2003: Starting with Foreign Trade

Chapter 835 The Return of Beicang Securities Branch (Seeking Monthly Tickets)

PS: The previous chapter about FlashTech deregistering its controlling shareholder was incorrect; it has been corrected.

There were quite a few representatives from institutions and listed companies who participated in this market rescue meeting in Beijing along with Tan Jincheng.

However, no one expected that the company under Boss Tan, who was the first to be named and made a statement, would react so quickly.

It was so fast, it was as if it had been prepared in advance.

"Of course it was prepared in advance. The plan was discussed a long time ago, and the announcement was also a template; all you had to do was fill in a number."

It was another long trip abroad. After landing in Beijing, I was even pulled into a meeting, but my tired body did not diminish my joy at returning home.

Both listed companies had considered their respective plans.

Weilai Group is only in the early stages of development. It would be a pity to cancel up to 800 million shares worth nearly 10 billion yuan. In addition, Weilai Group would have to pay for the cancellation.

The controlling shareholder increases its shareholding and uses the increased shares for employee incentive plans. This serves as an incentive mechanism for employees and can be considered a benefit.

On the other hand, it can also enhance Tan Jincheng's control over the company.

As for why FlashTech went through the repurchase and cancellation process, it actually stemmed from the company's own situation.

The high stock dividend at the end of April, which expanded the total share capital to 10.2 billion, was ultimately a way to fleece retail investors. Without this high stock dividend, institutional investors and speculative funds would not have had the opportunity to speculate on FlashTech.

The cancellation of a portion of the share capital is mainly for show, to impress those above.

"So, shall we start buying from tomorrow?"

Her husband was still engrossed in conversation, and Gu Qingqing was also very happy. She spent her days resting at home, and her sleep was very light at night, so this was just right.

"Let's see how it goes. Actually, I'm not optimistic about this bailout."

"How do you say this?"

"The capital market is all about profit. There are 21 securities firms, the national team, and other institutions and listed companies of all sizes. How can they possibly work together to save the market?"

"Just watch, it would be better if we didn't try to save them, but if we try to save them in the wrong way, they'll fall even harder."

The national team's mission this time is to buy large-cap blue-chip stocks to stabilize the index. Brokerages are cooperating with the national team's actions. However, while buying large-cap blue-chip stocks, it was not said that they could not sell small and medium-sized enterprises (SMEs) and growth enterprises, which were already severely overvalued.

Whether they have ulterior motives or are driven by self-interest, the so-called joint announcement is nothing more than a piece of paper.

The market rescue measures that retail investors had been hoping for actually dealt them a greater blow.

The reason is simple: during this period, most retail investors held small and medium-sized growth stocks, and market intervention would only lead to greater selling pressure on their holdings.

"Let's take a look tomorrow."

"Okay, come with me to the Weilai Securities Department tomorrow, and we'll see it for ourselves."

Weilai Shares is a heavyweight stock on the ChiNext board and was also on the list of stocks bought up by the national team this time. However, Tan Jincheng also knows that its priority is definitely not as high as that of sectors such as banks and securities companies.

It's uncertain whether we'll be able to benefit from the national team's increased holdings in the first wave.

"Hehe, let's buy stocks for fun these next couple of days. We're going to buy a lot this time, let's have some fun."

FlashTech is expected to repurchase 2000 million yuan worth of shares, and Weilai Shares is expected to repurchase 800 million shares. That's quite a lot of work, and it's also a rare opportunity to happily buy stocks.

Silent all night.

"Today is the first day the national team enters the market, what do you think the market trend will be?"

At eight o'clock in the morning, Tan Jincheng brought Gu Qingqing to the Weilai Securities Department. Amidst the welcoming voices of his colleagues, he, like a leek being harvested, inquired about the day's market trend.

Employees of listed companies are allowed to invest in stocks. Apart from senior executives and employees in key sensitive positions who need to report their purchases in a timely manner, there are not many other restrictions on purchasing company stock.

The same applies to employees in the securities department; anything not prohibited by law is permissible. Tan Jincheng wouldn't go out of his way to tell his employees not to buy stocks.

With tens of thousands of employees and higher incomes than its peers, Tan Jincheng could almost imagine how many people were losing money.

People work hard to earn a little money, and they are reluctant to spend money on food and drinks in their daily lives, even being picky about what they order for takeout. But when it comes to the stock market, they spend money like water. This is probably the true mentality of stock investors.

"It should surge, right?"

The employees in the securities department were not very familiar with their boss and dared not be too presumptuous, but most of them looked distressed when talking about stock trends.

"Hehe, you've lost quite a bit, haven't you? If it's our own stock, then don't worry, but for the others, you'll have to be patient. Don't join in the fun today, just focus on your work."

When gods fight, mortals suffer.

That's all the advice I can offer. This is only the first stock market crash; there will be a second and a third.

Next year's circuit breakers are going to be really interesting.

When he arrived at the office, only he, Gu Qingqing, and Zeng Jixiang remained.

Tan Jincheng laughed and said, "Actually, it's easy to speculate on A-shares. You can find out from the data that there are one or two stock market crashes or major declines in A-shares on average every year."

"What ordinary stock investors need to do is to stay out of the market and wait for the stock market crash, then wait for it to stabilize and find a suitable time to buy at the bottom. After that, they just wait for the market to recover. Over the course of a year, they can basically make some money."

Zeng Jixiang was slightly taken aback: "Boss, that's a novel idea of ​​yours. I might give it a try if I have the chance."

"The stock market won't be doing too well today. Be prepared. We're just testing the waters today. We'll do something big with the real buybacks later."

Everyone believed that the situation would immediately change after the national team entered the market, especially for new stock market investors this year.

But this does not include those like Tan Jincheng who control upper-level resources.

After giving some instructions, Tan Jincheng took Gu Qingqing to the securities department of FlashTech, and then went to ByteDance's advertising platform.

Eighty percent of the employees on leave have returned, and the remaining 20 percent will also be back in place within the next two days. The two companies' rescue measures are simple: just find the right time to blindly buy their own company's stock.

The situation with ByteDance's advertising platform is more complicated. Tan Jincheng said he would use 15 billion yuan of expected funds to rescue the market, but the actual funds used to purchase Weilai shares were only budgeted at 10 billion yuan.

If things follow the trend that Tan Jincheng knows, even 10 billion yuan wouldn't be enough to spend it all.

The remaining 20 billion yuan will also be invested in the market rescue efforts. With 20 billion yuan in cash flow and financing leverage, there's a lot that can be done.

Knowing how to buy is also an art.

"Buy first- and second-tier liquor brands and large home appliances. Specifically, for large home appliances, it's Midea Group. This time, the funds will mainly be used to buy Midea Group at rock-bottom prices."

"Or to put it more directly, at least half of our 20 billion yuan will go to Midea."

While the government is trying to rescue the market, Tan Jincheng will not engage in large-scale market buying like the national team. ByteDance is an investment institution, and investment institutions, in addition to financial investment, focus more on strategic planning.

Cheng Linfeng had a knowing look on his face, knowing that things wouldn't be that simple.

"How much should we buy? Boss, you can tell me the number. If it's too much, I can arrange a bulk transaction or discuss a private placement with Midea."

"Let's buy no more than 1% of the total share capital, that's the target."

Gu Qingqing smiled and said, "Are you looking to collaborate with Midea?"

"That's right, this is a rare opportunity."

Mobile phones, home appliances, and automobiles are all major consumer goods categories that are closely related to people's daily lives. The three are interconnected and none can exist independently.

On December 14 last year, Xiaomi invested 12.66 billion yuan in Midea Group. Midea issued 55 million shares to Xiaomi at a price of 23.01 yuan per share. Similarly, Midea also invested in Xiaomi Technology this year.

The two parties have officially formed a strategic partnership on the ecosystem system.

Based on Midea's current total share capital of 42.90 billion shares, Xiaomi holds 1.28% of the shares, making it one of Midea's major shareholders.

Ms. Dong's constant criticism of Lei Jun is not just for the sake of gaining attention. The two have been true competitors since 2014. With Ms. Dong's vision and perspective, she would not stop at merely trying to gain attention.

Lei Jun's investment acumen is beyond question. From a purely financial investment perspective, Midea Group, which focuses on small home appliances, refrigerators, and air conditioners, is far more promising than Gree, which has a single business focus.

Most importantly, Midea is highly capitalized and doesn't mind cooperating with major companies in the industrial chain, making them much easier to talk to than Gree.

“Private placements might be more expensive, so I think it’s more cost-effective to buy directly from the secondary market or through block trades.”

Throughout the bull market of 2014-2015, the price increases of major consumer goods were not high, but Midea's stock price more than doubled, closing at 37.28 yuan last month.

The private placement is calculated at 90% of the 20-day average share price, which still requires a bid of over 34 yuan.

On the previous trading day, Midea's closing price was 33.30 yuan. When it comes to block trades, you don't need to look at how much it has risen today. Generally speaking, it is based on 90% of the previous trading day's price, which is the limit down price.

Of course, large transactions can also have premiums, but this is rare.

“Okay, I’ll make the contact now. We’ll also make acquisitions in the secondary market while the bulk transaction is taking place.”

With less than an hour until the official opening, given Cheng Linfeng's connections and the current stock market situation, it wouldn't be difficult for him to spread the word that he wanted to acquire a large number of Midea Group shares.

There are far too many capital institutions that want to abscond.

"Okay, you arrange the bulk trades. Your boss and I will also be traders in the secondary market today, hehe."

"Also, this time we'll use our main seats and be more high-profile."

Qilu Securities Beicang Hengshan Road Securities Business Department was once a highly sought-after seat in the secondary market in 2007. However, since the size of ByteDance's trading platform has grown significantly and Tan Jincheng has adopted a low-key approach, it has rarely appeared on the list of top traders.

The first private enterprise to publicly invest heavily in market rescue is already on the moral high ground and has the opportunity to gain favor, so there is no need to be overly low-key.

"Haha, no problem. We've been keeping a low profile for too long. It's time to let everyone reminisce."

Twenty-one securities firms contributed funds to rescue the market, the head of the China Securities Regulatory Commission was photographed smiling, the China Banking and Insurance Regulatory Commission issued an announcement promising to stabilize the stock market, and the People's Bank of China made an unprecedented commitment to provide unlimited liquidity to the stock market.

Major state media outlets are collectively bullish on the stock market, and funds and listed companies are pledging to actively repurchase shares.

The weekend pushed emotions to their peak, and the opening auction on July 6 was extremely bullish, with all three major indices opening higher. The Shanghai Composite Index opened at 3975.21 points, a surge of 7.82%.

Hundreds of stocks opened at their daily limit, with both PetroChina and Sinopec opening more than 4% higher, and the entire banking sector opening more than 8% higher! "Oh no, the sentiment has been driven too high, especially for PetroChina and Sinopec and banks."

At 9:25, after the opening auction ended, Cheng Linfeng frowned. He had raised his emotions so high so early in the morning, especially since the two sectors that retail investors dislike the most were being targeted.

For a long time, whenever the two major oil companies surged, the stock market would inevitably plummet.

"That's right, this mood is really over. Let's not rush to buy it, let's wait until this afternoon."

FlashTech opened at the daily limit, at 18.98 yuan, while Weilai Shares opened at 89.71 yuan, up 5.13%. The performance of the two stocks mirrored that of the overall market.

Midea Group, which is seeking strategic investment by taking advantage of the market rescue, also opened higher, with a price of 35 yuan, up 5.11%, similar to Weilai Shares.

Even the trading volume was similar for both stocks, with inflows exceeding 100 million yuan during the pre-market auction.

Even a stable stock like Kweichow Moutai opened 4.46% higher during the pre-market auction, with a turnover of nearly 3 million yuan. The sentiment of large blue-chip stocks was brought to the extreme even before the official trading began.

Even Gu Qingqing, who doesn't pay much attention to the stock market, nodded repeatedly: "Things tend to reverse when they reach an extreme. It's really not good to have emotions running high so early in the morning."

With price limits in place, how can anyone trade stocks like FlashTech, which aren't blue-chip stocks, that just open at the daily limit? It's utterly foolish.

The market trend after the official opening was as expected.

The three major indices plummeted, and stocks that had opened at their daily limit were forced to sell off. The opening point of 3975.21 was the highest point of the Shanghai Composite Index today.

"To some extent, today's trend is even more terrifying than the previous times, and it's a bad start."

Stock trading is actually the same as doing business. All profits must be based on the premise that both parties have room to make money, and the most crucial element in this is trust.

The outcry from so many high-level officials over the weekend had driven ordinary stock market investors' emotions to their peak, yet the market opened with this unexpected trend.

"If trust is lost, the market will become difficult to navigate, and it will definitely become increasingly difficult for us to achieve anything in the A-share market in the future."

"That's true, it will only get harder in the future."

When ordinary stock investors perceive this market rescue as a harvest, they will inevitably lose confidence. It should be noted that most of the new stock investors at this time are post-90s who have just entered the workforce, and they are also the ones who have lost the most money.

Experienced investors, upon seeing the opening bell, will immediately think of running away; only new investors wouldn't understand this.

"Let's get started. There's no need to wait until this afternoon. Let's buy FlashTech and Weilai shares first."

At 10 o'clock, half an hour later, the Shanghai Composite Index had fallen from nearly 8% to less than 3%, a drop of nearly 5%, while the national team was still attacking the two oil giants and the banking sector.

Tan Jincheng was somewhat disappointed, as he had not truly experienced the 2015 stock market crash, but only learned about it from the news.

They could have done better. In fact, the national team didn't need to take action during the opening phase; they could have just stood by and maintained the situation. Leaving everything to the market would have been more effective than attacking the two oil giants and the banks.

Gu Qingqing smiled and said, "Then I'll start buying. I'll buy Flash Technology today, and you can buy Weilai Shares."

"Okay, don't sit for too long, get up and move around from time to time."

"I see."

Cheng Linfeng pursed his lips. The boss and his wife had a pretty good relationship. Today, the boss said he was going to be a trader, but wasn't he also making time to spend with his wife?

FlashTech's stock price had fallen back to around 17.25 yuan, the flat price.

Within half an hour, investors who bought in during the opening auction had already lost 10%, demonstrating that the market's severity was far greater than imagined.

"Our two stocks are pretty good. Boss, look at the small and medium-sized enterprises and growth enterprises. There are already a lot of stocks that have hit the daily limit up and down."

"Forget about small and medium-sized enterprises and growth enterprises. Their bubble is already huge, so it's normal for them to fall. Let's stabilize our own stock price this morning. As for bottom-fishing, we can talk about that this afternoon."

The average price-to-earnings ratio (P/E ratio) of the entire A-share market, excluding the oil and banking sectors, is over 50, while the average P/E ratio of the ChiNext market is over 150. Even stocks like LeEco, whose owners have fled, opened at the daily limit up price, with a market capitalization approaching 1200 billion yuan. It's simply insane.

Compared to LeEco's market capitalization, Weilai's market capitalization of 1952 billion yuan at the opening today is practically a steal.

"Don't worry about the stock price. Our task today is to support the price. If there are large sell orders, we will buy them. Tell the traders to take action."

"Today, we need to buy at least 50 million yuan worth of Flash, and at least 100 million yuan worth of Wei Lai's shares. Let's begin."

Cheng Linfeng nodded. Before the market opened, he had already contacted some institutions to take over Midea Group through block trades after the market closed. He would also decide whether to make a purchase in the afternoon.

As for the two listed companies of our own, since the boss has said so, there is no need to consider anything else.

"Boss lady, you don't need to place the current price. You can place the price at the daily limit up. With the advantage of capital, you can get priority in the transaction."

This office is his own, with no outsiders. It has state-of-the-art equipment and network access, and also offers convenient access.

"Huh? Didn't that mean I overpaid?"

Gu Qingqing genuinely doesn't pay attention to stocks. She has never really had much of a concept of wealth. She liked making money when she was in college, but that doesn't mean she was actually short of money.

She barely paid attention to Orange Technology's stock performance, and rarely traded it.

"No, even if you place an order at the daily limit, it will still be executed at the current price. In fact, that's what I like to do the most."

Tan Jincheng knew a lot about this from his wife. Before the A-share market was reformed, his favorite thing to do was to place a buy order at the limit-up price and sell at the limit-down price.

The experience was fantastic.

"Oh? Is that so? I really didn't know. Let me give it a try."

Gu Qingqing's actions seemed a bit clumsy, and Tan Jincheng, sitting next to her, smiled knowingly. "What a novice!" he thought, "haha."

Today's A-share market performance was a very bad experience for investors. The Shanghai and Shenzhen stock markets opened high and closed low throughout the day, while the market rescue team did not change its strategy and continued to attack the two oil giants.

At the moment PetroChina hit its daily limit, all three major indices turned green, and sentiment plummeted to its lowest point. Countless investors cursed in front of their computer and mobile phone screens, even though they had rushed in at the opening bell that morning.

More and more stocks are experiencing extreme price swings.

FlashTech and Weilai shares saw their prices supported by funds, and their fundamentals were also sound, so their overall performance throughout the day wasn't particularly bad. Although they turned negative along with the broader market, the decline wasn't significant.

Throughout the day, FlashTech's price fluctuation range was 12.69%, and Weilai's was 10.65%. Both stocks experienced a sharp rise in the final stages of the trading day, coinciding with the index's rebound.

At 3:00 PM, both Shanghai and Shenzhen stock exchanges closed. FlashTech closed at 17.98 yuan, up 4.23% for the day, with a total turnover of 7.79 million yuan.

Weilai shares closed at 86.18 yuan, up 1%, with a total turnover of 25.31 billion yuan for the day.

"Oh dear, honey, I think I bought the wrong account."

They had lunch at ByteDance's website. Gu Qingqing, who was pregnant, didn't have as much energy as Tan Jincheng. She took a two-hour nap and only resumed buying around 2:30 pm, still feeling groggy.

I don't know how it happened, but she clicked on the wrong account.

"Huh? What's going on?"

"I just checked, and this is our own trust fund account. Will there be any problems?"

Tan Jincheng looked through her purchase records and was both amused and exasperated. She hadn't even noticed that the accounts in the morning and afternoon were different until after the market closed.

Nearly 50 shares were traded at an average price of 18.18 yuan, costing 900 million yuan.

"No problem, we'll just issue an announcement later. We'll support the buyback with our own funds. But you can't accidentally sell it, okay? That would be a huge problem."

Thankfully, today is T0 day, meaning you can only buy and not sell, otherwise it would be truly ridiculous.

"Oh? Then I won't do anything else. I'll just try it out today. But you have to be careful not to click the wrong thing."

"Okay, you can rest tomorrow, or you can come and play with me without doing anything."

The first day of market intervention on July 6 ended in failure. On July 7, the national team continued to buy oil and bank stocks, following the strategy of the previous day. The effect was naturally not very clear, and small and medium-sized enterprises continued to plummet.

According to statistics, within two trading days, the national team bought more than 60 billion yuan worth of PetroChina shares and more than 33 billion yuan worth of Ping An Bank shares, a move that can be described as extravagant.

In the past two days, Tan Jincheng has not stopped. In the two trading days, the total funds used to maintain his own stock exceeded 4 million yuan, of which more than 1.5 million yuan was used to buy Flash Technology.

Excluding the 50 shares that Gu Qingqing mistakenly bought, the repurchase account now holds a total of 890 million shares, nearly half of the repurchase target of 2000 million shares.

Wei Lai's side was not slow either, with his repurchase account holding as many as 296 million shares in two days.

"According to this plot, once we spend all 15 billion yuan of the repurchase funds, the number of shares we buy will definitely exceed the number of shares we currently own."

"You can't spend it all, you simply can't spend it all."

"How much did Midea buy?"

"We've bought quite a lot. We've been using the block trading platform and the secondary market. We currently hold 1201.03 million shares of Midea Group, at an average price of 30.81 yuan, which cost us 3.7 million yuan."

"Boss, you can contact Midea Group and have a talk with them."

In the past two days, Qilu Securities Beicang Hengshan Road branch has been making headlines just like the national team, frequently appearing on the list of top traders and the block trading platform, instantly bringing veteran stock investors back to 2007.

The frequent appearances of the dedicated trading seat on ByteDance's stock trading platform have attracted the attention of institutions, especially their large-scale purchases of Midea Group shares.

At the same time, it also gave a lot of confidence to veteran stock investors who experienced the bull market of 2007 to 2008, and the dedicated seats of ByteDance's trading platform still have a certain appeal.

Tan Jincheng nodded: "Okay, I understand. I won't come tomorrow. Just continue at this pace and spend all 30 billion yuan of your own funds in the securities account."

The stock market will continue to fall, but what they need to do is long-term investment. Being able to build a position in just a few trading days is far better than buying slowly. Time is far more important than cost.

After returning home, Tan Jincheng dialed Lei Bus's number, as he wasn't very familiar with Midea.

"Hey, Mr. Tan, what made you think of calling me? I heard you've been making a killing in the A-shares market these past few days? What made you decide to call me?"

Lei Jun is well-informed and is also paying close attention to changes in the A-share market in order to find some investment opportunities.

The fact that ByteDance's dedicated trading seat made large-scale purchases of Midea Group shares over two consecutive trading days through block trades is hard not to attract the attention of its strategic partner.

(End of this chapter)