February 27, 2026 - Convertible Bond Rebalancing

Investing is a popularity contest. Buying at the peak of popularity is the riskiest, as all positive factors and opinions are already priced in, and no new buyers will appear.

The safest and most profitable investments are made when no one likes them. Given time, once a stock becomes popular, its price will only move in one direction: up!

Since personal convertible bond holdings account for less than 45% of the total portfolio, which is already the lower limit, I do not plan to reduce holdings further. I am gradually adjusting the portfolio slowly. This week is the first trading week after the Spring Festival, with the New Year’s red envelope market, 2 reds and 1 green…

Yesterday’s overall market performance:

Previous trading day: Convertible bonds fell, A-shares fell, US stocks fell, FTSE A50 fell…

The convertible bond index dropped from 2090 on February 13, 2023, to 1753 on February 5, 2024. Now it’s at 2781, with a median of 143.7, temperature at 95.1 degrees. There are 289 convertible bonds above 130 yuan, 16 fewer than the previous day, accounting for 78.3%. There are 7 below 110 yuan, 1 more than the previous day, with prices ranging from a low of 0 to a high of 15. In February, there were 6 green and 7 red convertible bonds. The trading volume of convertible bonds was 73.5 billion, 6.3 billion less than the previous trading day, with a turnover rate of 14.4%, reaching 700 billion on the second day. The convertible bond index dropped 28 points to 2781, with an average price of 167, down 1.8 from the previous day. The median premium is 32.5%, down 1.8. A-shares traded 25,568 billion, 800 million more than the previous day. Yesterday opened low and declined sharply, but the sentiment temperature remains very high; some traders are doing T+T, maintaining positions.

Yesterday, Jiali led with a 6.5% increase; trading concentration of convertible bonds decreased, with the top 5 traded varieties accounting for 21.1% of total convertible bond trading, down from 21.9%. The highest single trade volume was 3.6 billion. Most varieties saw increased activity, with the number of varieties with trading volume below 10 million decreasing from 3 to 2, accounting for 0.8% of the market. The minimum transaction amount increased from 6.32 million to 7.62 million.

Today’s convertible bond and market-related information:

SaiLong last trading day, TongLian convertible bond: subscription on March 2; GuanZhong: no forced redemption; HuaTi matures on 3/25.

XiaoMing: reducing holdings…

Today, DiOu Garden, HongBo, HangYu, HaiYou, DiOu, SongLin, WeiXin, JiZhi will likely meet the possible forced redemption one day earlier; today GuanYu and BaoLai are also likely to meet the trigger for downward adjustment one day earlier.

No new bonds listed today, no new stock subscriptions, no new convertible bond subscriptions. Focus today on whether Jiali’s multiple convertible bonds will be forcibly redeemed.

Jiali’s stock hit the daily limit yesterday; it’s a small-cap stock nearing maturity, worth monitoring. HuaYa, HongBo, and others show good trends; continue to watch. Also pay attention to JinTian, ShanShi, LanTian, HaiBo, and other varieties…

Summary of information:
1: RMB exchange rate broke through 6.84, hitting a nearly 3-year high…
2: Expected hot topics: Power grid equipment (Jin05, JingDa, HuaChen, JiaZe, YuBang), Space photovoltaic (ShuangLiang, Fu22, AoWei, DiEr, RuiKe, Tian23, Long22), AI applications (FengYu, DingJie, ShengXun, JiZhi, RunDa, GuanZhong, YaoJi, KeLan, SiTe, PuLian), Commercial aerospace (GuangLian, Zai22, HuaTi, ShenYu, MengSheng, HangYu); Chemical industry (BaiChuan2, HongQiang, JinJi, HeDa, HengYi, QiXiang2), Chips (LiYang, MaoLai, LuWei, HuiCheng, JingRui2, AnJi, YangGu), Photoresists (JingRui2, HuaTe, HuaMao, QiangLi); also keep an eye on humanoid robots and other concepts…

Yesterday, the convertible bonds opened lower and declined, with moderate fluctuations, and trading volume decreased; today is expected to see slight decline; thematic speculation opportunities exist. Overall, convertible bond prices and premiums are high, with some traders doing T+T.

Below are last weekend’s bond selections: (Personal bond selection record, not investment advice) Due to high median levels, I relaxed the selection criteria! Overall quality has improved compared to last week, considering volatility capacity. Of course, the premise is still optimistic about the market outlook, and I plan to hold some convertible bonds, choosing relatively low prices and small caps, preferably with rich concepts and active trading, mainly for broad allocation rather than single-position recommendations:

1: Micro-cap (within 300 million) convertible bonds around 130 yuan can be included:
Jiali, Silk Road…

2: Micro bonds within 200 million under 150 yuan, with limited downward volatility, capable of driving premiums, with high upper limits, small retracements, excluding recent potential forced redemptions:
Ailu, HaiBo…

3: Relatively low-priced, low-premium varieties, around 145 yuan, with about 30% premium, with 0.5-5.5 years remaining, suitable for swing trading:

TianHao, JinPu, WanTian, QiangLi, WanShun2, ChaoSheng, XingQiu, WanXun, LanTian…

4: Relatively low-priced charging teams, around 150 yuan, ensuring certain profit/loss ratio, within 500 million, with about 20% premium:

HengFeng, FengShan…

5: Pure offensive types, with about 15% premium, around 160 yuan, scale of 400 million, excluding those with potential forced redemption in 2 weeks:
None…

6: Pure defensive types, with moderate premiums around 70%, not fully relying on downward adjustments, within 1 billion, with yields around -3%, with diverse concepts:

ZhiBang, GongTong, KeSi, BaiChang, XinNeng, ZheJian…

7: Personally more active and concept-rich varieties, with relatively low prices, good elasticity, usually around 145 yuan:

KeLan, ShanShi, LiHe, JingRui2, HongBo, YiRui, JinTian, HongWei, WeiTang, MeiNuo, MingLi…

8: Bond-oriented varieties, suitable for those unwilling to hold cash…
ShenHao, FuHan, JieTe, LiGao, JianFan, Shou22, KangYi, LiZi, YuXing…

Current market conditions show significant pressure from forced redemptions, limiting upper bounds, so avoid selecting too expensive varieties.

Overall strategy: avoid deep research, avoid concentration, broad allocation, ride the waves, play whack-a-mole mode, using width instead of depth, leveraging volatility, and risk defense. Pursue average returns, possibly using conditional orders and grid trading to maximize volatility utilization. No single-position recommendations; all selections are personal summaries, not investment advice. Investing involves risks; enter cautiously.

Stay true to the original purpose of convertible bonds. Currently, they are very suitable for retail investors. Convertible bond investing is a marathon; stay on the right path, avoid speculative mindsets. This is the truth and the cause-and-effect. All phenomena are like illusions, like a dream, like a bubble, like a flash of lightning. One should observe as such, without attachment, and let the mind arise freely. Though water droplets are tiny, they gradually fill a large vessel…