2003: Starting with Foreign Trade

Chapter 826 Even Giants Go Crazy!
P.S.: Sorry, there was a problem with the power supply in our neighborhood last night, so I was a little late.

"Let's implement this during this annual report window. How much should we send?"

Weilai's annual report has been released, but FlashTech's has not. Cheng Linfeng's suggestion to implement a high stock dividend plan during the annual report period is a good one.

"Then let's do ten for ten, all at once. FlashDrive can make the arrangements."

With a 10-for-10 bonus share issue and dividends, the price could be driven down to around 20 yuan, which would be a reasonable price. In addition, the total share capital of 10.2 billion is not particularly high.

After the ex-rights date, some shareholders and institutions will inevitably reduce their holdings, which will increase market liquidity.

In a bull market, a 10-for-10 stock split is nothing special, especially since Flash has performance to back it up. But once 641 comes to power in a few years, they won't be able to do it anymore. This is probably the biggest contribution this guy has made to the A-share market.

It cracked down on a large number of garbage companies with little performance and only hyped up the concept of high stock dividends and share transfers.

In the years before he took office, the high stock dividends in the A-share market were incredibly rampant. A 10-for-10 stock split was the norm, and there were even 20-for-30 splits. It was chaotic and murky.

FlashTech distributes dividends every year, and Wei Lai's first annual report can't be stingy; dividends are definitely a must.

According to the plan in the annual report, Weilai Group, which is still in the growth stage, will distribute a dividend of 1.4 yuan per ten shares. The dividend ratio is not high, but based on the total number of shares, it still takes out 3 million yuan to distribute dividends.

Some A-share technology companies do distribute dividends, but not many. For a growing company that needs money, being able to distribute 3 million yuan in dividends in its first year of listing is already quite good.

Many stock investors think that after a dividend is distributed, the rights issue will occur, meaning that the money will be given to them, and that it's just a word game. But that's not actually the case.

First and foremost, it's important to understand that if a listed company is willing to pay dividends, it at least indicates that it has money. If it doesn't have money, there's no point in paying dividends. Companies with money are generally safer.

In addition, companies that can pay dividends in the long term indicate that they have good growth and stability. Just look at the trend of bank stocks. Even if their stock prices do not change much from year to year, the annual dividend of about 4% to 5% is very worthwhile in the long run.

Buying some bank stocks at a low point each year for a few months to a year allows you to receive dividends and enjoy the growth of the stock price. This investment approach is actually quite good.

At least relatively stable, the primary factor in stock trading is ensuring the safety and stability of funds.

Monday, April 3th.

Both the Shanghai and Shenzhen stock markets opened higher. Stimulated by annual reports, Weilai Co., Ltd., the largest weighted stock on the ChiNext board, opened at 85.77 yuan, and the ChiNext index continued its upward momentum, showing signs of challenging the 2000-point mark.

Weilai Shares, which opened high, only consolidated for seven minutes during the opening phase before this giant with a market capitalization of hundreds of billions of yuan quickly surged, with trading volume rising rapidly.

At 9:37 AM, after a rapid surge, Weilai Co., Ltd.'s stock price reached 88.49 yuan, up 4.88%, with exceptionally active trading, which also drove the ChiNext index to rise rapidly.

In contrast, the Shanghai Composite Index entered a consolidation phase after opening higher.

The market continues to see strong performance from small-cap stocks, particularly those on the ChiNext board, while large-cap stocks are undergoing corrections, a pattern consistent with the early stages of a bull market.

"Judging from this trend, it seems like it's going to push the market capitalization to 2000 billion today."

At 10 o'clock, Weilai's stock price soared to 91.60 yuan, an increase of 8.57%. If the stock price can stabilize above 92 yuan today, then the market value of 2000 billion yuan can be secured.

"The trading volume is still good. If we can maintain this volume, reaching a market capitalization of 2000 billion today shouldn't be a problem."

After three quarters of explosive growth, the market capitalization of many companies in the A-share market has increased significantly. Take Tonghuashun, a popular stock on the ChiNext board, for example. Although its market capitalization is only 250 billion yuan now, it should be noted that in June 2014, its market capitalization was less than 40 billion yuan.

ByteDance's massive engine, holding only 300 million shares, has entered the ranks of the top ten shareholders of Tonghuashun, holding 1.12% of the shares.

Speaking of the funds under ByteDance's advertising platform, they began to gradually invest in A-shares as early as the end of 2013. Currently, they are among the top ten shareholders of many A-share listed companies, and their shareholdings rarely exceed 5%, except for some companies in the industrial chain.

Among A-shares, BYD should be the largest shareholder. Through continuous increases in holdings, ByteDance's advertising platform currently holds a total of 4.99% of the A+H shares of its biggest competitor, making it the fifth largest shareholder of BYD.

The two years from 2012 to 2013 were a period of adjustment for BYD. The battery business was saturated, the automotive business was being adjusted, and the clearing out of the solar energy business led to a significant decrease in its gross profit margin and unstable revenue.

When Dizi initially went public on the A-share market in 2011, its market value was only 200 billion yuan. Before 2013, its market value hardly changed. During that period, ByteDance continuously increased its shareholding in Dizi.

Even now, BYD's market value is only around 100 billion yuan, and its former title as the number one domestic independent brand in terms of market value is long gone.

Not only Wei Lai, but even companies like Great Wall have a market value exceeding his. However, the investment in ByteDance's engine has not been a loss, and the current return on holdings has already exceeded three times.

Who could have imagined that Di Zi, who was so successful ten years later, would be living such a difficult life now?
With the first annual report in March showing such impressive results, the market responded positively. At 11:00 AM, Weilai Co., Ltd.'s stock price rose to 92.81 yuan, a daily increase of 10.01%, thanks to a large order of 3000 lots.

The market value has returned to over 2000 billion yuan, but this is not the highest price of Weilai. When it was first listed and hyped up, Weilai's highest price reached 95.08 yuan, which is still more than two points away from today's limit-up price.

"When the market is good, even a big player can easily hit the daily limit up."

The A-share market is always this distorted market. When the market is booming, no matter if you are a junk stock or a big player, they will all rise in a rush. When there is no market or during a bear market, no matter how good the stock is, it can fall to the point where no one cares about it.

While working in the office this morning, the computer was also displaying the intraday chart of Weilai's stock price. Although the stock price increase had little to do with Boss Tan, whether the annual report met market expectations could not be determined by a few news articles.

Everything depends on whether the funds are willing to buy in. In the morning trading, from the initial rise to the daily limit, Weilai's turnover was nearly 10 billion yuan, indicating that the funds are quite optimistic about Weilai's annual report.

This was in March 2015. The market was far from reaching its most frenzied stage. A single day's trading volume of one trillion yuan was still big news, and it was extremely rare for an individual stock to have a single day's trading volume of more than one billion yuan.

"It would be relatively easy for Wei Lai to push the stock to its daily limit; it just depends on whether the institutions are willing to do so."

"That's true. There aren't many shares in circulation, and the number that can actually be traded on the market is very limited."

With a market capitalization of 200 billion yuan, Weilai Co., Ltd. should only have no more than 2000 billion yuan worth of shares actually circulating in the market. It would be quite easy to drive the stock price to its daily limit with 5% of the circulating market capitalization.

When talking about A-shares, the phrase "retail investors taking the fall" always comes up, and the concept of long-term investment in this market seems to be more of an antonym.

Although there are no capital restrictions for opening a ChiNext account now, and the daily price fluctuation limit is the same as the main board at 10%, the ever-high stock prices still deter retail investors.

Buying one lot costs nearly 10,000 yuan. For most small investors who don't have much capital but like to trade, they wouldn't consider stocks like Moutai.

Weilai is alright, because it's a newly listed stock and there are occasional large price fluctuations. Moutai, on the other hand, has very small daily price fluctuations and a high stock price, so it's not even within their consideration.

However, institutional investors are not worried about a lack of buyers when they drive up prices. They have many methods, and the most common buyers are fund investors, who indirectly hold these large assets through funds.

Weilai Shares, which hit the daily limit at 11:00, opened several times in the afternoon trading session, but quickly closed at the limit again, and the limit was not opened again until after 2:00 pm.

The total turnover exceeded 15 billion yuan, ranking first in the two markets today. The ChiNext index rose by 3.56% in a single day, driven by the surge in stocks such as Weilai.

The closing price of 1993.57 points is only a very small fluctuation away from the 2000-point mark.

It has to be said that Weilai, which is a leader in the new energy industry, is very popular in the market. Without the power battery business, Weilai's market value would not be so high, at most between 500 billion and 600 billion yuan.

If a bull market comes along, it might jump to around 100 billion, but that's about it.

The bull market from 2014 to June 2015 saw a collective rise, but the automotive industry was not a particularly popular sector. However, the new energy concept was different; this relatively new concept had a lot of room for speculation.

"Boss, how many consecutive daily price limits do you think Wei Lai can achieve?"

"You're dreaming. It's good enough that there's one. The current market value is 200 billion. One limit up would add another 20 billion to the market value. At most, it'll just be a stock that hits 100 yuan later."

New energy, specifically lithium batteries, is an emerging concept and a hot topic of hype, but it's just hype; the real boom is yet to come.

Take Weilai as an example. As the leading domestic power battery manufacturer, its revenue from power batteries in 2014 was only 8.57 million yuan. Companies like BYD had even less. BYD's revenue from its entire new energy business segment in 2014 was only 26 billion yuan, which included complete vehicles.

While the revenue from fuel-powered vehicles is slightly higher, it only accounts for 10% of the total revenue. The real bulk of the revenue comes from fuel-powered vehicles and their parts.

Is it possible that a mere few billion in revenue can drive a 2000 billion market capitalization giant to its daily limit?
This is Mr. Tan's understanding; he thinks it won't work.

However, the crazy A-share market quickly proved him wrong. You simply cannot understand the madness of the A-share market with conventional thinking, especially on March 3rd when the ChiNext index was hitting the 2000-point mark.

Weilai once again experienced a full-scale breakout, opening strongly with a gap up, just like the previous trading day.

Weilai Shares opened at 94.88 yuan, and like yesterday, it briefly adjusted its pace for ten minutes before surging strongly.

There were two strong upward surges. During the first surge, Weilai broke through the previous high point of 97.77 yuan, raising the stock price to a new level.

"Damn it, even the giants are going this crazy. If this continues, Boss Tan is really going to become the richest man."

Wei Lai's performance has left the market speechless. This is a giant with a market value of 2000 billion yuan, and there are only a handful of such companies in the entire A-share market.

Today's price movement was almost a carbon copy of yesterday's, and even showed signs of acceleration, shocking both large and small institutions and ordinary investors who have been following this stock for a long time. If it hits the daily limit today, its market value will exceed 2200 billion yuan. Based on Tan Jincheng's shareholding in Weilai, his net worth from this one company alone would be as high as 1100 billion yuan.

In 2004, Chen Tianqiao, the 31-year-old owner of Shanda, topped the list of the richest people in China with a net worth of 80 billion yuan, becoming the youngest person to top the list since it was first established.

Tan Jincheng is not yet 30 years old this year.

Or are you trying to break this record?

"Forget about becoming the richest person. Our stock is rising, Ali's is rising, and so is Tencent's."

Boss Tan certainly couldn't be watching the stock charts every day. At this moment, he was receiving Mr. Cai from miHoYo. The two sides had exchanged some opinions on the issue of the "Anime Street" before the Lunar New Year. At that time, miHoYo was very interested, and Mr. Cai said he would come to Ningbo to discuss the matter in person, but he couldn't find the time then.

Accompanying them were the design team for the Shanghai branch building and a few people brought by Lao Cai, who discussed how to maintain stylistic consistency.

It needs to integrate into the culture of anime and manga, but also maintain its own style and not become an appendage of miHoYo, since the majority of the money comes from miHoYo.

During a break in the discussion, Zeng Jixiang, who came in to see Tan Jincheng about something, told his boss about the continued surge in the stock market.

When Zeng Jixiang came in, Weilai had already reached today's daily limit of 102.09 yuan. Weilai Group, with an issue price of 25.14 yuan, achieved the goal of becoming a 100-yuan stock only four months after its listing, which is quite fast.

Today's price is four times higher than the issue price.

"That's hard to say. Everyone has seen how crazy the A-share market is right now. When it rises, it's like it's going to explode."

During the break, Tan Jincheng had some coffee and snacks prepared. Everyone was chatting and expressing surprise that Weilai, a giant with assets of hundreds of billions, could achieve two consecutive limit-up days.

Especially Tan Jincheng himself, he said yesterday that there was no possibility of consecutive limit-up days. The annual report was good, but the first quarter report did not show much change compared to the same period last year, and the growth rate was also limited.

These organizations are really crazy.

"It's not that simple. After all, it's still the world of internet companies. Our market value can't compare with that of BAT (Baidu, Alibaba, Tencent)."

Although A-shares have price fluctuation limits, they are still more volatile. The ChiNext index rose to 4000 points during the bull market in 2015, but is now only at 2000 points.

Weilai's market value might actually double again. It's all speculation. Nobody cares about price-to-earnings ratios or bubbles. They just want to drive up the price. Anyway, they don't have to worry about finding buyers.

Especially after a certain newspaper published a report that "4000 points is just the beginning of a bull market," the A-share market went completely crazy.

Compared to a few years later, the credibility of a certain newspaper before 2015 was extremely high. For a protagonist in an online novel to be named by a certain newspaper was a major event.

The rapid increase in wealth in Wei Lai's stock price could indeed temporarily boost Tan Jincheng's net worth, but he wasn't really worried about becoming the richest man in the country.

In the stock market crash that followed June, very few stocks did not suffer a 50% drop in price, especially those on the ChiNext board, which had experienced explosive growth and a huge bubble; almost none of them escaped the fate of ChiNext stocks.

By then, Tan Jincheng's net worth would naturally decrease as well.

"This kind of surge is unhealthy and not a good thing for ordinary stock investors."

"Yes, we're in the mobile internet era now. The speed of information dissemination is on a completely different level compared to 2008. Recently, more and more people are opening accounts, and you can hear middle-aged women discussing stocks on the bus."

Some members of the design team also trade stocks. When Boss Tan brought this up, everyone sighed with admiration.

With revenue of nearly 400 billion yuan in 2014, and an annual profit of 50 billion yuan, is such a company worth a market value of 2000 billion yuan?

That's definitely worthwhile, but not in this way. It only took four months to reach 2000 billion yuan after listing, and just two days to go from 1800 billion yuan to 2200 billion yuan.

What should we do from now on? Should we just give up?

Tan Jincheng prefers the way FlashTech grows its market value. It has been listed for several years, and its rapid growth only started in the second half of last year. For most of the time, its market value has remained stable at a relatively reasonable level.

Speaking of Flash's three competitors, Chipray, Yadi and Aima, they all seem to be preparing for IPOs. Yadi is targeting the Hong Kong stock market, while Chipray and Aima, like Flash, are aiming for the A-share market.

Tan Jincheng stopped paying attention to the electric vehicle market, and Shanchi's marketing methods became more conventional. The company has done quite well in recent years, with decent profit margins.

Like Flash, Yadi, which values ​​technology, has great potential and has now firmly surpassed Aima to become the second largest electric vehicle company in terms of market share. Meanwhile, Xinri has gradually begun to shift its focus to export business and is doing quite well.

On the other hand, Aima, despite its seemingly glamorous appearance, is actually facing considerable crises. They have almost no market share in the high-end electric vehicle sector, and their marketing expenses remain high. Compared to the other two companies, Aima is the one that urgently needs to go public.

However, Tan Jincheng knew that of the three companies, only Yadi, which chose to list on the Hong Kong Stock Exchange, was able to go public normally; the other two companies failed to list due to the stock market crash.

The stock market crash in June will lead to a suspension of IPOs, and all companies' IPOs will be delayed. The problem of Aima is even more complicated. They have a partnership system, and there were quite a few disputes at the beginning of the IPO. In the end, a partner was even forced to work as a sewing machine operator for some reason.

When the CEO of miHoYo came to Ningbo, besides discussing the issue of the "Anime Street," he also had a specific collaboration with Flashpoint or GXG. Boss Tan gave them face and asked them to maintain a unified style on that street, and Lao Cai is also a person who can handle things well.

miHoYo is preparing to collaborate with GXG on some of the more popular characters from its Honkai series, producing co-branded clothing to be sold online.

Collaborations have been a very hot topic in recent years, with many clothing brands and even food and beverage brands collaborating. GXG has done several collaborations so far, but this is the first time they have collaborated with anime and manga brands.

Old Cai said with some regret, "It's a pity, Mr. Tan, that your car brands are all too rugged. Otherwise, you could have a collaboration with a car brand."

"It's not that we don't have any. Our FlashTech's Windspeed series is quite cute, and we also have some high-end models with designs that resemble QQ coins. If Mr. Cai doesn't mind the electric vehicle market, we could do a collaboration."

"Oh, by the way, we at Flash are planning a collaboration with Honor of Kings."

Honor of Kings will be heavily marketing this year. In addition to sponsoring game teams, it plans to establish its own league and launch various plans, including co-branding of merchandise, such as GXG and the Fengchi series, which are products under Tan Jincheng.

Currently, Honor of Kings has nearly 50 million registered users, and it should have no problem reaching 100 million users this year.

For any internet product, reaching 100 million users is a significant milestone. Once that number is reached, the product is considered stable and unlikely to face the risk of bankruptcy in the short term.

"Hmm? That doesn't seem like a bad idea. Or how about Mr. Tan shows me around your company so I can get a comprehensive understanding of your products and make a specific plan when I get back?"

"Or we could develop a strategic cooperation plan."

Tan Jincheng's mention of Honor of Kings was a good thing, but it reminded Lao Cai that the other side had such a powerful weapon, and that they also had Orange Technology, a top ten internet company in China by market value.

Taking advantage of this opportunity to establish a strategic partnership with Tan Jincheng's companies is also a good opportunity to promote the Honkai series.

"That's no problem. I'm free today anyway, and we can't really discuss anything right now, so let's all go for a walk together."

Tan Jincheng probably understands better than Lao Cai himself how profitable miHoYo is. The charm of anime and manga is beyond the imagination of ordinary people, who also cannot comprehend their spending power. Establishing a partnership with such a promising company is definitely beneficial to the promotion of miHoYo's products.

"Sure, let's go then. Maybe we can get some inspiration by changing our perspective."

How to combine automobiles and anime, create an anime-themed street, and not completely ignore the presence of massive skyscrapers—it's really hard to figure out how to design it all in the short term.

This was the first time these designers had ever encountered true anime/manga culture.

The suggestion was good, and everyone thought it was great. So, led by Tan Jincheng, they all left the office, and their first stop was naturally the Orange Technology Building in the center of Beicang District.

There's not much to see at the Flashpoint Building; it was bought outright and doesn't have its own style. In contrast, the design of the Orange Technology headquarters building incorporates their own culture.

At 11:00 AM again, Weilai Co., Ltd. hit the daily limit up again, with the stock price at 102.09 yuan and the amount of buy orders exceeding 500 million yuan.

By the close of trading at 3 p.m., Weilai Co., Ltd. had not opened the limit-up price again. The total turnover of 13.8 billion yuan for the day was lower than yesterday, but it was still the stock with the highest turnover in the two markets.

With one annual report, the stock price hit the daily limit for two consecutive trading days, with a turnover exceeding 10 billion yuan. Wei Lai's popularity was unparalleled.

The surge in related stocks, such as new energy vehicles and lithium batteries, has brought tremendous vitality to the market, and these two concepts have also experienced a period of speculation.

Interestingly, FlashTech, which has always performed steadily, experienced significant fluctuations due to Wei Lai's influence.

Retail investors who couldn't buy Weilai, or dared not buy Weilai, started attacking another stock under Boss Tan's control.

"Flash Technology's electric vehicles also use lithium batteries, so why not include the lithium battery concept?"

This was the most frequently asked question in the comments section of FlashTech's board secretary's forum during trading today, which is both amusing and frustrating.

(End of this chapter)