Core Viewpoint - The China Convertible Bond Index opened higher by 0.2% on January 16, reaching 517.94 points, indicating a positive market sentiment in the convertible bond sector [1][2]. Summary by Categories Market Performance - The top gainers in the convertible bond market included Aohong Convertible Bond, Huachen Convertible Bond, Jiazhe Convertible Bond, Yongxi Convertible Bond, and Jingda Convertible Bond, with respective increases of 30.00%, 7.31%, 3.81%, 3.33%, and 3.16% [1][2]. - Conversely, the largest decliners were Xinfeng Convertible Bond, Jiamei Convertible Bond, Shanhe Convertible Bond, Fumiao Convertible Bond, and Saili Convertible Bond, which saw decreases of 3.99%, 2.53%, 2.36%, 2.26%, and 1.59% respectively [1][2].

Summary of Key Points Core Viewpoint - The article discusses recent corporate actions including share buybacks, shareholder reductions, and convertible bond updates, indicating a dynamic market environment for investors. Group 1: Corporate Actions - Hongchuan Zhihui plans to reduce its shareholding by no more than 2% of the company's shares [1] - Meijin Energy expects a loss of 850 million to 1.25 billion yuan in 2025 [1] - Luxshare Precision intends to repurchase company shares worth between 1 billion to 2 billion yuan [1] Group 2: Convertible Bonds - Jia Mei Convertible Bond and Fumiao Convertible Bond are subject to strong redemption [2] - Wei Er Convertible Bond will not undergo a downward adjustment [2] - New listings and subscriptions for various convertible bonds are noted, including Shangle and Naipu [1] Group 3: Market Data on Convertible Bonds - The current price and redemption price for several convertible bonds are provided, with specific details on their last trading and conversion dates, as well as their remaining scale and market capitalization ratios [4][6]

Group 1 - The company announced the issuance of convertible bonds named "Aohong Convertible Bonds" with a total amount of 580 million yuan [1] - The number of bonds issued is 580,000 hands, equivalent to 5.8 million bonds [1] - The bonds will be listed on the Shanghai Stock Exchange, with the listing date set for January 16, 2026 [1]

Macro Strategy - The report highlights that export control measures on key metals have become a crucial advantage for China in the context of major power competition, particularly against the US and EU [8][9] - China's leading position in key metals is attributed to its resource advantages and a complete industrial system, which is difficult for developed economies to replicate in the short term [8] Fixed Income - The bond market is expected to face challenges in 2026, with less likelihood of a one-sided decline in interest rates as seen from 2022 to 2024, suggesting a need for a more flexible trading strategy [10] - The report notes that the 10-year government bond yield increased slightly to 1.8425% during the week, reflecting market reactions to policy announcements [10] Industry Analysis Minshi Group (敏实集团) - Minshi Group is a leading global supplier of automotive exterior and structural parts, benefiting from the acceleration of electric vehicle adoption in Europe, particularly in the battery box business [22][24] - The company is expanding into humanoid robotics and liquid cooling for servers, which are expected to open new growth opportunities [22][24] - Profit forecasts for Minshi Group indicate net profits of 2.753 billion, 3.257 billion, and 3.878 billion yuan for 2025-2027, with corresponding EPS of 2.34, 2.76, and 3.29 yuan, and P/E ratios of 11.91, 10.07, and 8.46 respectively [22] Zhongwei Company (中微公司) - Zhongwei Company plans to acquire Hangzhou Zhonggui to enhance its capabilities in CMP equipment, which is crucial for semiconductor manufacturing [7] - The acquisition aims to strengthen Zhongwei's competitiveness in complete process solutions, complementing its existing dry process equipment [7] - Profit forecasts for Zhongwei Company remain at 2.44 billion, 3.41 billion, and 4.46 billion yuan for 2025-2027, with dynamic P/E ratios of 70, 50, and 38 respectively [7]

Macro Strategy - The report highlights that export control measures on key metals have become a crucial advantage for China in the context of major power competition, particularly against the US and EU [10][11] - China's leading position in key metals is attributed not only to resource advantages but also to a complete industrial system that is difficult for developed economies to replicate [10][11] Fixed Income - The report indicates that the bond market is expected to face challenges in 2026, with less likelihood of a unilateral decline in interest rates as seen from 2022 to 2024, suggesting a need for a more flexible approach to bond trading [12][13] - Recent meetings have emphasized a continuation of proactive fiscal and moderately loose monetary policies, which are expected to influence bond market sentiment positively [12][13] Industry Analysis - The report discusses the merger of CICC with Dongxing and Xinda, which is expected to create a company with total assets exceeding one trillion yuan, ranking fourth in the industry [21][23] - The merger is seen as a strategic move to enhance scale and comprehensive strength in the securities industry, with large brokers expected to fill gaps through acquisitions while smaller brokers may achieve rapid growth through external mergers [21][23] Recommended Stocks - The report recommends investing in StarRing Technology, which is positioned as a leader in AI and big data infrastructure, with expected revenues of 426 million, 488 million, and 583 million yuan for 2025, 2026, and 2027 respectively [23][24] - The company is noted for its innovative GPU-Native database, which is anticipated to benefit significantly from the growing demand for AI inference [23][24]

1. Report Industry Investment Rating No information provided regarding the industry investment rating. 2. Core Viewpoints of the Report - As of December 12, 2025, the convertible bond's 100 - yuan fitted premium rate has risen to 31.82%. With the valuation reaching historical highs and continuing to fluctuate, there are doubts about the applicability of past curve - fitting methods in the current high - price and high - valuation market. The algorithm for the fitted premium rate may need to be re - explored [1][10]. - The convexity of the fitted premium rate curve has increased. The right - shift of the parity indicates a structural difference in the convertible bond market. High - parity convertible bonds have relatively stable valuations, and as parity decreases, the valuation premium rises faster, causing the convexity of the curve to strengthen. The change in parity may lead to deviations in the calculated 100 - yuan premium rate [1][15]. - The distribution of the conversion premium rate is more extreme. The low - parity group has a steeper slope of premium rate increase, and the high - parity group's premium rate has nearly doubled compared to the end of 2024, while the medium - parity group shows relatively small fluctuations. This requires a change in the function form for curve fitting [2][17]. - When the parity is changing, the fitting interval should be widened, especially towards high - parity. The fitting function form may be adjusted to an exponential form, which can better reflect the premium rate distribution in the high - parity range and is suitable for some low - price and high - valuation samples. Considering the expected positive performance of the equity market in 2026, attention can be paid to such fitting method adjustments [2][3]. 3. Summary According to the Table of Contents 3.1 Fitted Premium Rate Curve Shape Changes, Pay Attention to Structural Differences - **Valuation and Parity Changes**: As of December 12, 2025, the convertible bond's 100 - yuan fitted premium rate has reached 31.82%, up 11.14 pct from the beginning of the year, at the 98.90% historical quantile since 2017. The high - parity proportion has increased, and the traditional curve - fitting method may not be applicable [10]. - **Convexity of the Fitted Curve**: Compared with the end of 2024, the parity has shifted to the right. High - parity convertible bonds have stable valuations, and as parity decreases, the valuation premium rises faster, strengthening the convexity of the curve. The change in parity may cause the model to deviate, resulting in inaccurate 100 - yuan premium rate calculations [15]. - **Extreme Distribution of Premium Rate**: The low - parity (70 - 90) group has a steeper premium rate increase slope, and the high - parity (110 - 130) group's premium rate has nearly doubled compared to the end of 2024. The medium - parity group has relatively small fluctuations. The traditional cubic inverse function is not suitable for the current market, so the function form needs to be changed [2][17]. - **Consider Extreme Parity Values**: The common 70 - 130 fitting interval is less applicable when the parity rises. An exponential function (Y = A×e^(-k(x - B))+C) can be considered for fitting, as it has advantages at both ends and can better reflect the market distribution [2][19]. 3.2 Market Review: Convertible Bonds Rose Slightly Weekly, Valuation Remained Basically Flat 3.2.1 Weekly Market Quotes: Convertible Bond Market Rose Slightly, Most Equity Sectors Pulled Back - **Index Performance**: Last week, most major stock indices rose. The Shanghai Composite Index fell 0.34%, the Shenzhen Component Index rose 0.84%, the ChiNext Index rose 2.74%, the SSE 50 Index fell 0.25%, the CSI 1000 Index rose 0.39%, and the CSI Convertible Bond Index rose 0.20% [26]. - **Industry and Concept Performance**: In the Shenwan primary industry index, most equity markets pulled back last week. Communication, national defense and military industry, electronics, machinery and equipment, and power equipment led the gains; household appliances, basic chemicals, textile and apparel, real estate, and steel led the losses. The convertible bond market had mixed performance, with building materials, national defense and military industry, communication, automobiles, and power equipment leading the gains, and food and beverage, media, basic chemicals, commercial retail, and coal leading the losses. Among popular concepts, some concepts rose and some fell [30][33]. 3.2.2 Valuation Performance: Premium Rates of Convertible Bonds of Most Ratings and Sizes Rose - **Closing Price and Premium Rate**: The weighted average closing price of convertible bonds was 132.26, down 0.01% from the previous Friday. The closing price of equity - biased convertible bonds was 194.10 yuan, up 2.02% from last Friday; the closing price of bond - biased convertible bonds was 119.15 yuan, down 0.34% from last Friday; the closing price of balanced convertible bonds was 128.77 yuan, down 0.10% from last Friday. The proportion of the 120 - 130 (including 130) interval in the closing price distribution increased significantly. The price median was 130.59 yuan, down 0.21% from the previous Friday. The 100 - yuan parity fitted conversion premium rate of the convertible bond market was 31.82%, down 0.01 pct from last Friday. In terms of ratings and sizes, the premium rates of most convertible bonds rose [35]. 3.3 Terms and Supply: 2 Convertible Bonds Announced Forced Redemption, Total Pending Issuance Scale About 125 Billion 3.3.1 Terms: Last Week, 2 Convertible Bonds Announced Forced Redemption, 3 Convertible Bonds' Boards Proposed Downward Revisions - **Forced Redemption**: As of December 12, Yingbo and Hugong convertible bonds announced early redemption; Bojun convertible bond announced no early redemption; Xiangfeng, Kaisheng, Jinzhong, Furong, and Bo 23 convertible bonds announced that they were expected to meet the forced redemption conditions [4][55]. - **Downward Revision**: Last week, Bengang, Jinlang Zhuan 02, and Hongchuan convertible bonds issued announcements of the board's proposal for a downward revision of the conversion price. No convertible bonds announced the results of the downward revision. 15 convertible bonds announced no downward revision, and 11 convertible bonds announced that they were expected to trigger a downward revision [4][55]. 3.3.2 Primary Market: Last Week, Tianzhun, Shenyu, and Aohong Convertible Bonds Were Issued, Total Pending Issuance Scale About 125 Billion - **Issuance and Listing**: Last week, Tianzhun, Shenyu, and Aohong convertible bonds were issued, with a total scale of 19.52 billion yuan. Maolai and Ruike convertible bonds were listed, with a scale of 15.63 billion yuan. Dingjie convertible bond was listed on December 15, with a scale of 8.28 billion yuan [5][58]. - **Pending Issuance**: Last week, there were no new board proposals. Three companies passed the shareholders' meeting, two passed the issuance review committee's approval, and one was newly approved by the CSRC, an increase of +0, +3, +0, +1 respectively compared to the same period last year. As of December 12, four listed companies obtained convertible bond issuance approvals, with a proposed issuance scale of 41.67 billion yuan. Eight listed companies passed the issuance review committee, with a total scale of 83.14 billion yuan [60][65].

Group 1 - The core point of the announcement is the results of the online lottery for the issuance of convertible bonds by Changzhou Aohong Electronics Co., Ltd. [1] - The company issued a total of 58,301 winning numbers for the convertible bonds, with each winning number allowing the subscription of 1 lot (1,000 yuan) of Aohong convertible bonds [2] - The lottery was conducted under the principles of openness, fairness, and justice, supervised by relevant representatives and notarized by the Shanghai Oriental Notary Office [1][2]

Core Viewpoint - The company has received approval from the China Securities Regulatory Commission (CSRC) for the issuance of 580 million yuan in convertible bonds, named "Aohong Convertible Bonds" [1] Group 1: Bond Issuance Details - The issuance includes a preferential subscription for existing shareholders amounting to 522 million yuan, which represents 89.95% of the total issuance [1] - The public subscription for online investors is set at 58 million yuan, accounting for 10.05% of the total [1] - The online subscription success rate is reported at 0.00065988% [1] Group 2: Subscription and Underwriting - The subscription period for existing shareholders and online public investors will end on December 11, 2025 [1] - Investors who successfully subscribe online must ensure sufficient funds in their accounts by December 15, 2025, or their subscriptions will be considered forfeited [1] - The lead underwriter will underwrite any shortfall in subscription amounts, with a cap of 30% on the underwriting ratio [1] Group 3: Future Announcements - The listing date for the Aohong Convertible Bonds will be announced separately [1]

Group 1 - The article discusses the issuance of convertible bonds by Shenyu Co. and Aohong Electronics, highlighting their respective bond ratings and conversion prices [2][3] - Shenyu Co. has issued a convertible bond with a conversion price of 100.00 yuan and a bond rating of AA- [2][3] - Aohong Electronics has also issued a convertible bond with a conversion price of 100.00 yuan and a bond rating of AA- [2][3]

Group 1 - The article reports that "Aohong Convertible Bonds" and "Shenyu Convertible Bonds" are available for subscription today, with subscription codes 713058 and 370563 respectively [1]