1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report Although the retracement of ultra - long credit bonds in this round is relatively low compared to the bond market adjustment in the past two years, the current point offers limited gaming space. With potential disturbances from "fixed - income plus" products and the pressure of wealth management funds returning to the balance sheet at the end of the quarter, there are still valuation fluctuation risks in the short term [5][46]. 3. Summary According to the Directory 3.1 Stock Market Characteristics - Ultra - long credit bond yields have slightly retraced. This week (March 16 - 20, 2026), the improvement in fundamental data and inflation concerns due to the escalation of geopolitical conflicts have suppressed the performance of long - term interest - rate bonds. Although the ultra - long credit bond market shows signs of adjustment, the overall retracement is low, and the yield center of existing ultra - long credit bonds remains stable between 2.2% - 2.5% [2][12][13]. 3.2 Primary Issuance Situation - The supply of new ultra - long credit bonds has increased. Due to the "rigid" financing needs of issuers and seasonal patterns, the supply of new ultra - long credit bonds this week has risen to 19.9 billion. In terms of issuance rates, the rate of new ultra - long urban investment bonds has continued to decline to 2.45%, and the coupon rate of new ultra - long industrial bonds remains around 2.4%. From the perspective of new bond subscriptions, the subscription sentiment for new ultra - long industrial bonds has cooled significantly this week, possibly due to insufficient price protection for new bonds and the temporary weakening of end - of - quarter allocation power [3][22]. 3.3 Secondary Transaction Performance - The performance of the ultra - long end is weaker than that of the medium - short end. This week, the ultra - long end of credit bonds has continued to be under pressure. The full - price indices of ChinaBond AA+ credit bonds with maturities of 7 - 10 years and over 10 years have fallen by 0.07% and 0.04% respectively, which are less resilient than medium - short general credit bonds [4][29]. - The trading sentiment of ultra - long credit bonds has remained sluggish. In the past week, the overall trading activity of credit bonds has declined, and the liquidity of ultra - long credit bonds has also weakened. The number of transactions of general credit bonds with maturities over 7 years has dropped to 225. As of March 20, the yields of 7 - 10 - year ultra - long industrial bonds have basically reached the same level as those of 20 - 30 - year treasury bonds, and the relative value of ultra - long credit bonds has significantly weakened [4][30]. - The ultra - long credit bond market has changed from the previous "simultaneous increase in volume and price" to "decrease in volume and stable price". Although the TKN ratio is still not low, the transaction prices of ultra - long credit bonds are highly anchored to the valuation, indicating that buyers lack the willingness to actively go long and are only willing to passively accept at around the valuation [4][36]. - In terms of investor structure, trading desks such as public funds are still reducing their holdings of ultra - long credit bonds. The net buying power of insurance companies for credit bonds with maturities over 7 years is also significantly weaker than last year, and only other product categories have a large - scale takeover of this variety [4][43].

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].

1. Report's Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - The ultra - long credit bond market ended its pre - holiday strong performance this week, facing pressure and a callback. The future trend of the ultra - long credit bond market depends on the tightness of the capital market, the change of risk appetite, and the stability of policy expectations during the Two Sessions [2][5]. 3. Summary of Each Section 3.1 Stock Market Characteristics - The yield of ultra - long credit bonds has undergone a callback. From February 24 to 27, 2026, the ultra - long credit bond market ended its pre - holiday strong performance and showed a pressured and callback trend. The number of outstanding ultra - long credit bonds with a yield of 2.5% - 2.6% increased to 152 compared with last week [2][13]. 3.2 Primary Issuance Situation - The supply of new ultra - long credit bonds is at a low level. In the past two weeks, the supply of new ultra - long credit bonds has remained low, with only the ultra - Great Wall Investment Bonds having incremental issuance. The interest rate of new ultra - Great Wall Investment Bonds fluctuated down to 2.57% in the latest week, and the subscription sentiment increased marginally. According to historical patterns, March to April will be the peak period for credit bond issuance, and attention can be paid to the selection space brought by the increased supply of long - term bonds [3][23]. 3.3 Secondary Transaction Performance - The price of ultra - long bonds fluctuated slightly. This week, the ultra - long credit bond market experienced a callback due to multiple pressures on the basis of the vulnerability accumulated in the previous extreme market. The full - price indices of ChinaBond AA + credit bonds with maturities of 7 - 10 years and over 10 years both declined by more than 0.06%, but the amplitude was generally smaller than that of government bonds and secondary capital bonds of the same maturity [4][31]. - The trading sentiment of ultra - long credit bonds remained weak. In the first week after the holiday, the trading activity of ultra - long credit bonds significantly declined. The number of transactions of general credit bonds with maturities over 7 years dropped to 226, and the number of transactions of the most active 7 - 10 - year industrial bonds fell to the bottom 30% in the past two years. Since the spread of ultra - long credit bonds has been compressed to a relatively low level (the spread between 7 - 10 - year industrial bonds and 20 - 30 - year government bonds is only 11bp), the price protection is insufficient, making the market extremely sensitive to marginal negative news and leading to a decline in trading activity after the holiday [4][33]. - The low - valuation transaction amplitude of ultra - long credit bonds significantly converged this week. The proportion of TKN (Take - No - Offer) in 7 - 10 - year general credit bonds dropped sharply from 83.8% before the holiday to 53.5%, indicating a significant decline in the market's willingness to chase long - term bonds [4][39]. - In terms of investor structure, the concentrated profit - taking of trading desks such as public funds was the direct cause of the callback of ultra - long credit bonds. The unexpected implementation of the "Shanghai Seven - Point" real - estate new policy and the increasing policy uncertainty before the Two Sessions suppressed their bullish sentiment. Insurance funds, traditionally the main investors in ultra - long bonds, did not show a strong willingness to take over during this adjustment [4][43]. - From a more microscopic perspective, the spread between active ultra - long credit bonds and government bonds of similar maturities widened this week. The net price of Chengtong Holdings' ultra - long bonds with maturities over 10 years basically returned to the level at the end of January [5][47].

1. Industry Investment Rating - No relevant information provided in the report. 2. Core Viewpoints - After a continuous decline, the bond market adjusted this week, with interest - rate bond yields rising overall, driving up credit - bond yields. Credit investors may need to control duration and be more cautious. It is recommended to look for coupon - bearing assets in bonds with a maturity of about 2 years or less. For Tier - 2 and perpetual bonds and ultra - long bonds, appropriate waiting is needed [1][3][4]. 3. Summary by Directory 3.1 How to Understand This Week's Trend? - The bond market adjusted this week after a continuous decline. Interest - rate bond yields rose overall, driving up credit - bond yields. In terms of varieties, the increase of Tier - 2 and perpetual bonds was higher than that of general credit bonds, and the yields of some low - grade coupon credit bonds even declined further. In terms of maturity, the increase of ultra - long credit bonds over 5 years was higher than that of medium - and short - term credit bonds. In terms of credit spreads, the spreads of Tier - 2 and perpetual bonds widened, while those of general credit bonds were mostly compressed passively [1][10]. - From an institutional perspective, funds, wealth management products, money - market funds, insurance companies, and other institutions are still net buyers of credit bonds in the secondary market, mainly focusing on general credit bonds with a maturity of 3 years or less. Other institutions have taken over some ultra - long credit bonds, but the overall volume is limited. Funds sold long - term interest - rate bonds and bought short - term credit bonds for risk - avoidance [13][14]. 3.2 How to Understand the Recent Trend of Tier - 2 and Perpetual Bonds? - Since the second half of 2025, Tier - 2 and perpetual bonds have experienced a process of continuous weakness - equivalence - continuous strength compared with general credit bonds. The reasons for the weakness in the second half of 2025 are: the increase in value - added tax on financial bonds, concerns caused by new regulations on public - fund redemptions, the fact that amortized - cost bond funds can only invest in general credit bonds, and the portfolio adjustment needs of insurance companies due to the implementation of new accounting standards [2][16]. - In 2026, most of the unfavorable factors have become history, but the impact of amortized - cost bond funds is still difficult to fade. Benefiting from the strong performance of the stock market, the subscription volume of fixed - income + funds has increased significantly, bringing additional buying power for Tier - 2 and perpetual bonds. Also, with the decline of the bond market, market sentiment has been good, and Tier - 2 and perpetual bonds have relatively benefited [2][24]. 3.3 How to Look Forward When Credit Spreads Are at a Low Level? - Recently, as the bond market has continued to decline, credit - bond yield spreads have also declined. Currently, both credit - bond yields and credit spreads have dropped to relatively low levels. The yields and spreads of credit bonds with a maturity of less than 2 years have dropped to extremely low historical levels, and there is little room for further decline in credit spreads [3][26]. - Looking back at history, when credit spreads are at a low level, the positive effects of interest - rate cuts on credit bonds are not strong, as seen in February 2020. After credit spreads decline to an absolute low level, there are more unfavorable factors than favorable ones. Historically, when spreads widen, credit - bond yields are likely to rise as well. For credit investments, it may be necessary to control duration and be more cautious [3][30][33]. 3.4 How to Participate? - Short - term bonds with a maturity of about 2 years are a high - probability choice in the current environment. It is recommended to look for coupon - bearing assets in bonds with a maturity of about 2 years or less [4][36]. - For Tier - 2 and perpetual bonds, appropriate waiting is needed. As the stock market enters a volatile period, the inflow of fixed - income + funds may slow down, and the price - performance ratio of Tier - 2 and perpetual bonds has significantly decreased [4][36]. - Ultra - long bonds also require appropriate waiting. Currently, the relative value of ultra - long bonds is low, and market sentiment is poor. The trading volume has increased significantly, banks' net sales before the Spring Festival have increased substantially, and credit spreads have dropped to the lowest level since 2025 [4][38].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - This week, the bond market strengthened overall driven by risk - aversion sentiment. The yield of ultra - long credit bonds declined slightly, and the number of ultra - long credit bonds with a yield of 2.4% - 2.5% increased to 388. The new issuance of ultra - long credit bonds saw increased subscription sentiment, but the supply volume shrank to a relatively low level in the past two years. Ultra - long bonds led the bond market rally, but the trading sentiment of ultra - long credit bonds was weak. In the short term, the pre - holiday asset shortage logic continues, and the continuous opening of amortized cost method bond funds will provide incremental funds. However, after the holiday, the extremely low pricing of ultra - long bonds is relatively fragile, and factors such as the recovery of the stock market, the increase in government bond supply, and unexpected policies may cause price fluctuations of ultra - long credit bonds [2][3][4][5] 3. Summary by Directory 3.1 Stock Market Characteristics - This week (from February 2, 2026, to February 6, 2026), the bond market strengthened overall driven by risk - aversion sentiment, and the yield of ultra - long credit bonds showed a slight downward trend. Compared with last week, the number of outstanding ultra - long credit bonds with a yield of 2.4% - 2.5% increased to 388 [2][13] 3.2 Primary Issuance Situation - The subscription sentiment for new ultra - long credit bonds increased this week. The total supply of new ultra - long credit bonds was 3.1 billion, and the supply volume shrank to a relatively low level in the past two years. The interest rate of new ultra - long urban investment bonds continued to decline to 2.58%, and the interest rate of new ultra - long industrial bonds remained around 2.5%. Driven by the correction of the equity market and the central bank's clear intention to protect liquidity before the Spring Festival, institutional participation in subscribing for new ultra - long credit bonds has strengthened [3][22] 3.3 Secondary Transaction Performance - Ultra - long bonds led the bond market rally. This week, the bond market sentiment continued to recover. Treasury bonds with a term of over 10 years performed well, with the full - price index rising nearly 0.5% weekly. The prices of ultra - long credit bonds also increased marginally. The full - price indices of AA+ credit bonds with terms of 7 - 10 years and over 10 years increased by 0.04% and 0.17% respectively compared with the previous week, outperforming medium - short - term credit bonds and secondary capital bonds [4][30] - The trading sentiment of ultra - long credit bonds was weak. Although long - term bonds led the rally this week, in terms of liquidity, the number of transactions of general credit bonds with a term of over 7 years slightly increased to 275, and the activity did not improve significantly. Investors were concerned about chasing up ultra - long credit bonds due to insufficient spread protection (the spread between 7 - 10 - year industrial bonds and 20 - 30 - year treasury bonds was only 13bp) and potential supply pressure [4][33] - This week, ultra - long credit bonds were mostly traded at a lower valuation. However, in terms of buying willingness, the proportion of TKN for varieties over 10 years decreased significantly, indicating limited enthusiasm for chasing long - term bonds in the market [4][39] - In terms of investor structure, the allocation sentiment of trading desks such as public funds towards ultra - long credit bonds became more cautious, and the net buying volume decreased month - on - month. The buying power of insurance and other funds for long - duration assets also weakened temporarily. Overall, ultra - long credit bonds lacked continuous and sufficient buying support [4][44] - From a more microscopic perspective, due to the faster decline in long - term treasury bond interest rates, the spread between active ultra - long credit bonds and treasury bonds of similar terms widened passively this week. Looking ahead, the pre - holiday asset shortage logic continues, and the continuous opening of amortized cost method bond funds will provide incremental funds for corresponding term varieties. However, looking after the holiday, the extremely low pricing of current ultra - long bonds is relatively fragile, and factors such as the recovery of the stock market, the increase in government bond supply, and unexpected policies may cause price fluctuations of ultra - long credit bonds [5][46]

1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - The stock - bond seesaw effect has generally strengthened since 2025, but there are periods of weakening. The restoration of the stock - bond seesaw effect requires the continuous strengthening of the pricing factors of stocks or bonds. The market trends of the stock and bond markets have their own dominant factors, and the stock - bond seesaw is not the only pricing factor for bonds [3][43][46]. - The bond market strategy is to hold bonds during the holiday and appropriately increase the account's income elasticity. The report is optimistic about the future market and suggests starting to prepare for the whole - year trading market, shifting from a configuration - oriented to a trading - oriented approach [48][52]. - In the first week of February, the bond market strengthened with oscillations due to the weakening of the equity market and the central bank's support. The 30 - 10y spread of treasury bonds has compression potential, and there are opportunities in long - term credit bonds [7][72][77]. 3. Summary by Directory 3.1 Stock - Bond Seesaw "Failure" Re - discussion - **Overall Strengthening of the Stock - Bond Seesaw Effect in 2025**: The strengthening is mainly due to the significant boost in market risk appetite by the strong performance of the equity market and the significant widening of the stock - bond price ratio. For example, from September 2024 to October 2025, the share of open - ended bond funds decreased by 3.18%, while that of open - ended stock funds increased by 22.92%. As of February 2026, the margin trading balance in the Shanghai and Shenzhen stock markets reached 2.67 trillion yuan [10][14][15]. - **Weakening of the Stock - Bond Seesaw Effect in Some Windows**: There are two situations: stock - bond co - rising and stock - bond co - falling. Stock - bond co - rising occurs when the bond market has clear bullish factors (mostly related to easing expectations), and the yield is in a downward channel. Stock - bond co - falling is mostly related to the redemption of "fixed - income +" products. For example, in November 2025 and February 2026, the redemption of "fixed - income +" products led to an increase in bond yields [22][32]. - **End of the Stock - Bond Seesaw "Failure"**: The restoration of the stock - bond seesaw effect is driven by different factors, such as the "anti - involution" logic in July 2025 leading to the bond market following the adjustment, and the early "spring rally" in the equity market and the cooling of the bond market's easing expectations in late December 2025 - early January 2026 [41]. - **Summary**: The "failure" of the stock - bond seesaw is more common after the bond market's cost - performance returns. To restore the seesaw effect, the pricing factors of stocks or bonds need to be continuously strengthened. The subsequent trend of the "failure" during the "fixed - income +" redemption stage after the stock market decline needs to be observed [43][46]. 3.2 Bond Market Strategy - **Under - expected Bond Market Gains after the Decline in Risk Appetite**: The bond market gains were under - expected due to the redemption of "fixed - income +" funds and the lack of a clear trading theme in the short - term bond market [48]. - **Optimistic Outlook for the Future Market**: The central bank's pre - holiday capital injection is relatively active, and the capital fluctuation pressure is controllable. However, the institutions' cross - holiday capital arrangements are relatively late, and short - term frictions in the last week need attention. The power of allocation - type funds is relatively strong, and the pricing influence of the equity market on bonds is weakened. The bond market yield is still in the cost - performance range [52][61][66]. - **Operation Suggestions**: Continue to layout convex - type varieties, conduct spread mining according to the convex points. Focus on 5y China Development Bank bonds in the short - term, 8y Export - Import Bank of China bonds and 10y local government bonds in the medium - term. Insurance funds can configure long - term local government bonds at high yield fluctuations. It is recommended to hold bonds during the holiday and appropriately increase the account's elasticity, and layout long - term offensive varieties with good liquidity [69][72]. 3.3 Interest - Rate Bond Market Review - **Market Performance**: In the first week of February, the equity market was weak, and the bond market strengthened with oscillations. The 10y treasury bond yield was blocked at 1.80% multiple times, and the 30y treasury bond led the rise, driving the compression of the 30 - 10y spread. The 1y treasury bond active bond yield rose 2BP to 1.3100%, the 10y treasury bond active bond yield fell 0.8BP to 1.8020%, and the 30y treasury bond yield fell 3.45BP to 2.2255% [7]. - **Funding Situation**: The central bank's net withdrawal of funds was 656 billion yuan this week, and the funding situation was generally loose. The 1y inter - bank certificate of deposit issuance price of national joint - stock banks fell to 1.58%, and the weighted price of DR007 fell to 1.4613% [8]. - **Primary Issuance**: The net financing of policy - financial bonds decreased, while the net financing of treasury bonds, local government bonds, and inter - bank certificates of deposit increased [92]. - **Benchmark Changes**: The term spreads of treasury bonds and China Development Bank bonds both narrowed. The short - end yields of treasury bonds rose 2.08BP, and the long - end yields fell 0.1BP. The short - end yields of China Development Bank bonds fell 1.32BP, and the long - end yields fell 2.2BP [89].

1. Report's Investment Rating for the Industry No information provided regarding the report's investment rating for the industry. 2. Core Viewpoints of the Report - The current rally in ultra - long credit bonds is a sentiment - driven "technical rebound." The sustainability of this rally largely depends on the performance of the interest - rate bond market. Given the insufficient conditions for a trend - based upward movement, such as local bond supply pressure, weak core buying power, and limited room for credit spread compression, it is recommended to adopt a trading - range strategy. Investors should closely monitor marginal changes in central bank monetary policy signals and stock market performance and set timely profit - taking targets. [5][45] 3. Summary by Relevant Catalogs 3.1 Stock Market Characteristics - Ultra - long - end bonds led the market recovery. During the week of January 19 - 23, 2026, the bond market rebounded under the policy expectation of "room for reserve requirement ratio cuts and interest rate cuts" and the large - scale MLF injection by the central bank. Yields of various bond varieties mostly declined, and ultra - long credit bonds strengthened. The number of outstanding ultra - long credit bonds with a yield of 2.4% - 2.5% increased to 357 compared to the previous week. [2][13] 3.2 Primary Issuance Situation - The subscription sentiment for new ultra - long urban investment bonds increased. The total supply of new ultra - long credit bonds this week was 10.27 billion, with a slight increase. The issuance rate of new ultra - long urban investment bonds dropped to around 2.6%, while the overall rate of new ultra - long industrial bonds increased due to the relatively high coupon of Yangzhou Jiankong's new bond. Despite the hot secondary - market trading of ultra - long bonds and the central bank's strong intention to support the liquidity, the subscription enthusiasm for new ultra - long industrial bonds declined, and only the subscription sentiment for new ultra - long urban investment bonds improved. [3][22] 3.3 Secondary Trading Performance - Ultra - long credit bond indices followed the upward trend. The ultra - long Treasury bonds performed strongly this week. Due to the anxiety of investors who missed the opportunity, they chased other long - duration bond varieties passively, leading to a short - squeeze situation in ultra - long credit bonds. Compared with the previous week, the ChinaBond full - price indices of AA+ credit bonds with maturities of 7 - 10 years and over 10 years increased by 0.29% and 0.35% respectively, outperforming long - end secondary bonds and medium - to - short - term credit bonds. [4][30] - The trading activity of ultra - long credit bonds improved. The average trading yield of over - 10 - year general - credit bonds declined significantly. The yields of over - 10 - year urban investment bonds and industrial bonds decreased by 12bp and 7bp respectively compared to the previous week. Meanwhile, the trading volume also increased. The number of trading transactions of ultra - long general - credit bonds rebounded to 390, and the weekly trading volume of 7 - 10 - year industrial bonds exceeded 200 again. [4][32] - The TKN ratio of 7 - 10 - year general - credit bonds rebounded to 74%. The trading direction in the past two weeks shifted to low - valuation transactions, indicating a significant recovery in the sentiment of going long on long - term bonds. [4] - In terms of investor structure, public funds and wealth management products remained cautious about long - duration and illiquid bond varieties. Funds only slightly increased their holdings of 7 - 10 - year bonds. Insurance companies and other institutions are the main buyers of ultra - long non - financial credit bonds, but due to the expected slowdown in premium income growth and the positive outlook for the stock market, the incremental demand for bond investment from insurance funds may weaken, and their role as the "stabilizer" of ultra - long bonds is being challenged. [4][43]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In the week from January 5 - 9, 2026, the ultra - long credit bonds showed a downward trend. Affected by multiple factors such as the stock - bond seesaw effect, the withdrawal of impulsive funds, and the supply pressure of long - term bonds, the yields of ultra - long credit bonds generally increased. The number of outstanding ultra - long credit bonds with yields above 2.8% increased to 174 [2][13]. - The supply of ultra - long industrial bonds dropped to a low point. This week, the total supply of new ultra - long credit bonds was 5.03 billion, with issuers highly concentrated in urban investment platforms. The interest rate of new ultra - long urban investment bonds rose to around 3%, but the subscription enthusiasm remained low [3][22]. - The ultra - long credit bond index continued to decline. The sharp rise of the stock market this week impacted the bond market pricing. Most medium - and long - term general credit bond full - price index prices fell, with the price of AA + credit bonds over 10 years dropping by 0.05%. However, the trading activity of ultra - long credit bonds rebounded, and the average trading yield of general credit bonds over 10 years rose above 2.65%. After the New Year, the number of trading transactions of ultra - long credit bonds rebounded to over 350 [4][29][31]. - From a more microscopic perspective, the spread between 7 - 10 - year active ultra - long credit bonds and government bonds of similar maturities was 58bp this week, with good coupon value. In late January, the opening of amortized - cost bond funds may bring local benefits to the ultra - long credit bond market [5][43]. 3. Summary According to the Directory 3.1 Stock Market Characteristics - Ultra - long credit bonds declined. Affected by multiple factors, the yields of ultra - long credit bonds generally increased, and the number of outstanding ultra - long credit bonds with yields above 2.8% increased to 174 compared with last week [2][13]. 3.2 Primary Issuance Situation - The supply of ultra - long industrial bonds dropped to a low point. This week, the total supply of new ultra - long credit bonds was 5.03 billion, with issuers highly concentrated in urban investment platforms [3][22]. - In terms of issuance interest rates, in the context of overall bond market fluctuations and fragile investor sentiment, the market demanded a higher risk premium for ultra - long credit bonds. The interest rate of new ultra - long urban investment bonds rose to around 3% this week. Despite the continuous increase in coupon rates, the subscription enthusiasm for ultra - long urban investment bonds remained low, and market concerns about the uncertainty of ultra - long urban investment bonds with maturities spanning the debt - resolution node intensified [3][22]. 3.3 Secondary Trading Performance - The ultra - long credit bond index continued to decline. The sharp rise of the stock market this week impacted the bond market pricing. Most medium - and long - term general credit bond full - price index prices fell, with the price of AA + credit bonds over 10 years dropping by 0.05% [4][29]. - The trading activity of ultra - long credit bonds rebounded. The supply pressure of government bonds and the warming of stock market sentiment continuously disturbed long - term interest rates. The secondary - market trading yield of ultra - long credit bonds continued to fluctuate. The average trading yield of general credit bonds over 10 years rose above 2.65%. After the New Year, the number of trading transactions of ultra - long credit bonds rebounded to over 350, partly driven by the market pattern of "credit is better than interest rates" this week. Due to the overcrowded trading of short - and medium - term credit products, some asset allocations shifted to the long - end [4][31]. - Corresponding to the secondary - market trading performance, the TKN ratio of general credit bonds over 10 years rebounded to 60%. The certain high coupon attracted funds to flow from more volatile long - term interest - rate bonds to credit bonds [4][36]. - In terms of investor structure, wealth - management funds have the motivation to extend the duration to increase returns, but their behavior is constrained by net - value fluctuations and tends to be cautious during the interest - rate increase period. Public funds with stronger trading attributes have recently shown a continuous attitude of reducing or holding off on long - duration credit bonds. Traditional allocation players such as insurance companies have承接, but the intensity has weakened, and they may reserve more positions for newly issued local government bonds [4][41].

Group 1 - The bond market experienced significant volatility throughout 2025, with a notable concentration of investor positions in 1 to 3-year interest-bearing assets as a defensive strategy against net value uncertainty [2][10][11] - In December, the yield on 30-year government bonds reached a high of 2.2925%, reflecting the market's fragile sentiment and the impact of year-end assessments [10][11] - The introduction of new regulations regarding redemption fees for bond funds provided some relief to the anxious bond market, potentially reshaping investment strategies going into 2026 [10][11] Group 2 - The regulatory environment has shifted positively, with the new redemption fee rules easing previous constraints, which may lead to a recovery in the bond market [3][27] - The pricing of 5-year bank subordinated bonds is expected to see a valuation recovery of 5 to 10 basis points, with new pricing logic anticipated to return to the range of 2.1% to 2.15% [4][43] - The high yields on long-term credit bonds are influenced not only by the new redemption regulations but also by inherent liquidity issues, which may limit trading activity [3][38] Group 3 - The market has shifted focus from seeking excess returns to strictly controlling drawdowns, as evidenced by the significant trading volume in medium-term municipal bonds [11][22] - Fund managers have been the primary drivers of mid-term bond allocations, with net purchases reaching a weekly high of 21.2 billion, surpassing the average weekly volume from October to year-end [11][20] - The strategy of investing in 3-year AA+ municipal bonds has proven to be the most effective in December, highlighting the trend towards medium-term securities [22][23]

Report Summary 1. Core View - Due to the narrowing of long - bond spreads to the lowest level since 2024, institutional investors have different views on the allocation of ultra - long credit bonds. With insufficient spread protection and uncertainty about the inflection point, if there are floating profits in ultra - long credit bonds, it is recommended to focus on the profit - taking strategy in the short term [5]. 2. Summary by Directory 2.1 Stock Market Characteristics - Ultra - long credit bond yields have marginally adjusted back. Due to the compression of long - bond spreads to the lowest level since 2024, institutional investors' attitudes towards the allocation of ultra - long credit bonds have diverged, and profit - taking behavior has led to a slight adjustment in yields. The number of outstanding ultra - long credit bonds with a yield of 2.4% - 2.5% has increased to 299 [2][12]. 2.2 Primary Issuance Situation - The supply of ultra - long credit bonds has reached the bottom. This week, the total issuance scale of new ultra - long credit bonds was 2.3 billion, and only two urban investment entities, Beijing Infrastructure Investment and Anhui Investment Group, issued long - term bonds with a term of 7 years or more (preferred exercise). Although the trading sentiment in the cash bond market has weakened, investors' enthusiasm for participating in the primary market allocation of ultra - long urban investment bonds remains high [3][21]. 2.3 Secondary Transaction Performance - The upward trend of the ultra - long credit bond index has significantly slowed down. This week, the general credit bond index above 7 years has slightly increased. The 7 - 10 - year AA+ credit bond index has increased by 0.03%, and the AA+ credit bond index above 10 years has only increased by 0.11%, performing weaker than long - term interest - rate bonds [29]. - The trading volume of ultra - long credit bonds has significantly decreased. After three consecutive weeks of increase, the spread of general credit bonds above 7 years has been compressed to a low level. The spread between 7 - 10 - year industrial bonds and 20 - 30 - year treasury bonds has narrowed to 21bp. Concerned about the insufficient protection space of long - term credit spreads, the number of trading transactions of ultra - long general credit bonds has dropped to 315 this week, a decrease of 35.7% compared with the previous week [32]. - The intensity of buying ultra - long credit bonds at a low valuation has weakened significantly compared with the previous two weeks, and some urban investment long - term bond varieties have even shifted to high - valuation transactions. The proportion of TKN transactions in credit bonds above 10 years has dropped to 54.2% [37]. 3. Industry Investment Rating The document does not mention the industry investment rating.