2026-2-3 Convertible Bond Rebalancing: Adjusting the portfolio of convertible bonds on February 3, 2026, to optimize holdings and manage risk.

Investing is a popularity contest. Buying at the peak of popularity is the most dangerous, 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. Given time, once a product becomes popular, its price will only move in one direction: up!

Since individual convertible bond holdings are not a large proportion (less than 45% of the overall portfolio), I plan to gradually adjust the positions.

Yesterday’s overall market performance:

Previous trading day: Convertible bonds fell, A-shares fell, U.S. stocks rose, FTSE A50 rose…

The convertible bond index dropped from 2090 on February 13, 2023, to 1753 on February 5, 2024. Now at 2669, with a median of 136.7, a temperature of 91.5 degrees, 263 bonds above 130 yuan, 17 fewer than the previous day, accounting for 69.9%; 9 bonds below 110 yuan, 2 more than the previous day, with prices at the lowest 0 and highest 7; in February, convertible bonds were 1 green, 0 red.

Total convertible bond trading volume was 85 billion, 8.2 billion less than the previous trading day, with a turnover rate of 16.1%, dropping to 80 billion on the first day. The convertible bond index fell 70 points to 2669, with an average price of 160.2, down 4 from the previous day. The median premium was 33.3%, slightly lower by 0.1. A-shares traded 2,606.9 billion, 260 billion less than the previous day.

Yesterday opened lower and declined steadily, oscillating downward, moving southeastward, ultimately falling sharply. Sentiment temperature for convertible bonds remains high; T+ trading, maintaining positions.

Affected by the sharp decline in gold and silver on Friday night, A-shares opened lower yesterday. Although attempts at rebound during the session failed, the market ultimately declined sharply. Convertible bonds also followed the adjustment, but short-term gains remain significant, and some correction is needed. Maintaining positions is difficult; if overall convertible bond holdings are below 45%, forced rotation will be implemented to maintain positions…

Yesterday, Dongshi led with a 14.4% increase; trading concentration in convertible bonds decreased, with the top 5 traded varieties accounting for 16.7% of total convertible bond trading volume, down from 18.5%, with the highest single trade volume at 3.2 billion. Most varieties saw increased activity; the number of varieties with trading volume below 10 million decreased from 1 to 1; representing 0.3% of the market, with the lowest amount at 9.55 million to 9.5 million yuan…

Today’s convertible bond and market-related information:

Mino revises downward; Shantai Convertible Bond: listed on February 5; Huaxin Convertible Bond: last trading day before maturity: March 6, 2026; Haitan Convertible Bond subscription on February 5…

Baichuan Changyin: controlling shareholder and its concerted parties plan to transfer 10% of shares via agreement; Foster invests 25 million yuan to co-invest in private equity funds; Jinchengxin signs a 202 million yuan contract; Oppe rated AA- with negative outlook…

Today, Feng 21, Yaoji, Weixin, Yanpai are expected to meet potential early redemption within one day; Today, Huitian, Honglu are expected to meet potential early redemption within one day triggering a downward revision.

Today, 0 new bonds listed, 0 new stock subscriptions, 0 convertible bond subscriptions. Focus today: whether convertible bonds can stabilize after adjustment, etc.

Convertible bonds have been adjusting for 3 consecutive days. Today’s key focus is whether they can stabilize; no other obvious trend, continue to monitor; pay attention to Yirui, Haibo, Shanshi, Qiangli, and other previously high-performing varieties…

Summary of information:
1: The Asia-Pacific financial markets experienced “Black Monday,” with widespread declines…
3: Expected hot topics: Power grid equipment (Jin 05, Jingda, Huachen, Jazeera, Yubang), Space photovoltaic (Shuangliang, Fu 22, Aowei, Dier, Reco, Tian 23, Yubang, Long 22), AI applications (Xinzhi, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelun, Sit, Pulian), Brain-computer interfaces (Saili, Jiahe, Shengxun, Lepu 2, Baolai, Fengyu), Commercial aerospace (Guanglian, Zai 22, Huati, Shenyu, Mengsheng, Hangyu); AI edge (Fuxin, Chao Sheng, Jiahe, Chun 23), Chips (Liyang, Maolai, Luyi, Huicheng, Jingrui 2, Anji, Yanggu); Photoresist (Jingrui 2, Huate, Huamao, Qiangli); additionally, concepts like humanoid robots remain under close watch…

Yesterday, convertible bonds opened lower and declined sharply, with increased trading volume; today is expected to see moderate decline; thematic speculation opportunities exist; overall prices and premiums of convertible bonds are high, with T+ trading possible…

Below are bond selections from last weekend: (Personal bond selection record, not investment advice) Due to high median levels, bond selection standards have been relaxed! Overall quality has improved compared to last week, considering volatility capacity. Of course, the premise is still optimistic about the market outlook, and some convertible bonds will be held. Preference is given to relatively low prices, small caps, and concept-rich active varieties, mainly for broad allocation, not for single-position recommendations:

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

2: Slightly below 150 yuan, within 200 million, limited downward volatility, capable of driving premiums, with high upper limits, minimal retracement, excluding recent potential for early redemption:
Ailu, Haibo…

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

Hongbai, Wantian, Jinpu, Qiangli, Wanshun 2, Chao Sheng, Yong 22, Xingqiu, Shuyu, Changhai, Yirui, Shanshi…

4: Relatively low-priced assault team, around 150 yuan, ensuring a certain risk-reward ratio, within 500 million, with premiums about 20:

Hengfeng, Fengshan…

5: Pure offensive types, with premiums around 15, around 160 yuan, scale of 400 million, excluding those with potential early redemption within 2 weeks:
None…

6: Pure defensive types, with premiums not particularly high, around 70%, with a market cap under 1 billion, yield around -2, with diverse concepts as much as possible:

Zhibang, Gongtong, Kesi, Baichang, Xineng, Qiaoyin…

7: Personal focus on more active types, with diverse concepts, not too high prices, good elasticity, usually around 145 yuan…

Kelun, Shanshi, Lihe, Hangxin, Haibo, Jintian, Hongwei, Qiangli, Lantian…

8: Bond-type varieties, suitable for those unwilling to hold cash…
Shenhao, Fuhan, Bairun, Xiangjia, Kangyi, Lizhi, Yuxing, Zhejian…

Current market conditions show significant pressure from forced redemptions, limiting upper bounds, so it’s best to avoid very expensive varieties…

Overall strategy is not to delve deeply, avoid concentration, broad allocation, ride the waves, play whack-a-mole, using width instead of depth, while defending against risks and pursuing average returns. Conditional orders and grid trading can be used to maximize volatility utilization. No single-position recommendation. All bond selections are personal summaries, not investment advice. Investing involves risks; enter cautiously.

Stay true to the original purpose of convertible bond investing. Currently, convertible bonds are very suitable for retail investors. Convertible bond investing is a marathon; it’s essential to 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. One should observe with such a mindset, without attachment, and cultivate the mind. Although water drops are tiny, they gradually fill a large vessel…