Group 1: Market Overview - The issuance guidance rates for credit bonds have decreased across all categories, with a change range of -11 BP to -3 BP compared to the end of Q4 2025 [1][14] - As of March 29, 2026, the total issuance amount for credit bonds in Q1 2026 was 32,724.08 billion, a decrease of 7.39% quarter-on-quarter [12][13] - The net financing amount for credit bonds increased to 10,067.65 billion, up by 1,910.91 billion from the previous quarter [12] Group 2: Secondary Market Dynamics - The total transaction volume for credit bonds in Q1 2026 was 97,361.22 billion, reflecting an 11.30% decrease quarter-on-quarter [21] - Credit bond yields have generally declined, with credit spreads showing differentiation, narrowing in the short to medium term while widening in the long term [22][32] - The AAA-rated 7-year credit bond spread is currently at a historically low percentile, indicating a preference for shorter-duration bonds due to their stability [22][32] Group 3: Investment Strategy - The investment strategy for Q2 2026 should focus on the characteristics of short-term and long-term bonds, emphasizing a coupon strategy while remaining flexible to capitalize on long-term bond trading opportunities [1] - The report suggests that the overall conditions for a bear market in credit bonds are insufficient, with a long-term downward trend in yields expected [1] - Investors are advised to pay attention to the effectiveness of growth-stabilizing policies and market sentiment influenced by supply and demand dynamics [1]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The current real - estate bond market shows three characteristics: valuation has stopped falling, risks are clear, and spreads are differentiated. The impact of the Vanke event is significantly differentiated, with a greater impact on state - owned enterprises and limited impact on mixed - ownership and private enterprises [3]. - Assuming that the real - estate bond spreads are repaired to the lowest point of the year and the 10 - year Treasury bond yield drops by 10BP, extending the duration to bet on the repair of high - quality central and local state - owned enterprises can obtain excess returns. The actual repair process may be slow, and coupon income is the most certain source of return. It is recommended to adopt a strategy combining "bottom - position allocation + band trading" [3]. 3. Summary According to the Directory 3.1 Vanke Event Process and Its Impact on Real - Estate Bonds 3.1.1 Vanke Debt Extension Event Process In late November 2025, Vanke initiated debt extension negotiations for multiple domestic bonds due to large - scale debt maturities and liquidity tensions. After several setbacks, some bonds were successfully extended in January 2026 [8]. 3.1.2 Differentiated Impact of Vanke's Debt Extension Event - **Mixed - ownership and private enterprises**: The impact on private real - estate enterprises' bonds was relatively limited. The market had already been highly sensitive to their credit risks, and the Vanke event was generally regarded as a company - specific problem rather than a recurrence of systemic risks for private enterprises [13]. - **State - owned enterprises**: The negotiation of debt extension by Vanke had a significant impact on the bond prices of state - owned real - estate enterprises. It made investors re - evaluate the debt risks of state - owned real - estate enterprises [14]. 3.2 Current Right - hand Position and Return Space of Real - Estate Bonds 3.2.1 Review of the Default Process of Real - Estate Bonds since 2015 The credit risk evolution of the real - estate industry since 2015 has gone through five stages: the policy - easing period from 2015 - 2017 with only individual small and medium - sized real - estate enterprises facing operational risks; the first wave of defaults by small and medium - sized real - estate enterprises from 2018 - 2019 due to tightened financing; the spread of risks to large real - estate enterprises with high - leverage expansion from 2020 - the first half of 2021 under the "Three Red Lines" policy; the systemic credit crisis of leading real - estate enterprises from the second half of 2021 to 2024 due to a sharp decline in sales and stricter pre - sale fund supervision; and the approaching end of the real - estate default wave in 2025 [22]. 3.2.2 Characteristics of the Current Stage of Real - Estate Bonds - **Valuation has stopped falling**: The valuation of mixed - ownership and private enterprises has recovered first, and the spreads of state - owned enterprises have stopped hitting new highs. The panic selling caused by the Vanke event has been basically digested [27]. - **Risks are clear**: The Vanke debt extension event has a clear disposal path. A 40% immediate recovery rate has broken the pessimistic expectation of "losing all principal", and the arrangement of extending the remaining 60% of the debt for one year provides a reference for subsequent debt disposal [31]. - **Spreads are differentiated**: The market is now distinguishing between good and bad, and pricing is returning to individual credit qualifications. Some financially sound entities have seen their spreads recover first, while those with weaker financial performance or higher leverage pressure are still trading at high levels [33]. 3.2.3 Yield Calculation under the Repair Assumption - **Calculation assumptions**: A unified holding period of one year, all bonds are fully held. The 10 - year Treasury bond is used as the benchmark, and it is assumed that its yield will drop to the lowest point in the past year. For credit bonds, it is assumed that the yields of each variety will drop to the lowest point in the past year [41]. - **Calculation results**: The comprehensive yield of 2 - 3 - year high - grade state - owned real - estate bonds is in the range of 2.8% - 6.4%; the yield of 1 - year high - grade state - owned real - estate bonds is in the range of 1.8% - 2.4%; the comprehensive yield of the 10 - year Treasury bond is 2.94%; the yield of 1 - year mixed - ownership and private real - estate bonds is in the range of 2.3% - 2.9%. Extending the duration to bet on the spread repair of high - quality central state - owned enterprises can obtain higher excess returns [42][44][45][46]. 3.3 Coupon Strategy: Allocation Value of High - Quality Real - Estate Bond Entities 3.3.1 Central State - Owned Real - Estate Enterprises Due to the risk - aversion sentiment caused by the Vanke event, some high - quality central state - owned real - estate bonds have experienced irrational valuation corrections, but their long - term default risks are low. It is recommended to focus on leading entities with good financial performance, strong shareholder strength, and core - city layouts, such as Poly Developments and Holdings Group Co., Ltd., China Resources Land Limited, and China Green Development Group Co., Ltd. The duration can be moderately extended from less than one year to 1 - 3 years [50]. 3.3.2 Local State - Owned Real - Estate Enterprises The overall debt risks of local state - owned real - estate entities with large outstanding bond volumes are controllable. It is recommended to focus on entities in regions with good economic development, strong shareholder backgrounds, and good financial performance, such as Shanghai Lujiazui Group Co., Ltd., Guangzhou Urban Construction Development Co., Ltd., and Beijing Urban Construction Investment & Development Co., Ltd. [53]. 3.3.3 Mixed - Ownership and Private Real - Estate Enterprises Mixed - ownership and private real - estate enterprises are not the focus of allocation. Only institutions with high - risk tolerance can moderately bet on short - term investment opportunities for bonds with a maturity of less than one year. It is advisable to choose entities with a high willingness of shareholder support and sound financial conditions [57][59].

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The issuing guidance rates announced by the National Association of Financial Market Institutional Investors (NAFMII) during the period from March 16th to March 22nd showed a divergence, with most rates for medium - and short - term maturities decreasing and most for long - term maturities increasing, with an overall change range of -2 BP to 1 BP [1][51]. - The issuance scale of credit bonds continued to increase on a week - on - week basis and was at a historically high level. Corporate bonds remained at zero issuance, the issuance amount of private placement notes decreased, and the issuance amounts of other varieties increased. The net financing of credit bonds increased on a week - on - week basis [1][51]. - In the secondary market, the trading volume of credit bonds increased on a week - on - week basis, with the trading volume of corporate bonds decreasing and that of other varieties increasing [1][51]. - The yields of credit bonds declined overall, with a larger decline in the medium - and short - term [1][51]. - In terms of credit spreads, the medium - and short - term credit spreads of medium - and short - term notes and corporate bonds generally narrowed, while the long - term spreads widened; the 5 - year credit spread of urban investment bonds widened, and most spreads of other maturities narrowed [1][51]. - From an absolute return perspective, the relatively strong allocation demand will drive the credit bond market to continue its recovery. Although fluctuations and adjustments are inevitable under the influence of multiple factors, the conditions for a full - scale bear market in credit bonds are still insufficient. In the long run, future yields are still in a downward channel, and the idea of increasing allocation during adjustments is still feasible [1][51]. - From a relative return perspective, the compression space of credit spreads at all maturities is insufficient at present, and the cost - effectiveness of most varieties for allocation is not high. The coupon strategy in the current allocation should be cautious, while the trading strategy can be moderately optimistic. The key to bond selection is to focus on the trend of interest - rate bonds and the coupon value of individual bonds [1][51]. - The end - of - quarter factor may cause some disturbances. Considering the possible volatile market in the near future, it is necessary to coordinate and transform the allocation and trading strategies in line with the trend. Attention should also be paid to the effectiveness of growth - stabilizing policies, the impact of the equity market on the bond market, and the influence of changes in the capital market and supply - demand pattern on market sentiment [1][51]. - The central and local governments are continuously and actively optimizing real - estate policies, which have played a positive role in promoting the stabilization of the real - estate market. For real - estate bonds, investors with higher risk tolerance can consider early layout, focusing on enterprises with outstanding new financing and sales recovery, and balancing risks and returns. The focus of allocation should be on central and local state - owned enterprises with stable historical valuations and excellent performance, as well as high - quality private enterprise bonds with strong guarantees. Longer durations can be used to increase returns, and trading opportunities from the valuation repair of oversold real - estate enterprise bonds can also be appropriately explored [2][52][53]. - For urban investment bonds, the possibility of default is low, and they can still be a key allocation variety for credit bonds. The debt resolution has achieved remarkable results, and the reform and transformation of financing platforms are in the final stage. Attention can be paid to the reform and transformation opportunities of "entity - type" financing platforms [3][53]. 3. Summary by Directory 3.1 Primary Market Situation 3.1.1 Issuance and Maturity Scale - From March 16th to March 22nd, a total of 482 credit bonds were issued, with an issuance amount of 396.635 billion yuan, a week - on - week increase of 17.70%. The net financing of credit bonds was 92.633 billion yuan, an increase of 11.306 billion yuan on a week - on - week basis [12]. - By variety, corporate bonds had zero issuance with a net financing of -9.783 billion yuan, an increase of 0.999 billion yuan on a week - on - week basis; 182 corporate bonds were issued, with an issuance amount of 138.026 billion yuan, a week - on - week increase of 19.10%, and a net financing of 45.560 billion yuan, an increase of 28.919 billion yuan on a week - on - week basis; 148 medium - term notes were issued, with an issuance amount of 124.231 billion yuan, a week - on - week increase of 3.52%, and a net financing of 53.343 billion yuan, a decrease of 6.639 billion yuan on a week - on - week basis; 122 short - term financing bills were issued, with an issuance amount of 119.022 billion yuan, a week - on - week increase of 46.39%, and a net financing of 9.016 billion yuan, a decrease of 1.171 billion yuan on a week - on - week basis; 30 private placement notes were issued, with an issuance amount of 15.356 billion yuan, a week - on - week decrease of 22.38%, and a net financing of -5.503 billion yuan, a decrease of 10.802 billion yuan on a week - on - week basis [12]. 3.1.2 Issuance Interest Rates - The issuing guidance rates announced by the NAFMII showed a divergence, with most rates for medium - and short - term maturities decreasing and most for long - term maturities increasing, with an overall change range of -2 BP to 1 BP. By maturity, the rate change range for 1 - year varieties was -1 BP to 1 BP, for 3 - year varieties was -2 BP to 0 BP, for 5 - year varieties was -1 BP to 1 BP, and for 7 - year varieties was -2 BP to 1 BP. By rating, the rate change range for key AAA - rated and AAA - rated varieties was -1 BP to 1 BP, for AA + - rated varieties was 0 BP to 1 BP, for AA - rated varieties was -2 BP to -1 BP, and for AA - - rated varieties was -1 BP to 1 BP [13]. 3.2 Secondary Market Situation 3.2.1 Market Trading Volume - From March 16th to March 22nd, the total trading volume of credit bonds was 980.127 billion yuan, a week - on - week increase of 10.10%. The trading volumes of corporate bonds, corporate bonds, medium - term notes, short - term financing bills, and private placement notes were 17.686 billion yuan, 382.526 billion yuan, 358.574 billion yuan, 162.769 billion yuan, and 58.572 billion yuan respectively. The trading volume of credit bonds increased on a week - on - week basis, with the trading volume of corporate bonds decreasing and that of other varieties increasing [16]. 3.2.2 Credit Spreads - For medium - and short - term notes, most varieties' credit spreads widened. Specifically, the 1 - year AAA - rated variety's credit spread widened, while those of other varieties narrowed; for the 3 - year period, the credit spreads of AAA - rated and AA + - rated varieties widened, while those of other varieties narrowed; the 5 - year and 7 - year credit spreads widened [19]. - For corporate bonds, most varieties' credit spreads widened. Specifically, for the 1 - year and 3 - year periods, the credit spread of the AAA - rated variety widened, while those of other varieties narrowed; the 5 - year and 7 - year credit spreads widened [26]. - For urban investment bonds, the credit spreads of each variety showed mixed trends. Specifically, for the 1 - year and 7 - year periods, the credit spread of the AAA - rated variety widened, while those of other varieties narrowed; for the 3 - year period, the credit spreads of AAA - rated and AA + - rated varieties widened, while those of other varieties narrowed; the 5 - year credit spread widened [29]. 3.2.3 Term Spreads and Rating Spreads - For AA + medium - and short - term notes, the 3Y - 1Y term spread widened by 0.79 BP, the 5Y - 3Y term spread widened by 1.52 BP, and the 7Y - 3Y term spread narrowed by 1.65 BP. The 3Y - 1Y term spread was at a historically low - to - medium percentile, at the 25.8% percentile; the 5Y - 3Y term spread was at the 28.3% percentile; the 7Y - 3Y term spread was at the 35.0% percentile. In terms of rating spreads, the (AA - )-(AAA) spread of 3 - year medium - and short - term notes narrowed by 2.00 BP, the (AA)-(AAA) spread narrowed by 2.00 BP, and the (AA + )-(AAA) spread remained the same as the previous period. The (AA - )-(AAA) spread was at a historically low level, at the 0.6% percentile; the (AA)-(AAA) spread was at the 5.0% percentile; the (AA + )-(AAA) spread was at the 1.6% percentile [36]. - For AA + corporate bonds, the 3Y - 1Y term spread widened by 0.41 BP, the 5Y - 3Y term spread widened by 2.31 BP, and the 7Y - 3Y term spread widened by 2.39 BP. The 3Y - 1Y term spread was at a historically low - to - medium percentile, at the 27.1% percentile; the 5Y - 3Y term spread was at the 25.8% percentile; the 7Y - 3Y term spread was at the 33.8% percentile. In terms of rating spreads, the (AA - )-(AAA) spread of 3 - year corporate bonds narrowed by 2.00 BP, the (AA)-(AAA) spread narrowed by 2.00 BP, and the (AA + )-(AAA) spread narrowed by 2.00 BP. The (AA - )-(AAA) spread was at a historically low level, at the 0.1% percentile; the (AA)-(AAA) spread was at the 5.2% percentile; the (AA + )-(AAA) spread was at the 3.0% percentile [41]. - For AA + urban investment bonds, the 3Y - 1Y term spread widened by 0.40 BP, the 5Y - 3Y term spread widened by 1.07 BP, and the 7Y - 3Y term spread widened by 0.07 BP. The 3Y - 1Y term spread was at a historically low - to - medium percentile, at the 23.0% percentile; the 5Y - 3Y term spread was at the 20.4% percentile; the 7Y - 3Y term spread was at the 37.7% percentile. In terms of rating spreads, the (AA - )-(AAA) spread of 3 - year urban investment bonds narrowed by 2.00 BP, the (AA)-(AAA) spread narrowed by 2.00 BP, and the (AA + )-(AAA) spread narrowed by 1.00 BP. The (AA - )-(AAA) spread was at a historically low level, at the 2.1% percentile; the (AA)-(AAA) spread was at the 0.5% percentile; the (AA + )-(AAA) spread was at the 0.5% percentile [44]. 3.3 Credit Rating Adjustment and Default Bond Statistics 3.3.1 Credit Rating Adjustment Statistics - According to iFinD statistics, during the period from March 16th to March 22nd, the ratings (including outlooks) of 2 companies were adjusted, with 1 downgraded and 1 upgraded [48]. 3.3.2 Default and Extended - Maturity Bond Statistics - There were no defaults of credit bonds under any issuer during the period from March 16th to March 22nd. There were also no extended - maturity credit bonds under any issuer during this period [50]. 3.4 Investment Views - The same as the core views of the report, including the analysis of primary and secondary markets, yield, credit spreads, and investment strategies from absolute and relative return perspectives, as well as investment suggestions for real - estate bonds and urban investment bonds [1][51][52][53].

Market Overview - The current market is characterized by a steepening yield curve, with short-term rates supported and long-term rates experiencing controlled volatility[4] - Geopolitical conflicts have driven oil prices up, impacting inflation expectations but with limited effect on domestic fundamentals and monetary policy[10] Economic Data Insights - Economic data from January to February shows structural recovery, particularly in infrastructure investment, but consumer recovery remains weak[10] - The anticipated economic growth rate for March may see a marginal decline due to seasonal factors, with ongoing verification needed for sustained recovery[10] Investment Strategy Recommendations - Suggested strategies include a focus on 1-year AA- certificates of deposit to capture short-term certainty, alongside 3-5 year perpetual bonds with a tilt towards 5-year positions[4] - High-yield real estate bonds are recommended for defensive positioning against market volatility, particularly 3-year high-rated varieties[11] Risk Factors - Potential risks include unexpected policy changes or external disturbances that could exceed current expectations[4] - Limitations in sample data and historical data may affect the accuracy of predictions and strategies[4] Performance Metrics - The cumulative return of the weekly strategy since early 2025 stands at 3.91%, outperforming short-term bond fund indices by 1.80% and medium to long-term bond indices by 0.65%[14]

1. Report Industry Investment Rating No information provided in the given content. 2. Core Views of the Report - During the period from March 9th to March 15th, most of the issuance guidance rates announced by the National Association of Financial Market Institutional Investors (NAFMII) declined, with an overall change range of -4 BP to 0 BP. The issuance scale of credit bonds increased month - on - month, with enterprise bonds remaining at zero issuance and the issuance amounts of other varieties increasing. The net financing of credit bonds increased month - on - month, with the net financing of corporate bonds and commercial paper decreasing, and the net financing of other varieties increasing. The net financing of enterprise bonds was negative, while that of other varieties was positive [1][54]. - In the secondary market, the trading volume of credit bonds decreased month - on - month. The trading volumes of enterprise bonds, medium - term notes, and private placement notes increased, while those of corporate bonds and commercial paper decreased. The yields of credit bonds showed differentiation, with short - term yields declining and long - term yields rising. Most credit spreads widened. In terms of quantiles, most spreads were at historical lows, and the 7 - year variety had a relatively higher quantile [1][54]. - From the perspective of absolute return, the relatively strong allocation demand will drive the credit bond market to continue its recovery. Although fluctuations and adjustments are inevitable under the influence of multiple factors, the conditions for a full - scale bear market in credit bonds are still insufficient. In the long run, yields are still in a downward channel, and the idea of increasing allocation during adjustments is still feasible. From the perspective of relative return, the compression space of credit spreads at all tenors is insufficient at present, and the cost - effectiveness of most varieties for allocation is not high. The coupon strategy in the current allocation should be cautious, while the trading strategy can be moderately optimistic. The key to bond selection is to focus on the trend of interest - rate bonds and the coupon value of individual bonds. It is necessary to coordinate and transform allocation and trading strategies according to the market trend. In the future, attention should be paid to the effectiveness of growth - stabilizing policies, the impact of the equity market on the bond market, and the influence of changes in the capital market and supply - demand pattern on market sentiment [1][54]. - The central and local governments continue to optimize real - estate policies, which have played a positive role in stabilizing the real - estate market. The "Government Work Report" signals that the new real - estate development model has entered a new stage of institutional and systematic implementation. For real - estate bonds, the sales recovery process will have a significant impact on bond valuations. Investors with higher risk tolerance can consider early layout, focusing on enterprises with outstanding new financing and sales recovery. The focus of allocation should be on central and local state - owned enterprises with stable historical valuations and excellent performance, as well as high - quality private enterprise bonds with strong guarantees. Longer durations can be used to increase returns, and trading opportunities from the valuation repair of oversold real - estate enterprise bonds can also be appropriately explored [2][59]. - For urban investment bonds, under the principle of coordinating development and security, the probability of default is very low, and they can still be a key allocation variety for credit bonds. The debt resolution has achieved remarkable results, and the reform and transformation of financing platforms are in the final stage. It is expected that financing platforms will fully withdraw by the end of June 2026. The next step is to focus on resolving their operating debt risks, and credit qualifications will return to fundamental pricing. During this process, opportunities for the reform and transformation of "entity - type" financing platforms can be focused on [3][60]. 3. Summary by Directory 3.1 Primary Market Situation 3.1.1 Issuance and Maturity Scale - From March 9th to March 15th, a total of 422 credit bonds of enterprise bonds, corporate bonds, medium - term notes, commercial paper, and private placement notes were issued, with a total issuance amount of 336.988 billion yuan, a month - on - month increase of 28.09%. The net financing of credit bonds was 81.327 billion yuan, a month - on - month increase of 1.933 billion yuan [12]. - By variety, enterprise bonds had zero issuance, with a net financing of - 10.782 billion yuan, a month - on - month increase of 2.067 billion yuan. Corporate bonds had 155 issuances, with an issuance amount of 115.893 billion yuan, a month - on - month increase of 13.94%, and a net financing of 16.641 billion yuan, a month - on - month decrease of 30.029 billion yuan. Medium - term notes had 145 issuances, with an issuance amount of 120.004 billion yuan, a month - on - month increase of 60.58%, and a net financing of 59.982 billion yuan, a month - on - month increase of 48.147 billion yuan. Commercial paper had 91 issuances, with an issuance amount of 81.307 billion yuan, a month - on - month increase of 18.79%, and a net financing of 10.187 billion yuan, a month - on - month decrease of 18.833 billion yuan. Private placement notes had 31 issuances, with an issuance amount of 19.784 billion yuan, a month - on - month increase of 8.76%, and a net financing of 5.299 billion yuan, a month - on - month increase of 0.581 billion yuan [13]. 3.1.2 Issuance Interest Rate - Most of the issuance guidance rates announced by the NAFMII declined, with an overall change range of -4 BP to 0 BP. By tenor, the 1 - year variety had an interest rate change range of -4 BP to 0 BP, the 3 - year variety had a change range of -3 BP to -1 BP, the 5 - year variety had a change range of -4 BP to 0 BP, and the 7 - year variety had a change range of -2 BP to 0 BP. By rating, the key AAA - rated and AAA - rated varieties had an interest rate change range of -2 BP to 0 BP, the AA + - rated variety had a change range of -4 BP to -1 BP, the AA - rated variety had a change range of -4 BP to -1 BP, and the AA - - rated variety had a change range of -4 BP to 0 BP [15]. 3.2 Secondary Market Situation 3.2.1 Market Trading Volume - From March 9th to March 15th, the total trading volume of credit bonds was 890.25 billion yuan, a month - on - month decrease of 2.81%. The trading volumes of enterprise bonds, corporate bonds, medium - term notes, commercial paper, and private placement notes were 18.385 billion yuan, 360.755 billion yuan, 333.627 billion yuan, 122.159 billion yuan, and 55.324 billion yuan respectively. The trading volume of credit bonds decreased month - on - month, with the trading volumes of enterprise bonds, medium - term notes, and private placement notes increasing, and those of corporate bonds and commercial paper decreasing [17]. 3.2.2 Credit Spreads - In medium - and short - term notes, most credit spreads widened. Specifically, the 1 - year credit spread narrowed, while the 3 - year and 5 - year credit spreads widened. For the 7 - year variety, the AAA - rated credit spread widened, and the AA + - rated spread narrowed [20]. - In enterprise bonds, most credit spreads widened. Specifically, the 1 - year AA - rated and below varieties had narrowing credit spreads, while the rest had widening spreads [27]. - In urban investment bonds, all credit spreads widened [35]. 3.2.3 Term Spreads and Rating Spreads - For AA + medium - and short - term notes, the 3Y - 1Y term spread widened by 1.71 BP, the 5Y - 3Y spread widened by 1.81 BP, and the 7Y - 3Y spread narrowed by 0.58 BP. Currently, the 3Y - 1Y spread is at a relatively low historical quantile (24.1%), the 5Y - 3Y spread is at 24.3%, and the 7Y - 3Y spread is at 32.4%. In terms of rating spreads, the 3 - year (AA - )-(AAA) spread narrowed by 1.00 BP, the (AA)-(AAA) spread narrowed by 2.00 BP, and the (AA + )-(AAA) spread narrowed by 1.00 BP. Currently, the (AA - )-(AAA) spread is at a historical low (1.4%), the (AA)-(AAA) spread is at 7.3%, and the (AA + )-(AAA) spread is at 1.5% [39]. - For AA + enterprise bonds, the 3Y - 1Y term spread widened by 1.55 BP, the 5Y - 3Y spread widened by 2.67 BP, and the 7Y - 3Y spread widened by 1.08 BP. Currently, the 3Y - 1Y spread is at 25.8%, the 5Y - 3Y spread is at 18.9%, and the 7Y - 3Y spread is at 27.6%. In terms of rating spreads, the 3 - year (AA - )-(AAA) spread widened by 1.00 BP, the (AA)-(AAA) spread remained unchanged, and the (AA + )-(AAA) spread widened by 1.00 BP. Currently, the (AA - )-(AAA) spread is at 0.3%, the (AA)-(AAA) spread is at 7.5%, and the (AA + )-(AAA) spread is at 7.9% [44]. - For AA + urban investment bonds, the 3Y - 1Y term spread widened by 1.15 BP, the 5Y - 3Y spread widened by 2.03 BP, and the 7Y - 3Y spread widened by 1.32 BP. Currently, the 3Y - 1Y spread is at 22.4%, the 5Y - 3Y spread is at 15.0%, and the 7Y - 3Y spread is at 37.5%. In terms of rating spreads, the 3 - year (AA - )-(AAA) spread narrowed by 1.00 BP, the (AA)-(AAA) spread widened by 1.00 BP, and the (AA + )-(AAA) spread remained unchanged. Currently, the (AA - )-(AAA) spread is at 3.1%, the (AA)-(AAA) spread is at 4.3%, and the (AA + )-(AAA) spread is at 2.3% [47]. 3.3 Credit Rating Adjustment and Default Bond Statistics 3.3.1 Credit Rating Adjustment Statistics - From March 9th to March 15th, a total of 2 companies had their ratings (including outlooks) adjusted, with 1 downgrade and 1 upgrade [50]. 3.3.2 Default and Extension Bond Statistics - From March 9th to March 15th, there were no defaults or extensions of credit bonds issued by any issuer [53]. 3.4 Investment Views - The views are consistent with the core views mentioned above, emphasizing the market trends of credit bonds, real - estate bonds, and urban investment bonds, as well as corresponding investment strategies and points to watch [1][54].

Fixed Income Research - The overall yield of credit bonds has declined, with credit spreads showing differentiation across various types, particularly widening in the short to medium term while narrowing in the long term [2] - The issuance scale of credit bonds has significantly increased due to a low base effect, while corporate bonds have seen zero issuance; net financing for credit bonds has increased, with corporate bonds showing negative net financing [2] - The secondary market has experienced a rise in transaction volume, with all types of credit bonds seeing increased trading activity [2] - Despite fluctuations, the overall conditions for a bear market in credit bonds are not sufficient, and a long-term downward trend in yields is expected, suggesting a strategy of increasing allocations during adjustments [2] Real Estate Industry - Continuous optimization of real estate policies by central and local governments is positively impacting the stabilization of the real estate market, transitioning from a phase of large-scale expansion to one focused on quality improvement [3] - The recovery in sales will significantly influence bond valuations, and investors with higher risk tolerance may consider early positioning in companies showing strong performance in new financing and sales recovery [3] - The focus for investment should remain on historically stable valuations of high-performing state-owned enterprises and quality private enterprises with strong guarantees, while also considering opportunities in undervalued real estate bonds [3] Metal Industry - The supply of aluminum is expected to tighten due to export disruptions in the Middle East, which may support aluminum prices in the short term [6] - The geopolitical situation, particularly the conflict involving Iran, is influencing various metal prices, with copper prices facing downward pressure due to rising oil prices and a strong dollar [6] - The upcoming disclosure of corporate earnings in March may lead to a verification phase for industry fundamentals, with a focus on sectors supported by geopolitical factors and demand for strategic resources [6][7]

1. Report's Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - During the period from March 2nd to March 8th, most of the issuance guidance rates announced by the National Association of Financial Market Institutional Investors (NAFMII) increased, with an overall change range of -1 BP to 6 BP. Due to the low - base effect, the issuance scale of credit bonds increased significantly on a month - on - month basis. Corporate bonds remained at zero issuance, while the issuance amounts of other varieties increased. The net financing of credit bonds increased, with corporate bond net financing decreasing and that of other varieties increasing. Corporate bond net financing was negative, while that of other varieties was positive. [1][11][55] - In the secondary market, the trading volume of credit bonds increased on a month - on - month basis, with the trading volume of each variety increasing. The yields of credit bonds all declined. The credit spreads of each variety were differentiated, showing a general widening trend at the short - to - medium end and a narrowing trend at the long end. In terms of quantiles, the spreads of most varieties were at historical lows, with the quantiles of 7 - year varieties being relatively high. [1][15][55] - From the perspective of absolute return, the relatively strong allocation demand will drive the credit bond market to continue its recovery. Although fluctuations and adjustments are inevitable under the influence of both positive and negative factors, the conditions for a full - scale bear market in the credit bond market are still insufficient. In the long run, future yields are still on a downward path, and the idea of increasing allocations during adjustments is still feasible. [1][55] - From the perspective of relative return, the compression space of credit spreads at each maturity is currently insufficient, and the cost - effectiveness of allocating most varieties is not high. The coupon strategy in the current allocation thinking should remain cautious, while the trading thinking can be moderately optimistic. When selecting bonds, the focus should still be on the changing trend of interest - rate bonds while paying attention to the coupon value of individual bonds. [1][55] - The central and local governments continue to actively optimize real - estate policies, and the supporting policies are continuously strengthening, actively releasing rigid and improved housing demand, which has played a positive role in promoting the stabilization of the real - estate market. Although the real - estate market is currently in the transition period between old and new models, with the effectiveness of various policies to stabilize the real - estate market, the market is moving towards stabilization. [2][58] - For real - estate bonds, the sales recovery process will have a significant impact on bond valuations. As the market shows signs of stabilization, funds with higher risk appetite can consider early layout, especially focusing on enterprises with outstanding performance in new financing and sales recovery. The allocation focus should still be on central and state - owned enterprises with stable historical valuations and excellent performance, as well as high - quality private - enterprise bonds with strong guarantees. [2][58] - For urban investment bonds, under the principle of coordinating development and security, the probability of default of urban investment bonds is very low, and they can still be a key allocation variety in the credit bond market. Under the strict supervision of promoting the clearance of local financing platforms in an effective and orderly manner, the reform and transformation of financing platforms are accelerating, and attention should be paid to the opportunities for the reform and transformation of "entity - type" financing platforms. [2][58] 3. Summary According to the Directory 3.1 Primary Market Situation 3.1.1 Issuance and Maturity Scale - From March 2nd to March 8th, a total of 334 credit bonds, including corporate bonds, corporate - issued bonds, medium - term notes, commercial paper, and private placement notes, were issued, with a total issuance amount of 263.087 billion yuan, a month - on - month increase of 177.64%. The net financing of credit bonds was 79.394 billion yuan, a month - on - month increase of 145.668 billion yuan. [11] - Specifically, corporate bonds had zero issuance, with a net financing of - 12.849 billion yuan, a month - on - month decrease of 10.344 billion yuan. Corporate - issued bonds had 127 issuances, with an issuance amount of 101.718 billion yuan, a month - on - month increase of 255.45%, and a net financing of 46.670 billion yuan, a month - on - month increase of 82.174 billion yuan. Medium - term notes had 102 issuances, with an issuance amount of 74.731 billion yuan, a month - on - month increase of 305.05%, and a net financing of 11.835 billion yuan, a month - on - month increase of 49.080 billion yuan. Commercial paper had 77 issuances, with an issuance amount of 68.448 billion yuan, a month - on - month increase of 51.53%, and a net financing of 29.020 billion yuan, a month - on - month increase of 15.901 billion yuan. Private placement notes had 28 issuances, with an issuance amount of 18.190 billion yuan, a month - on - month increase of 621.54%, and a net financing of 4.718 billion yuan, a month - on - month increase of 8.859 billion yuan. [11] 3.1.2 Issuance Interest Rates - Most of the issuance guidance rates announced by the NAFMII increased, with an overall change range of -1 BP to 6 BP. By maturity, the interest rate of 1 - year varieties changed from 0 BP to 2 BP, that of 3 - year varieties from 0 BP to 6 BP, that of 5 - year varieties from -1 BP to 3 BP, and that of 7 - year varieties from -1 BP to 2 BP. By rating, the interest rate of key AAA - rated and AAA - rated varieties changed from 0 BP to 2 BP, that of AA + - rated varieties from -1 BP to 4 BP, that of AA - rated varieties from 2 BP to 6 BP, and that of AA - - rated varieties from -1 BP to 4 BP. [13] 3.2 Secondary Market Situation 3.2.1 Market Trading Volume - From March 2nd to March 8th, the total trading volume of credit bonds was 915.999 billion yuan, a month - on - month increase of 76.45%. The trading volumes of corporate bonds, corporate - issued bonds, medium - term notes, commercial paper, and private placement notes were 17.907 billion yuan, 363.026 billion yuan, 328.115 billion yuan, 151.917 billion yuan, and 55.034 billion yuan respectively, with the trading volumes of all varieties increasing. [15] 3.2.2 Credit Spreads - For medium - and short - term notes, the credit spreads of each variety were differentiated. Specifically, the credit spreads of 1 - year and 3 - year varieties widened, while those of 5 - year and 7 - year varieties narrowed. [18] - For corporate bonds, the credit spreads of each variety were also differentiated. Specifically, the 1 - year credit spreads widened; for 3 - year varieties, the credit spreads of AA + - rated and above widened, while those of other varieties narrowed; the 5 - year and 7 - year credit spreads narrowed. [28] - For urban investment bonds, the credit spreads of each variety were differentiated. Specifically, the credit spreads of 1 - year and 3 - year varieties widened, while those of 5 - year and 7 - year varieties narrowed. [32] 3.2.3 Term Spreads and Rating Spreads - **For medium - and short - term notes**: In terms of term spreads, the 3Y - 1Y spread of AA + medium - and short - term notes widened by 0.28 BP, the 5Y - 3Y spread narrowed by 1.55 BP, and the 7Y - 3Y spread widened by 0.52 BP. Currently, the 3Y - 1Y spread is at a historical low, at the 19.8% quantile, the 5Y - 3Y spread is at a historical low, at the 18.4% quantile, and the 7Y - 3Y spread is at a low - to - medium historical level, at the 33.4% quantile. In terms of rating spreads, the spreads of (AA - )-(AAA), (AA)-(AAA), and (AA + )-(AAA) for 3 - year medium - and short - term notes remained the same as the previous period. Currently, (AA - )-(AAA) is at a historical low, at the 1.6% quantile, (AA)-(AAA) is at a historical low, at the 11.3% quantile, and (AA + )-(AAA) is at a low level, at the 4.0% quantile. [39] - **For corporate bonds**: In terms of term spreads, the 3Y - 1Y spread of AA + corporate bonds widened by 0.17 BP, the 5Y - 3Y spread narrowed by 0.04 BP, and the 7Y - 3Y spread narrowed by 0.69 BP. Currently, the 3Y - 1Y spread is at a low - to - medium historical level, at the 21.8% quantile, the 5Y - 3Y spread is at a historical low, at the 9.5% quantile, and the 7Y - 3Y spread is at a low - to - medium historical level, at the 24.8% quantile. In terms of rating spreads, the (AA - )-(AAA) spread of 3 - year corporate bonds narrowed by 2.00 BP, the (AA)-(AAA) spread narrowed by 2.00 BP, and the (AA + )-(AAA) spread narrowed by 1.00 BP. Currently, the (AA - )-(AAA) spread is at a historical low, at the 0.1% quantile, the (AA)-(AAA) spread is at a historical low, at the 7.4% quantile, and the (AA + )-(AAA) spread is at a historical low, at the 5.4% quantile. [45] - **For urban investment bonds**: In terms of term spreads, the 3Y - 1Y spread of AA + urban investment bonds widened by 1.32 BP, the 5Y - 3Y spread narrowed by 2.11 BP, and the 7Y - 3Y spread narrowed by 2.90 BP. Currently, the 3Y - 1Y spread is at a low - to - medium historical level, at the 20.2% quantile, the 5Y - 3Y spread is at a historical low, at the 8.3% quantile, and the 7Y - 3Y spread is at a low - to - medium historical level, at the 34.8% quantile. In terms of rating spreads, the (AA - )-(AAA) spread of 3 - year urban investment bonds narrowed by 0.01 BP, the (AA)-(AAA) spread widened by 0.99 BP, and the (AA + )-(AAA) spread widened by 0.99 BP. Currently, the (AA - )-(AAA) spread is at a historical low, at the 3.5% quantile, the (AA)-(AAA) spread is at a historical low, at the 1.4% quantile, and the (AA + )-(AAA) spread is at a historical low, at the 2.2% quantile. [48] 3.3 Credit Rating Adjustments and Default Bond Statistics 3.3.1 Credit Rating Adjustment Statistics - According to iFinD statistics, there were no company rating (including outlook) adjustments from March 2nd to March 8th. [52] 3.3.2 Default and Extended - Maturity Bond Statistics - In terms of bond defaults, according to iFinD statistics, there were no defaults of credit bonds issued by any issuer from March 2nd to March 8th. [53] - In terms of bond extensions, according to iFinD statistics, there were no extensions of credit bonds issued by any issuer from March 2nd to March 8th. [53] 3.4 Investment Views - The investment views are consistent with the core viewpoints, emphasizing the trends of the primary and secondary markets of credit bonds, the analysis from the perspectives of absolute and relative returns, and the investment suggestions for real - estate bonds and urban investment bonds. [1][55][58]

Group 1 - The report indicates that the credit spread is currently at a low level, with limited compression potential, suggesting a focus on stability and high-yield opportunities in the market [2][24][28] - In March, the bond market is expected to experience a seasonal slow decline in yields, with credit spreads likely to widen, thus presenting opportunities for strategic allocation at high points [3][15][24] - The report highlights that the demand for credit bonds typically strengthens in the second quarter, despite the current low value for credit spreads, which may pose risks if spreads widen significantly [2][3][24] Group 2 - The strategy for credit bonds suggests that within the 3-year maturity range, there is a high demand for funds and wealth management products, with yields expected to fluctuate between 1.65% and 2.05% [3][28] - For 4-5 year maturity bonds, the report notes that the compression space is limited, and investors should consider strategic allocations at high points during the month [3][28] - Long-term bonds (over 5 years) are still seen as having some value, particularly for insurance and long-term liabilities, with a recommendation for active trading and quick exits to capitalize on market movements [3][28] Group 3 - The report emphasizes the importance of sector strategies, particularly in urban investment bonds, real estate bonds, coal bonds, and steel bonds, each with specific recommendations based on current market conditions [4][11][28] - Urban investment bonds are highlighted for their ticket value in lower-grade varieties, while real estate bonds are suggested for their potential recovery in valuation, especially for high-quality entities [4][11] - The coal and steel sectors are advised for short-term investments, with specific focus on high-grade bonds and the potential for yield improvements based on market conditions [4][11]

Group 1 - The report indicates a downward trend in credit bond yields, with the overall change in issuance guidance rates ranging from -6BP to 1BP [1][15] - In February, the issuance scale of credit bonds decreased month-on-month due to holiday factors, with all varieties showing a decline in issuance amounts [1][12] - The net financing amount for credit bonds decreased month-on-month, with corporate bonds and targeted instruments showing an increase, while other varieties saw a decrease [1][12][13] Group 2 - The secondary market saw a decline in transaction volume for credit bonds, with a total transaction amount of 22,665.99 billion, down 39.05% month-on-month [1][17] - Credit spreads for most varieties narrowed in February, with many varieties' spreads at historical low levels [1][20][26] - The report suggests that the absolute yield perspective indicates a continuation of the recovery trend for credit bonds, driven by insufficient supply and relatively strong demand [1][62] Group 3 - The report highlights the recent policy adjustments in Shanghai's real estate market aimed at promoting stable and healthy development, including easing purchase restrictions and increasing public housing loan limits [2][63] - Continuous optimization of real estate policies by central and local governments is expected to support the stabilization of the real estate market, transitioning from a phase of large-scale expansion to one focused on quality improvement [3][65] - The report emphasizes the importance of focusing on high-quality development in the real estate sector, with an expectation of further policy announcements to support this transition [3][65][66]

Group 1 - The real estate market in 2025 continued its adjustment, with significant declines in both second-hand and new housing prices, down 6.1% and 3.1% year-on-year respectively in December [1] - The total sales area of commercial housing decreased by 8.7% year-on-year, while the total development investment fell by 17.2% [1] - Despite the ongoing market adjustments, there was notable progress in debt restructuring among real estate companies, positively impacting their balance sheets [1] Group 2 - In 2026, the real estate policy is expected to maintain a marginally loose tone, focusing on guiding actual mortgage rates down and optimizing supply-demand structures [2] - The likelihood of significant increases in real estate support policies is low, suggesting continued market adjustments but with a potential narrowing of the adjustment range [2] - Core cities are expected to see a release of housing demand, while lower-tier cities will still face high inventory and prolonged de-stocking cycles [2] Group 3 - The credit risk outlook for real estate companies in 2026 indicates a decrease in repayment pressure for state-owned enterprises, while private companies will experience lower overall repayment pressure due to reduced bond issuance [3] - The trend of debt restructuring through significant debt reduction and diversified debt instruments is expected to continue [3] Group 4 - In 2025, the central government emphasized "promoting high-quality development of real estate" and included the construction of a new development model in the 14th Five-Year Plan [4] - Key policy directions included accelerating inventory clearance, enhancing financing support for project completion, and continuing to promote demand-side policy easing [4] Group 5 - The real estate market in 2025 did not show clear signs of stabilization, remaining in a deep adjustment phase towards a new development model [14] - Second-hand housing prices showed a trend of initial small contraction followed by significant widening of declines, with a year-on-year drop of 6.1% in December [15] - New housing prices also followed a downward trend, with a year-on-year decrease of 3.0% in December [17] Group 6 - The total sales area of commercial housing in 2025 was 88.101 million square meters, down 8.7% year-on-year, with sales revenue decreasing by 12.6% [20] - The real estate development investment completed in 2025 was 827.88 billion yuan, a year-on-year decline of 17.2% [28] - The funding sources for real estate development decreased by 13.4% year-on-year, indicating a significant contraction in capital availability [29] Group 7 - The real estate bond market in 2025 showed overall stability with structural differentiation, as debt restructuring efforts progressed significantly [40] - The total issuance of real estate bonds reached 796.9 billion yuan, a year-on-year increase of 93.3%, although the overall financing situation remained challenging [41] - The credit risk landscape is evolving, with a decrease in the number of new defaults and extensions, although the Vanke extension incident had a notable impact on market confidence [57]