March 18, 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 becomes popular, its price can only move in one direction: up!

Since personal convertible bond holdings are not high (about 45% overall), this is already the lower limit of holdings. I do not plan to reduce positions proactively. Last week, I slightly increased holdings. Maintaining positions is indeed challenging…

Yesterday’s overall market performance:

Previous trading day: Convertible bonds fell, A-shares fell, U.S. stocks rose, FTSE A50 rose, U.S. stocks rose last night, Japan and Korea markets opened slightly higher. External influences remain significant. Observe whether the market can stabilize today; overall, convertible bonds are still unstable. Do not increase or adjust positions too quickly. If your holdings are very low, you can start adjusting to below 50%.

The convertible bond index dropped from 2090 on February 13, 2023, to 1753 on February 5, 2024. It then rose to 2600, with a median of 136, and a temperature of 84.9 degrees. There are 247 convertible bonds above 130 yuan, 12 fewer than the previous day, accounting for 68.5%. There are 9 bonds below 110 yuan, 1 fewer than the previous day, with prices ranging from a low of 0 to a high of 2. In March, there were 8 green and 4 red convertible bonds.
Total convertible bond trading volume was 66 billion, 7.4 billion less than the previous trading day, with a turnover rate of 13%, the first day below 600 billion. The index fell 52 points to 2600, with an average price of 153.8, down 3.6 from the previous day. The median premium is 29.7%, unchanged from the previous day. A-shares traded 22,247 billion, 1,200 billion less than the previous day. Yesterday opened low and declined sharply, ending at the lowest point, but sentiment remains relatively high; some traders are maintaining positions.

Yesterday, Tongyu rose 3.5%, leading gains. Convertible bond trading concentration decreased; the top 5 traded varieties accounted for 16.7% to 17% of total convertible bond trading, with the highest single trade volume at 3.5 billion. Most varieties saw increased activity; the number of varieties with trading volume below 10 million remained at 2, representing 0.6% of the market, with the lowest amount at 5.68 million to 5.6 million yuan.

Today’s convertible bond and market news:

Mengsheng last trading day; Hongtu meeting on revision; Zh26 convertible bond; Doctor bond: 【Subscription】; Pu’ang Medical: new stock on Beijing Stock Exchange 【Subscription】;
Zuxing New Materials: new stock on Beijing Stock Exchange 【Listing】; Zhongte Convertible Bond: no revision; Tonglian Convertible Bond: listed on March 20; Jianyou Convertible Bond: last trading day before maturity: April 17, 2026.

Huitian New Materials: wholly owned subsidiary suffered a fire and was ordered to halt production; Yongji Shares: controlling shareholder plans to reduce holdings by no more than 2%; Lidao New Materials: plans to invest 280 million yuan to expand battery aluminum foil project; Daimai, Huate, and Wanjian reduce holdings.

Today, no new bonds are listed; one new stock subscription; two convertible bond subscriptions. Focus today: whether convertible bonds can stabilize, etc.

Are multiple varieties like Jinji, Ala, etc., able to meet the redemption conditions? Mino, Huaxing, etc., show good trends; continue to monitor. Also pay attention to relatively low-priced varieties like Jingrui 2, Zhengyuan 2, Huaxing, etc.

Summary of information:
1: The Ministry of Foreign Affairs states that the U.S. has clarified that President Trump’s visit to China is unrelated to the Hormuz navigation issue.
2: The Ministry of Finance will continue to implement more proactive fiscal policies this year.
3: Expected hot topics: computing power (Aofei, Zhongbei, Yitian, Xinfu); power grid equipment (Jin05, Jingda, Huachen, Jazeera, Yubang); space photovoltaics (Shuangliang, Fu22, Aowei, Dier, Reco, Tian23, Long22); AI applications (Fengyu, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelun, Sit, Pulian); commercial aerospace (Guanglian, Zai22, Huatian, Shenyu, Mengsheng, Hangyu); chemicals (Baichuan2, Hongqiang, Jinji, Heda, Qixiang2); chips (Liyang, Maolai, Luwei, Huicheng, Jingrui2, Anji, Yanggu); lithography (Jingrui2, Huate, Huamao, Qiangli); plus humanoid robots and other concepts remain worth watching.

Yesterday, convertible bonds opened low and declined sharply, with decreased trading volume; today, slight decline expected; whether they can stabilize is key. The theme speculation has opportunities; overall prices and premiums are relatively high, with some traders doing T+T.

Below are bond selections from last weekend (personal record, 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, the premise is still optimistic about the market and prepared to hold some convertible bonds, selecting relatively low-priced, small-cap, 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:
Silk Road, Ailv…

2: Slightly below 150 yuan, within 200 million, limited downward volatility, capable of driving premiums, with high upper limits, small retracements, excluding recent potential for strong redemption:
Ailv, Haibo…

3: Relatively low-priced, low-premium varieties, around 142 yuan, with about 30% premium, remaining 0.5-5.5 years, good for swing trading:

Wanshun2, Wantian, Jinpu, Qiangli, Weitang, Lantian, Shangsheng, Hengfeng, Wanquan…

4: Low-priced, aggressive team, around 150 yuan, ensuring certain profit/loss ratio, within 500 million, about 20% premium:

Tianhuo, Mino, Yinwei, Fengshan…

5: Pure offensive, premium rate around 15%, about 160 yuan, scale 400 million, excluding those with potential for strong redemption within 2 weeks:
None…

6: Pure defensive, not very high premium rate, around 70%, not fully relying on revision, within 1 billion, yield around -3%, with diverse concepts:

Gongtong, Kesi, Baichang, Xineng, Zejian, Haishun, Haineng, Huitian, Yuxing…

7: Actively watched by individuals, conceptually rich, not too expensive, with good elasticity, usually around 140 yuan…

Kelan, Lihé, Jingrui2, Jintian, Hongwei, Mingli, Bairun, Changhai, Zhengyuan2, Sanjiao, Huaxing…

8: Bond-type varieties, suitable for those unwilling to hold no position…
Shenhao, Fuhan, Jiete, Ligao, Jianfan, Shou22, Kangyi, Lizhi, Jinkai23, Mars, Taiji21, Xinhai…

Recently, some convertible bonds have been adjusted to meet redemption conditions for several days, while others may no longer qualify. The premium rates have been cut down, such as DIO, Garden, Huaxing, Weitang, Hangxin, Sanjiao, Aidi, Jinji, Changhai…

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

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 maximize volatility utilization. Not recommended for single holdings. All selected bonds are personal summaries, not investment advice. 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; 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 such a mindset, be unattached, and let the mind arise. Water droplets are tiny but can gradually fill a large vessel…