Becoming the King of Bottom Fishing After Going All-In on A-Shares

Chapter 113 Becoming a Second-Largest Shareholder Through Stock Trading

On Friday, October 31st, at six o'clock in the morning, Lu Chenzhou got up and glanced at the news.

The U.S. GDP fell 0.3% quarter-on-quarter in the third quarter, further strengthening recessionary signals.

Overnight, U.S. stocks were mixed, with the Dow Jones Industrial Average down 0.80% and the Nasdaq Composite up 0.47%.

Asian stock markets opened lower across the board, with the Nikkei falling more than 2% and South Korea falling more than 3%.

Hang Seng Index futures opened about 2.5% lower in pre-market trading in Hong Kong.

He glanced at it a few times and put the phone down.

There are two things to do today. At 7:00 AM, Zhizhou Capital's announcement of its shareholding increase will be posted on the Hong Kong Stock Exchange's disclosure website.

At 9:30 a.m., Hong Kong stocks opened and China National Building Material resumed trading.

He sat up, put on his coat, and went to the bathroom to wash up.

The cold water splashed on his face, and he was completely sober.

Today is the last trading day of October.

He changed into his workout clothes, pushed open the door, and went out for a run.

At 6:40, Lu Chenzhou returned to his dormitory after finishing his run.

Zhang Yixing had already gotten up and was sitting at the table with a laptop in front of him, the screen of which displayed the Hong Kong Stock Exchange's disclosure website.

He refreshed the page every minute. Xia Yaozong was still in bed, but he was awake, leaning against the headboard with his phone in his hand.

"The announcement hasn't come out yet?" Lu Chenzhou asked.

"The submission system will only open at six o'clock," Zhang Yixing said. "We can only log in at seven o'clock, so there are still twenty minutes left."

At exactly 7 o'clock, Zhang Yixing tapped his finger on the keyboard, and the page refreshed.

一则新的权益披露通知出现在列表里：知舟资本有限公司于10月28日在场内以每股均价1.60港元增持中国建材1.125亿股，涉及资金约1.8亿港元。

Following the increase, Zhizhou Capital's shareholding ratio rose from 0% to 12.47%, crossing the 5% threshold for disclosure of a shareholding for the first time.

Xia Yaozong whistled: "12.47%, the second largest shareholder."

Zhang Yixing continued, "I am optimistic about the company's development prospects and would not rule out further increasing my holdings at the appropriate time. This statement carries significant weight."

Lu Chenzhou didn't speak. He stared at the announcement on the screen, read it from beginning to end, and confirmed that every word was within the scope of the law before closing the page.

The significance of the timing is obvious: he established the position on October 28 and disclosed it on October 31, within the legally mandated three-day trading period, and he was stuck on the last day.

It wasn't early, nor was it late; it was just right.

"Let's go to the science park."

7:15, West Gate of Renmin University.

When Lu Chenzhou arrived, Wen Zhiyu was already waiting.

She was wearing a thin black down jacket today and carrying two insulated bags.

Seeing Lu Chenzhou walk over, she handed one of them to him.

"Century egg and lean pork congee, one egg, four vegetarian steamed buns, and two pumpkin pancakes."

Lu Chenzhou took it and took a bite of the pumpkin cake.

"Has the announcement been released?" Wen Zhiyu asked.

"It's been sent."

"Is there a problem?"

"no."

The two walked side by side toward the science park.

7:50 AM, Room 608, Renmin University Cultural and Technological Park.

When Lu Chenzhou pushed open the door, Zhang Yixing was already in front of the computer.

The screen in front of him displayed pre-market data for Hong Kong stocks.

"What time did you arrive?" Lu Chenzhou asked.

Zhang Yixing rubbed his eyes. "I came here after the announcement was released, and I couldn't sleep."

He pointed to the screen. Lu Chenzhou walked over and took a look.

Hang Seng Index futures opened about 2.5% lower in pre-market trading, at around 13900.

China Building Materials opened at 3.50, down 5.4% from yesterday's closing price of 3.70.

China Shenhua opened at 13.50 pre-market, 0.7% higher than yesterday's closing price of 13.40.

Conch Cement opened at 23.75, down 1.0% from yesterday's closing price of 24.00.

"Building materials opened five points lower." Zhang Yixing's voice was a little tense. "The announcement has been released, and some people are trying to run away."

"That's normal," Lu Chenzhou said. "A six-month lockdown has scared some people."

He sat down, turned on his computer, glanced at his holdings, and then switched to the market data page.

At 8:15, room 608 was getting more and more crowded.

Today is October 31st, Friday, the last trading day of October.

Yesterday, the Hang Seng Index surged 12.82%, and the building materials sector soared 85% in a single day.

This morning, Lu Chenzhou's announcement of holding up a sign dominated social media throughout the morning.

The market opened lower in pre-market trading, and everyone is waiting for the market to open.

Wen Zhiyu stood by the window, holding the notebook in her hand. She turned to a new page and wrote down the date: October 31st, Friday.

She wrote a few lines in the header: On the first trading day after the announcement of the takeover bid, the building materials market opened 5.4% lower in pre-market trading.

Then she stopped and waited for the market to open.

Hong Kong stocks opened at 9:30 a.m.

The Hang Seng Index opened about 2.5% lower, at around 13900 points.

At the moment the market opened, a flood of sell orders appeared on the order book. These were not short sellers, but rather short-term profit-taking and panic selling.

Yesterday it surged 85%, and today an announcement came in that it would be locked up for six months. Some people are choosing to exit the market regardless of the cost.

China National Building Materials opened at 3.50, then immediately dipped.

3.40, 3.35, 3.30, 3.28...

"It's March 3.28th." Zhang Yixing's voice was a little tense. "Building materials have fallen by 11%."

Xia Yaozong turned to look at Lu Chenzhou.

Lu Chenzhou's expression remained unchanged.

He stared at the chart, watching the downward-sloping intraday line, his fingers hovering over the mouse, motionless.

China Shenhua opened at 13.50 and hit a low of 12.84, a drop of 4.2%.

Conch Cement opened at 23.75 and hit a low of 22.50, a drop of 6.3%.

The entire market is falling.

In Goldman Sachs' Asian trading room, at 9:45 a.m., Cheng Jiajun stared at the order book of China National Building Materials, his voice slightly tense.

"Boss, building materials have fallen to 3.28, a drop of 11%. Some people are selling."

Wei Zhexuan walked to the screen and glanced at the betting odds data.

"Retail investors are fleeing. The announcement came out, and the stock is locked for six months. They're scared."

"Then we..."

"We're not doing anything," Wei Zhexuan said calmly. "We've already closed out our short positions, so the rise and fall of the market is none of our business now."

10 o'clock sharp.

On the order book, the number of sell orders for China National Building Materials has begun to decrease.

It's not that there aren't any left, it's that someone is taking over.

买单从3.30开始往上挂，3.32、3.35、3.38、3.40..

The stock price began to rebound.

Zhang Yixing stared at the order book: "Someone is buying, not retail investors, but institutional investors."

"QFII?" Xia Yaozong asked.

"I don't know," Zhang Yixing said, "but someone has built a defensive line around 3.30 to prevent building materials from falling below this level."

""

At 10:15, China National Building Materials returned to 3.50.

At 10:30, it surged to 3.80.

At 11 o'clock, it surged to 4:00.

中国神华从低点12.84开始反弹，13.00、13.50、14.00、14.50..

Conch Cement rebounded from 22.50 to 23.50, 24.00, and 24.50.

Zhang Yixing's voice was trembling: "Building materials are at 4.00, they've become popular again."

Shenhua rose 4 points to 14.50.

Conch Cement is trading at 24.50, back to near yesterday's closing price.

All three stocks experienced a sharp V-shaped reversal.

Xia Yaozong leaned back in his chair and let out a long sigh.

"From 3.28 to 4.00, it rose by 22 points. Who is buying?"

Lu Chenzhou picked up his water glass and took a sip: "Someone is building a position."

"Who?"

"People who are optimistic about building materials."

At midday closing, the Hang Seng Index closed at 14150 points, down about 1.2%.

China National Building Material Co., Ltd. closed at HK$4.00 at midday, up 8.11%.

China Shenhua Energy Co., Ltd. rose 4.48% to HK$14.50.

Anhui Conch Cement rose 2.08% to HK$24.50.

Wen Zhiyu was recording the midday closing data in her notebook when she looked up at Lu Chenzhou.

Will the price continue to rise this afternoon?

"There won't be a big surge," Lu Chenzhou said. "The emotions have already been released this morning, and the market will likely trade sideways this afternoon."

"So, are you going to do it this afternoon?"

"High probability of no action."

At noon, on a bench at the entrance of the science park.

Lu Chenzhou and Wen Zhiyu sat side by side, each with a boxed lunch in front of them.

"Weren't you worried when building materials prices dropped to 3.28 today?" Wen Zhiyu picked up a piece of twice-cooked pork and placed it in Lu Chenzhou's lunchbox.

Lu Chenzhou glanced at the piece of meat, seemingly used to eating it: "Not nervous."

Why?

"Because someone bought in at 3.30, not me, but an institution, they were building a position."

"How do you know it's accumulation of shares and not market intervention?"

"Market support is for selling off inventory, while building up positions is for holding inventory."

Those orders placed at 3:30 today were not sold at 4:00.

If it were a market intervention, they would have run away long ago.

He paused for a moment: "They are building a position, not for the short term, but for the medium to long term."

Hong Kong stocks continued to fluctuate in the afternoon after the market opened.

China National Building Materials fluctuated narrowly around 4.00, neither pushing it to 4.20 nor falling back.

On the order book, buy and sell orders are evenly matched.

At 2 PM, a large order appeared on the order book.

It's not a payment, it's a selling order.

A sell order for 500 million shares of China National Building Materials was placed at a price of 4.05.

The stock price instantly dropped to 4.00.

The second transaction was for 300 million shares at 3.98.

The third order was for 200 million shares at 3.95.

Three consecutive sell orders caused the stock price to drop from 4.05 to 3.90.

Zhang Yixing's voice was a little tense: "Someone is unloading their shares, not individual investors, but institutional investors."

Lu Chenzhou stared at the betting odds and remained silent for three seconds.

"It's not a sell-off, it's a change of hands. Some people no longer want to hold the shares, and others want to enter the market."

Sure enough, after the three sell orders were placed, even larger buy orders appeared on the order book.

At the 3.90 level, someone placed a buy order for 800 million shares, which supported the stock price.

The stock price fluctuated between 3.90 and 4.00.

At 3 p.m., China National Building Materials surged to 4.63, a 25.1% increase.

China Shenhua surged to 15.10, a 12.7% increase.

Conch Cement surged to 25.20, a 5.0% increase.

But it quickly fell back.

In the last half hour of trading, China National Building Material remained stable at around 4.30, China Shenhua remained stable at around 14.00, and Conch Cement remained stable at around 23.85.

At 4:00 PM sharp, the closing bell rang.

The Hang Seng Index closed at 14300 points, down about 0.5%.

"The day is over. Building materials rose 17 points, Shenhua rose 4 points, Conch fell 0.6 points, and you didn't make a single move today."

"Um.

""

"You don't regret it?"

"Regret what?"

"Building materials prices fell to a low of 3.28, but you didn't buy more; they rose to a high of 4.63, but you didn't sell."

Lu Chenzhou thought for a moment: "The building materials have been locked up for six months, so they can't be replaced."

Shenhua and Conch are stuck below the threshold for mandatory disclosure of shareholding; any further purchases would exceed the 5% threshold, requiring another announcement.

We're not selling because it's not the right time to sell yet.

He closed his laptop, stood up, grabbed his coat, and said, "I'm leaving."

After the market closed, Lu Chenzhou brought up his holdings interface.

Holding stock: China National Building Material (HK3323)

持股数量：11250万股成交均价：1.60港元收盘价：4.33港元持仓市值：48712.50万港元当日盈亏：+7087.50万港元（+17.03%）

Unrealized profit/loss: +30712.50 million HKD (+170.63%)

Holding 12.47% of the total H-share capital, triggering a disclosure requirement, with a six-month lock-up period. Target stock: China Shenhua (HK1088).

持股数量：15802.50万股成交均价：10.20港元收盘价：14.00港元持仓市值：221235.00万港元当日盈亏：+9481.50万港元（+4.48%）

Unrealized profit/loss: +60055.00 million HKD (+37.26%)

Holding 4.65% of the total H-share capital, not triggering a disclosure requirement for the following stock: Conch Cement (HK0914)

持股数量：1632.63万股成交均价：18.50港元收盘价：23.85港元持仓市值：38938.23万港元当日盈亏：—244.89万港元（—0.62%）

Unrealized profit/loss: +8738.23 million HKD (+28.92%)

Holding shares representing 3.77% of the total H-share capital, not triggering a disclosure requirement. Total market value of holdings: HKD 308885.73. Cash on hand: 0.

Total Assets: HK$308885.73 Total Profit/Loss for the Day: +HK$16324.11 (+5.58%)

Total unrealized profit/loss: HK$108885.73 (+54.44%)