On February 23, zhongdingzhuan 2 ushered in the last trading day and will be forcibly redeemed at a redemption price of 100.97 yuan / piece. As of February 22, the closing price of zhongdingzhuan 2 was 165.3 yuan / piece. If the holder does not operate in time, it may directly lose nearly 40%.
As of February 21, the balance of non convertible shares of Zhongding Zhuan 2 was still 158 million yuan, equivalent to 1.58 million non convertible shares of convertible bonds.
on the last day, if you don’t operate, you will lose nearly 40%
Anhui Zhongding Sealing Parts Co.Ltd(000887) recently, it has issued several announcements, suggesting that it will redeem the bonds issued by the company in advance, and reminding the holders of Zhongding Zhuan 2 to convert shares within the time limit.
The announcement shows that the redemption registration date of zhongdingzhuan 2 is February 23, 2022, and the redemption price is 100.97 yuan / piece. According to the arrangement, as of February 23, 2022, zhongdingzhuan 2, which has not been converted into shares after the closing of the market, will be forcibly redeemed. After this redemption, zhongdingzhuan 2 will be delisted in Shenzhen Stock Exchange.
If zhongdingzhuan 2 held by the holder is pledged or frozen, the pledge and freezing shall be lifted before the date of suspension of trading and share conversion, so as to avoid being redeemed due to inability to convert shares.
Anhui Zhongding Sealing Parts Co.Ltd(000887) said that due to the large difference between the current secondary market price and the redemption price, the holders are specially reminded to complete the transaction or share conversion before or on February 23, 2022, otherwise they may face losses.
As of February 22, the closing price of zhongdingzhuan 2 was 165.3 yuan / piece. Based on this calculation, if the investors holding zhongdingzhuan 2 do not convert or sell shares on February 23, they may have a direct loss of 38.92%.
Anhui Zhongding Sealing Parts Co.Ltd(000887) on March 8, 2019, 12 million convertible corporate bonds were publicly issued, with a face value of 100 yuan each and a total issuance amount of 1.2 billion yuan. However, as of February 21, the balance of zhongdingzhuan 2’s non convertible shares was 158 million yuan, equivalent to 1.58 million convertible bonds, and the proportion of non convertible shares was 13.16%.
When handling the matter of share conversion, the holder of Zhongding transfer 2 must report the share conversion through the securities company hosting the bonds. At the same time, the shares applied for conversion by the holder must be integer shares. If the balance of convertible corporate bonds is not enough to be converted into one share at the time of share conversion, the company will cash the balance of convertible corporate bonds and the current accrued interest corresponding to the balance within five trading days after the date of share conversion.
two more convertible bonds were redeemed in advance this week
After zhongdingzhuan 2 completes the redemption registration, Galaxy convertible bonds and xingshuai convertible bonds will usher in the last trading day on February 24.
The redemption price of Galaxy convertible bonds was 100.13 yuan / piece, while on February 22, the closing price of Galaxy transfer was 263.16 yuan / piece. The higher the price, the greater the loss caused by strong redemption. Based on the closing price on February 22, if investors do not operate in time, the loss may reach 61.95%.
It is worth noting that the positive stock Foshan Golden Milky Way Intelligent Equipment Co.Ltd(300619) corresponding to Galaxy convertible bonds is a GEM listed company. The convertible bond holders need to open the trading authority of the sector. Foshan Golden Milky Way Intelligent Equipment Co.Ltd(300619) it is also specially reminded that if the holders of Galaxy convertible bonds convert shares, they need to open the permission of gem trading. Investors who do not meet the requirements for the appropriateness management of GEM stocks and do not open the trading authority of gem cannot convert their Galaxy convertible bonds into stocks. Investors are reminded to pay attention to the risk of not being able to convert shares.
In addition, on the last trading day, investors can apply for conversion of convertible bonds purchased on the same day, but they need to pay attention to whether the gem trading authority is opened. At the same time, the new shares converted from convertible bonds to shares can be listed and circulated on the next trading day after the declaration of conversion.
Xingshuai convertible bonds will also usher in the last trading day on February 24. Xingshuai convertible bonds that have not been converted into shares after the closing of the market on February 24 will be forcibly redeemed at the price of 100.13 yuan / piece. As of February 22, the closing price of xingshuai convertible bonds was 136.602 yuan / piece. If investors do not operate in time, they may directly lose 26.7%.
It is worth mentioning that despite repeated reminders by listed companies, many convertible bond investors who were forcibly redeemed did not sell or convert shares in time, resulting in large losses.
For example, after the registration date of redemption on February 17, 771791 pieces of Zhengyuan convertible bonds were still not converted into shares, and the proportion of non converted shares reached 44.1%. As of the closing of the day, the closing price of Zhengyuan convertible bonds was 162.88 yuan / piece, and the forced redemption price was 100.67 yuan / piece, which means that the value of this part of convertible bonds evaporated nearly 48 million overnight, and this part of investors have to bear a loss of 38.19%.
will the valuation of convertible bonds continue to be compressed?
From February 14 to February 15, the convertible bond market suddenly suffered a sharp valuation impact. The CSI convertible bond index fell 4.49% in two days, while the market fell only 0.49% in the same period. Then, the market continued to rebound and the convertible bond gradually stabilized.
However, on February 22, affected by the external market, the market fell sharply again, the Shanghai index fell 0.96%, and the China Securities convertible bond index also fell again, down 0.57%.
Compared with positive stocks, the recent excess decline in the convertible bond market also means that there has been a significant active valuation compression in the convertible bond market. From the historical experience, the bond valuation centers have been significantly compressed in a neat and uniform manner, and the probability comes from the large redemption of high convertible bond positions by debt side institutions in the bond market.
Gf Securities Co.Ltd(000776) it is expected that under the optimistic expectation and referring to the historical redemption impact, the current round of valuation compression is expected to come to an end in the short term; The reference level in the pessimistic case is that the valuation center of the parity 130 yuan convertible bond fell back to 0; Under neutral expectation and considering market demand factors, if the 80% quantile level since 2017 is taken as a reference, the theoretical valuation compression space of subsequent valuation is about 8 percentage points.
Gf Securities Co.Ltd(000776) believes that although the opportunity for large-scale additional allocation after the valuation bottoms may not yet come, some individual bonds with a large oversold compared with positive shares in the early stage are expected to usher in higher participation value. If the positive stock support continues to weaken and the valuation compression may come again, the varieties with high subject rating (AA or above), high debt bottom (net debt value of more than 90 yuan) and low net debt premium ratio can be selected; Or select varieties with AA or above and high dividend rate for defense response.
Northeast Securities Co.Ltd(000686) believes that the valuation killing phenomenon in the convertible bond market is more obvious, mainly because the positions of institutional investors in the convertible bond market are crowded in the early stage, and the premium rate of convertible bonds has been in a high position since 2019. Under the background of weak short-term bond market, there is great pressure on bond base redemption, resulting in large unilateral adjustment of convertible bonds. At present, At present, the premium rate is still at a historically high level, and the adjustment risk still exists. However, the valuation of positive shares corresponding to most convertible bonds has experienced the adjustment of the stock market since the beginning of the year, and it is in a relatively low position. It is unlikely that the convertible bond market will repeat the sharp adjustment last week.
