Analysis On The Investment Value Of Longji Convertible Bond

As a relatively complex hybrid financial instrument,convertible bonds reflect the combination of bond and warrants,debt and equity.For issuers,the issuance of convertible bonds is in the form of debt issuance,but in essence it also sells implied options,which can reduce the issuer' s financing costs.For investors,they can choose to hold convertible bonds,sell in the secondary market or convert shares,and have certain hedging function.Since China's convertible bonds are generally subject to multiple complex clauses and are highly flexible,although the capital market is enriched,it is difficult to accurately judge the investment value of convertible bonds based on investors.Under the background of the rapid growth of China's convertible bond transaction volume,it is of great practical significance to study the investment value of convertible bond and provide investors with an reference to accurately grasp the investment value of convertible bonds.This paper uses the literature research method,the combination of qualitative and quantitative methods and the comparative analysis method to conduct research on the investment value analysis of convertible bonds.Taking Longji convertible bond as the object of investment value analysis,firstly analyze its investment value from the perspective of valuation pricing.After analyzed the basic influencing factors of Longji convertible bond valuation and the complicated game terms,it is considered that Longji convertible bonds reflect the characteristics of the American option path dependence,the LSM valuation pricing model with high applicability is selected to evaluate it and determine whether its market price deviates from the intrinsic value.Through the analysis of the empirical results,this paper believes that the value of the Longji convertible bonds is undervalued by the market during the recent valuation.The price of the convertible bonds will have room for improvement in the future,and there is a certain investment value.Secondly,because the convertible bonds have the characteristics of both stock and debt,the strength of the stocks will have different effects on the future changes of the convertible bonds with the trend of the stocks.The stronger the stocks,the stronger the convertible bonds will follow the positive stocks.Therefore,the evaluation of the value of Longji convertible bond investment needs to analyze its stock strength,and judge the expected rising space of the convertible bond value based on the stock situation.Finally,a comprehensive evaluation of the investment value of Longji convertible bonds was conducted.Through the specific analysis of the investment value of Longji convertible bonds,this paper provides a clear idea for the analysis of the investment value of convertible bond.It hopes to provide a reference for investors to analyze the investment value of convertible bond,scientifically formulate investment strategies and reduce blind investment,reduce investor investment risk.