached over 2.8 trillion yuan, the highest this year and the third highest in history, reflecting strong investor interest [3] - Despite the current downturn in the bond market, many institutions maintain an optimistic outlook, citing factors such as a weak economic backdrop and expectations of continued liquidity [4][5] Group 3 - The Ministry of Finance announced measures to support the liquidity of government bonds, indicating a proactive approach to stabilize the bond market [4] - Analysts suggest that the bond market's recent decline is primarily due to supply pressures and weak buying interest, rather than fundamental economic issues [5][6] - There is a consensus among analysts that the bond market may have been oversold, and future movements will depend on monetary policy adjustments and economic conditions [6]