Core Viewpoint - The first "mega" convertible bond project in history, the SPDB convertible bond, is set to delist from the Shanghai Stock Exchange, with a conversion rate of 99.67%, significantly exceeding market expectations [2][4]. Summary by Sections Convertible Bond Performance - As of October 27, the SPDB convertible bond had an unconverted balance of 164 million yuan, representing only 0.33% of the total issuance of 50 billion yuan [4]. - The bond was issued on October 28, 2019, with a maturity date of October 28, 2025, and was intended to support the bank's future business development and core tier one capital [4]. Market Dynamics - Following the delisting of the SPDB convertible bond, only six bank convertible bonds will remain in the market, with five having a conversion rate of less than 0.01% [2][7]. - The disparity in performance among bank convertible bonds is attributed to the underlying stock performance [6][9]. Investor Activity - Multiple capital entities, including China Mobile, have increased their holdings in SPDB through the conversion of bonds, raising their stake to 18.18% [4][5]. - The management of SPDB has accelerated the conversion process this year, reflecting confidence in the bank's future operations and capital replenishment [5]. Future Outlook - The market for bank convertible bonds may continue to shrink in the short term due to a lack of large financial convertible bond issuance and ongoing low conversion rates [9]. - This situation may lead to a restructuring of the convertible bond market, with institutional investors seeking alternative assets to fill the gap left by the exiting bank convertible bonds [9].

Core Viewpoint - The convertible bond market for banks in October is experiencing a significant divergence, with some banks like Shanghai Pudong Development Bank achieving a high conversion rate due to support from institutional investors, while many others are struggling with near-zero conversion rates [1][2][4] Group 1: Performance of Convertible Bonds - Shanghai Pudong Development Bank has achieved a conversion rate of 76.50%, with a total conversion amount of 38.25 billion yuan, alleviating repayment pressure ahead of its 50 billion yuan convertible bond maturity [2][4] - The market shows a stark contrast, with over half of the existing bank convertible bonds having conversion rates close to zero, indicating a significant disparity in performance [1][4] - Five banks have successfully exited the market through forced redemption, with a total issuance amount of 56 billion yuan involved [4][5] Group 2: Role of Institutional Investors - Institutional investors, referred to as "white knights," have played a crucial role in supporting the conversion of bonds into stocks, enhancing market confidence and improving the financing environment for banks [2][3] - Notable investors include China Mobile and Dongfang Asset, which have increased their holdings in Shanghai Pudong Development Bank through bond conversions [2][3] Group 3: Challenges for Smaller Banks - Smaller banks are facing challenges due to their stock prices being below the conversion price, leading to a lack of motivation for investors to convert bonds [6][7] - The low conversion rates directly limit banks' ability to supplement their core tier one capital, which is essential for risk management [6][7] Group 4: Future Outlook and Strategies - Analysts predict that the divergence in conversion rates will continue, with larger banks likely to achieve higher rates through stock price recovery or strategic investor involvement, while smaller banks may struggle [8][9] - Banks are encouraged to explore diversified capital-raising strategies beyond relying solely on convertible bonds to address core tier one capital pressures [8][9]

Core Viewpoint - The upcoming expiration of the 50 billion yuan convertible bonds from Shanghai Pudong Development Bank (SPDB) is drawing significant market attention, with a substantial portion yet to be converted into equity, raising concerns about potential cash payouts and capital adequacy [2][4][5]. Summary by Sections Convertible Bonds and Shareholding Changes - On October 13, SPDB announced that China Mobile converted 56.31 million convertible bonds into 450 million ordinary shares, increasing its stake from 17.00% to 18.18% [2]. - In June, Xinda Securities converted approximately 118 million SPDB convertible bonds into A-shares, representing 23.57% of the total issuance [2]. - As of now, 37% of the convertible bonds, amounting to about 18.6 billion yuan, remain unconverted, with a premium rate of around 8% [2][4]. Market Pressure and Stock Performance - SPDB's stock price rose by 5.66% to 12.51 yuan per share on October 13, followed by a 2.08% increase to 12.77 yuan on October 14, coinciding with the conversion price of the bonds [4]. - The remaining 18.6 billion yuan of convertible bonds must be converted within two weeks, creating significant pressure on the bank [4]. Capital Adequacy Concerns - As of the end of Q1, 99.9971% of the SPDB convertible bonds had not been converted, raising concerns about the bank's capital adequacy if a large cash payout is required [5][6]. - The core Tier 1 capital adequacy ratio is close to regulatory limits, making the conversion of bonds critical for maintaining capital levels [5][6]. Market Dynamics and Future Outlook - The convertible bond market is experiencing a significant reduction in size, with 121 bonds successfully delisted since 2025, indicating a trend of shrinking market scale [9]. - Despite the increase in new bond issuance, the lack of large-scale bank convertible bonds may lead to a continued decline in overall market size [10][11]. - Regulatory encouragement for banks to supplement capital through various debt instruments is expected to continue, with a focus on optimizing capital structures and enhancing risk resilience [12].

Group 1 - The A-share market experienced a significant shift on October 14, with technology stocks adjusting while the banking sector gained momentum, highlighted by a 2.41% increase in the "billion-level top flow" bank ETF (512800) [1] - China Mobile converted 56.31 million convertible bonds into 450 million ordinary shares of Shanghai Pudong Development Bank (SPDB), increasing its shareholding from 17.00% to 18.18% as of October 13 [1] - As of the end of June, China Mobile held a total of 90.85 million SPDB convertible bonds, indicating that there are still some convertible bonds that have not been converted [1] Group 2 - Since September of last year, the A-share banking sector has rapidly risen, with several banks' convertible bonds triggering strong redemption and conversion, including Chengdu Bank and Suzhou Bank [2] - SPDB's convertible bonds are set to be delisted from the Shanghai Stock Exchange on October 28 [2]

Core Viewpoint - Chengdu Bank reported a steady growth in financial performance for the first half of 2025, with significant increases in revenue and net profit, while maintaining a strong risk management profile [1][8]. Financial Performance - Total assets reached CNY 1,372.22 billion, an increase of 9.77% compared to the end of the previous year [1]. - Operating income for the first half of 2025 was CNY 12.27 billion, up 5.91% from CNY 11.59 billion in the same period of 2024 [1][8]. - Net profit attributable to shareholders was CNY 6.62 billion, reflecting a growth of 7.29% year-on-year [1][8]. - Basic earnings per share were CNY 1.57, with a diluted earnings per share of CNY 1.56 [2][8]. Key Financial Ratios - The return on average equity was 7.94%, down from 9.02% in the previous year [2]. - The non-performing loan ratio stood at 0.66%, with a provision coverage ratio of 452.65% [2][8]. - The liquidity ratio was reported at 95.44%, indicating a strong liquidity position [2][8]. Business Growth - Total loans and advances amounted to CNY 834.63 billion, a 12.40% increase from CNY 742.57 billion in the previous year [1]. - Total deposits reached CNY 983.48 billion, up 11.02% from CNY 885.86 billion [1]. Capital Structure - Core Tier 1 capital was CNY 83.22 billion, with a capital adequacy ratio of 13.13% [3]. - The bank's leverage ratio was reported at 6.27% [3]. Strategic Developments - The bank is in the process of dissolving Sichuan Mingshan Jincheng Village Bank, following regulatory approval [7]. - The bank has successfully issued CNY 8 billion in convertible bonds, which are now in the conversion period [6].

Core Viewpoint - The banking sector has shown strong performance in 2023, with a cumulative increase of 20.54% in the banking index and nearly 20 bank stocks reaching new highs this year [1] Group 1: Convertible Bonds - There has been a notable surge in the redemption of bank convertible bonds, with two bonds officially delisted from the capital market this month [2] - Nanjing Bank's convertible bond is set to be redeemed and delisted on July 18, following a period where its closing price exceeded the conversion price threshold [3] - Hangzhou Bank's convertible bond completed its market-based conversion and delisting, strengthening its core tier one capital [4] - Several bank convertible bonds have completed conversion and delisting this year, with conversion rates for Chengyin and Suhang bonds reaching 99.94% and 99.93% respectively [5] - Qilu Bank's convertible bond is also approaching delisting, having triggered redemption clauses due to its stock price exceeding the conversion price threshold [5] Group 2: Shareholder Actions - Chengdu Bank's controlling shareholders have not executed their planned share buyback, as the stock price has consistently exceeded the buyback price limit [6][7] - The buyback plan was announced on April 9, with a price cap set at 17.59 yuan per share, but the stock price surpassed this limit shortly after the announcement [8][9] - Chengdu Bank indicated that the controlling shareholders will continue to monitor stock price fluctuations and market trends to determine the timing of their buyback [10]

Core Viewpoint - The banking sector has shown strong performance in 2023, leading to a significant increase in bank convertible bonds, with many set to exit the market, raising questions about asset allocation for institutional investors [1][2][3]. Group 1: Market Dynamics - Several bank convertible bonds, including Hangzhou Bank and South Bank, have completed their market conversion and delisting, with a total estimated reduction of around 100 billion yuan in bank convertible bonds this year [1][2]. - The strong redemption mechanism of convertible bonds is closely linked to the performance of the underlying bank stocks, which have been rising recently [1][2]. - The total outstanding convertible bonds as of July 8 was approximately 664.65 billion yuan, a decrease of 68.98 billion yuan since the beginning of the year, with projections suggesting it may fall below 600 billion yuan by the end of the year [3][6]. Group 2: Institutional Investment Trends - Convertible bonds have become a key asset in the "fixed income plus" strategy for asset management products, with institutions increasingly favoring them due to their low volatility and high returns [3][4]. - The demand for bank convertible bonds remains high due to their strong credit quality and risk resistance, despite a slowdown in new issuances [3][4]. - Institutions are now seeking to diversify their asset allocation strategies, looking for alternative high-yielding base assets as the supply of convertible bonds decreases [5][7]. Group 3: Future Outlook - The shrinking supply of bank convertible bonds and the ongoing demand may lead to a situation where valuations become difficult to maintain, prompting institutions to explore other investment opportunities [6][7]. - Analysts suggest that the current market conditions may create short-term trading opportunities in bank convertible bonds, despite their high valuations [6][7]. - The focus may shift towards convertible bond ETFs and other asset classes like REITs and thematic ETFs as institutions adapt to the changing market landscape [6][7].

Core Viewpoint - The article discusses the recent triggering of mandatory redemption for convertible bonds issued by Qilu Bank, highlighting the impact of rising bank stock prices on convertible bond mechanisms [1][2][3]. Summary by Sections Qilu Bank Convertible Bond Redemption - On July 4, Qilu Bank's stock price closed at 6.52 yuan per share, triggering the mandatory redemption of its convertible bond "Qilu Convertible Bond" due to the stock price exceeding the redemption conversion condition for five consecutive trading days [1][2]. - The bond's conversion price was adjusted to 5.00 yuan per share, and the stock price had to be at least 130% of this conversion price for the redemption to be triggered [2][4]. Stock Performance and Redemption Mechanism - Qilu Bank's stock has seen a significant increase of 22.08% year-to-date, which directly contributed to the triggering of the mandatory redemption mechanism for the convertible bonds [3][4]. - The bank's board approved the early redemption of the "Qilu Convertible Bond," with the redemption price set at 100.4932 yuan per bond, and the redemption date scheduled for July 7 [1][4]. Market Context and Trends - The article notes that several banks, including Chengdu Bank and Suzhou Bank, have also triggered mandatory redemptions of their convertible bonds, with a total issuance amount of 480 billion yuan involved [11]. - The trend of mandatory redemptions is attributed to the overall rise in A-share bank stocks since September of the previous year [11][12]. Capital Supplementation - Convertible bonds are seen as a favorable tool for banks to supplement their core Tier 1 capital, especially when stock prices are low [15]. - The article emphasizes that successful conversion of these bonds into equity is crucial for banks to count them towards their core capital, otherwise, they must repay the principal and interest at maturity [8][15].

Core Viewpoint - The banking sector is experiencing a strong performance, leading to an accelerated conversion of convertible bonds into stocks this year, with several banks triggering redemption clauses for their convertible bonds [2][7]. Group 1: Convertible Bond Redemption - Qilu Bank announced that its stock price has been above 130% of the current conversion price for 10 out of the last 15 trading days, which may trigger the redemption clause for its convertible bonds [4]. - If Qilu Bank's stock price remains above 6.50 CNY (130% of the adjusted conversion price of 5.00 CNY) for 5 more trading days, the bank has the right to redeem the bonds at face value plus accrued interest [4][5]. - This year, five convertible bonds from various banks have exited the market due to triggering redemption clauses, including those from Suhang Bank, Chengyin Bank, Hangyin Bank, and Nanyin Bank [8]. Group 2: Market Trends and Implications - The continuous rise in bank stock prices has led to a significant reduction in the outstanding balance of Qilu convertible bonds, which currently stands at 60.87 billion CNY, with an unconverted ratio of 76.09% [4]. - The trend of convertible bonds exiting the market is expected to continue, with only seven remaining if Qilu's bonds are redeemed [8]. - Approximately 100 billion CNY of bank convertible bonds are anticipated to complete conversion this year due to rising stock prices [8]. Group 3: Capital Supplementation and Market Dynamics - Convertible bonds serve as a crucial tool for banks to supplement their core Tier 1 capital, with a strong incentive for banks to convert bonds into stocks to enhance capital adequacy [2][11]. - The adjustment of conversion prices, such as Qilu Bank's reduction from 5.14 CNY to 5.00 CNY, increases the likelihood of triggering redemption clauses [9]. - The acceleration of bond conversions, combined with a slow pace of new bond approvals and issuances, may lead to irrational price increases for remaining high-quality convertible bonds in the market [11].

1. Report Industry Investment Rating No information provided regarding the industry investment rating. 2. Core Viewpoints of the Report - Bank and other financial high - quality bottom - position convertible bonds are continuously shrinking, and medium - large bottom - position convertible bonds may benefit from the capital spill - over trend. It is recommended to select targets based on credit quality, remaining term, and clause games [1][11]. - The A - share market valuation has recovered but is still at a relatively low level in the long term, with a good risk - return ratio. Domestic economic fundamentals and capital flow may gradually resonate. For convertible bonds, be vigilant about valuation callback risks, focus on the game space of downward revisions and strong redemption risks, and pay attention to short - term game opportunities of near - maturity convertible bonds [14]. - Industries worthy of attention include popular themes, domestic demand - oriented sectors, central state - owned enterprises under the China - specific valuation system, and the military industry [15]. 3. Summaries Based on Relevant Catalogs 3.1. Convertible Bond Weekly Special and Outlook 3.1.1. After the Continuous Shrinking of Bottom - Position Convertible Bonds - This week, Nanyin Convertible Bond announced a strong redemption as expected. Since this year, 4 bank convertible bonds have announced early redemptions, and 1 has matured. As of June 13, the scale of bank convertible bonds has decreased to 1519.61 billion yuan, a decrease of about 39 billion yuan from the beginning of the year. There is still 5.7 billion yuan of Hangyin and Nanyin Convertible Bonds that will be converted or redeemed [1][9]. - In the future, 50 billion yuan of Pufa Convertible Bond will mature and delist. It is advisable to select convertible bonds based on credit quality, remaining term, and clause games, and pay attention to convertible bonds with a relatively large remaining scale and a remaining term of less than 2 years among those maturing in the non - downward - revision period in June [11]. 3.1.2. Weekly Review and Market Outlook - The market fluctuated this week, with an overall weekly decline. The A - share market valuation has recovered but is still at a relatively low level. The export order rebound drove a slight improvement in the May PMI. Domestic economic fundamentals and capital flow may gradually resonate [14]. - For convertible bonds, the issuance pressure is expected to be low. Be vigilant about valuation callback risks, focus on the game space of downward revisions and strong redemption risks, and pay attention to short - term game opportunities of near - maturity convertible bonds [14]. - Industries to focus on include popular themes, domestic demand - oriented sectors, central state - owned enterprises under the China - specific valuation system, and the military industry [15]. 3.2. Weekly Tracking of the Convertible Bond Market 3.2.1. The Equity Market Declined, and Cyclical Sectors such as Metals Strengthened - This week, major equity market indices declined. 13 Shenwan industry indices rose, and 18 declined. Industries such as non - ferrous metals, petroleum and petrochemicals, and agriculture, forestry, animal husbandry, and fishery led the gains, while food and beverage, household appliances, and building materials led the losses [18][20]. 3.2.2. The Convertible Bond Market Declined, and the Premium Rate per 100 - Yuan Par Value Slightly Decreased - This week, the convertible bond market declined. The average daily trading volume increased to 69.298 billion yuan, with a total weekly trading volume of 346.489 billion yuan [23]. - In terms of industries, 11 industries rose, and 18 declined. Agriculture, forestry, animal husbandry, and fishery, non - bank finance, and public utilities led the gains, while communication, media, and machinery and equipment led the losses [25]. - Most individual convertible bonds declined. The top five gainers were Jinling Convertible Bond, Jinji Convertible Bond, Haibo Convertible Bond, Liande Convertible Bond, and Zhite Convertible Bond; the top five losers were Zhengyu Convertible Bond, Huati Convertible Bond, Haomei Convertible Bond, Tianyang Convertible Bond, and Aofei Convertible Bond [26][28]. - The weighted conversion value of the whole market decreased, and the premium rate increased. The premium rate per 100 - yuan par value decreased slightly and is above the 50% quantile since 2017 [35]. 3.2.3. High - Frequency Tracking of Different Types of Convertible Bonds 3.2.3.1. Classification Valuation Changes - This week, the valuation of equity - biased convertible bonds and balanced convertible bonds declined significantly. The valuation of convertible bonds with a par value of 80 - 90 yuan and 110 - 120 yuan increased, while most other par - value convertible bonds' valuations decreased. The valuation of convertible bonds rated A+ and below decreased, while other ratings increased. The valuation of small - cap convertible bonds decreased, while other scale - graded convertible bonds increased [44]. - Since the beginning of 2024, the conversion premium rates of equity - biased and balanced convertible bonds have rebounded from the bottom [44]. 3.2.3.2. Market Index Performance - This week, convertible bonds rated AA+ and above and A and below rose, while others declined. Since 2023, high - rated AAA convertible bonds have performed steadily, and low - rated convertible bonds have shown weaker downside resistance and greater rebound strength [54]. - This week, large - cap convertible bonds rose, while other scale convertible bonds declined. Since 2023, small - cap convertible bonds have recorded a 13.98% return, medium - small - cap convertible bonds 14.10%, medium - cap convertible bonds 9.60%, and large - cap convertible bonds 10.31% [54]. 3.3. Tracking of Convertible Bond Supply and Terms 3.3.1. This Week's Primary - Market Issuance Plans - This week, there were no newly listed convertible bonds. Two convertible bonds (Dianhua Convertible Bond and Anke Convertible Bond) announced plans to be issued, and one (Hengshuai Convertible Bond) has been issued but not yet listed. Six convertible bonds passed the first - level approval [4][59]. - Since the beginning of 2023 to June 13, 2025, there have been 90 convertible bonds in the pipeline, with a total scale of 145.842 billion yuan [60]. 3.3.2. Downward Revision and Redemption Clauses - As of June 14, 2025, 20 convertible bonds announced that they were expected to trigger downward revisions, 7 announced no downward revisions, 1 proposed a downward revision, and 1 announced the result of a downward revision [64]. - Seven convertible bonds announced that they were expected to trigger redemptions, 3 announced no early redemptions, and 2 announced early redemptions [67][68]. - As of the end of this week, 3 convertible bonds were still in the put - option declaration period, and 33 were in the company's capital - reduction settlement declaration period [70].