April 8, 2026 Convertible Bonds Portfolio Adjustment

Investing is a popularity contest. Buying in when popularity is at its peak is the most dangerous. At that time, all favorable factors and viewpoints have already been priced in, and no new buyers will ever appear again…

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

Right now, my personal convertible bond allocation is not very high at this stage (about 45% of my total position). I’m near the lower end of my holdings. To deal with the possibility of even more new highs, I’m not planning to proactively reduce my position. In the first three months of this year alone, my maximum drawdown is already 8.2%, which is even more than the whole of last year. This is a year of turbulence for investing…

Yesterday’s market performance overall:

On the previous trading day: convertible bonds up, A-shares up, U.S. stocks flat, FTSE A50 up. U.S. markets were consolidating overnight. The already-opened stock markets in South Korea and Japan were both up. As for whether A-shares will follow today and by how much, it’s uncertain. I expect A-shares to rise slightly and convertible bonds to trade sideways/up. External factors are still very significant. I’ll watch whether convertible bonds can hold up today. Recently, the overall situation hasn’t stabilized, so I’m reducing trading activity. I can’t cut positions or adjust them too quickly. If the position size is very low, you can start gradually rebalancing to below 50%…

The convertible bond index fell from 2090 on Feb 13, 2023, to 1753 on Feb 5, 2024. Then to the current level of 2575. The current median is 135.7, the “temperature” is 84.4 degrees. There are 227 convertible bonds above 130 yuan, which is 5 more than the day before, accounting for 66%; there are 11 below 110 yuan, same as the day before. The price range hit the lowest 0 / highest 3. In April’s issuances, there was 1 green and 3 red. Convertible bond trading volume was 60 billion yuan, down 6.1 billion from the prior trading day. Turnover rate was 12.2%. It drops to 60 billion for the 3rd day. The convertible bond index rose by 15 points to 2575. Average price was 152.4, up 0.8 from the day before. The median premium was 38.4%, down 1.1 from the day before. A-share trading volume was 1.62T yuan, down 40 billion from the prior day. Yesterday opened flat, then rallied high before falling back; ultimately there was a mid-sized rise. Convertible bond sentiment temperature is still okay. There is “T+0/做T” activity—maintain an appropriate position size;

Yesterday: Xin’gang led with a 7.8% gain. Concentration in convertible bond trading increased. The top 5 issues accounted for convertible bonds’ overall trading volume falling from 31% to 27.7%. The highest single issue trading volume was 4.9 billion yuan. Most issues’ activity increased. The number of issues with trading volume below 10 million yuan fell from 5 on the previous day to 2. Their share of the market was 0.7%, and the lowest amount decreased from 6.61 million to 6.49 million yuan…

Today’s related information on convertible bonds and the market:

Yesterday convertible bonds opened flat, rallied, then pulled back with a mid-sized rise. Trading volume decreased and the premium rate decreased. Today is expected to rise slightly. Convertible bonds still show no signs of having stabilized. It’s either a big rise or a big drop. There’s an opportunity for theme speculation. Convertible bonds’ overall price and premium rate are both relatively high, and there is 做T—so…

COMAC Beijing Changbao Rental Housing REIT (180503): 【Subscription】;
Ruitai, Dongshi, last convert-to-stock day;
Xianghe convertible bond: no downwards adjustment;
Chenguang Electric Motor: new shares on the NEEQ 【Listing】;
Shangshui Intelligent: new shares on the SSE/SZSE 【Subscription】…

ST Zhanggu: Zhanggu shares convertible bond resumes trading, due to false financial records in the annual report; the company’s stock is subject to other risk warnings; Wen’tai to hold a meeting for downwards adjustment; Yiywei convertible bond: net profit up year-over-year…

Today Ruichuang: likely meets the “fast” call/strong redemption requirement after one more day; today there is none: likely meets the “fast” requirement one day later, which could trigger a downwards adjustment.

Today, 0 new bonds are listed, 1 new stock is open for subscription, 0 convertible bonds are open for subscription. Today to watch: Zhanggu; whether the overall convertible bond market can hold up, etc.

Zhanggu resumes today; there’s a possibility of a -20% daily limit-down. Watch today. Strongly 聚合, WanShun 2, etc. have good momentum—keep tracking. Consider rebalancing options: watch Hengfeng, Ultrasonic, Hongwei, and other relatively low-priced issues…

Information summary:
1: Iran-Iraq agreement among the parties to stop fire for 2 weeks, oil down;
2: Expected hotspots:
Computing power (Aofei, Zhongbei, Yitian);
Power grid equipment (Jin05, Jingda, Huachen, Jiaze, Yubon);
Space solar (Shuangliang, Fu22, Aowei, Dier, Ruike, Tian23, Long22);
AI applications (Fengyu, Dingjie, Shengxun, Jizhi, Runda, Guanzhong, Yaoji, Kelan, Sitong, Pulian);
Commercial spaceflight (Guanglian, Zai22, Shenyu, Mengsheng, Hangyu);
Chemicals (Jinji, Heda, Qixiang2);
Chips (Maolai, Luowei, Huicheng, Jingrui2, Anji, Yanggu);
Photoresist (Jingrui2, Huat, Huamai, Qiangli);
Also keep an eye on concepts like humanoid robots…

Below are selected convertible bonds from last weekend. Updated weekly, not daily: (personal record of selected bonds; not investment advice). Because the median is at a high level, I’ve relaxed the selection criteria appropriately! Overall quality improved compared with last week. All of them consider volatility capacity, of course on the premise that I still believe in the outlook and plan to hold part of the convertible bond position. I choose issues that are relatively cheap and relatively small in market cap, and as much as possible choose active issues with rich concepts. All are for “spread the pancake” allocations—no recommendation for any single holding: (pure-debt-only issues also aren’t recommended)

1: Convertible bonds with a micro-cap size around 130 (within 300 million) can be included in the list:
Wansxun, Shanshi, Kelan, Juh e, Silu, Eryi, Jiudian2, Hengfeng …

2: Micro-cap under 200 million within 150 yuan, with limited downside volatility, can drive premiums, high ceiling, and small drawdowns; exclude those that may have a strong redemption in the near term:
Ailu, Haibo, Jingyuan …

3: Relatively low-priced, relatively low-premium issues, with prices between 140, premium around 30, and remaining terms of 0.5 to 5.5 years; good for swing trading:

Qiangli, Waitang, Ultrasonic, Jinpingu, Wantian, Lantian, Haishun…

4: Relatively low-priced “charge” team, around 150, guaranteeing a certain profit-loss ratio, within 500 million; premium around 20:

Wanshun2, Fengshan, Lidao …

5: Pure offensive type, premium rate around 15, around 160, size about 400 million; exclude those with possible strong redemption within 2 weeks:
None …

6: Pure defensive type, premium rate not particularly high, around 70%; not fully relying on downwards adjustment; within 1 billion in market cap; yield around -3; try to have a rich set of concepts:

Gongtong, Kesi, Zhejian, Haineng, Huitian, Yuxing, Dongya, Zhite, Dongbao…

7: Personally watched more actively traded types, richer in concepts, not too expensive, with decent elasticity. Usually around 140…

Kelan, Lihe, Jingrui2, Hengfeng, Hongwei, Mingli, Changhai, Zhengyuan2, Sanjiao, Huaxing, Yaoji, Xingrui, Lidao …

Recently, convertible bonds have been adjusted. Some have begun to meet the strong redemption conditions for several days but might not be able to meet them; premium rates have already been crushed down, such as:
Diao’ou, Huayuan, Huaxing, Waitang, Hangxin, Sanjiao, Yidi, Changhai, Sait e, Yong02…

In the current environment, strong redemption pressure is relatively obvious, which leads to a limited upper bound. So I try not to choose issues that are too expensive…

The overall strategy is: don’t conduct deep research, don’t concentrate positions, spread the pancake, trade the volatility, and “mousetrap” style. Use breadth instead of depth, and while defending against risks, aim for average returns. It can be coordinated with conditional orders and grid orders. Make as much use of volatility as possible, and do not recommend any single holding. Also, all selected convertible bonds are for my personal summary only and are not investment recommendations. Investing is risky—enter cautiously.

Don’t forget the初心 when trading convertibles. Judging from the current situation, convertibles are currently very good options for retail investors. Convertible bond investing is a marathon—you must stick to the right path and stay away from a speculation mindset. This is a truth, and also a cause-and-effect. All things you do will be like dreams and illusions, like dew that is also like lightning; they should be treated in that way—so you should have no place to abide, and yet give rise to that mind. Even a water droplet is small, but gradually it becomes a great device…

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