Summary of Key Points Core Viewpoint - The announcement provides an update on the conversion of convertible bonds into common shares by Hongfa Technology Co., Ltd, highlighting the low conversion rate and the remaining unconverted bonds. Convertible Bond Issuance Overview - The company issued convertible bonds amounting to 2 billion yuan, which began trading on November 23, 2021, with an initial conversion price of 72.28 yuan per share [2]. - The conversion period for the bonds is from May 5, 2022, to October 27, 2027 [3]. Conversion Status - As of June 30, 2025, a total of 521,000 yuan worth of convertible bonds have been converted into 8,345 shares, representing 0.001% of the total shares before conversion [1][3]. - The amount of unconverted convertible bonds stands at 1,999,479,000 yuan, which is 99.9740% of the total issuance [1][3]. Share Capital Changes - The total share capital before the conversion was 1,042,676,326 shares. After the conversion and capital increase, the total share capital is now 1,459,746,940 shares [6]. - The company decided to increase capital by 0.4 shares for each share held, resulting in an increase of 417,070,554 shares [6]. Other Information - The company has provided contact information for investor inquiries, indicating a commitment to transparency [7].

Core Viewpoint - The company announced an adjustment to the conversion price of its convertible bonds due to the implementation of the 2024 annual profit distribution plan, resulting in a decrease from 32.32 CNY per share to 22.72 CNY per share, effective from June 19, 2025 [1][4]. Summary by Sections Bond Information - The company issued 20 million convertible bonds with a total value of 200 million CNY on October 28, 2021, with an initial conversion price of 72.28 CNY per share [1]. - The latest conversion price before the adjustment was 32.32 CNY per share [1]. Profit Distribution Plan - The company plans to distribute a total cash dividend of 536,978,215.19 CNY (including tax) based on a total share capital of 1,042,676,146 shares as of December 31, 2024 [2]. - Each share will receive a cash dividend of 0.51500 CNY (including tax) and a capital reserve transfer of 0.4 shares [3]. Conversion Price Adjustment - The conversion price adjustment is based on the profit distribution and capital reserve transfer plan approved at the 2024 annual shareholders' meeting [2]. - The adjustment formula for the conversion price is defined in the company's convertible bond prospectus, taking into account cash dividends and capital increases [4]. - The new conversion price of 22.72 CNY per share was calculated using the formula, effective from June 19, 2025 [4]. Trading Suspension - The convertible bonds will be suspended from conversion from June 10, 2025, until June 18, 2025, and will resume conversion on June 19, 2025 [5].

Core Viewpoint - The announcement details the implementation of the profit distribution and capital increase plan for Hongfa Technology Co., Ltd. for the year 2024, which includes a cash dividend and a stock bonus for shareholders [1][2]. Summary by Sections Profit Distribution and Capital Increase Plan - The total share capital before the distribution is 1,042,676,386 shares, with a cash dividend of 0.51500 CNY per share (tax included) and a capital increase of 0.4 shares per share from capital reserves [2][4]. - The plan was approved at the annual general meeting on April 21, 2025 [1]. Important Dates - The record date for the cash dividend is June 18, 2025, with the last trading day and ex-dividend date both on June 19, 2025 [3][4]. Implementation Method - Cash dividends will be distributed through China Securities Depository and Clearing Corporation Limited, Shanghai Branch, to shareholders registered by the record date [4][5]. - Shareholders who have not completed designated transactions will have their dividends held until such transactions are completed [4]. Taxation Information - For individual shareholders, the tax treatment varies based on the holding period, with a maximum tax rate of 20% for shares held for less than one month and a reduced rate of 10% for shares held between one month and one year [5][6]. - For qualified foreign institutional investors (QFII), a 10% withholding tax applies, resulting in a net cash dividend of 0.4635 CNY per share [5][6]. Changes in Share Capital Structure - After the capital increase, the total number of shares will rise to 1,459,746,940 shares, with the number of unrestricted circulating shares increasing significantly [8]. - The diluted earnings per share for the fiscal year 2024 is projected to be 1.12 CNY based on the new total share capital [8]. Adjustment of Convertible Bonds - The conversion price for the company's convertible bonds will be adjusted from 32.32 CNY per share to 22.72 CNY per share, effective from the ex-dividend date [8].

Core Viewpoint - The company has adjusted its profit distribution plan for the year 2024, specifically the cash dividend per share, due to changes in the total share capital resulting from the conversion of convertible bonds [1][3]. Summary by Sections 1. Profit Distribution Adjustment - The cash dividend per share has been adjusted from 0.515 yuan (including tax) to 0.51500 yuan (including tax) [1][3]. - The adjustment is due to the increase in total share capital to 1,042,676,386 shares as a result of the conversion of the "Hongfa Convertible Bonds" from January 1, 2025, to June 9, 2025 [1][2]. 2. Basic Situation of the 2024 Profit Distribution Plan - The company held its annual general meeting on April 21, 2025, where the profit distribution and capital reserve transfer plan was approved [1]. - The total share capital as of March 31, 2025, was 1,042,676,146 shares, with a proposed cash dividend distribution totaling 536,978,215.19 yuan (including tax) [1][3]. 3. Details of the Adjusted Cash Dividend - The adjusted cash dividend per share is calculated as the total cash dividend amount divided by the total share capital at the time of the equity distribution registration date [3]. - The total cash dividend amount to be distributed is approximately 536,978,338.79 yuan (including tax) based on the adjusted cash dividend per share [3]. 4. Capital Reserve Transfer - The company plans to transfer 0.4 shares for every share held from the capital reserve, resulting in a total transfer of 417,070,554 shares [3]. - After the transfer, the total share capital will increase to 1,459,746,940 shares [3].

Group 1 - The company will participate in the "2025 Online Collective Reception Day for Listed Companies in Hubei" on June 12, 2025, to enhance interaction with investors [1] - The event will be held online, allowing investors to engage with company executives regarding the 2024 annual performance, governance, development strategy, and sustainability [1] - The company plans to distribute a cash dividend of 0.515 yuan per share and a capital reserve conversion of 0.4 shares for every share held, resulting in a total cash dividend of approximately 536.98 million yuan and an increase in total shares to approximately 1.46 billion [5][6] Group 2 - The company's convertible bonds, "Hongfa Convertible Bonds," will suspend conversion from June 10, 2025, until the equity registration date due to the annual profit distribution [3][6] - The company will announce the adjustment of the conversion price for the "Hongfa Convertible Bonds" following the implementation of the profit distribution plan [6] - The profit distribution plan was approved at the annual shareholders' meeting held on April 21, 2025 [5]

Core Points - The company, Hongfa Technology Co., Ltd., has maintained its credit rating for its convertible bonds and corporate entity at "AA" with a stable outlook [1][2] - The previous rating results were also "AA" for both the corporate entity and the convertible bonds, indicating no change in the creditworthiness assessment [1][2] Summary by Sections - **Rating Results** - The current credit rating for Hongfa Technology Co., Ltd. is "AA" for both the corporate entity and the convertible bonds, with a stable outlook [1][2] - The rating agency, Shanghai New Century, conducted a comprehensive analysis of the company's operational status and industry conditions before issuing the report [2] - **Previous Ratings** - The previous ratings were also "AA" for both the corporate entity and the convertible bonds, with a stable outlook, showing consistency in the company's credit profile [1][2] - **Rating Agency** - The credit rating was conducted by Shanghai New Century Credit Rating Agency, with the latest report dated May 23, 2025 [2]

Macro Overview - The Federal Reserve is expected to maintain interest rates for a longer period, with a higher probability of rate cuts occurring in the second half of the year, although the likelihood of a July cut is decreasing due to slow tariff negotiations and resilient economic growth [1][2][7] - The A-share market is anticipated to show stronger resilience due to ongoing policy support aimed at stabilizing and activating the capital market, with a focus on mergers and acquisitions for company transformation [1][12] Equity Market Insights - The U.S. stock market is facing multiple pressures that could trigger a downward spiral, despite some recovery due to eased tariff policies and fiscal stimulus expectations [1][17] - The A-share market is expected to benefit from policies promoting long-term capital inflows and corporate restructuring, with a focus on high-margin assets and sectors boosted by policy support [1][17] Fixed Income Strategy - The convertible bond market is experiencing a decline, with a focus on identifying undervalued securities and opportunities related to redemption clauses [19][20] - The performance of convertible bonds is closely tied to the overall equity market, with a recommendation for a diversified portfolio including specific convertible bonds [19][21] Non-Banking Financial Sector - The "Action Plan for Promoting the High-Quality Development of Public Funds" aims to enhance investor returns and expand the scale of equity investments in public funds, which is crucial for long-term capital market stability [24][28] - The plan emphasizes performance-based fee structures and long-term investment strategies to improve the overall quality of the public fund industry [25][26] Automotive Industry - The automotive sector has shown strong performance in Q1 2025, with significant fund allocation and a continuous increase in holdings by public funds, driven by favorable policies and market conditions [30][31] - The sector is expected to maintain high growth momentum due to new product launches and consumer demand stimulation [30][31] Pharmaceutical Sector - The pharmaceutical industry is under pressure due to cost control measures, with a notable decline in revenue and profit margins, but there are signs of recovery in the innovative drug segment [36][39] - The innovative drug sector is projected to benefit from supportive policies and improving market conditions, leading to potential value recovery [38][39]

1. Report Industry Investment Rating There is no information regarding the industry investment rating in the provided report. 2. Core Viewpoint of the Report The report forecasts the May convertible bond strategy, suggesting a focus on performance as the foundation, with opportunities in oversold targets and terms as the driving forces. It anticipates the end of the phased impact of tariff negatives and advocates for left - side oversold layout under monetary easing. The recommended convertible bond portfolio for May includes Wenshan Convertible Bond, Hongfa Convertible Bond, etc. [3][46] 3. Summary According to the Catalog 3.1 April Convertible Bond Market Review 3.1.1 Convertible Bond Market Review: Resilient Against the Underlying Stocks Amid Tariff Games, with Declining Parity but Rising Valuation - In April, the equity market fell 3.2%, and the convertible bond market followed with a 1.3% decline. The convertible bond ETF scale contracted 5.0% to 41.3 billion yuan. The trading activity of the equity - biased market declined, and the convertible bond parity dropped 7.4% to 86.9 yuan, while the 100 - yuan parity premium rate (MA5) rose 2.8pp to 25.3% [3][5][8] 3.1.2 Industry and Style: Media and Agriculture Led the Gains in April, with Medium - priced, Small - cap, and High - rated Styles Outperforming - In April, most industries' convertible bonds declined. Media (2.8%) and agriculture (1.9%) led the gains, while coal (-3.9%) and power equipment (-3.2%) had the largest declines. In terms of style, medium - priced, small - cap, and high - rated convertible bonds were more advantageous [22][25][29] 3.2 May Convertible Bond Market and Strategy Outlook 3.2.1 Convertible Bond Market Outlook: The End of the Phased Impact of Tariff Negatives, Left - side Oversold Layout Under Monetary Easing - In 2024, the performance of convertible bond underlying stocks was generally under pressure, but there was marginal improvement in Q1 2025. Targets with overseas revenue accounting for over 20% were still 3% more oversold than the industry average in April and may have room for repair. About 32% of convertible bonds that entered the call - back progress and 45% that triggered the call - back clause since last year chose to implement the call - back. The central bank announced a 50BP reserve requirement ratio cut and a 10BP interest rate cut on May 7 [35][41][45] 3.2.2 Convertible Bond Strategy Outlook: Performance as the Foundation, Opportunities in Oversold Targets and Terms as the Driving Forces - The strategy combines a 40% base position of broad - based large - cap targets, 30% for oversold repair, and 30% for call - back clause opportunities. The recommended convertible bond portfolio for May includes Wenshan Convertible Bond, Hongfa Convertible Bond, etc. [46][47] 3.3 Quantitative Strategies: Medium - volatility Strategies Outperformed, High - volatility Strategies Underperformed 3.3.1 Low - volatility Strategy: Low - price Enhancement Strategy - The strategy uses the low - price factor and relaxed the overseas revenue ratio constraint after April 22. The performance from April 1 - 30 was 0.01%, outperforming the benchmark by 1.32%. The current holdings and changes compared to the previous period are also provided [52][53][57] 3.3.2 Medium - volatility Strategy: Improved Dual - low Strategy - The strategy selects convertible bonds with relatively low prices and conversion premium rates. The performance in April was 1.28%, outperforming the benchmark by 2.59%. The current holdings and changes are presented [59][62][63] 3.3.3 High - volatility Strategy: High - price and High - elasticity Strategy - The strategy selects high - price and low - premium convertible bonds and balances industry allocation. The performance in April was - 2.20%, underperforming the benchmark by 0.89%. The current holdings and changes are detailed [65][66][70] 3.4 Primary Market Tracking 3.4.1 May Primary Market Issuance - As of May 5, there were no announced convertible bonds pending listing or issuance in May. Convertible bonds listed in April included Zhengfan Convertible Bond, Haohan Convertible Bond, etc. The issuance process of convertible bonds and the list of recently fast - tracked convertible bonds are also provided [72][73][75]