March 17, 2026 - Convertible Bond Rebalancing

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

Since my personal convertible bond holdings account for about 45% of the total, which is already at the lower limit, I do not plan to reduce my holdings actively. I slightly increased my position last week, maintaining a difficult balance…

Yesterday’s overall market performance:

The previous trading day, convertible bonds fell while A-shares remained flat, U.S. stocks rose, FTSE A50 was flat, U.S. stocks rose last night, Japan and Korea markets opened slightly higher. External factors remain significant. We will observe if the market can stabilize today. Overall, it’s unstable; avoid rapid adjustments or increasing positions if holdings are low. If the position is very low, consider reducing to below 50%.

The convertible bond index has fallen from 2090 on February 13, 2023, to 1753 on February 5, 2024, then rose to 2652. The median is 138.4, with a temperature of 88.2 degrees. There are 259 bonds above 130 yuan, 6 fewer than the previous day, accounting for 71.9%. Ten bonds are below 110 yuan, unchanged from the previous day, with prices ranging from a low of 0 to a high of 4. In March, 7 bonds are green and 4 red. Total convertible bond trading volume was 73.4 billion, 1 billion less than the previous trading day, with a turnover rate of 14.4%, reaching 700 billion on the second day. The index dropped 2 points to 2652, with an average price of 157.4, down 0.3 from the previous day. The median premium is 29.7%, up 0.4. A-shares traded 23,401 billion, 700 billion less than the previous day. Yesterday, the market opened low and pulled back slightly, ending with a small decline. Sentiment remains high; some traders are doing T+0 trading to maintain positions.

Yesterday, Hongbo led with a 10.34% increase. Convertible bond trading concentration decreased; the top 5 bonds accounted for 16.6% of total trading volume, down from 22.7%. The highest single-trade volume was 3.7 billion. Most bonds saw increased activity; the number of bonds with trading volume below 10 million decreased from 4 to 2, representing 0.6% of the market, with the lowest amount dropping from 7.74 million to 7.18 million.

Today’s convertible bond and market-related information:

Hongbo, Songlin—last trading day; Lanfang—near the bottom of the downward revision; Baolai—less than bottom; Ruike convertible bond: proposal to revise downward; Huicheng convertible bond, Yuanxin convertible bond: forced redemption; Dazhong convertible bond, Wankai convertible bond, Jingzhuang convertible bond: no forced redemption; Jiete convertible bond, Tong 22 convertible bond, Guowei convertible bond: no revision; Shang 26 convertible bond, Doctor convertible bond: subscription on March 18.

Lánxiǎo Technology: 3,000-ton battery-grade lithium carbonate lithium extraction project sales contract terminated; Jiemei Technology: plans to acquire 100% equity of Aifusi Technology, resuming trading on March 17; Triangle plans to invest 200 million yuan to establish a satellite in-orbit delivery company; Youfa reduces holdings…

Today, Ala is likely to meet the potential forced redemption a day earlier; Zhongte and Haitian may meet the conditions for downward revision a day earlier.

No new bonds, no new stock subscriptions, no new convertible bond subscriptions today. Focus today on whether the convertible bonds can stabilize, etc.

Weil, Jin Hong, Chaoda, and other trends remain positive; continue to monitor. Pay attention to relatively low-priced stocks like Jingrui 2, Kelun, Lihui, etc.

Summary of information:

1. China and the U.S. hold Paris trade negotiations, agree to explore mechanisms to promote bilateral trade and investment cooperation.
2. Major economic indicators in China for January-February show significant improvement.
3. Expected hot topics: computing power (Aofei, Zhongbei, Yitian, Xinfu); power grid equipment (Jin05, Jingda, Huachen, Jiazhe, Yubang); space photovoltaics (Shuangliang, Fu22, Aowei, Dier, Ruike, 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, Jinjii, Heda, Qixiang2); chips (Liyang, Maolai, Luwi, Huicheng, Jingrui2, Anji, Yanggu); photoresists (Jingrui2, Huate, Huamao, Qiangli); also keep an eye on humanoid robots and other concepts.

Yesterday, convertible bonds opened lower and pulled back, with slight declines and flat trading volume. Today, expect moderate gains. The overall prices and premiums of convertible bonds are relatively high, with some traders doing T+0.

Below are last week’s bond selections (personal notes, not investment advice). Due to high median values, I relaxed the selection criteria somewhat! Overall quality has 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, focusing on relatively low prices, small caps, and concept-rich active stocks, mainly for broad allocation, not single-position recommendations:

1. Micro-cap bonds around 130 yuan (within 300 million):
   Silk Road, Ailv, etc.

2. Bonds under 150 yuan, within 200 million, with limited downward volatility, capable of premium, high upper limit, minimal retracement, excluding recent potential forced redemptions:
   Ailv, Haibo, etc.

3. Relatively low-priced, low-premium bonds, around 142 yuan, with about 30% premium, maturity 0.5-5.5 years, suitable for swing trading:

Wanshun2, Wantian, Jinpu, Qiangli, Weitang, Lantian, Shangsheng, Hengfeng, Wanquan, etc.

4. Aggressive low-price bonds, around 150 yuan, with guaranteed profit/loss ratio, within 500 million, about 20% premium:

Tianhuo, Mino, Yinwei, Fengshan, etc.

5. Pure offensive bonds, premium around 15%, around 160 yuan, scale 400 million, excluding those potentially forced redemptions within two weeks:
   None.

6. Defensive bonds, with moderate premiums (~70%), not relying solely on downward revisions, within 1 billion, yield around -3%, with diverse concepts:

Gongtong, Kesi, Baichang, Xineng, Zejian, Haishun, Haineng, Huitian, Yuxing, etc.

7. Personally active and concept-rich bonds, with relatively low prices, good flexibility, usually around 140 yuan:

Kelun, Lihui, Jingrui2, Jintian, Hongwei, Mingli, Bairun, Changhai, Zhengyuan2, Triangle, Huaxing, etc.

8. Bond-type stocks, suitable for those unwilling to hold cash:
   Shenhao, Fuhan, Jiete, Lige, Jiankang, Shou22, Kangyi, Lizhi, Jinxing23, Huoxing, Tai21, Xinhai, etc.

Recently, some convertible bonds have been adjusted, with some beginning to meet the conditions for forced redemption in the coming days, while others may not, and their premiums have been reduced accordingly. Examples include DIO, Garden, Huatian, Weitang, Hangxin, Triangle, Aidi, Jinjii, Changhai, etc.

The current market environment shows significant pressure from forced redemptions, limiting upper bounds. Therefore, I avoid overly expensive bonds.

Overall strategy: avoid deep research, focus on broad allocation, ride the volatility, adopt a whack-a-mole approach, use wide positions to replace deep ones, and hedge risks. Pursue average returns, possibly using conditional orders and grid trading to leverage volatility. Do not recommend specific holdings; all selections are personal summaries. 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. All actions are like illusions—dreams, bubbles, like dew or lightning. Maintain this perspective, be unattached, and cultivate your mind. Water droplets may be tiny, but they gradually fill a large vessel…