March 24, 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. Over time, once a product gains popularity, its price can only move in one direction: up!

Since my current convertible bond holdings are not high (about 45% overall), which is already the lower limit, I am not planning to reduce positions proactively to prepare for potential new highs later. Last week, I slightly increased holdings. Maintaining the position is indeed challenging…

Yesterday’s overall market performance:

The previous trading day: convertible bonds fell, A-shares fell, U.S. stocks rose, FTSE A50 rose. U.S. stocks had a moderate increase last night, Japan and South Korea markets rose moderately in the morning. Today, A-shares are expected to rebound. External factors remain significant. Watch whether convertible bonds can stabilize today. Do not add or adjust positions too quickly. If your position is low, you can gradually reduce to below 50%.

The convertible bond index fell from 2090 on February 13, 2023, to 1753 on February 5, 2024. Now it is at 2521. The median is 131.5, with a temperature of 76.8 degrees. There are 203 bonds above 130 yuan, 20 fewer than the previous day, accounting for 56%. There are 15 bonds below 110 yuan, 4 more than the previous day. Long-term bonds have fallen back below 100 yuan, with prices hitting a low of 2 and a high of 2. In March, 11 green and 5 red bonds. No new lows have appeared for days. Convertible bond trading volume reached 72.4 billion, up 3.7 billion from the previous trading day, with a turnover rate of 14.3%, reaching 700 billion for the first day. The convertible bond index dropped 36 points to 2521, with an average price of 148.4, down 2.5 from the previous day. The median premium is 35.4%, up 3.2. A-shares traded 24,485 billion, 1,800 billion more than the previous day.

Yesterday, the market opened low, rose, then sharply declined again—a V-shaped reversal. In the afternoon, it moved southeast and finally fell sharply, indicating a cooling of sentiment. Some traders are using T+ strategies to maintain positions.

Yesterday, East Time led with an 8.1% increase. Convertible bond trading concentration decreased; the top 5 bonds accounted for 14.2% of total trading volume, down from 16.7%. The highest single-trade volume was 3 billion. Most bonds saw increased activity; the number of bonds with volume below 10 million dropped from 3 to 0, representing 0% of the market. The minimum transaction amount increased from 4.61 million to 10.76 million, indicating short-term overselling.

Today’s convertible bond and market news:

Lepu 2 last trading day, Hengyi, Xin Zhi, Rong 23 last conversion day; Shuang Le bonds, Zheng Fan bonds: no adjustments;

Taifu Pump Industry: the actual controller is planning a change of control, suspending trading from the 24th. No wonder it recently rose against the trend. Dazhong plans to build a 200,000-ton lithium salt project with Wanhua. Yongguan’s actual controller plans to increase holdings by 50 million to 100 million shares. Libert signed a $20 million contract and a 2.8 project general contracting contract. Kelan Hongmeng Smart Bank branch plan launched.

Today, Alar may meet the redemption trigger a day earlier; Wu may meet the adjustment trigger a day earlier.

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

Wate, Shuangliang, and other trends are positive; continue to monitor. Pay attention to relatively low-priced stocks like Huaxing, Yaoji, Haibo, Kelan, etc.

Summary of information:
1: Influenced by President Trump’s remarks on US-Iran negotiations, oil prices fluctuate significantly.
2: Expected hot topics: computing power (Aofei, Zhongbei, Yitian, Xinfu); power grid equipment (Jin 05, Jingda, Huachen, Jazeera, Yubang); space photovoltaics (Shuangliang, Fu 22, Aowei, Dier, Reco, Tian 23, Long 22); AI applications (Fengyu, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelan, Sit, Pulian); commercial aerospace (Guanglian, Zai 22, Huatian, Shenyu, Mengsheng, Hangyu); chemical industry (Baichuan 2, Hongqiang, Jinjii, Heda, Qixiang 2); chips (Liyang, Maolai, Luwi, Huicheng, Jingrui 2, Anji, Yanggu); photoresist (Jingrui 2, Wate, Huamao, Qiangli); also keep an eye on humanoid robots and other concepts.

Yesterday, convertible bonds opened low and declined sharply, with increased trading volume. Sentiment is subdued. Today, moderate gains are expected. Whether convertible bonds can stabilize remains key. There are opportunities in thematic speculation. Overall prices and premiums are relatively high, with some traders using T+ strategies.

Below are bond selections from last weekend (personal notes, not investment advice). Due to high median levels, I relaxed the selection criteria somewhat. Overall quality improved compared to last week, considering volatility capacity. Of course, I still remain optimistic about the market and plan to hold some convertible bonds, focusing on relatively low prices and small caps, preferably with rich concepts and active trading. These are for broad allocation, not specific recommendations (no pure debt products recommended).

1: Micro-cap bonds around 130 yuan (under 300 million) can be included:

Hengfeng, Wanshun, Shanshi, Kelan, Juhe, Silk Road, Yirui, Jiudian 2, Lida…

2: Bonds under 150 yuan, under 200 million, with limited downward fluctuation, capable of premium, high upper limit, small retracement, excluding recent potential for forced redemption:
Ailu, Haibo…

3: Relatively low-priced, low-premium bonds, around 140 yuan, with about 30% premium, maturity 0.5-5.5 years, good for swing trading:

Chaosheng, Wanshun 2, Wantian, Fengshan, Jinpu, Qiangli, Weitang, Lantian, Dier…

4: Relatively low-priced, around 150 yuan, with guaranteed profit/loss ratio, under 500 million, about 20% premium:

Meinuo, Xingang, Ruifeng…

5: Pure offensive bonds, premium around 15%, around 160 yuan, scale 400 million, excluding those likely to be redeemed within 2 weeks:
None…

6: Pure defensive bonds, not very high premium, around 70%, under 1 billion, with yields around -3%, rich in concepts:

Gongtong, Kesi, Zhejiang Construction, Haishun, Haineng, Huitian, Yuxing, Dongya, Zhit, Dongbao…

7: Personally active and concept-rich bonds, not too expensive, with good flexibility, usually around 140 yuan:

Lihe, Jingrui 2, Hongwei, Mingli, Changhai, Zhengyuan 2, Sanjiao, Huaxing, Yaoji, Xingrui…

Recently, some bonds have been adjusted to meet redemption conditions, some may not, and premiums have been cut down. Bonds like Diao, Huayuan, Huaxing, Weitang, Hangxin, Sanjiao, Aidi, Jinjii, Changhai, Alar, Saite, etc.

Current market conditions show clear pressure from redemptions, limiting upper bounds. It’s best to avoid overly expensive bonds.

Overall strategy: avoid deep research, avoid concentration, broad allocation, ride volatility, play whack-a-mole, use width instead of depth, hedge risks, pursue average returns. Use conditional orders and grid trading to leverage volatility. Do not recommend specific holdings; all selections are personal summaries. Investing involves risks; enter cautiously.

Stay true to the original purpose of convertible bonds. Currently, they are very good for retail investors. Convertible bond investing is a marathon. Stay on the right path, avoid hype. This is the truth and the cause-and-effect. All actions are like illusions, like a dream, like a bubble, like a flash of lightning. Observe with equanimity, do not dwell anywhere, and let your mind be free.

Longda convertible bond, the lowest-priced bond in the market, matures in 3 months, with a yield over 50%. There is a default risk; otherwise, the price wouldn’t be this low. It’s not suitable to participate with small amounts at current prices. Fundamentally, I do not recommend participating in any small-scale investments…