Group 1 - The report emphasizes the return of market allocation forces, suggesting a cautious increase in credit positions, particularly in the 2-3 year range, with a potential configuration window around mid-August [4][10][11] - The expectation for the second half of the year remains a "dual bull market" for stocks and bonds, with stocks outperforming bonds, driven by market allocation dynamics [9][10] - The corporate perpetual bond market shows limited potential for excess returns in August, recommending a conservative approach with a focus on larger issuers [11][18] Group 2 - In the primary market for corporate perpetual bonds, issuance volume increased, with a total of 158 bonds issued in July, raising 171.5 billion yuan, a 9% increase from the previous month [18][19] - The financing cost for AAA and AA rated bonds decreased, with rates at 2.12% and 2.35% respectively, down 11 basis points and 18 basis points [18][19] - The sectors leading in issuance include public utilities, urban investment, and construction, with Jiangsu, Zhejiang, and Guangdong being the top provinces for new bond issuance [20][21][22] Group 3 - In the secondary market, the yield on corporate perpetual bonds showed mixed results, with short-term yields remaining stable while medium to long-term yields increased, leading to passive compression of spreads [28][30] - The report notes that the majority of urban investment perpetual bonds maintained stable or slightly compressed spreads, while industrial bonds experienced slight widening [30][33] - The report highlights that the risk profile of asset-backed securities (ABS) remains attractive, with a focus on standardized underlying assets, despite limited opportunities in August [13][14]

1. Report Industry Investment Rating - No industry investment rating information is provided in the report. 2. Core Viewpoints of the Report - In May 2025, the overall sentiment in the fixed - income market was relatively optimistic, but the cost - effectiveness of chasing the upward trend was decreasing. The supply pressure of secondary perpetual bonds throughout the year was controllable, and the risk mainly came from the non - redemption of small banks. It was recommended to control the duration at around 5Y and not to be too long. The strategy of appropriately extending the duration proposed at the beginning of May relatively outperformed [5]. 3. Summary by Relevant Catalogs 3.1 Enterprise Perpetual Bonds 3.1.1 Primary Market - In May, 82 enterprise perpetual bonds were issued, raising a total of 103.7 billion yuan, a decrease of about 37% compared to the previous month. The repayment scale dropped to 72.3 billion yuan, a significant 49% decrease month - on - month, resulting in a net inflow of 31.4 billion yuan. The proportion of issuance by AAA high - grade entities rose to 90%. The issuance costs of AAA and AA were 2.21% and 2.78% respectively, with the former decreasing by 8bp and the latter increasing by 9bp month - on - month, while the AA+ issuance rate dropped back to 2.77%. The top three industries in terms of issuance volume were public utilities, building decoration, and urban investment, with the comprehensive industry remaining in the fourth place [5][10]. 3.1.2 Secondary Market - In May, the yields of industrial and urban investment perpetual bonds fluctuated downward. The risk - free yield decreased at the short end and increased at the long end, leading to a narrowing of the credit spread at the short end and a widening at the long end. The urban investment variety spread mainly narrowed, while the high - and low - grade trends of the industrial variety spread diverged. The trading volume of enterprise perpetual bonds decreased slightly, and the turnover rate increased slightly. No new cases of non - redemption of enterprise perpetual bonds occurred in May [5]. 3.2 Financial Perpetual and Subordinated Bonds 3.2.1 Primary Market - In May, the issuance volume of financial perpetual bonds increased significantly month - on - month, with the issuance of bank perpetual bonds doubling. A total of 11 financial perpetual bonds were newly issued, with a total issuance scale of 194.3 billion yuan, doubling month - on - month. The issuance scale of financial subordinated bonds decreased month - on - month, with the bank issuance scale shrinking slightly. A total of 111.7 billion yuan of financial subordinated bonds were issued in May, with bank secondary capital bonds accounting for the largest proportion [37][41]. 3.2.2 Secondary Market - In May, the spreads of financial institutions narrowed across the board, with the narrowing of long - term bank spreads being particularly obvious. Except for the 27bp widening of the spread of AA+ insurance capital supplementary bonds, the spreads of other grades of financial institutions narrowed by 3 - 10bp. The total trading volume and turnover rate of bank perpetual bonds increased simultaneously, while the trading volume of bank secondary capital bonds decreased slightly, but the turnover rate also increased slightly. No new cases of non - redemption of bank secondary capital bonds occurred in May, but the redemption date of "20 Changchun Rural Commercial Secondary 01" was postponed by 3 months to September 29, 2025 [5][53][58]. 3.3 ABS 3.3.1 Primary Market - In May, a total of 159 ABS projects were issued, raising a total of 151.9 billion yuan. The number of projects decreased by 26% month - on - month, and the total financing amount decreased by 29% compared to April. Personal consumption loan ABS had the largest issuance scale, followed by financial leasing and accounts receivable. The financing cost of ABS projects decreased significantly [64]. 3.3.2 Secondary Market - In May, the yields to maturity of ABS at all grades and terms decreased across the board, with a consistent decline of around 5bp. The long - term spreads narrowed more significantly. The secondary trading enthusiasm of ABS continued to decline month - on - month, and a small amount of discount trading occurred in Gemdale ABS [70][72]. 3.4 June Strategy for Secondary Perpetual Bonds - In May, the increased issuance of secondary perpetual bonds brought supply pressure, and there was a certain selling pressure in the secondary market. The turnover rate fluctuated upward at a high level, and the spread narrowed slightly. Looking forward to June, the annual supply pressure was controllable, and the risk mainly came from the non - redemption of small banks. If seeking returns, it was necessary to extend the duration of large banks, but the cost - effectiveness of continuing to chase the upward trend was decreasing. It was recommended to control the duration at around 5Y [5].

1. Report Industry Investment Rating - No industry investment rating information is provided in the report. 2. Core Viewpoints of the Report - In April, the market had a strong appetite for secondary and perpetual bonds, especially at the beginning of the month, but the secondary - market performance was not strong due to sufficient supply. After the unexpected monetary policy was implemented by the central bank at the beginning of May, the liquidity environment is expected to improve further. With the rapid recovery of wealth - management scale in April, the supply - demand relationship is also expected to improve compared to April. Under the conditions of possible improvements in liquidity and supply - demand relationship, the duration of secondary and perpetual bonds can be appropriately extended to earn higher coupon opportunities. At the same time, cases of non - redemption by weak entities are still emerging, so it is not recommended to overly focus on rural and urban commercial banks. The main exploration logic lies in the allocation of debt - resolution resources, with the bottom - line control set at large city commercial banks in central regions and individual rural commercial banks in high - quality regions [5]. 3. Summary According to the Directory 3.1 Enterprise Perpetual Bonds 3.1.1 Primary Market - The net financing amount turned positive from negative. In April, 140 enterprise perpetual bonds were issued, raising a total of 152.9 billion yuan, a 34% increase from the previous month. The repayment scale increased to 142.4 billion yuan, a 5% month - on - month increase, resulting in a net inflow of 10.5 billion yuan. The proportion of AAA - rated high - grade issuers rose to 88%. The issuance costs of AAA and AA+ issuers decreased by 35bp and 27bp respectively, while the AA - rated issuance rate increased by 57bp [5][11]. - In terms of industries, the top three industries in terms of issuance volume were public utilities, urban investment, and building decoration. Urban investment perpetual bonds were newly issued in 11 provinces, with Jiangsu having the largest financing scale of 13 billion yuan, a 78% month - on - month increase. The building decoration industry raised 23.9 billion yuan, remaining basically flat month - on - month. The public utilities industry raised 41 billion yuan, an 82% month - on - month increase [13]. - Among the 140 newly issued enterprise perpetual bonds in April, 73 were sub - bonds, with a scale of 95.4 billion yuan. The proportion of sub - bonds in terms of quantity and scale decreased to 52% and 62% respectively [15]. 3.1.2 Secondary Market - The yields of industrial and urban investment perpetual bonds declined rapidly and then fluctuated at a low level. The risk - free yield curve showed a bull - flattening trend, and the credit spreads at the short and long ends were differentiated. The short - end spreads narrowed, while the medium - and long - end spreads widened. The yields of industrial perpetual bonds fluctuated downward, with the AAA - rated 1Y yield dropping by up to 13bp. The yields of urban investment bonds across all grades and tenors declined, with the AAA - rated and AA - rated 1Y yields dropping by up to 13bp [21]. - In terms of variety spreads, the variety spreads of urban investment and industrial perpetual bonds mostly widened slightly. For urban investment bonds, except for the 1Y and 3Y variety spreads of AAA - rated bonds narrowing by 1 - 2bp, the rest widened. For industrial bonds, the 3Y and 5Y variety spreads of AA+ - rated bonds narrowed, while the rest widened, especially the AA - rated bonds [23]. - In April, the trading volume and turnover rate of enterprise perpetual bonds decreased month - on - month. After adjusting for trading days, the turnover rate was 11.25%, a 1.27 - percentage - point decrease from the previous month. The top three industries in terms of trading volume were urban investment, public utilities, and building decoration. No new cases of non - redemption of enterprise perpetual bonds occurred in April [5][28]. 3.2 Financial Perpetual and Sub - Bonds 3.2.1 Primary Market - The issuance volume of financial perpetual bonds increased significantly month - on - month. In April, 11 financial perpetual bonds were newly issued, raising a total of 86.1 billion yuan, a 36% increase from the previous month. Among them, 7 were issued by banks, and 2 each by securities firms and AMC. The total maturity of financial perpetual bonds was 67.8 billion yuan, resulting in a net inflow of 18.3 billion yuan [34]. - The issuance volume of financial sub - bonds increased slightly, with banks contributing the main share. In April, financial sub - bonds were issued worth 65.5 billion yuan, with bank secondary capital bonds accounting for 57 billion yuan and securities firm sub - bonds for 5.5 billion yuan. The total maturity was 45.2 billion yuan, resulting in a net inflow of 20.4 billion yuan [39]. 3.2.2 Secondary Market - For perpetual bonds, the spreads of most financial institutions continued to narrow in April. Except for the 4bp widening of the spread of AAA - rated insurance, the spreads of other types of institutions continued to narrow. The spread of AAA - rated banks narrowed by up to 7bp, and that of AA+ - rated banks by 5bp. In terms of bank types, the narrowing amplitude was state - owned banks ≈ joint - stock banks ≈ city commercial banks > rural commercial banks. In terms of tenors, the spreads of high - grade, short - term banks narrowed significantly, while those of low - grade, long - term banks even widened slightly [46]. - For sub - bonds, the spread of low - grade insurance capital - supplementary bonds fluctuated greatly in April, while the spreads of other institutions mostly narrowed. The spread of AAA - rated insurance capital - supplementary bonds narrowed by 7bp, while that of AA+ widened by 24bp. The spreads of bank secondary capital bonds and securities firm sub - bonds narrowed by up to 4bp, and that of bank TLAC bonds by 5bp [48]. - In April, the total trading volume and turnover rate of bank perpetual bonds declined month - on - month. The trading volumes of bank, securities, AMC, and insurance perpetual bonds were 455.9 billion yuan, 14.9 billion yuan, 8.5 billion yuan, and 16.4 billion yuan respectively. The adjusted monthly turnover rates were 18.59%, 5.13%, 15.66%, and 6.98% respectively, with the total turnover rate decreasing by 6.12 percentage points year - on - year [50]. - For sub - bonds, the trading volume and turnover rate of bank secondary capital bonds declined slightly in April. The trading volumes of bank secondary capital bonds, bank TLAC bonds, securities firm sub - bonds, and insurance capital - supplementary bonds were 797.1 billion yuan, 17.9 billion yuan, 24.2 billion yuan, and 24.1 billion yuan respectively. The adjusted monthly turnover rates all decreased, and the total turnover rate decreased by 0.98 percentage points to 16.46%. One new case of non - redemption of bank secondary capital bonds occurred in April, involving Nanchang Rural Commercial Bank [54][58]. 3.3 ABS 3.3.1 Primary Market - In April, 171 ABS projects were issued, raising a total of 174 billion yuan. The number of issuances decreased by 10% month - on - month, and the total financing amount was basically the same as in March. The primary underlying asset was personal consumer loan ABS, followed by financial leasing and specific non - financial claims. The financing scale of urban - investment - related ABS in April was 15.8 billion yuan, showing a continuous monthly increase [60]. - The issuance volume of real - estate - related ABS decreased month - on - month in April, with a total issuance of 1.6 billion yuan, all of which were supply - chain ABS. The financing costs were concentrated between 2.15% and 3.60%. In terms of bond ratings, the proportion of high - grade ABS projects remained at a historical high in April, with AAAsf - rated bonds accounting for 96% of the issuance scale. The issuance costs of all tenors decreased significantly month - on - month, with a decrease of more than 10bp for medium - and short - term bonds [63][64]. 3.3.2 Secondary Market - In April, the yields to maturity of ABS across all grades and tenors declined, with the short - end decline being greater than the long - end. The short - term credit spreads of ABS across all grades narrowed by 6 - 7bp, while the 3Y - 5Y credit spreads widened by 2 - 9bp [66]. - The secondary - market trading activity of ABS declined slightly month - on - month in April. The total secondary - market trading volume was 163.2 billion yuan. After adjusting for trading days, the turnover rate decreased by 0.72 percentage points to 5.30%. The top three underlying assets in terms of trading volume were real - estate investment trusts (Reits), personal consumer loans, and accounts - receivable ABS. There were small - scale discounted transactions of Haifa Baocheng, Xinhu Zhongbao, and Gemdale ABS in April [68].

Group 1: Report Overview - The report focuses on the bond market dynamics of enterprise perpetual bonds, financial perpetual and subordinated bonds, and ABS in March 2025, aiming to provide investors with reference [9]. Group 2: Industry Investment Rating - No industry investment rating is provided in the report. Group 3: Core Views - The overall performance of the bond market in the second quarter is expected to be positive, with the 10-year Treasury bond yield likely to move from the right side to the middle of the 1.6% - 1.9% range [5]. - It is recommended to continue trading in bands and appropriately invest in short-term bonds of urban and rural commercial banks [5]. Group 4: Enterprise Perpetual Bonds 4.1 Primary Market - In March, 107 enterprise perpetual bonds were issued, raising a total of 111.4 billion yuan, a 56% increase from the previous month. However, the repayment scale increased to 136 billion yuan, resulting in a net financing outflow of 24.6 billion yuan, the first net outflow this year [5][10]. - The issuance scale of AAA-rated high-quality issuers decreased slightly, and the issuance costs of AAA, AA+, and AA-rated bonds increased by 24bp, 41bp, and 8bp respectively [10]. - The top three industries in terms of issuance volume were urban investment, building decoration, and public utilities, while the comprehensive industry dropped to the fourth place [5][10][13]. - Among the newly issued bonds in March, 63 were subordinated bonds, accounting for 59% of the total number and 67% of the total scale [15]. 4.2 Secondary Market - In March, the short-term yields of industrial and urban investment perpetual bonds fluctuated downward, and the short-term spreads narrowed significantly, while the long-term yields showed no obvious downward trend [21]. - The spreads of urban investment and industrial perpetual bonds fluctuated slightly in March, with the spreads of medium and low-grade, medium and long-term urban investment bonds tending to widen slightly [23]. - The trading volume and turnover rate of enterprise perpetual bonds increased significantly in March. The top three industries in terms of trading volume were urban investment, public utilities, and building decoration [5][30]. - No new cases of non-redemption of enterprise perpetual bonds were reported in March [34]. Group 5: Financial Perpetual and Subordinated Bonds 5.1 Primary Market - The issuance volume of financial perpetual bonds continued to increase in March, reaching the highest level in the first quarter. A total of 7 financial perpetual bonds were issued, raising 63.5 billion yuan, with a net financing outflow of 30.7 billion yuan [35]. - The issuance of financial subordinated bonds increased significantly, with banks contributing the main share. In March, 59.2 billion yuan of financial subordinated bonds were issued, with a net financing inflow of 27 billion yuan [39]. 5.2 Secondary Market - In March, the spreads of most financial institutions narrowed slightly, with the spreads of AA+-rated banks narrowing the most [44]. - The spreads of brokerage subordinated bonds narrowed significantly, while the spreads of TLAC bonds remained stable [48]. - The trading volume and turnover rate of bank perpetual bonds and secondary capital bonds increased significantly in March [52][56]. - No new cases of non-redemption of bank secondary capital bonds were reported in March, but investors are still advised to be cautious about the non-redemption risk of weak urban and rural commercial banks [60]. Group 6: ABS 6.1 Primary Market - In March, 189 ABS projects were issued, raising a total of 171.7 billion yuan, a significant increase from February in terms of both the number of projects and the total financing amount [61]. - Personal consumption loan ABS had the largest issuance scale, followed by financial leasing and microloan ABS [61]. - The issuance scale of real estate ABS increased in March, with a total of 3.4 billion yuan issued, mainly including CMBS and supply chain ABS [63]. - High-grade bonds still dominated the ABS market in March, with AAAsf-rated bonds accounting for 94% of the issuance scale. The issuance costs of short-term bonds increased significantly [64]. 6.2 Secondary Market - In March, the short and medium-term yields of ABS decreased significantly, while the long-term yields remained flat. The short and medium-term credit spreads also narrowed [65]. - The secondary trading volume of ABS increased significantly in March, reaching 185.5 billion yuan, almost doubling from the previous month. The top three types of underlying assets in terms of trading volume were Reits, personal consumption loans, and accounts receivable ABS [67]. - Some Sunac ABS were traded at a significant discount in March [67].