CITIC Construction Investment said that the cost effectiveness of bond conversion is more applied to position selection control than to the safety and protection of short-term earnings. We believe that in the short term, debt conversion is the main gripper for subsequent policy games; in the medium term, it is a risk protection tool for the recovery of macro-fundamentals of trading. 1. Similar to equity, cheap individual stock valuations are not a driving factor in short-term transactions. There are even valuation traps. The cost performance ratio at the level of converting bonds to individual bonds also requires caution. Simply from the perspective of the cost effectiveness of converting bonds, subnew bonds are an option. 2. The double low strategy has proven to be a very effective debt conversion strategy, but judging from historical reviews, the absolute trend return of the double low strategy requires an increase in debt conversion valuations. 3. The increase in institutional allocation is due to the increase in the valuation of debt conversion, but the core reason driving institutions to increase the allocation of debt conversion is not that the valuation of debt conversion is lower and cost-effective; it is more a resonance between improved macroeconomic fundamentals and the upward equity market.

CITIC Construction Investment said that the cost effectiveness of bond conversion is more applied to position selection control than to the safety and protection of short-term earnings. We believe that in the short term, debt conversion is the main gripper for subsequent policy games; in the medium term, it is a risk protection tool for the recovery of macro-fundamentals of trading. 1. Similar to equity, cheap individual stock valuations are not a driving factor in short-term transactions. There are even valuation traps. The cost performance ratio at the level of converting bonds to individual bonds also requires caution. Simply from the perspective of the cost effectiveness of converting bonds, subnew bonds are an option. 2. The double low strategy has proven to be a very effective debt conversion strategy, but judging from historical reviews, the absolute trend return of the double low strategy requires an increase in debt conversion valuations. 3. The increase in institutional allocation is due to the increase in the valuation of debt conversion, but the core reason driving institutions to increase the allocation of debt conversion is not that the valuation of debt conversion is lower and cost-effective; it is more a resonance between improved macroeconomic fundamentals and the upward equity market.