Core Viewpoint - The article highlights the recent default of Hongda Convertible Bond, indicating a growing trend of credit risk in the convertible bond market, particularly among companies with weak fundamentals [1][2][4]. Group 1: Default Events - On February 25, Hongda Convertible Bond announced it could not repay the principal and interest due to insufficient liquidity, marking another instance of default [1][4]. - The company had previously announced similar defaults in December 2024 and June 2024, citing cash flow issues and large overdue debts [2][5]. Group 2: Company Background - Hongda Convertible Bond, originally known as Hongda Convertible Bond before delisting, was issued in December 2019 with a total scale of 2.427 billion yuan and a six-year term [5]. - The company primarily engaged in the production and sale of chemical products, including polyvinyl chloride (PVC) and caustic soda, and faced significant financial difficulties leading to a 26.07% decline in revenue in 2022 and a further 42.04% drop in the first three quarters of 2023 [5]. Group 3: Market Trends - The article notes a trend of increasing credit risk in the convertible bond market, with several bonds, including Hongda, Suote, and Landun, experiencing defaults [2][7]. - The shift from a historical norm of convertible bonds exiting the market through conversion to a growing concern over repayment risks has been observed since 2020, with multiple instances of defaults and bankruptcies [8]. Group 4: Risk Identification - Investors are advised to monitor key indicators such as revenue, net profit, and cash flow declines, as well as potential non-operational fund occupations by major shareholders, which may signal underlying credit risks [8].