The last opportunity to convert shares, don’t forget this operation!
Tomorrow (January 10), Binhua convertible bonds will usher in the last trading day, and then will be forcibly redeemed at a redemption price of 100.378 yuan / piece. As of the closing on January 7, the closing price of Binhua convertible bonds was 170.28 yuan. If the holder does not seize the last opportunity, the loss may be as high as 41%.
It’s too late to take action before the market closes at 15 o’clock tomorrow!
not converting shares may lose 41%
Befar Group Co.Ltd(601678) recently, it has continuously issued suggestive announcements to redeem Binhua convertible bonds in advance.
The announcement shows that the redemption registration date of Binhua convertible bonds is January 10, 2022, and the redemption price is 100.378 yuan / piece.
Before the market closes tomorrow, Binhua convertible bond holders can choose to continue trading in the bond market or convert into shares of the company at the conversion price of 4.58 yuan / share.
After the market closes tomorrow, all Binhua convertible bonds that have not been converted into shares will be frozen, the trading and conversion will be stopped, and the bonds will be forcibly redeemed at the price of 100 yuan / piece of bond face value plus accrued interest for the current period. After the redemption, Binhua convertible bonds will be delisted on the Shanghai Stock Exchange.
Befar Group Co.Ltd(601678) said that the redemption price of this convertible bond may be quite different from the market price of Binhua convertible bond. In particular, the holders are reminded to complete the transaction or share conversion before or on January 10, 2022, otherwise they may face large investment losses.
On January 7, Binhua convertible bonds fell slightly by 0.42% to close at 170.28 yuan. Based on this calculation, if investors do not convert shares or sell them in time and the convertible bonds are forcibly redeemed, they will lose 69.902 yuan per share, with a loss ratio of 41%.
According to the conversion value, the loss is even greater. According to the Befar Group Co.Ltd(601678) announcement, each Binhua convertible bond can be converted into about 100 / 4.58 = 21.83 Befar Group Co.Ltd(601678) shares. On January 7, Befar Group Co.Ltd(601678) closed at 7.81 yuan, that is, the value of each Binhua convertible bond after conversion is about 21.83 * 7.81 = 170.52 yuan, slightly higher than the final closing price of the convertible bond.
According to Befar Group Co.Ltd(601678) , as of December 31, 2021, the amount of Binhua convertible bonds that have not been converted into shares is RMB 271 million, accounting for 11.30% of the total issuance of Binhua convertible bonds.
this convertible bond should also pay attention to
In addition to Binhua convertible bonds, another convertible bond will be redeemed in advance this month. According to the suggestive announcement released by Hainan Drinda Automotive Trim Co.Ltd(002865) , the redemption registration date of Junda convertible bonds is January 27, 2022, and the redemption price is 100.21 yuan / piece. On January 28, 2022, the convertible bonds will stop trading and conversion. On January 7, Junda convertible bonds received 355 yuan / piece. This means that if bondholders fail to convert or sell shares in time, the direct loss will be as high as 72%.
Data show that as of January 7, a total of 79 convertible bonds in trading status triggered redemption terms. In addition to the above two convertible bonds exercising redemption rights, 77 convertible bonds such as Yipin convertible bonds announced that they would not be redeemed.
Zhou Guannan, chief analyst of fixed income of Huachuang securities, analyzed that, on the one hand, the existence of convertible bonds in the convertible bond market is gradually increasing, some convertible bonds are listed for a short time when triggering redemption terms, and the listed companies have made arrangements for project funds; On the other hand, from January 31, 2021, the measures for the administration of convertible bonds will be officially implemented, requiring listed companies to make an announcement after triggering the terms of convertible bonds. In addition, after the implementation of the management measures for convertible bonds, the convertible bonds placed by shareholders holding more than 5% and directors, supervisors and Gao are included in the provisions on short-term trading. After some convertible bonds meet the redemption terms, the convertible bonds held by major shareholders have not been reduced, or the company temporarily chooses not to redeem in advance.
trend differentiation of convertible bonds
This week, in the case of “double killing” of global stocks and bonds, convertible bonds showed strong resistance to decline. The CSI convertible bond index fell slightly by 0.38%, while the Shanghai index and Shenzhen Component Index fell by 1.66% and 3.46% respectively in the same period.
This week, two convertible bonds, Perle convertible bond and Huisheng convertible bond, were listed on the first day of listing, with an increase of 38.27% and 30% respectively; The issuance of two convertible bonds, Borui convertible bonds and long22 convertible bonds, has been highly praised by investors. The number of online subscription households has exceeded the 11 million mark, reaching 11.21 million and 11.29 million respectively, creating a new historical record for the number of participating households.
The global stock and bond market has entered a period of fluctuation. What will be the future trend of convertible bonds? Yin Ruizhe, chief analyst of China Merchants Securities Co.Ltd(600999) fixed income, believes that the market entry of funds from bank financial subsidiaries is still a general trend in 2022. At the same time, the interest rate trend is downward, and investors\’ pursuit of income will drive the further growth of the scale of “fixed income +” products. The two factors will jointly boost the demand for convertible bonds. It is expected that the pattern of short supply of convertible bonds may continue in 2022, and the hot market is expected to continue.
Qin Han, chief analyst of Guotai Junan Securities Co.Ltd(601211) fixed income, analyzed that the current price center of convertible bonds is relatively high as a whole, and the trend of high and low price convertible bonds is obviously differentiated. It is suggested to put defense first. We should be cautious about the high price partial stock convertible bonds. We should select the subjects with relatively undervalued positive shares, rising expectations and strong willingness of the company to convert shares among the subjects with relatively low prices, and the industry should allocate them in a balanced manner.
(source: China Securities Journal)
