Orient Jincheng: The allocation cost-effectiveness of dual-low convertible bonds is expected to remain dominant.

Oriental Credit Rating released a research report on September 14 stating that, affected by Federal Reserve rate hike expectations and geopolitical risks, overall market sentiment remains cautious. In the short term, without unexpected catalysts, the equity and convertible bond markets are expected to be dominated by structural opportunities, making it difficult for a trend-based recovery to take shape. From a structural perspective, on the one hand, although the growth sector as a whole is under pressure, high-prosperity subsectors such as optical communications and PCBs, supported by solid fundamentals, are among the first to recover. It is expected that low-valuation hard-tech convertible bonds with industrial and earnings support offer relatively high cost-effectiveness for bargain-hunting allocation. On the other hand, given the high uncertainty in the current market environment, demand for defensive allocation continues to rise. High-dividend sectors such as banks, coal, and power will also continue to attract long-term allocation funds, providing support for dividend-type and large-cap base-position convertible bonds. As the triggering of strong redemption clauses has recently increased, continuous attention should be paid to the pullback pressure on high-valuation convertible bonds, while the allocation cost-effectiveness of double-low convertible bonds is expected to remain persistently superior.