March 13, 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 appear…

The safest and most profitable investments are made when no one likes them. Over time, once a stock or bond becomes popular, its price can only move in one direction: up!

Since personal convertible bond holdings account for a relatively small proportion (about 45% overall), I am at the lower limit of my holdings and do not plan to reduce positions proactively. Last week, I slightly increased my holdings, maintaining a cautious stance…

Yesterday afternoon, I met with two old colleagues to discuss investment opportunities related to convertible bonds and stocks. Both are optimistic about the current market, believing that with the government stabilizing the index, individual stocks and sectors have opportunities. Meanwhile, their main industries are quite challenging…

Yesterday’s market overview:

The previous trading day: Convertible bonds fell, A-shares fell, US stocks fell, FTSE A50 declined, US stocks dropped over 1% last night, Japan and Korea markets opened about 2% lower. External factors remain significant. Observe whether the market can stabilize today; overall, it remains unstable, so avoid rapid position adjustments…

The convertible bond index dropped from 2090 on February 13, 2023, to 1753 on February 5, 2024. Currently, it is at 2689, with a median of 139.7, and a temperature of 90.4 degrees. There are 272 bonds above 130 yuan, 12 fewer than the previous day, accounting for 75.8%. Ten bonds are below 110 yuan, one fewer than the previous day, with prices ranging from a low of 0 to a high of 12. In March, there were 5 green and 4 red bonds.

Total convertible bond trading volume was 63.2 billion yuan, 3.5 billion less than the previous trading day, with a turnover rate of 12.4%, reaching below 600 billion for the third day. The index fell 39 points to 2689, with an average price of 160.3, down 2.6 from the previous day. The median premium was 31.3%, slightly lower than the previous day by 0.9. A-shares traded 24,608 billion yuan, 600 billion less than the previous day. Yesterday opened lower and declined sharply, ultimately falling significantly. Sentiment remains high; some traders are maintaining positions.

Yesterday, Songlin led with an 11.84% increase. Convertible bond trading concentration decreased; the top five bonds accounted for 19% of total trading volume, with the highest single trade at 4.6 billion. Most bonds saw increased activity; the number of bonds with trading volume below 10 million decreased from five to one, representing 0.3% of the market, with the minimum transaction amount rising from 5.12 million to 8.41 million yuan.

Today’s convertible bond and market information:

Celi Convertible Bond, Yong 22 Convertible Bond, Guangli Convertible Bond, Weice Convertible Bond: callable; Weidao Convertible Bond: not callable…

Tianchuang’s major shareholder changed; Songlin’s actual controller increased holdings by 20-40 million yuan; Baichuan 2’s some products’ prices rose; Dier plans to issue H-shares listed in Hong Kong; Xiaoxiong reached a billion-yuan strategic cooperation with Baidu Cloud; Ultrasonic’s optical modules are in small batch production…

Today, Zhongchong 2 may meet the redemption condition a day earlier; Liko 2 may meet the trigger for a price adjustment a day earlier.

No new bonds or stocks are listed today, and no convertible bond subscriptions are scheduled. Focus today on whether convertible bonds can stabilize, among other things.

Xiaoxiong, Jinhong, and others show good trends; continue monitoring. Also watch Jingrui 2, Weitang, Zhengyuan 2, and other relatively low-priced bonds…

Summary of information:

1: The 2026 National Two Sessions concluded, passing multiple resolutions and laws;
2: International oil prices continue to rise, with US crude and Brent up 10%;
3: Expected hot topics include: crayfish farming computing power (Aofei, Zhongbei, Yitian, Xinfu); power grid equipment (Jin05, Jingda, Huachen, Jazeera, Yubang); space photovoltaics (Shuangliang, Fu22, Aowei, Dier, Reike, Tian23, Long22); AI applications (Fengyu, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelun, Sit, Pulian); commercial aerospace (Guanglian, Zai22, Huatian, Shenyu, Mengsheng, Hangyu); chemicals (Baichuan 2, Hongqiang, Jinjii, Heda, Qixiang 2); chips (Liyang, Maolai, Luwi, Huicheng, Jingrui 2, Anji, Yanggu); lithography (Jingrui 2, Huate, Huamao, Qiangli); also keep an eye on humanoid robots and related concepts…

Yesterday, convertible bonds opened lower and declined sharply, with decreased trading volume; today, a moderate decline is expected. Overall, prices and premiums are relatively high, with some traders engaging in T+0 trading.

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

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

2: Bonds under 150 yuan, within 200 million, with limited downward volatility, capable of premium, high upper limit, small retracements, excluding recent potential strong redemptions:
Ailu, Haibo…

3: Relatively low-priced, low-premium bonds around 145 yuan, with about 30% premium, maturity 0.5-5.5 years, suitable for swing traders:
Wan Tian, Qiangli, Lantian, Wanshun, Yinwei, Hengfeng, Yirui, Manno, Shanshi, Wanshun 2, Chao Sheng, Shang Sheng…

4: Aggressive low-priced bonds around 150 yuan, with about 20% premium, under 500 million, ensuring certain profit/loss ratio:
Tianhao, Weitang, Zhonglu, Fengshan…

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

6: Defensive bonds, with moderate premiums (~70%), under 1 billion, with yields around -3%, rich in concepts:
Zhibang, Gongtong, Kesi, Baichang, Xineng, Zejian, Haishun…

7: Actively watched, concept-rich, reasonably priced, with good flexibility, usually around 145 yuan:
Kelan, Lihe, Jingrui 2, Jintian, Hongwei, Mingli, Bainian, Changhai, Zhengyuan 2…

8: Bond-type bonds, suitable for those unwilling to hold cash:
Shenhao, Fuhan, Jiete, Lige, Jiankang, Shou22, Kangyi, Lizhi, Jinkai 23, Huoxing, Tai21, Yuxing, Xinhai…

Recently, some bonds have been adjusted, with some meeting redemption conditions for days, others not. The premium rates have been cut down, such as Dier, Huayuan, Huaxing, Weitang, Hangxin, Sanjiao, Aidi, Jinjii, Changhai…

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

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 employ conditional or grid orders to maximize volatility use. 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, stay away from hype. This is the truth and the cause-and-effect law. All phenomena are like illusions, like a dream, like bubbles, like lightning—observe with equanimity, without attachment, and let the mind arise naturally. Though water droplets are tiny, they gradually fill a large vessel…