March 2, 2026 - Convertible Bonds 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. Over time, once a stock becomes popular, its price can only move in one direction: up!

Since individual convertible bond positions are not high (below 45% of the overall portfolio), they are already at the lower limit of holdings. I do not plan to reduce holdings further, but last week I was still forced to cut positions. Maintaining the portfolio is indeed challenging…

Yesterday’s overall market performance:

The previous trading day, convertible bonds fell; A-shares declined; US stocks fell; FTSE A50 dropped. Over the weekend, the US conducted military strikes on Iran. This Monday, there are many uncertainties. Japan and South Korea opened down 1%, but the impact on A-shares is expected to be limited…

The convertible bond index dropped from 2090 on February 13, 2023, to 1753 on February 5, 2024. Now it stands at 2776, with a median of 143, a temperature of 94.9 degrees. There are 292 convertible bonds above 130 yuan, up 3 from the previous day, accounting for 79.2%. Eight bonds below 110 yuan, up 1, with prices at a low of 0 and a high of 6; in February, there were 7 green and 7 red convertible bonds.

Total convertible bond trading volume was 76.5 billion, up 3.3 billion from the previous trading day, with a turnover rate of 15%, reaching 700 billion for the third day. The convertible bond index fell 5 points to 2776, with an average price of 166.5, down 0.5 from the previous day. The median premium is 30.6%, down 1.9. A-shares traded 2,506.4 billion, 50 billion less than the previous day.

Yesterday, the market opened lower and recovered slightly, ending with a small decline. Sentiment for convertible bonds remains high; some traders are doing T+0 trading to maintain positions.

Yesterday, Weice rose 7.73%, leading gains. Trading concentration increased, with the top 5 bonds accounting for 25% of total convertible bond trading volume, with the highest single trade at 5.3 billion. Most bonds saw increased activity; the number of bonds with trading volume below 10 million rose from 2 to 7, representing 1.9% of the market, with the lowest amount at 6.82 million and the highest at 6.88 million.

Today’s convertible bond and market news:

Tianjian, Shouhua, last trading day; Tonglian convertible bonds subscription; Baolai’s price cut; Guanyu no cut; Jizhi, Hangyu no mandatory redemption; Haiyou, Hongbo, Songlin, Qiangshou redemption; Huati’s maturity trading date is 3/25.

Jiaze, Tian 23, Tianyuan reduced holdings; Hu’an Securities: controlling shareholder plans to invest 150 million to 300 million yuan in convertible bonds and convert; Aerospace Hongtu: 2025 revenue down 66.11% YoY, net loss of 1.215 billion after non-recurring items; Shuangliang under investigation for information disclosure violations; Weice, Ruike, Anji, Aiwei see increased net profits; Jinko’s product component prices rising…

Today, Diuo, Garden, Hengyi, Zhonghuan 2, Anji may meet early redemption conditions; Today, Xianle, Wentai, Hongtu may meet early redemption conditions within a day.

No new bonds listed today, no new stock subscriptions, one convertible bond subscription today. Focus today on whether Shuangliang’s multiple bonds will undergo mandatory redemption, etc.

Shuangliang’s stock surged yesterday; after hours, it was under investigation for disclosure issues. Personal speculation suggests a possible halt; stay tuned. Fenggong, Yinwei, and others show good trends; continue monitoring. Also watch Haibo, Bairun, Weitang, Shenhao, and other relatively low-priced bonds…

Summary of information:
1: Over the weekend, US military strikes on Iran caused global stock market volatility; impact on A-shares is expected to be limited.
2: Two domestic meetings will open this week.
3: Expected hot topics: power grid equipment (Jin 05, Jingda, Huachen, Jiaze, Yubang), space photovoltaics (Shuangliang, Fu 22, Aowei, Dier, Ruike, Tian 23, Long 22), AI applications (Fengyu, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelun, Sit, Pulian), commercial aerospace (Guanglian, Zai 22, Huati, Shenyu, Mengsheng, Hangyu); chemical industry (Baichuan 2, Hongqiang, Jinj, Heda, Hengyi, Qixiang 2), chips (Liyang, Maolai, Luwi, Huicheng, Jingrui 2, Anji, Yanggu), photoresists (Jingrui 2, Huate, Huamao, Qiangli); also keep an eye on humanoid robots and related concepts.

Yesterday’s convertible bonds opened lower and declined slightly, with increased trading volume. Today’s forecast: slight decline; sector hype may present opportunities. Overall prices and premiums are high, with some T+0 trading.

Below are last weekend’s bond selections: (personal selection records, not investment advice). Due to high medians, I relaxed some criteria. Overall quality improved compared to last week, considering volatility capacity. Still optimistic about the market and prepared to hold some bonds, focusing on relatively low prices, small caps, and concept-rich active bonds, mainly for broad allocation, not single-position recommendations:

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

2: Bonds under 150 yuan, within 200 million, with limited downward volatility, capable of premium growth, high upper limits, small retracements, excluding recent potential for strong redemption:
Ailu, Haibo…

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

Tuhao, Jinpu, Wantian, Qiangli, Lantian, Wanquan, Mino, Yinwei, Lihe…

4: Aggressive low-price bonds around 150 yuan, with about 20% premium, within 500 million, ensuring favorable risk-reward:

Hengfeng, Fenshan…

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

6: Defensive bonds, with moderate premiums (~70%), not relying solely on redemption, within 1 billion, with yields around -3%, conceptually diverse:

Zhibang, Gongtong, Kesi, Baichang, Xineng, Zhejiang Construction…

7: Personally focused on more active, concept-rich bonds with reasonable prices and flexibility, usually around 145 yuan:

Kelun, Shanshi, Lihe, Jingrui 2, Yirui, Jintian, Hongwei, Weitang, Chaosheng, Mino, Bairun…

8: Bonds with higher credit quality, suitable for avoiding full cash positions:
Shenhao, Fuhan, Jiete, Ligao, Jiankang, Shou 22, Kuangyi, Lizhi, Jinxing 23, Mars, Tai 21, Yuxing…

Given the current strong redemption pressure, upper limits are limited, so avoid overly expensive bonds.

Overall strategy: avoid deep research, focus on broad allocation, embrace volatility, play whack-a-mole, use wide margins instead of deep dives, hedge risks, pursue average returns, and consider conditional orders and grid trading to leverage volatility. Do not rely on single-position recommendations. All bond 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 bubbles, like lightning. Observe with equanimity, be unattached, and let the mind arise naturally. Though water drops are tiny, they can gradually fill a large vessel…