1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The net supply of ordinary credit bonds in the primary market decreased compared to the previous period, and there were no new issuances or maturities of bank perpetual and subordinated bonds. In the secondary market, short - term yields declined while medium - and long - term yields increased, and most credit spreads widened except for the 1 - year bonds. The credit spreads in March may fluctuate weakly, but the risk of a significant widening is relatively controllable. It is recommended to moderately reduce the duration and wait for potential allocation opportunities in the short - to medium - term [4]. 3. Summary by Directory 3.1 Primary Market - **Ordinary Credit Bonds**: The issuance of ordinary credit bonds increased, but the net financing decreased. The issuance of industrial bonds increased, and the net financing also increased slightly. The issuance of urban investment bonds increased slightly, but the net financing turned negative. The weighted issuance term of ordinary credit bonds decreased to 2.87 years. The bid - cap to coupon rate of credit bonds increased from 0.45% to 0.46%, and the subscription multiple decreased from 3.22 to 3.00 [4][7][21]. - **Bank Perpetual and Subordinated Bonds**: There were no new issuances or maturities of bank perpetual and subordinated bonds this period, and there have been no issuances for 10 consecutive weeks [4][25]. 3.2 Secondary Market - **Yields**: Short - term yields declined, and medium - and long - term yields increased. For example, 1 - year medium - term notes of all ratings decreased by 1.7BP, while 10 - year AAA -/AA +/AA - grade bank perpetual bonds all increased by 6.8BP, and 10 - year AAA - grade bank secondary capital bonds increased by 7.3BP [4]. - **Credit Spreads**: Most credit spreads widened except for short - term (1 - year) medium - term notes and bank perpetual and subordinated bonds. The 1 - year bank secondary capital bonds performed the best, with the AAA - grade narrowing by 0.7BP, AA +/AA - grade narrowing by 0.9BP, and AA - grade narrowing by 1.9BP. The 10 - year bank secondary capital bonds had the largest widening amplitude [4]. - **Turnover Rate**: The turnover rates of urban investment bonds and bank perpetual and subordinated bonds increased this week, while the turnover rate of industrial bonds decreased [4][57]. 3.3 Urban Investment Bonds - **Yields**: Yields in different regions showed differentiation. For example, in Anhui, the yields of AAA - series, AA +, AA, AA(2), and AA - were 1.85%, 1.84%, 1.83%, 1.91%, and 2.12% respectively as of March 13, 2026 [69]. - **Credit Spreads**: Most credit spreads widened. For example, in Anhui, the credit spreads of AAA - series, AA +, AA, AA(2), and AA - were 22.71BP, 23.08BP, 24.10BP, 32.84BP, and 55.01BP respectively [71]. - **Turnover Rate**: The turnover rates in different regions also showed differences [72]. 3.4 Industrial Bonds - **Yields**: The yields of various industries decreased overall. For example, the yields of the agriculture, forestry, animal husbandry, and fishery industry's AAA - series, AA +, AA, and AA - were 1.89%, 1.88%, 1.99%, and 2.92% respectively as of March 13, 2026 [78]. - **Credit Spreads**: Most credit spreads widened passively. For example, the credit spreads of the agriculture, forestry, animal husbandry, and fishery industry's AAA - series, AA +, AA, and AA - were 21.80BP, 27.70BP, 41.40BP, and 135.64BP respectively [80]. - **Turnover Rate**: The turnover rates of different industries showed differences [82]. 3.5 Financial Bonds - **Yields**: Yields showed differentiation. For example, the yields of the AAA - grade bank secondary capital bonds of state - owned large - scale banks, joint - stock banks, and small and medium - sized banks were 2.03%, 2.02%, and 1.90% respectively as of March 13, 2026 [107]. - **Credit Spreads**: Most credit spreads widened. For example, the credit spreads of the AAA - grade bank secondary capital bonds of state - owned large - scale banks, joint - stock banks, and small and medium - sized banks were 33.03BP, 33.27BP, and 26.95BP respectively [107]. - **Turnover Rate**: The turnover rates of bank secondary capital bonds and bank perpetual bonds in different regions and with different ratings showed differences [94]. 3.6 Stock Bond Distribution - The current yields are mostly distributed within 2.4%. The average yields of industrial bonds in various industries and urban investment bonds in different regions are presented in detail, showing different distributions according to implicit ratings and remaining maturities [119][121].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Affected by the monetary policy statements during the Two Sessions, long - term interest rates such as 10Y/30Y slightly increased, but ordinary credit bonds saw a decline in yields across all maturities due to buying pressure, with the spreads of ordinary credit bonds over 4Y slightly compressed. After a continuous decline, the secondary and perpetual bonds showed little change this week, and the credit spreads slightly widened [1][10]. - Fund companies are the main buyers of non - financial credit bonds with maturities within 5 years, and other types of funds are the main buyers of ultra - long - term credit bonds with maturities over 5 years. The buying intensity of both is at a high level in recent years. The current situation of banks, insurance, securities firms, and wealth management products is relatively normal. The buying of 3 - 5Y ordinary credit bonds by fund companies is mainly driven by the position - building of amortized - cost bond funds, and it is speculated that wealth management products are still the main buying force among other institutions [2][12]. - Currently, the yield quantiles of credit bonds are at a relatively low level in history, especially for ordinary credit bonds with maturities of 2 years and less, whose yields are at an absolute historical low. There is still room for the yields and spreads of medium - and long - term credit bonds to decline, but it may be difficult to compress the term spreads as the term spreads of medium - and long - term credit bonds are still at a high level, and the term spreads of credit bonds are difficult to move independently from those of treasury bonds [3][19][24]. - It is recommended to seek certainty in short - term bonds. In the current situation of loose capital interest rates, it is advisable to look for coupon income in credit bonds with a maturity of about 2 years. For secondary and perpetual bonds, although the price ratio has recovered recently, it is still necessary to wait appropriately. The reasonable price ratio range of 5 - year AAA - secondary bonds to 5Y AAA medium - term notes in March is 10 - 20bp. For ultra - long - term credit bonds, although they have performed strongly, more caution is needed due to high interest rate uncertainty [4][31][34]. 3. Summary According to Relevant Catalogs 3.1 Who is Driving the Market to Heat Up? - **Market Performance**: Affected by the tight - leaning monetary policy statements during the Two Sessions, long - term interest rates such as 10Y/30Y slightly increased. Ordinary credit bonds saw a decline in yields across all maturities due to buying pressure, with the spreads of ordinary credit bonds over 4Y slightly compressed. After a continuous decline, the secondary and perpetual bonds showed little change this week, and the credit spreads slightly widened [1][10]. - **Buying Forces**: Fund companies are the main buyers of non - financial credit bonds with maturities within 5 years, and other types of funds are the main buyers of ultra - long - term credit bonds with maturities over 5 years. The buying intensity of both is at a high level in recent years. The buying of 3 - 5Y ordinary credit bonds by fund companies is mainly driven by the position - building of amortized - cost bond funds. Other institutions are buying ordinary credit bonds in an above - seasonal manner, and it is speculated that wealth management products are still the main buying force [2][12][13]. - **Pricing Ability**: By comparing institutional buying and corresponding interest rate trends, it can be seen that funds still have strong marginal pricing ability, while the net buying of other institutions has a relatively weaker impact on credit bond pricing [17]. 3.2 Can the Medium - and Long - Term End Continue to Decline? - **Yield Quantiles**: Currently, the yield quantiles of credit bonds are at a relatively low level in history, especially for ordinary credit bonds with maturities of 2 years and less, whose yields are at an absolute historical low. The yield quantiles of medium - and long - term credit bonds are slightly higher due to the significantly higher medium - and long - term interest rates compared to 2025 [19][20]. - **Term Spreads**: The term spread quantiles of medium - and long - term credit bonds are significantly higher than the yield quantiles. There is still room for the term spreads of 10Y/1Y AAA medium - term notes to decline. However, it may be difficult to further compress the term spreads as the term spreads of medium - and long - term credit bonds are still at a high level, and the term spreads of credit bonds are difficult to move independently from those of treasury bonds [21][22][24]. 3.3 How to Participate? - **Short - Term Bonds**: It is recommended to seek certainty in short - term bonds. In the current situation of loose capital interest rates, which are likely to remain so in the future, the certainty of the short - end is still high. It is advisable to look for coupon income in credit bonds with a maturity of about 2 years [31]. - **Secondary and Perpetual Bonds**: After being driven by fixed - income plus funds earlier, the price ratio of secondary and perpetual bonds has recovered recently, but it is still necessary to wait appropriately. The reasonable price ratio range of 5 - year AAA - secondary bonds to 5Y AAA medium - term notes in March is 10 - 20bp [31]. - **Ultra - Long - Term Credit Bonds**: Although ultra - long - term credit bonds have performed strongly, more caution is needed due to high interest rate uncertainty. The trading volume of ultra - long - term credit bonds has increased again this week, banks' net selling has slightly increased, credit spreads are hovering at the bottom, and the yield curve has touched the lower limit of 2 - standard - deviation again, all indicating bearish signals [34].

Group 1 - The net supply of ordinary credit bonds in the primary market decreased compared to the previous period, with no new issuances or maturities for perpetual bonds [3][6][12] - The total issuance and net financing of ordinary credit bonds for the period (2026.02.23-2026.03.01) were 952 billion yuan and -892 billion yuan, respectively, compared to 1390 billion yuan and 363 billion yuan in the previous period [3][6][12] - The issuance of industrial bonds decreased to 503 billion yuan, with net financing turning negative at -294 billion yuan, while local government bonds also saw a decline in issuance to 449 billion yuan, with net financing at -598 billion yuan [3][6][12] Group 2 - In the secondary market, yields generally increased, with credit spreads showing differentiation, where high-quality bonds outperformed perpetual bonds [3][6][12] - The yield on high-quality bonds mostly increased, while some lower-rated medium-term notes saw a decline in yield, with the 1Y AA- rated notes down by 4.7 basis points and 5Y AA rated notes down by 4.6 basis points [3][6][12] - The credit spreads for high-quality bonds narrowed, while most perpetual bonds experienced widening spreads, particularly the 7Y perpetual bonds which widened by 4.7, 4.6, and 3.7 basis points for AAA, AA+, and AA- rated bonds, respectively [3][6][12] Group 3 - The strategy suggests a cautious approach towards long-duration assets, focusing on short to medium-term credit bonds with higher certainty [3][6][12] - The demand for credit bonds is expected to be supported by stable but limited downward space in deposit rates, alongside expectations of wider credit and government bond supply pressures [3][6][12] - Investment opportunities include 2-year or shorter high-quality central state-owned enterprise real estate bonds, 3-year or shorter lower-rated local government bonds, and 3-5 year high-grade insurance subordinated bonds [3][6][12] Group 4 - The trading volume of credit bond ETFs is expected to stabilize around the Spring Festival, with potential demand for credit bond ETFs approaching the end of March, although to a lesser extent than the previous year [3][6][12] - The current credit spreads are at relatively low historical levels, indicating limited room for further compression, thus highlighting the importance of selecting bonds with good value [3][6][12] - For perpetual bonds, attention should be paid to the progress of approvals from the People's Bank of China in March and the potential for resuming issuances [3][6][12]

1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report - Yields mostly increased, and credit spreads showed differentiation. General credit bonds (Pu Xin) performed better than Tier 2 and perpetual bonds. It is recommended to be cautious about long - term assets and focus on medium - and short - term credit bonds within 5 years [5]. 3. Summary by Directory 3.1 Primary Market - **General Credit Bonds**: The net supply of general credit bonds decreased compared to the previous period. The issuance of industrial bonds decreased to 503 billion yuan, and the net financing turned negative to - 294 billion yuan. The issuance of urban investment bonds decreased to 449 billion yuan, and the net financing turned negative to - 598 billion yuan. The weighted issuance term was 2.17 years, a decrease from the previous period [5][9]. - **Bank Tier 2 and Perpetual Bonds**: There was no new issuance or maturity of bank Tier 2 and perpetual bonds this period. This has been the case for 8 consecutive weeks this year [5][27]. 3.2 Secondary Market - **Yields**: Yields generally increased. Except for some low - quality medium - term notes, 3 - year non - public and perpetual bonds, most general credit bonds' yields increased. Tier 2 and perpetual bonds' yields increased across the board except for the 5 - year AA - perpetual bonds, with larger increases in the medium - and long - term [5][40]. - **Credit Spreads**: Credit spreads showed differentiation. General credit bonds' spreads mostly narrowed except for the 7 - year ones, and low - quality bonds within 5 years performed well. Tier 2 and perpetual bonds' spreads mostly widened except for the 1 - year and 10 - year ones [5][44]. - **Turnover Rate**: The turnover rates of general credit bonds and bank Tier 2 and perpetual bonds both decreased this week [55]. 3.3 Credit Strategy - Be cautious about long - term assets and focus on medium - and short - term credit bonds within 5 years. Consider the ticket - coupon value of some varieties and grade - sinking. Pay attention to investment opportunities in certain bonds such as real estate bonds of leading central and state - owned enterprises within 2 years, low - quality urban investment bonds within 3 years, medium - and high - grade perpetual or private general credit bonds around 3 years, and high - grade insurance sub - bonds from 3 - 5 years [5]. - For Tier 2 and perpetual bonds, pay attention to the approval progress of the People's Bank of China in March and the possibility of resuming issuance. In the short term, focus on the trading value of 6 - 7 - year Tier 2 and perpetual bonds [5]. 3.4 Urban Investment Bonds - Yields and credit spreads in different regions showed differentiation, with high - grade yields increasing and low - grade yields decreasing [58]. - The trading volume and turnover rate in different regions also showed different trends [63][65]. 3.5 Industrial Bonds - Yields and credit spreads in different industries showed differentiation, with low - grade bonds performing better than high - grade ones [66]. - The trading volume and turnover rate in different industries also showed different trends [70][73]. 3.6 Financial Bonds - Yields mostly increased, Tier 2 and perpetual bond spreads mostly widened, and the spreads of securities and insurance sub - bonds showed differentiation [74]. - The performance of yields, credit spreads, and excess spreads of bank Tier 2 and perpetual bonds, as well as securities and insurance sub - bonds in different regions and with different ratings, is presented in detail [93][105]. 3.7 Stock Bond Distribution - The current yields are mostly distributed within 2.4%. The average yield distributions of industrial bonds in different industries and urban investment bonds in different regions are provided, including different implicit ratings and remaining maturities [107][108][110].

Key Points - The core viewpoint of the article highlights the decline in net supply of ordinary credit bonds and the ongoing negative net supply of perpetual bonds, indicating a tightening market environment [3][4][5]. Primary Market - In the current period (February 9, 2026 - February 15, 2026), the total issuance of ordinary credit bonds is 139 billion, with net financing of 36.3 billion, a significant decrease from the previous period's 358.7 billion and 256.5 billion respectively [3][4]. - The issuance of industrial bonds has decreased to 76.8 billion, with net financing dropping to 19.1 billion, while local government bonds have seen a reduction to 62.2 billion in issuance and a sharp decline in net financing to 17.2 billion [3][4]. - There has been no issuance of bank perpetual bonds for six consecutive weeks this year, with net financing for secondary capital bonds and perpetual bonds being negative at -2 billion and -3 billion respectively [3][4]. Secondary Market - In the last week before the holiday, credit bond yields have generally declined, with credit spreads narrowing for most categories, particularly for perpetual bonds which outperformed ordinary credit bonds [3][4]. - The yield on high-grade local government bonds (10Y AAA) has improved by -10.6 basis points, while the 7Y bank perpetual bonds showed a yield decrease of over 5 basis points across all ratings [3][4]. - The trading volume for ordinary credit bonds and bank perpetual bonds has decreased, indicating a potential shift in market dynamics [9]. Credit Strategy - The article suggests that the core issue for the bond market remains the diversion of funds to the stock market, emphasizing the importance of interest rate arbitrage and coupon value in credit bonds [3][4]. - The current bond market is characterized by a pessimistic expectation correction, with a potential shift towards a phase of spread compression, although overall space for further compression is limited [3][4]. - It is recommended to focus on high-grade ordinary credit bonds with maturities of 2 years or less, weak-rated local government bonds with maturities of 3 years or less, and high-grade insurance subordinated bonds with maturities of 3-5 years for investment opportunities [3][4].

1. Report Industry Investment Rating No information provided in the text. 2. Core View of the Report - The core contradiction in the bond market may be the diversion of funds from the bond market to the stock market. Attention should be paid to the carry and coupon value of credit bonds. The current bond market is a pessimistic expectation correction market dominated by allocation funds, and may enter a stage of narrowing spreads, but the overall space is still limited. The core contradiction order of the subsequent market is: asset allocation re - balance (stock market diversion) > monetary and fiscal coordination > expectation of price recovery [4]. - For credit bonds, under the support of loose liquidity, the carry strategy of short - and medium - term credit bonds has high certainty, and it is advisable to "increase positions on dips". Under the support of the demand of amortized bond funds, the carry can appropriately extend the duration to 3 - 5 - year medium - and high - grade general credit bonds. Considering that the current credit spreads are at relatively low historical levels, attention should be paid to the coupon value of some varieties and grade sinking. [4] - For secondary perpetual bonds, in the January market, the long - end spreads of secondary perpetual bonds were less compressed, and the catch - up was more obvious in this round of market. In the past two weeks, the allocation power of insurance institutions to secondary perpetual bonds has weakened and even turned into net selling. Considering the valuation and supply - demand changes, it is recommended to be cautious and wait for the opportunity of valuation recovery or supply increase. Also, attention should be paid to the potential participation opportunities of securities company bonds with increasing supply since the beginning of the year. [4] 3. Summary by Relevant Catalogs 3.1 Primary Market - **General Credit Bonds**: The net supply of general credit bonds decreased this period. The issuance of general credit bonds was 139 billion yuan, and the net financing was 36.3 billion yuan, compared with 358.7 billion yuan and 256.5 billion yuan in the previous period respectively. Among them, the issuance of industrial bonds decreased to 76.8 billion yuan, and the net financing decreased to 19.1 billion yuan; the issuance of urban investment bonds decreased to 62.2 billion yuan, and the net financing decreased significantly to 17.2 billion yuan. The weighted issuance term of general credit bonds was 2.65 years, a decrease from the previous period (2.91 years). The credit bond bid - upper limit - coupon rate decreased from 0.42% to 0.41%, and the credit bond subscription multiple increased from 2.67 to 2.85 [4][7][17][21]. - **Bank Secondary Perpetual Bonds**: There was no issuance of bank secondary perpetual bonds this period, and the net financing scale decreased. The net financing of secondary capital bonds was - 200 million yuan, and the net financing of perpetual bonds was - 3 billion yuan. This was the sixth consecutive week of no issuance this year [4][25]. 3.2 Secondary Market - **Yield and Credit Spread**: The yields of credit bonds generally declined, and most credit spreads narrowed. Among general credit bonds, except for the 1/3Y AA - grade, 7Y AA - grade medium - term notes, and 5Y AAA/AA - grade renewable urban investment bonds, the yields mostly declined. The 10Y high - grade urban investment bonds performed the best (the 10Y AAA - grade urban investment bonds decreased by 10.6BP). The yields of all terms and grades of secondary perpetual bonds declined, and the 7Y bank perpetual bonds performed the best (the yields of 7Y secondary perpetual bonds of all qualifications declined by more than 5BP). Most credit spreads narrowed, with the spreads of general credit bonds within 7 years changing mostly within about 2BP or less. The 10Y urban investment bonds/renewable urban investment bonds performed the best (the 10Y AAA - grade urban investment bonds/renewable urban investment bonds decreased by 8.8BP). Except for the slight widening of the credit spread of 3Y AA - grade bank perpetual bonds, the credit spreads of other terms and grades of secondary perpetual bonds all narrowed. The widening varieties were mainly concentrated in 5Y non - public general credit bonds and 1/3/5/7Y weak - quality medium - term notes [4]. - **Turnover Rate**: The turnover rates of general credit bonds and bank secondary perpetual bonds both decreased this week [52]. 3.3 Stock Bond Distribution - The current yields are mostly distributed within 2.4% [6]. - **Industry Bonds**: The average yields of various industries' public - offering industry bonds are presented in a table, showing the distribution by implicit rating and remaining maturity. Most industries' yields are within a relatively low range [106]. - **Urban Investment Bonds**: The average yields of public - offering urban investment bonds in various regions are presented in a table, showing the distribution by implicit rating and remaining maturity. The yields in most regions are within a relatively low range [108]. - **Small and Medium - Sized Bank Secondary Perpetual Bonds**: The average yields of small and medium - sized bank secondary perpetual bonds in various regions are presented in a table, showing the distribution by implicit rating and remaining maturity [110].

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - In the primary market, the net supply of ordinary credit bonds increased compared to the previous period, while the net supply of bank perpetual and secondary capital bonds (two - tiered perpetual bonds, "二永债") turned negative due to no issuance this period [4]. - In the secondary market, yields mainly declined, and credit spreads mostly widened. 3 - year ordinary credit bonds, 5 - year financial bonds, and weak - quality urban investment bonds performed well. The turnover rate of ordinary credit bonds and bank perpetual bonds decreased, while that of bank secondary capital bonds increased [4]. - For credit strategies, it is advisable to moderately extend the duration to 3 - 5 years for carry trades, and also focus on short - to - medium - term coupon - bearing assets and the potential cost - effectiveness of ETF component bonds. For two - tiered perpetual bonds, it is recommended to be cautious and wait for opportunities for valuation recovery or increased supply [4]. 3. Summary by Related Catalogs 3.1 Primary Market 3.1.1 Ordinary Credit Bonds - Supply increased compared to the previous period, with the issuance amount reaching 357.3 billion yuan and net financing of 255.1 billion yuan. Both industrial and urban investment bonds saw an increase in issuance and net financing. The issuance of industrial bonds increased to 204.6 billion yuan, and net financing rose to 146.5 billion yuan. The issuance of urban investment bonds increased to 152.7 billion yuan, and net financing reached 108.6 billion yuan, the highest since 2024 [4]. - The weighted issuance term increased to 2.89 years (previously 2.76 years). The weighted issuance terms of urban investment bonds and industrial bonds also increased [15]. - The credit bond bid - cap minus the coupon rate rose from 0.37% to 0.43%, and the subscription multiple increased from 2.52 to 2.82, indicating increased subscription enthusiasm [21]. 3.1.2 Bank Two - Tiered Perpetual Bonds - There was no issuance of bank two - tiered perpetual bonds this period, and the net financing scale turned negative. Two secondary capital bonds matured, with net financing of - 7 billion yuan, and one perpetual bond matured, with net financing of - 10 billion yuan [4]. 3.2 Secondary Market 3.2.1 Overall Yield and Credit Spread - Yields mainly declined, with 3 - year ordinary credit bonds, 5 - year financial bonds, and weak - quality urban investment bonds performing better. For example, among 3 - year ordinary credit bonds, the AA - rated extendible industrial bonds had the largest decline of - 5.34BP [4]. - Credit spreads mostly widened, except for a small number of varieties such as 1 - year commercial financial bonds, some weak - quality urban investment bonds, and 10 - year two - tiered perpetual bonds, which saw a slight narrowing. The 5 - year AA - rated urban investment bonds performed best with a - 1.24BP change, while the 5 - year high - grade ordinary credit bonds had a relatively large widening [4]. 3.2.2 Urban Investment Bonds - Yields in various regions mostly declined, and credit spreads mostly widened. Weak - quality urban investment bonds performed better. For example, in Anhui, the yields of AA - rated and AA(2) - rated urban investment bonds decreased by - 1.76BP and - 6.33BP respectively in the past week [59]. - The turnover rate of urban investment bonds in different regions showed different trends, and the trading volume also varied [62][65]. 3.2.3 Industrial Bonds - Yields in various industries showed differentiation, and credit spreads generally widened. For example, in the steel industry, the AA - rated industrial bonds' yields decreased by - 2.30BP in the past week, while in the real estate industry, the AA - rated industrial bonds' yields increased by 4.80BP [68]. - The turnover rate and trading volume of industrial bonds in different industries also showed different characteristics [70][73]. 3.2.4 Financial Bonds - Yields mostly declined, credit spreads generally widened, and the performance of excess spreads was differentiated. For bank secondary capital bonds and perpetual bonds, yields of different ratings and bank types showed different degrees of decline, and credit spreads and excess spreads also changed accordingly [93]. 3.3 Stock Bond Distribution - Currently, most yields are distributed within 2.4%. The average yield distributions of industrial bonds in various industries and urban investment bonds in different regions are presented in detail in the report, with most yields concentrated in a relatively low range [105][106][108].

Group 1 - The net supply of ordinary credit bonds increased on a month-on-month basis, while there were no new issuances or maturities for perpetual bonds [3][5][6] - The total issuance and net financing of ordinary credit bonds for the period from January 26 to February 1, 2026, were 307.4 billion yuan and 183.6 billion yuan, respectively, compared to 328.8 billion yuan and 140.9 billion yuan in the previous period [3][5] - The issuance of industrial bonds decreased to 196.5 billion yuan, while the issuance of urban investment bonds slightly increased to 110.9 billion yuan, with net financing for urban investment bonds significantly rising to 64.3 billion yuan [3][5] Group 2 - In the secondary market, yields and credit spreads showed differentiation, with high-quality bonds performing better than perpetual bonds [3][5][6] - Most yields for high-quality bonds decreased, except for certain maturities, with the best performance seen in 5-year urban investment bonds, which saw a decline of 6.32 basis points [3][5] - The credit spreads for various categories varied, with short-term low-quality high-quality bonds showing better performance, particularly in the 3-year AA-rated medium-term notes and urban investment bonds [3][5][6] Group 3 - The overall pressure in the bond market for February is manageable, with limited room for compression in credit spreads, but the certainty of carry value in short- to medium-term credit bonds remains [3][5] - Recent positive performance in the bond market has been driven by allocation and a cooling equity market, with expectations for stable liquidity from the central bank [3][5] - The real estate sector may see a relaxation of financing restrictions, particularly with new loan support for major developers, which could benefit the valuation recovery of leading state-owned enterprises in the sector [3][5] Group 4 - The strategy suggests focusing on short- to medium-term coupon assets, with a recommendation to extend the duration of high-quality bonds to 3-5 years under the current market conditions [3][5] - There is a cautious outlook on perpetual bonds, with a recommendation to wait for better valuation opportunities as supply increases [3][5] - The demand for high-quality bonds is supported by the need for amortized bond funds, with expectations for a delayed start in related credit market activities [3][5]

Key Points - The net supply of ordinary credit bonds in the primary market increased on a month-on-month basis, with total issuance reaching 269.9 billion yuan and net financing at 131.1 billion yuan during the period from January 5 to January 11, 2026 [3][5] - The issuance of industrial bonds decreased to 139.2 billion yuan, while net financing surged to 91.7 billion yuan. Conversely, local government bonds saw a significant increase in issuance to 130.7 billion yuan, the highest since November 2025, with net financing rising to 39.4 billion yuan [3][5] - In the secondary market, bond yields showed mixed performance, with overall credit spreads narrowing, particularly for 1-year bonds, which experienced the largest contraction [3][5] - The yield on 7-year bonds performed the best, with a decline of 2.36 basis points for AA+/AA/AA- rated local government bonds, while 5-year bonds saw an overall increase [3][5] - The trading volume of credit bond ETFs decreased significantly, with a net outflow of 55.3 billion yuan over four days, approaching 50% of the inflow seen in December 2025 [3][5] - The investment outlook for credit bonds remains favorable, with expectations of a stable bond market environment in the first quarter of 2026, despite potential pressures on credit spreads [3][5] - The strategy for credit investment focuses on short to medium-term credit bonds, particularly those with a maturity of 3-5 years, and emphasizes the opportunities presented by high-grade bonds [3][5] - The performance of various credit bonds is expected to vary, with short-term bonds outperforming longer-term bonds in terms of yield and credit spread [3][5][11]

Summary of Conference Call Notes Industry or Company Involved - The notes primarily focus on the fixed income market, particularly the credit bond market and convertible bond market in China. Core Points and Arguments 1. **Asset Allocation Trends** - The allocation of amortized cost method funds has significantly shifted towards high-grade credit bonds and commercial bank financial bonds, with proportions exceeding 70% for public credit bonds and commercial bank bonds, reflecting a preference for higher yield assets due to low short-term interest rates [1][3][5] 2. **Market Demand Forecast** - By the end of 2026, the remaining maturity scale of amortized cost method funds is expected to reach 744.4 billion yuan, with incremental funding needs for public credit and commercial bank bonds estimated at 200.2 billion yuan and 136.2 billion yuan respectively, indicating a notable increase in market demand for these assets [1][6] 3. **Credit Risk Management** - High-grade central state-owned enterprise bonds dominate the credit asset holdings, with a focus on low credit risk and valuation fluctuations. The preference remains for high-rated credit and commercial bank financial assets [1][7] 4. **Monetary Policy and Interest Rate Outlook** - The recent slowdown in social financing credit growth and the emphasis on structural optimization rather than rapid stimulus suggest a potential opening of the lower bound for interest rate fluctuations in the medium to long term, although short-term expectations for rate cuts remain unfavorable [1][8][9][10] 5. **Impact of Policy on Credit Growth** - Current policy directions support a slowdown in credit growth, which may lead to a contraction in bank balance sheets. Historical data indicates that during periods of slowed bank expansion, the yield spread between long-term and short-term government bonds tends to widen [1][11][12] 6. **Convertible Bond Market Dynamics** - The convertible bond market faces supply and demand pressures, with expected issuance of 50-100 billion yuan in new convertible bonds over the next 6-12 months. Despite this, strong performance of underlying stocks and capital inflows create a positive feedback loop, limiting long-term valuation compression [2][13] 7. **Investment Strategy for Convertible Bonds** - Suggested strategies include focusing on sectors aligned with upward trends in the equity market, such as solid-state batteries and AI applications, while maintaining a balanced portfolio of cyclical and defensive bonds [2][14][15] 8. **Market Outlook** - The overall market outlook remains optimistic despite external disturbances, with limited downside potential and an upward trend expected to dominate, supported by improved corporate performance and favorable policy developments [2][16] Other Important but Possibly Overlooked Content - The shift in asset allocation reflects a broader trend of institutional investors seeking higher yields in a low-interest-rate environment, indicating a potential long-term change in investment strategies within the fixed income market [1][5] - The emphasis on high-grade assets suggests a cautious approach to credit risk, which may influence future investment decisions and market dynamics [1][7]