March 17, 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 emerge.

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

Since individual convertible bond holdings are not high (about 45% overall), I am at the lower limit of holdings and do not plan to reduce positions proactively. I slightly increased holdings last week, maintaining a difficult balance…

Yesterday’s overall market performance:

The previous trading day, convertible bonds fell while A-shares remained flat, U.S. stocks rose, FTSE A50 was flat, U.S. stocks rose last night, Japan and Korea markets opened slightly higher. External factors remain significant. We will observe if today can stabilize. Overall, it’s unstable; avoid rapid adjustments if holdings are low. If very low, consider reducing to below 50%.

The convertible bond index has fallen from 2090 on February 13, 2023, to 1753 on February 5, 2024, then up to 2652 now. The median is 138.4, with a temperature of 88.2 degrees. There are 259 bonds above 130 yuan, 6 fewer than the previous day, accounting for 71.9%. Ten bonds are below 110 yuan, unchanged from the previous day, with prices ranging from a low of 0 to a high of 4. In March, 7 bonds are green, 4 red.

Convertible bond trading volume was 73.4 billion, down 1 billion from the previous trading day, with a turnover rate of 14.4%, reaching 700 billion on the second day. The index fell 2 points to 2652, with an average price of 157.4, down 0.3 from the previous day. The median premium is 29.7%, up 0.4. A-shares traded 23,401 billion, 700 billion less than the previous day.

Yesterday, the market opened low and pulled back, ending slightly lower. Sentiment remains high; some traders are doing T+0 trading to maintain positions.

Yesterday, Hongbo rose 10.34%, leading gains. Convertible bond trading concentration decreased; the top 5 traded varieties accounted for 16.6% of total, down from 22.7%. The highest single trade volume was 3.7 billion. Most varieties saw increased activity; the number of varieties with less than 10 million in volume decreased from 4 to 2, representing 0.6% of the market, with the lowest amount from 7.74 million to 7.18 million.

Today’s convertible bond and market info:

Hongbo, Songlin—last trading day; Lanfang—near bottom revision; Baolai—bottom revision not yet reached; Ruike convertible bond: proposal to revise downward; Huicheng convertible bond, Yuanxin convertible bond: forced redemption; Dazhong convertible bond, Wankai convertible bond, Jingzhuang convertible bond: no forced redemption; Jiete convertible bond, Tong 22 convertible bond, Guowei convertible bond: no revision; Shang 26 convertible bond, Doctor convertible bond: subscription on March 18.

Laxiao Technology: 3,000-ton battery-grade lithium carbonate sales contract terminated; Jiemei Technology: plans to acquire 100% equity of EFOUS Technology, trading resumed on March 17; Triangle plans to invest 200 million to set up a satellite in-orbit delivery company; Youfa reduced holdings…

Today, Alar is likely to meet the forced redemption threshold in about a day; Zhongte and Haitian may also meet the threshold soon, possibly triggering revisions.

No new bonds or stocks listed today; no convertible bond subscriptions. Focus today on whether convertible bonds can stabilize, etc.

Weil, Jin Hong, Chaoda—trends are good; continue to monitor. Also watch relatively low-priced varieties like Jingrui 2, Kelun, Lihe, etc.

Summary of information:

1. China and the U.S. hold Paris trade negotiations, agree to explore mechanisms to promote bilateral trade and investment cooperation.
2. Major economic indicators in China from January to February show significant improvement.
3. Expected hot topics: computing power (Aofei, Zhongbei, Yitian, Xinfu); power grid equipment (Jin05, Jingda, Huachen, Jazeera, Yubang); space photovoltaics (Shuangliang, Fu22, Aowei, Dier, Ruike, Tian23, Long22); AI applications (Fengyu, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelun, Sit, Pulian); commercial aerospace (Guanglian, Zai22, Huatian, Shenyu, Mengsheng, Hangyu); chemicals (Baichuan2, Hongqiang, Jinjii, Heda, Qixiang2); chips (Liyang, Maolai, Luwi, Huicheng, Jingrui2, Anji, Yanggu); photoresists (Jingrui2, Huate, Huamao, Qiangli); also keep an eye on humanoid robots and other concepts.

Yesterday, convertible bonds opened low and pulled back, slightly down, with flat trading volume; today expected to rise moderately; thematic speculation opportunities exist. Overall, prices and premiums are relatively high, with some T+0 trading.

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

1. Micro-cap bonds around 130 yuan (under 300 million):
   Silk Road, Ailv…

2. Slightly below 150 yuan, under 200 million, limited downward volatility, can drive premiums, high upper limits, small retracements, exclude recent potential forced redemptions:
   Ailv, Haibo…

3. Relatively low-priced, low-premium bonds, around 142 yuan, with about 30% premium, maturity 0.5-5.5 years, good for swing trading:

Wanshun2, Wantian, Jinpu, Qiangli, Weitang, Lantian, Shangsheng, Hengfeng, Wanquan…

4. Low-priced, aggressive, around 150 yuan, with about 20% premium, under 500 million, ensuring profit/loss ratio:

Tianhuo, Mino, Yinwei, Fengshan…

5. Pure offensive, premium around 15%, about 160 yuan, scale 400 million, exclude those potentially forced redemptions within 2 weeks:
   None…

6. Defensive, moderate premiums (~70%), not relying solely on revisions, under 1 billion, yield around -3%, with diverse concepts:

Gongtong, Kesi, Baichang, Xineng, Zejian, Haishun, Haineng, Huitian, Yuxing…

7. Active personal favorites, concept-rich, not too expensive, with good flexibility, usually around 140 yuan:

Kelun, Lihe, Jingrui2, Jintian, Hongwei, Mingli, Bain, Changhai, Zhengyuan2, Triangle, Huaxing…

8. Bond-type varieties, suitable for those unwilling to hold cash:
   Shenhao, Fuhan, Jiete, Lige, Jiankang, Shou22, Kangyi, Lizhi, Jinxing23, Huoxing, Tai21, Xinhai…

Recently, some bonds have been adjusted to meet forced redemption conditions, while others may not, with premiums already reduced, such as: DIO, Garden, Huaxing, Weitang, Hangxin, Triangle, Aidi, Jinjii, Changhai…

Current market conditions show strong redemption pressure, limiting upper bounds. Avoid overly expensive varieties.

Overall strategy: avoid deep research, focus on broad allocation, ride volatility, adopt a whack-a-mole approach, use wide diversification instead of deep focus, leverage fluctuations, and hedge risks. Use conditional orders and grid trading to maximize volatility. Do not recommend single holdings; 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; stick to 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 cultivate a calm mind. Water droplets may be tiny, but they gradually fill a large vessel…