March 12, 2026 - Convertible Bond Rebalancing

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. Over time, once a product gains popularity, its price can only move in one direction: up!

Since individual convertible bond positions are not high (overall position around 45%), which is already the lower limit of holdings, I do not plan to reduce positions proactively. I slightly increased holdings last week, maintaining the position is indeed not easy…

Last night, I attended a gathering with old friends. During the discussion, opinions on the current market varied greatly. One friend and I believe the market has entered the late middle stage; our positions are 50% and 20%. An elder brother thinks the market is long-term optimistic, with over 80% in position. Another friend, who mainly followed us in low-risk trades, has wavered and plans to invest more in stocks. But he made profits in 2026, and he was the one who paid the bill last night…

Yesterday’s overall market performance:

Previous trading day: Convertible bonds and A-shares rose, US stocks closed mixed, FTSE A50 declined. US stocks consolidated last night, Japan and Korea markets opened slightly lower, external factors remain significant. Watching whether they can stabilize today…

The convertible bond index fell from 2090 on February 13, 2023, to 1753 on February 5, 2024. Now at 2728, with a median of 141.6, temperature at 92.6 degrees. There are 284 convertible bonds above 130 yuan, up 5 from the previous day, accounting for 78.7%. Below 110 yuan, there are 11, unchanged from the previous day, with prices ranging from a low of 0 to a high of 12; March convertible bonds show 4 green and 4 red. The turnover of convertible bonds reached 66.7 billion, up 1 billion from the previous trading day, with a turnover rate of 13%, dropping to 60 billion on the second day. The index rose 1 point to 2728, with an average price of 162.9, down 0.4 from the previous day. The median premium is 32.2%, up 0.4. A-shares traded 25,285 billion yuan, up 1,100 billion from the previous day. Yesterday, the market opened high, moved higher, then fell back, with moderate volatility, ending slightly higher. Sentiment for convertible bonds remains high; some traders are doing T+0 trades to maintain positions.

Yesterday, Baichuan 2 led with a 16.5% increase; trading concentration increased, with the top 5 traded varieties accounting for 15% to 19.6% of total convertible bond trading volume. The highest single trade was 5.1 billion. Most varieties saw decreased activity, with the number of trading varieties below 10 million dropping from 4 to 5; their proportion in the market is about 1.5%. The minimum transaction amount decreased from 7.98 million to 5.12 million.

Today’s convertible bond and market-related information:

Linuo: last trading day; Weining: price cut; Hongqiang: forced redemption; Yubang: no forced redemption; Haitian convertible bonds listed on March 12; Shengtai convertible bonds: no price cut.

Xiaoxiong Electric: 2025 net profit of 401 million yuan, up 39.17%; Yinlun: subsidiary Langxin approved by Beijing Stock Exchange; Shangsheng: stop converting from March 13; indicating recent issuance of convertible bonds…

Today, Guangli, Weice, Yong 22, Weidao, Seli: possibly meet the redemption conditions with one more day; today, Wu: possibly meet the price cut trigger with one more day.

Today, 1 new bond listed, no new stock or convertible bond subscriptions. Focus today: whether the rebound of convertible bonds can continue, etc.

Alabang, Yubang, and others show good trends; continue to monitor; focus on relatively low-priced varieties like Jingrui 2, Weitang, Zhengyuan 2, etc.

Information summary:
1: The 2026 National Two Sessions are nearing their end;
2: Expected hot topics: crayfish farming concept (Aofei, Zhongbei, Yitian, Xinfu); power grid equipment (Jin 05, Jingda, Huachen, Jiazhe, Yubang); space photovoltaics (Shuangliang, Fu 22, Aowei, Dier, Reike, 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, Luwi, Huicheng, Jingrui 2, Anji, Yanggu); lithography photoresist (Jingrui 2, Huate, Huamao, Qiangli); also keep an eye on humanoid robots and other concepts…

Yesterday, convertible bonds opened high and then declined slightly, with increased trading volume; today, slight decline expected; thematic speculation opportunities exist; overall prices and premiums are relatively high, with some traders doing T+0 trades.

Below are last weekend’s bond selections: (personal bond selection record, 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, choosing relatively low prices and small caps, preferably with rich concepts and active trading, mainly for diversification, not for single-position recommendations:

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

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

3: Relatively low-priced, low-premium varieties, around 145 yuan, with about 30% premium, maturity of 0.5-5.5 years, good for swing trading:

Wantian, Qiangli, Lantian, Wanshun 2, Yinwei, Hengfeng, Yirui, Manno, Shanshi, Wanshun 2, Ultrasound, Shangsheng…

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

Tianhuo, Weitang, Zhonglu, Fengshan…

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

6: Defensive types, with moderate premiums around 70%, not relying solely on price cuts, within 1 billion, yield around -3%, with diverse concepts:

Zhibang, Gongtong, Kesi, Baichang, Xineng, Zejian, Haishun…

7: Actively followed varieties with rich concepts, relatively low prices, good elasticity, usually around 145 yuan…

Kelun, Lihe, Jingrui 2, Jintian, Hongwei, Mingli, Bainian, Changhai, Zhengyuan 2…

8: Bond-type varieties, suitable for those unwilling to hold cash…
Shenhao, Fuhan, Jiete, Ligao, Jiankang, Shou 22, Kangyi, Lizhi, Jinxing 23, Huoxing, Tai 21, Yuxing, Xinhai…

Recently, some convertible bonds have been adjusted, with some starting to meet redemption conditions for several days, while others may not, and premiums have been cut down. Examples include: DIO, Garden, Huaxing, Weitang, Hangxin, Sanjiao, Aidi, Jinjii, Changhai…

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

Overall strategy: avoid deep research, avoid concentration, diversify widely, ride volatility, adopt a whack-a-mole approach, use broad coverage instead of depth, and hedge risks. Pursue average returns, possibly using conditional orders and grid trading to leverage volatility. Not recommended for single holdings. All selected bonds are personal summaries, not investment recommendations. 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 phenomena are like illusions, like a dream, like bubbles, like lightning. Observe with equanimity, do not cling, and let your mind be free. Though water droplets are tiny, they gradually fill a large vessel…