Stock market fluctuations and increased supplies were responsible for the recent drops in convertible bond prices, analysts said.

Convertible bonds are corporate bonds that are converted to company shares at a set price. As of Wednesday, the value of convertible bonds issued in China this year had reached 94.73 billion yuan ($14.5 billion), up 345.8 percent from the same period of 2016. It was greater than the total amount of convertible bonds issued in the last three years, according to Wind Information Co Ltd, a Shanghai-based financial data provider.

As a result of the abundant supply and market corrections, the estimated value of the convertible bond market is at historically low levels, analysts said. So far, 10 of the 35 subsisting convertible bonds have fallen below their issue price, and investors' enthusiasm for participation in the market is cooling off.

"In the short term, due to increased supplies and stock market adjustments, upcoming convertible bonds may still be issued at a price below their face value, and it may result in less willingness to buy convertible bonds," said Wang Wenhuan, an analyst at Hua Chuang Securities Co Ltd.

Earlier in December, Lens Technology Co Ltd, a company engaged in the research and development, manufacturing and sales of protective panels for electronic products, issued 4.8 billion yuan convertible bonds. But investors gave up the online subscription of 607.35 million yuan convertible bonds issued by the company after they learned that its largest shareholder abandoned the commitment for bond subscription.

The existing shareholders of Lens Technology bought only 650 million yuan, or 13.54 percent, of the convertible bonds issued. It was not until new investors raised doubts about the company did Lens Technology announce that Changsha Qunxin Investment Consulting Co Ltd, an invest-ment advisor controlled by its owners, plans to increase holdings in convertible bonds by at least 50 million yuan in the secondary market within six months.

To ensure successful issuance of convertible bonds, major shareholders of almost all the recent issuers said they will subscribe for the bonds of their own company.

In spite of weakening demand and falling prices, analysts still suggested that investors can have a moderately positive attitude toward convertible bonds.

"If we look at price declines from another angle, it indicates that the convertible bond market has bottomed out. With a market correction under way, investors could buy specific convertible bonds issued by the companies with strong fundamentals," said Wang of Hua Chuang Securities.

He said that investors should wait for opportunities patiently after the market corrects itself.

As stock market fluctuations may continue for a while, convertible bond market adjustments are inevitable, said Li Yong, an analyst with Northeast Securities Co Ltd.

"With continuous expansion of the convertible bond market and dwindling investment targets, institutional investors must have strong capabilities in selecting specific bonds," Li said in a research note.

In the meantime, a growing number of companies will issue convertible bonds to lower their cost of raising capital, analysts said.

Several listed companies, including Jilin Aodong Medicine Industry Group Co Ltd and Qianhe Condiment and Food Co Ltd, announced on Tuesday that the China Securities Regulatory Commission has approved their application for public offering of convertible bonds.