Group 1 - The report indicates that the credit bond market is experiencing a divergence in trends, with most credit bond yields rising and credit spreads showing mixed performance, particularly in the short-end segment [10][21] - It is suggested to focus on the 2-3 year credit bonds for yield opportunities, as their spreads are higher than the lowest points in 2024 and lower than the average spread since 2024, indicating potential for value [12][21] - The report highlights that the financial bonds have shown some recovery after significant adjustments, but the sentiment remains cautious with limited room for bullish positions [10][21] Group 2 - Key policies include the announcement of a loan from Shenzhen Metro Group to Vanke for debt repayment, totaling up to 2.064 billion yuan, with cumulative loans since 2025 reaching 25.941 billion yuan [3][14] - The Ministry of Finance reported that from January to August, the national general public budget revenue was 1.48198 trillion yuan, a year-on-year increase of 0.3%, with tax revenue slightly up by 0.02% [15][20] - The central bank is guiding commercial banks to provide loans to state-owned enterprises and financing platforms to settle overdue accounts, with a total debt scale of approximately 1.8 trillion yuan [4][16] Group 3 - The report notes that the secondary market for credit bonds is active, with a significant increase in trading volume observed [21] - The report emphasizes the importance of monitoring the adjustments in the credit bond market, particularly in the context of the upcoming policy changes and market conditions [10][21] - The report also mentions that the Shanghai Stock Exchange has optimized the bond repurchase business to stabilize market prices, which may lead to a narrowing of spreads for lower-rated bonds [4][13]

Group 1 - The second batch of 14 sci-tech bond ETFs raised a total of 40.786 billion yuan, with the total scale expected to exceed 600 billion yuan after listing in late September [1] - The bond market is experiencing a slight adjustment, with major interbank interest rate bond yields rising by 1-2 basis points, and the 30-year main contract for government bonds falling by 0.17% [1] - The yield curve is widening, reflecting market dynamics between long-term inflation expectations and short-term liquidity easing, as the 10-year government bond yield surpassed 1.8% and the 30-year yield exceeded 2.1% [1] Group 2 - Investment strategies suggested include a barbell strategy to balance short-term liquidity and long-term interest rate expectations, focusing on high-rated urban investment bonds for liquidity premiums [3] - Short-term bonds are recommended for opportunistic buying, while caution is advised for long-term varieties [3] - Industry bonds should focus on sectors related to "anti-involution," with mid-to-high grade varieties of "two eternal bonds" offering good value [3]

Group 1 - A-shares have reached a historic milestone, surpassing a total market capitalization of 100 trillion yuan for the first time, while the bond market is experiencing significant declines [1][2] - The Shanghai Composite Index closed at 3728 points, marking a nearly ten-year high, with over 4000 stocks in the two markets showing gains [2][3] - The bond market saw a notable drop, with the 30-year government bond futures contract falling by 1.33%, the largest decline since March 17 [2][3] Group 2 - The yield on long-term government bonds has risen significantly, with the 30-year bond yield exceeding 2% for the first time in over four months, indicating a shift in market sentiment [2][3] - The trading volume in the A-share market reached over 2.8 trillion yuan, the highest this year and the third highest in history, reflecting strong investor interest [3] - Despite the current downturn in the bond market, many institutions maintain an optimistic outlook, citing factors such as a weak economic backdrop and expectations of continued liquidity [4][5] Group 3 - The Ministry of Finance announced measures to support the liquidity of government bonds, indicating a proactive approach to stabilize the bond market [4] - Analysts suggest that the bond market's recent decline is primarily due to supply pressures and weak buying interest, rather than fundamental economic issues [5][6] - There is a consensus among analysts that the bond market may have been oversold, and future movements will depend on monetary policy adjustments and economic conditions [6]

Report Industry Investment Rating No relevant content provided. Core View of the Report - The credit bond market this week showed characteristics of "the end of spread compression, intensified liquidity stratification, and the initial appearance of policy disturbances." The market oscillated between policy expectations and capital - market fluctuations, with institutional behavior shifting from being dominated by trading desks to being supported by allocation desks. The strategy suggests seizing the "tail - end" market opportunities. [5] Summary by Related Catalogs Policy Dynamics and Market Hotspots - **Central Bank's Reverse Repo Operations**: From August 4th to 8th, 2025, the central bank had a net回笼 of 41 billion yuan in the first half - week and then conducted a 70 - billion - yuan outright reverse repo on Friday, switching to a net injection of 16.35 billion yuan for the whole week. This operation balanced government bond supply, tax - period disturbances, and financial stability while leaving room for subsequent policy tool innovation. [2] - **Credit Bond Issuance and Yield Changes** - **Primary Market**: From August 4th to 8th, the issuance and net financing scale of general credit bonds increased significantly compared to the previous week. The issuance amount of general credit bonds was 366.7 billion yuan, a week - on - week increase of 188 billion yuan; the net financing was 240.4 billion yuan, a week - on - week increase of 186 billion yuan. The weighted issuance term was 3.36 years, a week - on - week decrease of 0.75 years, and the weighted issuance interest rate was 1.65%, a week - on - week decrease of 0.29 percentage points. [2] - **Secondary Market**: The turnover rate of general credit bonds decreased week - on - week, with the turnover rate of general credit bonds with a maturity of less than 1 year slightly increasing, and that of other maturities significantly decreasing. The turnover rate of bank Tier 2 and perpetual bonds also decreased, possibly due to some institutions shifting to AA - and below - rated Tier 2 and perpetual bonds. [3] - **Yield and Spread**: As of August 8th, the average yields of medium - and short - term notes, urban investment bonds, Tier 2 capital bonds, and perpetual bonds of AAA - rated bonds at various maturities all decreased week - on - week. Credit spreads across the board compressed, with 1 - year - term spreads decreasing by 3 - 5BP, 3 - year - term spreads decreasing by 1 - 4BP, and 5 - year - term spreads decreasing by 2 - 3BP. [3] - **Bank Tier 2 and Perpetual Bonds**: The yields of bank Tier 2 and perpetual bonds decreased across the board this week, with medium - and low - grade varieties performing slightly better. The spreads of 3 - 5 - year high - grade varieties decreased less. [4] - **Regional and Industry Analysis**: Most provincial urban investment bond spreads decreased by 2 - 3BP, with Inner Mongolia, Liaoning, and Qinghai having the largest decreases of 6 - 7BP. Most industry spreads of industrial bonds widened slightly this week, with the AA - rated steel industry having the largest spread widening of 5.5BP. [4] Credit Strategy - Suggest focusing on the sinking opportunities of 2 - 3 - year AA/AA - rated urban investment bonds and short - term varieties in the steel industry. For bank Tier 2 and perpetual bonds, currently, the 3 - 5Y large - bank capital bonds have good liquidity, and capital gains can be gambled on. [5]

Group 1 - The report indicates that credit bond yields across various maturities continue to decline, with short-term yields decreasing more than long-term ones, and lower-rated bonds experiencing greater yield reductions than higher-rated ones [1][9] - As of August 8, the credit spreads for 3Y/AAA, AAA-, and AA+ short-term bonds are 18.81BP, 22.81BP, and 26.81BP respectively, which are close to the year's lowest points [1][9] - The current environment is favorable for credit bonds, with a high carry opportunity and stable funding conditions, suggesting further compression of credit spreads in the last three weeks of August [1][9] Group 2 - The report highlights that industrial investment and major project construction are becoming new drivers for regional economic development, with infrastructure projects in transportation, water conservancy, and energy expected to play significant roles [4][18] - It emphasizes the need for local governments to balance between reducing debt and increasing investment in infrastructure to stimulate employment and economic growth [18][19] - The report notes that there is substantial growth potential in industrial investments, particularly in high-tech sectors, which can provide significant returns [19][20] Group 3 - The report suggests that investors should focus on low-duration, high-rated, and highly liquid credit bonds, especially those with significant recovery potential, as the market adjusts [2][13] - It identifies specific bonds with high recovery potential, including 20 public bonds with implied ratings of AA+ and above, which have shown active trading and recovery space of over 12BP [3][16] - The report advises caution regarding long-term credit bonds, as the sustainability of the current credit spread compression is uncertain [2][13]

1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - The core purposes of the new bond VAT policy may include two aspects: unifying the bond market tax system and increasing government tax revenue to relieve fiscal pressure [2][15]. - The move to resume VAT collection on bonds may signal a gradual reduction in tax - incentives for the investment demand side in the bond and capital markets, and the reduction rhythm is affected by the maturity of asset categories and macro - economic and fiscal factors [2][15]. 3. Summary According to the Directory 3.1 Bond VAT Adjustment Policy Interpretation - Since August 8, 2025, interest income from newly - issued government bonds, local government bonds, and financial bonds will be subject to VAT, while previously issued bonds will remain tax - exempt until maturity. For new bonds, ordinary self - operating institutions and asset management products will be taxed at 6% and 3% respectively [1][14]. - The policy aims to unify the bond market tax system and increase government revenue. It may also indicate a gradual reduction in tax incentives in the bond and capital markets, with the reduction rhythm affected by asset category maturity and macro - economic and fiscal conditions [2][15]. 3.2 Impact of the New Bond VAT Policy on the Credit Bond Market 3.2.1 Impact Logic and Magnitude Calculation - After interest income from interest - rate bonds loses the VAT exemption advantage, the relative value of credit bonds increases. The spread between self - operating departments' credit bonds and other bonds narrows by about 10BP, and the relative value of credit bonds may increase by 5 - 15BP for self - operating departments and 3 - 10BP for asset management products and public funds [3][20]. - The credit spread of credit bonds compared to government bonds may decline due to the increase in the benchmark rate of newly - issued government bonds. The new policy may attract more funds from local government bonds and financial bonds to credit bonds, and the market sentiment after the policy implementation will affect the timing of credit bond allocation [3][21]. 3.2.2 Impact on Different Financial Institutions - For public funds, although the VAT rate on bond interest income rises to 3%, their investment advantage in bonds still exists and may attract more funds into the credit bond market, bringing trading volume to sub - categories of credit bonds [6][29]. - For self - operating departments, with the VAT rate rising to 6%, they may increase credit bond allocation through funds, and pay more attention to urban investment bonds and industrial bonds [6][29]. - For other asset management institutions, with the VAT rate rising to 3%, they may invest in public funds or private asset management products and slightly increase the proportion of credit bonds and inter - bank certificates of deposit [6][30]. 3.3 Impact of the New Bond VAT Policy on the Bank's Perpetual and Tier - 2 Bonds Market 3.3.1 Impact Logic and Magnitude Calculation - In the short - term, due to the tax - exemption advantage of existing bonds, the demand for bank perpetual and tier - 2 bonds in the secondary market will increase, and the yields of 5 - year tier - 2 capital bonds (AAA -) and 5 - year perpetual bonds (AAA -) will decline by 11.07BP and 11.44BP respectively. In the long - term, the policy may have little impact on bank perpetual and tier - 2 bonds [7][32]. 3.3.2 Impact on Different Financial Institutions - Public funds still have the motivation to allocate high - liquidity bank perpetual and tier - 2 bonds and can improve portfolio liquidity through credit bond ETFs [8][35]. - Self - operating departments may increase the allocation of bank perpetual and tier - 2 bonds and strengthen entrusted investment to reduce tax costs [8][35]. - Other asset management institutions may adopt a strategy of "shortening duration + exploring individual bonds" to deal with the tax policy change [8][36].

Credit Bond Yield Performance - In June, overall credit bond yields declined, with short-term credit bond spreads widening while medium to long-term spreads narrowed [1][4] - The AA- rated credit bond spreads mostly narrowed, while other ratings saw mixed results in 1-year and 3-year spreads, indicating a market trend towards longer durations and lower credit quality for yield enhancement [4][10] Industry-Specific Credit Bond Spreads Industrial Bonds - In June, the credit spreads for AAA-rated industrial bonds varied across industries, with the financial holding sector experiencing the largest narrowing of 12.31 basis points, while the textile and apparel sector saw the largest widening of 3.26 basis points [12][13] - The pharmaceutical and biological sector in private placements had the largest narrowing of spreads at 8.83 basis points, while the public utility sector experienced the largest widening of 9.65 basis points [12][13] Local Government Financing Bonds - The credit spreads for local government financing bonds showed a mixed trend, with lower-rated spreads continuing to narrow while mid to high-rated spreads fluctuated upwards [1][4] - In May, most provinces and entities saw a narrowing of credit spreads, with private placements showing a more significant reduction [1][4] Financial Bonds - In June, the credit spreads for bank perpetual bonds exhibited mixed results, with the lowest-rated spreads compressing the most, while the spreads for securities company subordinated bonds and insurance company capital replenishment bonds all declined [1][4]

Report Overview - Report Date: July 28, 2025 [1] - Research Team: Fixed Income Research Team [2] - Analysts: Chen Xi, Liu Rui [3] Investment Rating - The report does not mention the industry investment rating. Core Views - Credit bond issuance and net financing have recovered, and trading activity has increased [1][4] - The science and technology innovation bond market is in the second half, with room for spread compression [4] - Credit strategy focuses on balancing coupon and risk, increasing allocation to short - term high - coupon city investment bonds and 3Y/AAA - secondary capital bonds [6] Summary by Directory Policy and Market Trends - On July 18, 2025, the Shenzhen Stock Exchange issued a notice on pilot corporate bond re - issuance and asset - backed securities expansion business, aiming to enhance market depth and optimize financing efficiency [4] - The science and technology innovation bond market is in the second half. Driven by the expansion of underlying assets and policy guidance in the second half of the year, there is still room for spread compression [4] Primary Issuance - From July 21 - 25, the issuance amount of general credit bonds was 351 billion yuan, a week - on - week increase of 70.9 billion yuan; net financing was 128 billion yuan, a week - on - week increase of 83 billion yuan [4] - Among them, the issuance amount of urban investment bonds was 107.7 billion yuan, a week - on - week increase of 10.9 billion yuan; net financing was 29.8 billion yuan, a week - on - week increase of 27.5 billion yuan [4] - The issuance amount of industrial bonds was 243.2 billion yuan, a week - on - week increase of 60.1 billion yuan; net financing was 98.2 billion yuan, a week - on - week increase of 55.8 billion yuan [4] - The weighted issuance term of general credit bonds was 4.21 years, a week - on - week increase of 0.88 years; the weighted issuance interest rate was 1.75%, a week - on - week decrease of 0.09 pct [4] Secondary Trading - The turnover rates of general credit bonds with maturities of less than 1 year and 1 - 3 years increased, while those of other maturities decreased [5] - The turnover rate of bank Tier 2 and perpetual bonds increased overall, with a significant increase in the AAA - level, and a decrease in the AA+ and AA levels [5] Spread Tracking - As of July 25, the average yields of medium - and short - term notes, urban investment bonds, secondary capital bonds, and perpetual bonds with AAA ratings at various maturities were at historically low levels [5] - For urban investment bonds, most spreads widened, except for some 3 - year and 5 - year varieties [5] - For bank Tier 2 and perpetual bonds, the spreads of 3Y and 5Y levels widened, while the 1Y spread narrowed [5] - Regionally, most provincial urban investment bond spreads widened, with Heilongjiang having the largest widening amplitude of 11BP [5] - In the industrial bond sector, most industry spreads narrowed or remained flat, except for the AA - level chemical and AA - level building materials industries [6] Credit Strategy - Balance coupon and risk, and give priority to short - term high - rating varieties. Pay attention to liquidity premium opportunities at the ultra - long end and beware of policy and credit event disturbances [6] - Increase allocation to short - term high - coupon urban investment bonds and industrial bonds with a duration of less than 3 years [6] - Enter the ultra - long - term credit bond market after interest rate adjustments, and focus on the liquidity premium of insurance sub - debt and science and technology innovation bond ETF component bonds [6] - For bank Tier 2 and perpetual bonds, pay attention to changes in the capital market and the overall sentiment of the credit bond allocation end when considering sector games [6]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report The current spread compression space of high - quality large - bank capital bonds is limited, and although the 10 - year variety has relative value, the overall return space is also low. Therefore, to increase returns, it is recommended to implement a moderate credit - sinking strategy for bank perpetual and secondary capital bonds (referred to as "two - tier and perpetual bonds") under strict risk control, avoiding provinces with a large number of high - risk institutions [6][40]. 3. Summary by Relevant Catalogs 3.1 Bank Two - tier and Perpetual Bond Investment Screening Framework - **Issuer's Subject Qualifications and Operating Indicators**: A core risk - control framework covering six dimensions including equity nature, asset scale, operating region, asset quality, operating performance, and inter - bank liability ratio is constructed. It focuses on asset scale and central and state - owned enterprise equity nature, controls key operating indicators such as core tier - one capital adequacy ratio and ROE, and avoids provinces with a large number of high - risk institutions [5][7]. - **Central Bank's Financial Institution Rating Results**: As of the end of 2023, banks within the safety boundary accounted for 98.22% of the banking system's asset scale, and 357 banks were in a high - risk state. Large banks are in the "green zone", while some rural and urban commercial banks are high - risk banks [5][8]. - **Domestic Systemically Important Banks (D - SIBs) List**: In 2023, 20 domestic systemically important banks were identified, including 6 state - owned commercial banks, 9 joint - stock commercial banks, and 5 city commercial banks. They can all be included in the investment white list due to their low overall risk level [6][16]. - **Historical Non - Active Redemption of Bank Two - tier and Perpetual Bonds**: As of July 19, 2025, there have been 72 cases of secondary capital bonds not actively redeemed, with a total non - redemption amount of 50.677 billion yuan. Rural commercial banks account for 73.61% of the issuers, and regions such as Liaoning, Shandong, and Hubei have a high number of non - redemption cases [6][17]. - **Regional Fiscal Revenue Quality and Debt Pressure**: It is recommended to prioritize provinces with high - quality fiscal revenue and controllable debt, such as Shanghai, Beijing, Guangdong, and Fujian, and avoid high - risk regions like Liaoning, Gansu, and Inner Mongolia [6][29]. 3.2 Investment Opportunities for Two - tier and Perpetual Bonds under the Moderate Credit - Sinking Strategy - **Issuer Selection Criteria**: Focus on state - owned and central - enterprise - controlled banks with an asset scale between 400 billion and 1 trillion yuan, with a core tier - one capital adequacy ratio of not less than 7.5%, ROE higher than 3%, an inter - bank liability ratio within 30%, and avoid provinces with a large number of high - risk institutions [33]. - **Recommended Investment Targets**: Recommended targets include 25 Tianjin Rural Commercial Bank Secondary Capital Bond 01, 25 Guangxi Beibu Gulf Bank Secondary Capital Bond 01, and other bonds with a yield of over 2.5% [40].

Group 1 - The report indicates that since late May, the long-term credit bond market has seen significant net buying activity, reflecting high market participation enthusiasm [1][9] - The long-term credit bond market began to show independent trends in both last year and this year under extreme conditions of short-term yield compression, leading to a focus on duration for yield [9][12] - The report highlights that the current long-term credit bond market is influenced by the "stock-bond" effect, with institutions being cautious and focusing on profit-taking points [1][9] Group 2 - For the 5-7 year medium-term bonds, institutional net buying has significantly increased since late May, with peak net buying volumes reaching around 3.5 billion [2][14] - In the 7-10 year medium-term bonds, the fluctuation of fund net buying is a crucial factor affecting credit spreads, with insurance companies showing stronger net buying compared to last year [2][17] - For bonds over 10 years, the participation of funds has been limited this year, with the main buying force coming from insurance and other product categories, resulting in weaker effects on credit spread compression [2][18] Group 3 - The report states that the compression of credit spreads has reached an extreme level for short-term bonds (3 years and under), while there is still some room for long-term bonds (5 years and above) [3][23] - The report suggests that if funds continue to buy long-term credit bonds significantly, it could further compress spreads; otherwise, the compression potential may be limited [3][23] - The report identifies three key points for profit-taking in long-term credit bonds, including observing fund buying trends and credit spread movements [3][9] Group 4 - The report recommends that institutions with weaker liability stability should focus on 2-3 year low-grade bonds and 4-5 year high-yield bonds, while those with stronger stability should actively allocate long-term bonds [4][9] - The yield range for 7-year AA+ rated bonds and 10-15 year AA+ rated bonds is noted to be between 2.07% and 2.39%, indicating potential for yield exploration [4][9]