Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - In April 2025, 16 bond - issuing urban investment companies had acceptor overdue, with a monthly overdue amount of 336 million yuan. According to the list released by the Shanghai Bill Exchange on May 9th, a total of 919 entities had acceptor overdue in April, including 16 bond - issuing urban investment companies, a decrease of 5 compared to the previous month. The cumulative overdue amount of bills in that month was 336 million yuan, a decrease of 69 million yuan compared to the previous month. Among them, the cumulative overdue amount of new entities was 289 million yuan, and the new overdue amount of existing entities was 47 million yuan [1]. - Four urban investment companies had overdue for the first time, and one was the first overdue entity in its region. In terms of entity types, among all 16 overdue entities, 4 were newly disclosed, including a municipal - level platform in Xinyang and district - county - level platforms in Changsha, Huai'an, and Tai'an. In terms of regions, the urban investment companies with acceptor overdue in this month were mainly distributed in 6 provinces, with Shandong having relatively more, with a total of 8 entities having acceptor overdue. In the new regions, a district and county under Tai'an had a bond - issuing urban investment company with acceptor overdue for the first time [2]. - As of April 2025, a total of 283 bond - issuing urban investment companies had experienced acceptor overdue. From August 2021 to April 2025, there were 1113 records of overdue bills of bond - issuing urban investment companies, involving 283 bond - issuing urban investment companies. In terms of disclosure times, 149 were disclosed more than once, and 82 reached 5 times or more. In terms of the latest overdue amount, 87 bond - issuing urban investment companies reached 100 million yuan or more, and 12 were not less than 500 million yuan [2]. - District - county - level and AA - rated urban investment companies accounted for a relatively high proportion. In terms of administrative levels, 161 were district - county - level entities, 58 were municipal - level entities, 62 were park - level entities, and 2 were provincial - level entities. In terms of entity ratings, there were relatively more AA entities, with a total of 196, 66 AA+ entities, 14 AA - and below entities, 4 AAA entities, and 3 unrated entities. In terms of regional distribution, all overdue bond - issuing urban investment companies were distributed in 24 provinces, with 87 in Shandong, 38 in Jiangsu, 29 in Henan, 26 in Guizhou, 15 in Hunan, 14 in Yunnan, 13 in Sichuan, 10 in Shaanxi, and less than 10 in other provinces [3]. Summary by Relevant Catalogs City Investment Bill Overdue Subject Quantity and Monthly Occurrence Amount - The chart shows the quantity of city investment bill overdue subjects and the monthly occurrence amount (in ten thousand yuan, number of companies) [6][9]. City Investment Bill Overdue Monthly Balance - The chart shows the monthly balance of city investment bill overdue (in ten thousand yuan) [6][12]. City Investment Bill Overdue Subject Regional Distribution - The chart shows the regional distribution of city investment bill overdue subjects, with 32 new subjects added in the past six months (in number of companies) [6][16]. City Investment Bill Overdue Subject Administrative Level and Subject Rating Distribution - The chart shows the administrative level and subject rating distribution of city investment bill overdue subjects (in number of companies). There are 58 municipal - level, 161 district - county - level, and 62 park - level entities. In terms of ratings, there are 4 AAA, 66 AA+, 196 AA, 14 AA - and below, and 3 unrated entities [6][17]. List of City Investment Companies with Acceptor Overdue (Partial) - The table lists some city investment companies with acceptor overdue, including disclosure time, subject code, cumulative disclosure times, administrative level, province, city, district, park, subject rating, cumulative overdue occurrence amount (in ten thousand yuan), and overdue balance at the end of the month (in ten thousand yuan) [6][21]. Cumulative Overdue Occurrence Amount of City Investment Bills (Partial) - The table shows the cumulative overdue occurrence amount of city investment bills (in ten thousand yuan) of some entities from April 2024 to April 2025 [6][23]. Cumulative Overdue Balance of City Investment Bills (Partial) - The table shows the cumulative overdue balance of city investment bills (in ten thousand yuan) of some entities from April 2024 to April 2025 [6][25].

Core Viewpoint - The urban investment platform is under pressure to transform due to ongoing regulatory policies and debt management requirements, necessitating a reevaluation of its operational strategies and revenue structures [1]. Group 1: Government Subsidies and Financial Metrics - The requirement states that government subsidies should not exceed 50% of net profit during the reporting period [2][3]. - Various adjustment methods for calculating the impact of government subsidies include market-based recognition and flexible application of calculation formulas [3][4]. - The average of government subsidies as a percentage of net profit for 2023 and 2024 can be used to determine compliance with the 50% threshold [3]. Group 2: Revenue Recognition and Classification - The requirement specifies that construction-related revenue should not exceed 30% of total operating revenue [5]. - Key considerations for distinguishing between construction-related and market-based revenue include whether the payment source is a government entity and the nature of the project assignment [6][8]. - The classification of trade income and its implications for industry attributes must be disclosed, particularly regarding major clients and suppliers [8]. Group 3: Asset Management and Integration - The requirement indicates that construction-related assets should not exceed 30% of total assets [9]. - Key details include the definition of construction-related assets and the need for transparency regarding the composition of total assets [9][10]. - The marketability of inventory is crucial, with an emphasis on the ability to realize value through market transactions rather than government buybacks [11]. Group 4: Course and Practical Insights - A course titled "Key Points and Practical Cases for Urban Investment Industry Transformation" will provide in-depth analysis of revenue structure optimization and asset integration paths, focusing on compliance with new regulations [13][15]. - The course will cover various case studies from different sectors, including construction and technology investments, to illustrate practical strategies for transformation [16].

固收"申"音：月度策略 20250508 摘要 • 经济外需压力显现，市场对经济预期悲观，利率曲线趋于平坦。关注美国 联储政策、美元汇率及宽财政进度，警惕美国"双赤字"问题及其对美元 资产信用的潜在影响。 • 美国通过关税、汇率等手段解决特里芬难题，与中国等主要竞争对手博弈。 美国宽财政或难持续，未来几年可能转向紧缩，需重点关注美联储政策方 向和财政状况。 • 美国经济当前处于滞胀而非衰退，密歇根消费者信心指数下降主因通胀预 期回升。全球贸易增速或在 2024 年见顶，中美博弈加剧，全球贸易经济 重构概率大。 • 国内政策侧重提振内需，但海外负面影响或削弱政策效果。投资方面，地 产、基建、制造业增长空间有限；消费受储蓄意愿、收入预期和房价下跌 制约，未来政策应侧重促进消费。 • 货币政策方面，大工具保持定力，小工具灵活调整，实体融资需求下降形 成自发性宽松。5-8 月利率或下行，全年或为嵌套在宏观审慎框架内的利 率下行期，需警惕利率下行引发的金融风险。 Q&A 今年 5 月份整体在线市场的看法是什么？ 今年 5 月份整体在线市场的看法主要集中在利率下行期的开始。宽松交易窗口 已经打开，这与最新新闻发布会内容相 ...

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The economic growth in the central Jiangsu region is rapid, but the industrial layout is still traditional, and the tax - source cultivation ability lags behind that of the southern Jiangsu region. The government's fiscal revenue is under pressure due to the real - estate market adjustment, resulting in dual debt pressure. However, significant progress has been made in debt risk prevention and control. The bond - issuing urban investment enterprises in the three cities in central Jiangsu have prominent problems such as large debt scale, weak profitability, and over - dependence on government subsidies, and they need to transform and resolve debts [3][38][39]. Summary According to the Table of Contents 1. Debt Cause Analysis - **Economic and Demographic Situation**: The central Jiangsu region has strong economic development momentum, with a compound GDP growth rate of 6.32% in the past five years. However, the population growth in some cities is slow, and the urbanization rate and per - capita disposable income still have room for improvement [5]. - **Industrial Structure**: The fixed - asset investment in the three cities in central Jiangsu has promoted industrial transformation, but the industrial structure is still "secondary - tertiary - primary", and the proportion of the tertiary industry is relatively low compared to the provincial average. The traditional industries in each city are relatively strong, and the emerging industries are weak, with low tax - creation ability [7]. - **Fiscal Revenue**: From 2020 - 2024, the compound growth rate of the general budget revenue in the three cities in central Jiangsu was 2.9%. The fiscal budget balance rate is mostly below 65%, and the fiscal self - sufficiency rate is low. The government - funded revenue is under pressure due to the real - estate market adjustment, and the urban investment platforms' land - acquisition behavior has increased their debt burden [11]. - **Debt Scale**: The local debt in the central Jiangsu region has expanded rapidly in the past five years, with a compound growth rate of 13.6%. Since 2021, the broad - based debt ratio has been on the rise [14]. 2. Main Debt - Resolution Measures and Progress - **Policy and Measures**: The Jiangsu provincial government implements a full - scale debt classification management system. The three cities in central Jiangsu have formulated corresponding management policies, including debt scale control, cost reduction, and platform transformation [18]. - **Specific Actions**: Each city has introduced a series of measures, such as debt risk warning mechanisms, budget management reforms, and platform company integration. As of March 1, 2025, 105 government financing platforms in the three cities have exited. The financing costs in each city have also been significantly reduced [19][21]. 3. Observation of the Fundamentals of Bond - Issuing Urban Investment Enterprises in the Three Cities in Central Jiangsu - **Enterprise Hierarchy and Credit Rating**: As of December 31, 2024, there were 151 bond - issuing urban investment enterprises in the three cities in central Jiangsu, mainly at the district - county level, and the credit ratings are mainly AA and AA+. The overall quality of the district - county - level enterprises is relatively weak [24][25]. - **Asset and Financial Leverage**: The asset scale of the bond - issuing urban investment enterprises is increasing, mainly driven by government - related assets. The financial leverage is also rising [24]. - **Operating Performance**: The operating cash - generating ability of the enterprises is limited, and they are highly dependent on government subsidies. The cash - recovery ability is acceptable, but the profitability of some enterprises is declining [31]. - **Debt Situation**: The scale of the existing interest - bearing debt is increasing, and the progress of debt scale reduction is average, but the financing cost has decreased significantly. The financing is generally tightening, and the effect of non - standard financing reduction is remarkable [24][33][36]. 4. Summary - The economic development in the central Jiangsu region is accompanied by dual debt pressure. Although progress has been made in debt control, the bond - issuing urban investment enterprises still face problems such as large debt scale and weak self - hematopoietic ability. They need to transform and resolve debts [38][39].

Core Viewpoint - The recent revision of the Shanghai Stock Exchange's "Guidelines for the Review of Corporate Bond Issuance and Listing" introduces stricter requirements for local government financing vehicles (LGFVs), aiming to enhance transparency and promote genuine transformation in the industry [1][3][4]. Group 1: Regulatory Changes - The revised guidelines expand the number of clauses from 56 to 66, introducing new requirements for the disclosure of the "335" indicators, which limit non-operating assets and income to 30% and government subsidies to 50% of net profit [1][4]. - The guidelines require LGFVs to disclose their asset structure, income structure, and profit structure, marking the first formal acknowledgment of the "335" indicators in public documents [4][6]. - The new rules aim to guide LGFVs towards market-oriented transformation and reduce reliance on government resources, thereby improving profitability and debt repayment capabilities [3][7]. Group 2: Market Impact - As of April 2025, the total scale of canceled corporate bond issuances reached 19.815 billion, with local state-owned enterprises accounting for 88.95% of these cancellations [2]. - In the first quarter of 2025, LGFV bond issuance dropped to 15.762 billion, a year-on-year decrease of 13.7%, while net financing fell by 30.2% [2][5]. - The number of first-time issuers among LGFVs decreased by 18 compared to the same period last year, indicating a more cautious approach to bond issuance [2]. Group 3: Trade Business and Risks - The revised guidelines emphasize the need for LGFVs to disclose the rationality and authenticity of their trade business, addressing issues of "pseudo-trade" practices that have emerged in the industry [6][7]. - There are concerns regarding the authenticity of trade operations, with some LGFVs engaging in non-standard practices such as financing trade and "empty transfers" to inflate revenue [7][8]. - The guidelines require LGFVs with significant trade operations to disclose key customer and supplier information, accounting methods, and the commercial rationale behind their trade activities [7][8].

Group 1: Report Overview - The report focuses on the bond market dynamics of enterprise perpetual bonds, financial perpetual and subordinated bonds, and ABS in March 2025, aiming to provide investors with reference [9]. Group 2: Industry Investment Rating - No industry investment rating is provided in the report. Group 3: Core Views - The overall performance of the bond market in the second quarter is expected to be positive, with the 10-year Treasury bond yield likely to move from the right side to the middle of the 1.6% - 1.9% range [5]. - It is recommended to continue trading in bands and appropriately invest in short-term bonds of urban and rural commercial banks [5]. Group 4: Enterprise Perpetual Bonds 4.1 Primary Market - In March, 107 enterprise perpetual bonds were issued, raising a total of 111.4 billion yuan, a 56% increase from the previous month. However, the repayment scale increased to 136 billion yuan, resulting in a net financing outflow of 24.6 billion yuan, the first net outflow this year [5][10]. - The issuance scale of AAA-rated high-quality issuers decreased slightly, and the issuance costs of AAA, AA+, and AA-rated bonds increased by 24bp, 41bp, and 8bp respectively [10]. - The top three industries in terms of issuance volume were urban investment, building decoration, and public utilities, while the comprehensive industry dropped to the fourth place [5][10][13]. - Among the newly issued bonds in March, 63 were subordinated bonds, accounting for 59% of the total number and 67% of the total scale [15]. 4.2 Secondary Market - In March, the short-term yields of industrial and urban investment perpetual bonds fluctuated downward, and the short-term spreads narrowed significantly, while the long-term yields showed no obvious downward trend [21]. - The spreads of urban investment and industrial perpetual bonds fluctuated slightly in March, with the spreads of medium and low-grade, medium and long-term urban investment bonds tending to widen slightly [23]. - The trading volume and turnover rate of enterprise perpetual bonds increased significantly in March. The top three industries in terms of trading volume were urban investment, public utilities, and building decoration [5][30]. - No new cases of non-redemption of enterprise perpetual bonds were reported in March [34]. Group 5: Financial Perpetual and Subordinated Bonds 5.1 Primary Market - The issuance volume of financial perpetual bonds continued to increase in March, reaching the highest level in the first quarter. A total of 7 financial perpetual bonds were issued, raising 63.5 billion yuan, with a net financing outflow of 30.7 billion yuan [35]. - The issuance of financial subordinated bonds increased significantly, with banks contributing the main share. In March, 59.2 billion yuan of financial subordinated bonds were issued, with a net financing inflow of 27 billion yuan [39]. 5.2 Secondary Market - In March, the spreads of most financial institutions narrowed slightly, with the spreads of AA+-rated banks narrowing the most [44]. - The spreads of brokerage subordinated bonds narrowed significantly, while the spreads of TLAC bonds remained stable [48]. - The trading volume and turnover rate of bank perpetual bonds and secondary capital bonds increased significantly in March [52][56]. - No new cases of non-redemption of bank secondary capital bonds were reported in March, but investors are still advised to be cautious about the non-redemption risk of weak urban and rural commercial banks [60]. Group 6: ABS 6.1 Primary Market - In March, 189 ABS projects were issued, raising a total of 171.7 billion yuan, a significant increase from February in terms of both the number of projects and the total financing amount [61]. - Personal consumption loan ABS had the largest issuance scale, followed by financial leasing and microloan ABS [61]. - The issuance scale of real estate ABS increased in March, with a total of 3.4 billion yuan issued, mainly including CMBS and supply chain ABS [63]. - High-grade bonds still dominated the ABS market in March, with AAAsf-rated bonds accounting for 94% of the issuance scale. The issuance costs of short-term bonds increased significantly [64]. 6.2 Secondary Market - In March, the short and medium-term yields of ABS decreased significantly, while the long-term yields remained flat. The short and medium-term credit spreads also narrowed [65]. - The secondary trading volume of ABS increased significantly in March, reaching 185.5 billion yuan, almost doubling from the previous month. The top three types of underlying assets in terms of trading volume were Reits, personal consumption loans, and accounts receivable ABS [67]. - Some Sunac ABS were traded at a significant discount in March [67].

Group 1 - The article discusses the potential economic strategies employed by Trump, suggesting that actions like tariff increases and mass layoffs could lead to a recession, which may lower U.S. Treasury yields and save up to $400 billion in interest payments for every 100 basis points reduction in rates [1] - Global debt levels have reached $313 trillion, which is 11.5 times the U.S. GDP, highlighting the urgent need for countries to address debt issues [2] - The Chinese government has proposed a debt resolution plan involving a 12 trillion yuan strategy to manage local government debt, indicating a proactive approach to debt management [2] Group 2 - The article outlines China's previous debt resolution cycles, noting significant market impacts, such as the 2015 debt swap that led to a peak in the Shanghai Composite Index and the strong performance of sectors like food and beverage during subsequent cycles [3] - It emphasizes that understanding the underlying logic of debt resolution is crucial for investors to capitalize on structural opportunities in the equity market [3][4] - The upcoming course led by Dr. Liu Yu aims to clarify the core logic of the current debt resolution wave and its implications for investment strategies [4][8] Group 3 - Dr. Liu Yu, a prominent economist, is recognized for her deep understanding of debt issues and has been invited to share insights on the impact of debt resolution on capital markets [5][6] - The course will cover global debt experiences, particularly Japan's "lost three decades," and how these lessons can inform China's debt resolution strategies [13][14] - Participants will gain insights into the current state of China's local and municipal debts, effective resolution methods, and their economic impacts [14][20]

Summary of Key Points from Conference Call Industry Overview - The conference call primarily discusses the bond market, focusing on the transition from old issues related to debt to new developments in sectors like technology [2][8]. Core Insights and Arguments - **Old Issues vs. New Developments**: The old issues in the bond market are primarily related to debt clearance and the financial cycle of debt. New developments are emerging in sectors such as technology, which is expected to lead future high-yield growth [2][8]. - **2025 Fiscal Budget**: The 2025 fiscal budget reflects a cautious approach, with general public budget revenue projected at 21.985 trillion yuan, showing only a 0.1% increase. Tax revenue is expected to grow by 3.7%, while non-tax revenue is projected at 3.839 trillion yuan [3][4]. - **Deficit and Debt Levels**: The nominal deficit rate for 2025 is set to rise to 4%, with new government debt reaching 13.86 trillion yuan, marking the highest level since 2017. The broad deficit is expected to reach 9.8% [5][6]. - **Risk Mitigation Measures**: Significant funds are being allocated to mitigate risks, aimed at improving cash flow and repairing balance sheets. However, these measures are not expected to fully resolve debt issues in the short term [6][8]. - **Government Fund Revenue and Land Finance**: Government fund revenue is closely tied to land finance, with a notable decline in revenue from 2022 to 2024 due to falling land income and real estate prices [7][8]. - **City Investment Company Debt Growth**: The debt growth of city investment companies has slowed significantly, dropping from 16% in 2020 to around 6% in 2024, influenced by stricter regulations on local hidden debts [9][10]. - **Support for Technological Innovation**: The People's Bank of China is increasing financial support for technological innovation, planning to launch a technology-focused bond market. The Science and Technology Innovation Board has raised over 1 trillion yuan, with 50% of the funds allocated to technology-related bonds [12][13]. - **Challenges in the Technology Sector**: The technology sector faces challenges such as mismatched financing terms and insufficient credit enhancement measures. Only 3.6% of issued technology-related bonds have credit guarantees [16][17]. Other Important but Overlooked Content - **Market Adjustments**: Recent adjustments in the bond market are attributed to tighter funding conditions and misinterpretations of central bank easing policies from the previous year [19][20]. - **Real Estate Market Impact**: The real estate market is showing signs of recovery, with stable prices and increased transaction volumes, which may support macroeconomic stability but will take time to fully materialize [23]. - **Investment Strategy Recommendations**: A cautious approach is advised for the bond market, suggesting a barbell strategy that combines long and short positions to navigate marginal changes [22]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the bond market and related sectors.