March 16, 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 product gains popularity, its price can only move in one direction: up!

Since my personal convertible bond holdings are not large (about 45% of the total), I am at the minimum position and do not plan to reduce holdings proactively. I slightly increased my position last week, maintaining a difficult balance…

Market performance yesterday:

The previous trading day: Convertible bonds fell, A-shares fell, US stocks fell, FTSE A50 rose. Last night, US stocks continued to decline. Japan and Korea markets opened about 2% lower. External factors remain significant. We will observe if today can stabilize. Overall, it’s unstable; rapid adjustments are not advisable. If your position is 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. Now at 2655, with a median of 138.7, temperature at 88.6 degrees. There are 265 convertible bonds above 130 yuan, 7 fewer than the previous day, accounting for 73.6%. Ten bonds below 110 yuan, unchanged from the previous day, with prices ranging from a low of 0 to a high of 3. In March, 6 green and 4 red convertible bonds. Total trading volume: 73.5 billion yuan, up 10.3 billion from the previous day, with a turnover rate of 14.4%, reaching 700 billion yuan on the first day. The convertible bond index fell 34 points to 2655, with an average price of 157.7, down 2.6 from the previous day. The median premium is 29.4%, down 1.9. A-shares traded 24,175 billion yuan, 400 billion less than the previous day. Yesterday opened low and declined sharply, overall sentiment remains high; some traders are doing T+0 trading to maintain positions.

Yesterday, Tongyu rose 9.74%, leading gains. Convertible bond trading concentration decreased; the top 5 traded varieties accounted for 19% to 22.7% of total convertible bond trading, with the highest single trading volume at 5.4 billion. Most varieties saw decreased activity; the number of varieties with trading volume below 10 million decreased from 1 to 4, representing 1.1% of the market. The minimum trading amount dropped from 8.41 million to 7.74 million yuan.

Today’s convertible bond and market info:

Lanfan, Baolai, scheduled revisions, trust, Lianchuang, last conversion date; Shiya Technology, Hongming Electronics: Shanghai-Shenzhen new stock subscription; Yue Long Technology: Beijing Stock Exchange new stock subscription; Shang 26 convertible bonds, Doctor convertible bonds: subscription on March 18; Zhongchong Convertible 2: forced redemption; Lithium Science Convertible: no revision planned…

Shuangliang Energy-saving: company’s controlling shareholder received notice of investigation from the CSRC; Jin Hong Gas: actual controller plans to transfer 5.29% of shares to Qianyuan Hui Investment; Daotong, Hongbo, and others reduced holdings…

Today, Huicheng, Yuanxin, Dazhong, Wankai, Jingzhuang are expected to meet the possible forced redemption within one day; Guowei, Tong 22, Ruike, Jiete: possible revision trigger within one day.

No new bonds listed today; 3 new stocks subscribed; no convertible bond subscriptions today. Focus today: whether convertible bonds can stabilize, etc.

Mino, Yinwei, and others show good trends; continue to monitor. Also watch relatively low-priced varieties like Jingrui 2, Kelun, Lihe, etc.

Summary of information:

1. The 315 Gala exposed seven major issues;
2. International oil prices continue to rise, with many countries releasing strategic reserves;
3. Expected hot topics: crayfish farming computing power (Aofei, Zhongbei, Yitian, Trust), power grid equipment (Jin 05, Jingda, Huachen, Jaze, Yubang), space photovoltaics (Shuangliang, Fu 22, Aowei, Dier, Ruike, Tian 23, Long 22), AI applications (Fengyu, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelun, Sit, Pulian), commercial aerospace (Guanglian, Zai 22, Huatian, Shenyu, Mengsheng, Hangyu); chemical industry (Baichuan 2, Hongqiang, Jinjii, Heda, Qixiang 2); chips (Liyang, Maolai, Luwei, Huicheng, Jingrui 2, Anji, Yanggu); lithography (Jingrui 2, Huate, Huamao, Qiangli); also keep an eye on humanoid robots and other concepts…

Yesterday, convertible bonds opened low and declined sharply, with increased trading volume; today, slight upward trend expected; thematic speculation opportunities; overall prices and premiums are relatively high, with some traders doing T+0.

Below are last weekend’s bond selections: (personal selection records, not investment advice). Due to high median levels, I relaxed some selection standards! Overall quality improved compared to last week, considering volatility capacity. Of course, the premise is still optimistic about the market, and I plan to hold some convertible bonds, selecting relatively low prices and small caps, preferably with rich concepts and active trading, mainly for broad allocation, not for single-position recommendations:

1. Micro-sized 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, high upper limit, small retracement, excluding recent potential forced redemptions: Ailv, Haibo…

3. Relatively low-priced, low-premium bonds, around 142 yuan, with about 30% premium, maturity 0.5-5.5 years, good for swing trading: Wanshun 2, Wantian, Jinpu, Qiangli, Weitang, Lantian, Shangsheng, Hengfeng, Wanquan…

4. Low-priced, aggressive bonds around 150 yuan, with about 20% premium, within 500 million, ensuring certain profit/loss ratio: Tihao, Mino, Yinwei, Fengshan…

5. Pure offensive bonds, premium around 15%, around 160 yuan, scale 400 million, excluding those with potential forced redemption within 2 weeks: None…

6. Defensive bonds, not very high premium, about 70%, not entirely relying on revision, within 1 billion, yield around -3%, with diverse concepts: Gongtong, Kesi, Baichang, Xineng, Zhejiang Construction, Haishun, Haineng, Huitian, Yuxing…

7. Personally more active and concept-rich, not too expensive, with good flexibility, usually around 140 yuan: Kelun, Lihe, Jingrui 2, Jintian, Hongwei, Mingli, Bainian, Changhai, Zhengyuan 2, Sanjiao, Huaxing…

8. Bond-type varieties, suitable for those unwilling to hold cash: Shenhao, Fuhan, Jiete, Lige, Jiankang, Shou 22, Kanyi, Lizhi, Mars, Tai 21, Xinhai…

Recently, some convertible bonds have been adjusted, with some meeting the conditions for forced redemption for several days, while others may not. The premium rates have been reduced significantly, such as DIO, Garden, Huaxing, Weitang, Hangxin, Sanjiao, Aidi, Jinjii, Changhai…

Current market conditions show clear pressure from forced redemptions, limiting upper bounds. It’s advisable to avoid overly expensive bonds.

Overall strategy: avoid deep research, focus on broad allocation, ride the waves, use a whack-a-mole approach, rely on volatility, use wide coverage instead of depth, while managing risks and pursuing average returns. Use conditional orders and grid trading to maximize volatility utilization. Not recommended for single-position holdings. All selected bonds are personal summaries, not investment advice. Investing involves risks; proceed cautiously.

Stay true to the original purpose of convertible bonds. Currently, they 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 actions are like illusions, like dreams, bubbles, or lightning—view them as such, without attachment, and cultivate a calm mind. Water droplets may be tiny, but they gradually fill a large vessel…