2026-3-27 Convertible Bond Portfolio Adjustment

Investing is a popularity contest. Buying in at the height of popularity is the most dangerous; by that time, all favorable factors and opinions have already been factored into the price, and no new buyers will appear.

The safest and most profitable investment is to buy when no one likes it. Given time, once the asset becomes popular, its price can only change in one direction: up!

Due to my current position in convertible bonds being relatively low (overall position around 45%), I am already near the lower limit of my holdings. In order to respond to possible new highs, I am not preparing to actively reduce my position for now. Last week, I slightly increased my holdings; maintaining my position is indeed not easy…

Yesterday’s market overall performance:

On the previous trading day, convertible bonds fell, A-shares fell, U.S. stocks fell, and the FTSE A50 fell. The U.S. stock market had a moderate decline last night, while the already opened Japanese and Korean stock markets experienced slight declines. After two days of rebounds, A-shares had a significant drop yesterday, expecting a decline today. External influencing factors remain substantial; observe whether convertible bonds can stabilize today. Recent strategy: overall instability, less observation and less action; do not increase positions or adjust too quickly. If the position is very low, gradual adjustments to below 50% can begin…

The convertible bond index dropped from 2090 on February 13, 2023, to 1753 on February 5, 2024. Now it is at 2578, with a current median of 134.8, temperature at 83.3 degrees, and 226 convertible bonds priced above 130 yuan, which is 15 fewer than the previous day, accounting for 64.6%; there are 13 below 110 yuan, unchanged from the previous day, with prices reaching a low of 0/high of 4; in March, 12 convertible bonds are green and 7 are red. The trading volume of convertible bonds was 61.3 billion, down 13.5 billion from the previous trading day, with a turnover rate of 12.3%, marking the first day below 60 billion. The convertible bond index fell by 42 points to 2578, with an average price of 152.2, down 2.6 from the previous day, and the median premium at 35.3%, down 0.3 from the previous day. A-shares traded 1.8571 trillion, down 200 billion from the previous day. Yesterday, the market opened flat and declined throughout the day, ultimately experiencing a significant drop, while the sentiment in convertible bonds remains acceptable; there are trades being made to maintain positions.

Yesterday, Meinuo rose 14.2%, leading the gains; the concentration of convertible bond trading increased, with the top 5 varieties accounting for 19.4% to 30.5% of overall trading, with the highest single trading volume at 6.8 billion; the activity of most varieties decreased, with the number of varieties with trading volume below 10 million rising from 0 to 3; accounting for 1% of market varieties, with the minimum amount falling from 12.3 million to 8.27 million…

Today’s convertible bonds and market-related information:

Jia Yuan has its last trading day; Lepu 2 has its last conversion day; Weining is holding a meeting for adjustment; Changgao Convertible Bonds: listed on March 30; Huamao Convertible Bonds: no strong redemption; Haitan Convertible Bonds: no adjustment; Puang Medical: new shares listed on the Beijing Stock Exchange; Hongban Technology, Sanrui Intelligent: new shares for subscription on the Shanghai Stock Exchange…

Zhongtian Jingzhuang: shareholders plan to reduce holdings of no more than 3% of shares; Huiyun Titanium Industry: shareholders plan to collectively reduce holdings of no more than 3% of shares; Lantian Gas: controlling shareholder has a financial loan contract dispute, freezing 42.8 million shares; Kangtai Medical: shareholders plan to inquire about the transfer of 3.74% of shares;

Today, Alara and Jinjiji are one day away from potentially meeting strong redemption requirements; today, Wu is one day away from potentially triggering adjustment.

Today, 0 new bonds are listed, 2 new stocks are subscribed, and 0 convertible bonds are subscribed. Today’s focus: whether Meinuo Convertible Bonds can stabilize, etc.

Meinuo’s underlying stock has been very active recently, with consecutive limit-ups, and the premium rate is not too high; keep an eye on it; Lidao, Chao Da, and other trends are good, continue to monitor; consider stocks like Yaoji, Kelin, Jingrui 2, Yaoji, etc., as relatively low-priced varieties for adjustment options…

Information summary:
1: U.S.-Iran negotiations are uncertain; the U.S. proposed a peace negotiation plan containing 15 conditions, while Iran has put forward preconditions;
2: Expected hotspots: computing power (Aofei, Zhongbei, Yitian, Xinfeng); 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, Kelin, Siter, Pulian); commercial aerospace (Guanglian, Zai 22, Huati, Shenyu, Mengsheng, Hangyu); chemicals (Baichuan 2, Hongqiang, Jinjiji, Heda, Qixiang 2); chips (Liyang, Maolai, Luwei, Huicheng, Jingrui 2, Anji, Yanggu); photoresist (Jingrui 2, Huate, Huamao, Qiangli); additionally, humanoid robots and other concepts remain a focus…

Yesterday, convertible bonds opened flat and declined significantly, with trading volume greatly reduced; today is expected, with various uncertainties accumulating over the weekend, leading to a moderate decline; convertible bonds still show no signs of stabilizing; speculative opportunities may arise; overall prices and premium rates for convertible bonds remain high, and there are trades being made…

Below are the selected bonds from last weekend: (personal bond selection record, not an investment suggestion) Due to the high median, I have appropriately relaxed the selection criteria! Overall quality has improved compared to last week, all considering volatility capability, of course, the premise is still optimistic about the market outlook, still preparing to hold a portion of convertible bond positions, choosing relatively low-priced and small-cap varieties, trying to select those with rich concepts and active varieties, all for broad allocation considerations, not recommending any single holding: (pure bond types are also not recommended)

1: Convertible bonds around 130 (within 300 million) can be included in the list:

Hengfeng, Wanxun, Shan Shi, Kelin, Juhe, Silk Road, Yirui, Jiu Dian 2, Lidao…

2: Convertible bonds within 150 yuan and 200 million, limited downward volatility, can drive premiums, higher upper limit, less pullback, excluding those potentially facing strong redemption recently:
Ailu, Haibo…

3: Relatively low-priced, low premium varieties, priced between 140, with around 30 premiums, with durations of 0.5 to 5.5 years, suitable for swing trading:

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

4: Relatively low-priced offensive team, around 150, ensuring a certain profit-loss ratio, within 500 million, with around 20 premiums:

Meinuo, Xingang, Ruifeng…

5: Pure offensive type, with around 15 premiums, around 160, size 400 million, excluding those that may face strong redemption in the past two weeks:
None…

6: Pure defensive type, with not particularly high premiums, around 70%, not completely relying on adjustments, within 1 billion, with a yield of around -3, aiming for rich concepts:

Gongtong, Kesi, Zhejian, Haishun, Haineng, Huitian, Yuxing, Dongya, Zhite, Dongbao…

7: Personally关注 actively traded types, with relatively rich concepts, not too high in price, reasonable elasticity, usually around 140…

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

Recently, convertible bonds have adjusted, with some starting to meet strong redemption criteria for several days but may not meet them again. The premium rates have already decreased, such as: Diou, Huayuan, Huaxing, Weitang, Hangxin, Sanjiao, Aidi, Jinjiji, Changhai, Alara, Sait…

The current situation shows noticeable pressure from strong redemptions, resulting in limited upper limits, so it is best to avoid selecting overly expensive varieties…

The overall strategy is to not delve deeply, not concentrate, to spread out, take advantage of fluctuations, and adopt a whack-a-mole approach, using width to replace depth, while defending against risks, pursuing average returns. Conditional orders and grid orders can be used to maximize volatility. This is not a recommendation for any single holding, and all bond selections are for personal summary use, not investment recommendations. Investing carries risks, and caution is advised upon entry.

In doing convertible bonds, do not forget the original intention. Convertible bonds currently appear to be very good varieties for retail investors. Convertible bond investment is a marathon; one must stick to the right path and stay away from speculative mindsets. This is the truth and the cause-and-effect; all actions are as fleeting as dreams and illusions, like dew or electricity. One should observe this and remain unattached, thus generating a heart for it. Although water droplets are tiny, they gradually fill large vessels…