Honglu Convertible Bond Price Reset Trigger Nears
HEFEI, CHINA - June 1, 2026 - Honglu Steel Structure said its convertible bond may be approaching the threshold for a downward conversion-price revision, after the company’s share price closed below the relevant trigger level on multiple trading days.
The company disclosed that from May 13 through June 1, its shares had closed below 85% of the current RMB 21.99 conversion price on 10 trading days. If the share price continues to close below the threshold, the “Honglu Convertible Bond” may satisfy the conditions for a price reset under the bond’s prospectus.
Convertible Bond Terms in Focus
Honglu issued RMB 1.88 billion of convertible bonds in October 2020, with each bond carrying a face value of RMB 100 and a six-year term. The bonds were listed on the Shenzhen Stock Exchange on November 2, 2020 under the abbreviation “Honglu Convertible Bond” and code 128134.
The conversion period began on April 15, 2021 and runs through October 8, 2026, subject to any holiday-related extensions. The current conversion price is RMB 21.99 per share, following a downward revision approved in February 2026.
Key Reset Conditions
- Current Conversion Price: The bond’s conversion price is RMB 21.99 per share.
- Trigger Threshold: A reset may be considered if the company’s shares close below 85% of the conversion price in at least 15 out of any 30 consecutive trading days.
- Current Progress: As of June 1, Honglu had recorded 10 qualifying trading days since May 13.
- Approval Requirement: Any downward revision would require board action and shareholder approval, with convertible-bond holders abstaining from the relevant vote.
What Investors Are Watching
Honglu said it will follow the bond prospectus and applicable Shenzhen Stock Exchange rules if the reset condition is formally triggered. Investors tracking the company will be watching whether further share-price weakness leads to a new board proposal, and how any reset could affect bondholder conversion incentives, equity dilution expectations, and Honglu’s broader capital-market profile.