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 product gains popularity, 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; U.S. stocks fell; FTSE A50 dropped. Over the weekend, the U.S. 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%. There are 8 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%. It reached 700 billion on 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, up from 21.1%. The highest single-trade volume was 5.3 billion. Most bonds saw increased activity; the number of bonds with trading volume below 10 million increased from 2 to 7, representing 1.9% of the market. The minimum transaction amount decreased from 7.62 million to 6.88 million.

Today’s convertible bond and market news:

Tianjian, Shouhua, last trading day; Tonglian convertible bonds subscription; Baolai, price reduction; Guanyu, no reduction; Jizhi, Hangyu, no mandatory redemption; Haiyou, Hongbo, Songlin, mandatory redemption; Huati, maturity trading date 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 saw net profit increases; Jinko, product component prices rising…

Today, Diuo, Garden, Hengyi, Zhonghuan 2, Anji may meet mandatory redemption conditions in about a day; Xianle, Wentai, Hongtu may meet the conditions for early redemption in about a day.

No new bonds or stocks listed today; one convertible bond subscription. 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 violations. Personal speculation suggests a possible “elevator” move; stay tuned. Fenggong, Yinwei, and other trends remain positive; continue monitoring. Also watch Haibo, Bairun, Weitang, Shenhao, and other relatively low-priced bonds…

Summary of information:
1: Over the weekend, U.S. military strikes on Iran caused global stock market volatility, with limited impact expected on A-shares.
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), chemicals (Baichuan 2, Hongqiang, Jinj, Heda, Hengyi, Qixiang 2), chips (Liyang, Maolai, Luwi, Huicheng, Jingrui 2, Anji, Yanggu), lithography (Jingrui 2, Huate, Huamao, Qiangli), and other concepts like humanoid robots remain worth attention.

Yesterday, convertible bonds opened lower and declined slightly, with increased trading volume. Today, a slight decline is expected; thematic speculation opportunities exist. Overall, prices and premiums are high, with some T+0 trading.

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

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

2: Bonds under 150 yuan, within 200 million, with limited downward volatility, high potential for premium, low retracement, excluding recent strong redemption risks:
Ailv, Haibo…

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

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

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

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 around 70%, not relying solely on redemption, within 1 billion, with yields around -3%, rich in concepts:

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

7: Personally active and concept-rich bonds, with relatively low prices, good flexibility, around 145 yuan:

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

8: Bonds with higher credit risk, suitable for those unwilling to hold cash:
Shenhao, Fuhan, Jiete, Lige, Jiankang, Shou 22, Li Zi, Mars, Tai 21, Yuxing…

Current strong redemption pressures limit upper bounds, so avoid overly expensive bonds.

Overall strategy: avoid deep research, focus on broad allocation, embrace volatility, use a “whack-a-mole” approach, and rely on wide coverage rather than depth. Use grid and conditional orders to leverage fluctuations, avoid single-position bias. All bond selections are personal summaries, not investment recommendations. Investing involves risks; proceed 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, stay away from hype. This is the truth and the cause-and-effect. All phenomena are like illusions, like a dream, like bubbles, like lightning. Observe with equanimity, do not dwell, and let the mind arise naturally. Water droplets may be tiny, but they gradually fill a large vessel…