2026-3-26 Convertible Bond Portfolio Adjustment

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. Over time, once a stock becomes popular, its price can only move in one direction: up!

Since my personal convertible bond holdings are not high at this stage (overall position around 45%), which is already the lower limit, I am not planning to reduce my holdings proactively to prepare for potential new highs. I slightly increased my position last week. Maintaining the position is indeed challenging…

Yesterday’s overall market performance:

The previous trading day: Convertible bonds rose, A-shares rose, US stocks rose, FTSE A50 fell. US stocks slightly increased last night. The Japanese, Korean, and other Asian markets opened mixed. After two days of rebound, A-shares are expected to fluctuate. External factors remain significant. Watch whether convertible bonds can continue to rebound today. Do not increase or adjust positions too quickly. If your position is low, you can gradually reduce it to below 50%…

The convertible bond index fell from 2090 on February 13, 2023, to 1753 on February 5, 2024, then rose to 2630. The median is 136.9, with a temperature of 86.3 degrees. There are 241 convertible bonds above 130 yuan, up 7 from the previous day, accounting for 68.3%. There are 13 below 110 yuan, unchanged from the previous day, with prices ranging from a low of 0 to a high of 5. In March, 11 green and 7 red convertible bonds. Total trading volume was 74.8 billion, down 1.4 billion from the previous trading day, with a turnover rate of 14.9%, reaching 700 billion for the third day. The convertible bond index increased by 30 points to 2620, with an average price of 154.8, up 2.1 from the previous day. The median premium is 35.6%, slightly lower than the previous day by 0.4. A-shares traded 21,931 billion, up 1,000 billion from the previous day. Yesterday, the market opened high, moved slightly higher with some fluctuations, and ultimately surged significantly. Sentiment for convertible bonds continues to warm; some traders are doing T+0 trading, maintaining positions.

Yesterday, the energy-saving sector rose 11.2%, leading the gains. Trading concentration increased, with the top 5 bonds accounting for 15.5% to 19.4% of total convertible bond trading volume. The highest single trade was 5.5 billion. Most bonds saw increased activity, with the number of bonds with trading volume below 10 million dropping from 0 to 0 (no change). The minimum trading amount increased from 11.42 million to 12.3 million.

Today’s convertible bond and market-related information:

Liqun, Baichuan 2 last trading day; Anji’s last conversion day; Xianghe convertible bond listed, pre-157; Changgao convertible bond: listed on March 30…

Kangtai Medical: Shareholders plan to inquire about transferring 3.74% of shares;

Today, Alar, Huamao, Jinjii are expected to meet the possible early redemption within one day; today, Wu is expected to meet the possible early redemption within one day, triggering a downward adjustment.

Today: 1 new bond listed, 0 new stock subscriptions, 0 new convertible bond subscriptions. Focus today: whether Mino can stabilize the convertible bond, etc.

Mino’s underlying stock has been very active recently, with continuous limit-ups, and the premium rate is not too high. Continue to monitor; Huaya, Yuanxin, and others show good trends, keep an eye on them; also watch for relatively low-priced options like Yaoji, Haibo, Jingrui, Xingrui, Qiangli, etc., for rebalancing…

Summary of information:

1. US-Iran negotiations are uncertain; the US proposed a 15-condition peace plan, Iran rejected a ceasefire plan.
2. Expected hot topics: computing power (Aofei, Zhongbei, Yitian, Xinfu); power grid equipment (Jin05, Jingda, Huachen, Jiazhe, Yubang); space photovoltaics (Shuangliang, Fu22, Aowei, Dier, Reike, Tian23, Long22); AI applications (Fengyu, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelun, Sit, Pulian); commercial space (Guanglian, Zai22, Huatian, Shenyu, Mengsheng, Hangyu); chemicals (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 related concepts…

Yesterday, convertible bonds opened high and moved higher, with significant gains and decreased trading volume. The convertible bond index returned above 2600, indicating a revival of interest. Today, a slight increase is expected. The trend shows signs of stabilization; thematic speculation opportunities exist. Overall prices and premiums are relatively high, with some traders doing T+0.

Below are last weekend’s bond selections (personal notes, not investment advice). Due to high median values, I relaxed the selection criteria! Overall quality improved compared to last week, considering volatility capacity. Still optimistic about the market and prepared to hold some convertible bonds, focusing on relatively low prices, small caps, and concept-rich active bonds for diversified allocation—not recommended for single holdings (no pure debt products either).

1. Micro-sized bonds around 130 yuan (under 300 million) can be included: Hengfeng, Wanshun, Shanshi, Kelun, Juhe, Silk Road, Yirui, Jiudian 2, Lida…

2. Slightly larger bonds under 150 yuan, under 200 million, with limited downward volatility, capable of premium, high upper limit, minimal retracement, excluding recent potential early redemptions: Ailu, Haibo…

3. Relatively low-priced, low-premium bonds around 140 yuan, with about 30% premium, maturity 0.5-5.5 years, suitable for swing trading: Chaosheng, Wanshun 2, Wantian, Fengshan, Jinpu, Qiangli, Weitang, Lantian, Dier…

4. Low-priced, aggressive bonds around 150 yuan, with about 20% premium, under 500 million, ensuring certain profit/loss ratio: Meinuo, Xingang, Ruifeng…

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 around 70%, market cap under 1 billion, yield around -3%, with diverse concepts: Gongtong, Kesi, Zhejiang Construction, Haishun, Haineng, Huitian, Yuxing, Dongya, Zhit, Dongbao…

7. Active and concept-rich bonds with relatively low prices, good flexibility, usually around 140 yuan: Lihe, Jingrui 2, Hongwei, Mingli, Changhai, Zhengyuan 2, Sanjiao, Huaxing, Yaoji, Xingrui…

Recent adjustments in convertible bonds have some meeting redemption conditions in a few days, while others may not. Premiums have been reduced accordingly. Bonds like Diao, Huayuan, Huaxing, Weitang, Hangxin, Sanjiao, Aidi, Jinjii, Changhai, Alar, Sait, etc., are affected.

Current market conditions show clear redemptions, limiting upside potential. It’s best to avoid overly expensive bonds.

Overall strategy: avoid deep research, focus on diversification, spread bets, ride volatility, adopt a whack-a-mole approach, use broad exposure instead of deep, hedge risks, pursue average returns, and consider conditional orders and grid trading to utilize volatility. Do not recommend specific holdings; all selections are personal summaries. Investment 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, like a dream, bubble, or shadow, like dew or lightning. Observe with equanimity, do not dwell, and cultivate a calm mind. Though water droplets are tiny, they can gradually fill a large vessel…