2026-4-2 Convertible Bond Portfolio Adjustment

Investing is a popularity contest. Buying when popularity is at its peak is the most dangerous. At that point, all good-for-the-market factors and viewpoints have already been priced in, and there will never be new buyers again..

The safest investment with the biggest profit potential is to buy when nobody likes it. Give it time—once the issue becomes popular, its price can only move in one direction: up!

At the moment, my personal current convertible bond (CB) position size isn’t very high (overall position around 45%). I’m near the lower bound of my holdings. To deal with the possibility of still another new high, I’m not planning to proactively cut positions first. Last week I slightly increased my position. In this year, I’ve only opened positions for the first three months. My maximum drawdown is already 8.2%, which is more than the whole of last year. This year is a not-so-calm year for investing…

Yesterday’s market overall performance:

Previous trading day CBs up A-shares up US stocks up FTSE A50 up. US stocks were up slightly last night. The already-opened South Korean and Japanese stock markets also rose slightly. As for A-shares, I don’t know whether they’ll follow today and by how much. Expect a slight rise today. External factors are still very significant. We’ll observe whether CBs can hold steady today. In the recent strategy, the overall situation hasn’t stabilized—reduce trading. Don’t add positions or rebalance too quickly. If your position size is very low, you can start gradually rebalancing to below 50%…

The CB index dropped from 2090 on February 13, 2023 to 1753 on February 5, 2024. Then to today’s 2594. The current mid value is 135.8, temperature 85.3 degrees. There are 236 CBs above 130 yuan, 26 more than the previous day, accounting for 67.8%; below 110 yuan there are 12, 1 fewer than the previous day. The price hit the lowest 0 / highest 0. For April CBs: 0 green, 1 red. CB trading was 78.6 billion yuan, up 11.9 billion from the previous trading day, turnover rate 15.8%. It reached up to 70 billion yuan on day 1, ranking #1. The CB index rose by 56 points to 2594 points. The average price was 153.4, up 3.8 from the previous day. Mid premium was 35.5%, up 1.3 from the previous day. A-share trading was 2,025.1 billion yuan, up 19.0 billion from the previous day. Yesterday opened high and then went higher—straight north-east all the way—and ultimately rose sharply. CB sentiment temperature is still okay. With T trades (buy-sell churn within holdings), maintain an appropriate position size;

Yesterday, DaoTong led with a gain of 9%. The concentration of CB trading fell. The top 5 issues by trading volume went from 31.2% of total CB trading to 21.9%. The highest single issue trading volume was 7.0 billion yuan. Most issues saw increased activity. The number of issues with trading volume below 10 million yuan fell from 5 the previous day to 1. That’s 0.3% of market issues; the lowest amount fell from 6.97 million to 9.31 million yuan…

Today’s CBs and related market information:

Yesterday CBs opened high and rallied strongly, with a big jump in trading volume—April had an opening red day. Today is expected to be slightly up. CBs still show no signs of stabilizing; it’s either a big up move or a big down move. There may be opportunities for theme-driven trading. CB prices and premium rates are both still relatively high overall, with T trades available…

Dongshi, Luta i, last trading day; Weic e, last conversion day; Zhenhua CB, Al a CB: strong redemption; Zhejiang Mine CB, Longda CB: no downwards revision; Linggang CB: last trading day before maturity: April 7, 2026; Boshi CB: listed April 7…

B a i l an Medical: the actual controller plans to increase holdings of no less than 20 million yuan worth of shares; Gansu Nenghua: plans to purchase 100% equity of Jinchang Chemical and raise supporting funds by issuing shares; the stock will be suspended from trading…

Today, Tianyuan, Sait e: possibly strong redemption as one day short of the threshold. Today, Guotou, Sanfang: possibly triggering a downwards revision as one day short of the threshold.

Today, 0 new CBs listed, 0 new stock subscriptions, 0 CB subscriptions. Today to watch: whether Dongshi CB can hold steady, etc.

Dongshi: last trading day. The announcement says there’s no money to repay—so it’s advised not to gamble on small amounts. Lidao, Jial i, and others with good trends—keep monitoring continuously. Watch relatively lower-priced options such as Ultrasound, L i he, Yaoji, etc. as possible choices for rebalancing…

Information summary:
1: Premier Li Qiang of the State Council focuses on improving the construction of new-type power grids;
2: Expected hot themes: computing power (Ao fei, Zhongbei, Yi tian); grid equipment (Fin 05, Jinga, Huachen, Jaze, Yubang) space solar (Shuangliang, Fu22, Owei, Dier, R ic o, Tian23, Long22) AI applications (Fengyu, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelan, S i te, Pulian) commercial aerospace (Guanglian, Z ai22, Shenyu, Mengsheng, Hangyu); chemical (Jingji, Hed a, Qixiang2) chips (Maolai, Luowi, Huicheng, Jingrui2, Anji, Yanggu, ) photoresist (Jingrui2, Huat e, Huma o, Qiangli). Also keep an eye on concepts like humanoid robots…

The following are CB selections from last weekend. Updated weekly, not daily: (personal CB record only, not investment advice). Since the mid value is at the high end, I loosened the selection standards appropriately! Overall quality improved compared to last week. I’ve all considered their ability to withstand volatility—of course provided that I still like the outlook and still plan to hold part of my CB positions. I choose relatively low-priced, relatively small-cap issues, and try to select active issues with rich themes. They’re for spreading exposure (“making a big pancake” allocation), not recommendations for any single holding: (CBs with pure bond-like characteristics are also not recommended)

1: CBs around 130 yuan for micro caps (within 300 million) can be included in the list:
Wansxun, Shanshi, Kelan, Juh e, Silu, Yirui, Jiudian2 …

2: Micro caps within 200 million for under 150 yuan. Volatility downward is limited, can drive premium, has a high ceiling, and less drawdown. Exclude strong redemption risks in the near term:
Ail u, Hai bo …

3: Relatively low-price, low-premium issues. Prices between 140. Premium around 30. Maturity remaining 0.5–5.5 years. Good for swing trading:

Qiangli, Waiton g, Ultrasound, Jinpingu, W aiting …

4: Relatively low-price “frontline” units. Around 150. Ensures a certain profit/loss ratio. Within 500 million. Premium around 20:

Xingang, Rui feng, Fengshan …

5: Pure aggressive type. Premium rate around 15. Around 160. Size 400 million. Exclude those that may strongly redeem within the next 2 weeks:
None …

6: Pure defensive type. Premium rate not especially high, around 70%. Not completely relying on downwards revision. Within 1 billion, yield around -3. Try to have as many different concepts as possible:

Gongtong, Kesi, Zhejiang Jian, Haineng, Huitian, Yuxing, Dongya, Zhite, Dongbao…

7: Personally watch the more active types, with richer concepts, not too high prices, and decent elasticity—usually around 140…

Kelan, L ihe, Jingrui2, Hengfeng, Hongwei, Mingli, Changhai, Zhengyuan2, S anjiao, Huaxing, Yaoji, Xingrui …

Recently, CBs have adjusted. Some have begun meeting strong redemption conditions for several days, yet may not continue to meet them. The premium rates have already been cut down. Examples: Eio u, Huayuan, Huaxing, Waiton g, Hangxin, S anjiao, Aidi, Jingji, Changhai, Al a, Sait e …

With the current situation, strong redemption suppression is quite obvious, leading to limited upside. Therefore, I try not to choose issues that are too expensive…

The overall strategy: don’t do deep research; don’t concentrate; spread exposure (“make a big pancake”), trade volatility, and play a “whack-a-mole” style. Use width instead of depth. At the same time, defend against risks, seek average returns. It can be combined with conditional orders and grid orders. Make as much use of volatility as possible. Not recommending any single holding. Also, all selected CBs are for personal summaries, not investment recommendations. Investing has risks—enter the market cautiously.

To trade convertible bonds, don’t forget the original intention. CBs, as it stands, are currently very good picks for retail investors. Convertible bond investing is a marathon—you must keep to the right path and stay away from a speculative mindset. This is the truth, also a matter of cause and effect. All “actions” are like dreams and illusions, like dew that evaporates and lightning that flashes. It should be done that way; one should not be attached, yet gives rise to one’s mind. Even a water droplet is small, but it gradually fills and becomes a great vessel…