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

Chapter 123 A 20-year-old, the second largest shareholder of two listed companies

He put his hands in his pockets and turned to walk back to his dormitory.

When I opened the door, Xia Yaozong was lying on the bed scrolling through his phone.

Zhang Yixing sat at the table, looking at something.

Yang Cheng leaned against the headboard, holding a book in his hand.

All three people looked at him at the same time.

Xia Yaozong spoke first, his tone tinged with gossip.

"You're back?"

"Um.

""

"Is everything settled in Hong Kong?"

"nailed it."

Xia Yaozong stared at him for a few seconds: "What happened to your mouth?"

Lu Chenzhou walked to his bedside, sat down, and changed his shoes.

"Nothing much."

Xia Yaozong didn't believe it, so he sat up from the bed and carefully examined his face.

Your lips are red.

Zhang Yixing also turned his head, glanced at it, and then quickly turned back, pretending he hadn't seen anything.

Yang Cheng turned a page of his book, and the corner of his mouth twitched slightly.

Xia Yaozong suddenly realized what was happening and slapped his thigh.

"Holy crap! Lu Chenzhou, did you kiss Wen Zhiyu?"

Lu Chenzhou didn't answer. He took off his shoes, put on slippers, and went to the bathroom to wash up.

Xia Yaozong called out from behind, "If you don't say anything, it means you agree."

The sound of the tap water drowned out his shouts.

Xia Yaozong lay back on the bed, stared at the ceiling, and smiled.

"This kid has finally figured it out."

Zhang Yixing didn't reply. He looked at the computer screen, but the screen was empty.

Yang Cheng turned a page of his book, and the corners of his mouth curved into a wider smile.

Lu Chenzhou came out of the bathroom, turned off the light, and lay down on the bed.

There was silence for a while in the darkness.

Xia Yaozong's voice came from under the covers, muffled.

"Brother Lu."

"Um."

"How did it feel to kiss?"

No one answered.

Xia Yaozong waited a few seconds, then said, "You're the kind of person who doesn't even say 'kiss' on the lips."

Lu Chenzhou's voice came from the darkness, very softly.

"good."

Xia Yaozong paused for a moment, then smiled.

He laughed so loudly that the blankets shook.

Zhang Yixing laughed, and Yang Cheng laughed too.

Lu Chenzhou didn't laugh, but he licked his lips.

July 6th, Thursday, early morning.

The Hong Kong Stock Exchange's disclosure website promptly posted two disclosure announcements regarding interests.

First: Zhizhou Capital Limited increased its stake in Galaxy Entertainment by 1.05 shares on November 4th at an average price of HK$0.543 per share.

The company acquired 100 million shares, increasing its stake from 0% to 4.99%.

第二份：知舟资本有限公司于11月5日透过场外交易，以每股0.72港元收购Permira持有的8.4亿股银河娱乐股份，持股比例由4.99%升至24.01%。

The two announcements appeared side-by-side on the disclosure page, like two bombs detonating simultaneously.

The news spread even faster than Lu Chenzhou had anticipated.

The first to be affected were the investment groups.

Someone posted screenshots of the two announcements, and the group was silent for a full five seconds.

Then messages flooded in like a burst dam, making the screen too busy to read.

"24.01%??? Am I seeing things???"

"4.99% plus 19.02% equals 24.01%. Did Brother Lu buy all of Permira's shares yesterday? 20%?"

"8.4 million shares, HK$0.72 per share, totaling HK$6.05 million. Adding the 1.05 million shares held in the secondary market, the total holdings are 9.45 million shares, representing 24.01%."

"He's now the second-largest shareholder; he's become the second-largest shareholder of Galaxy Entertainment."

"Yesterday they were talking about Galaxy Entertainment and SJM Holdings, and today they've already made two share acquisitions?"

"It wasn't a shareholding increase; they directly bought out the shares and became the second-largest shareholder."

"6.05 million? Where did he get so much money?"

"He has over 8 million yuan in cash on hand. Yesterday, he sold off all his shares in China Shenhua, which brought in a lot of funds, enough to pay his bills."

"So yesterday's clearance sale of Shenhua shares was to raise money to buy Permira?"

"It should be."

"Damn, he's planned every single step from September 18th until now."

"The key point is that Lui Che-woo agreed. The announcement stated that the Lui family waived their right of first refusal."

Why did Lui Che-woo agree?

"Because he also lacks money. Due to the financial crisis, banks tightened credit, and he needed to keep his money to pay off debts and maintain a 35% stake. He couldn't come up with 6 million to buy Permira's shares."

"So he needs a buyer."

"Yes. Lu Chenzhou fits both criteria perfectly: a buyer who can take over Permira's shares without threatening his controlling stake."

"So Lui Che-woo agreed?"

"Will he join the board of directors?"

"I don't know. With a 24.01% stake, there should be a board seat, but it wasn't mentioned in the announcement."

"The announcement states that it involves the acquisition of shares and does not involve any changes to the board of directors."

"So that means not joining the board of directors?"

"Not at least not for now."

"24.01%, he is now the second largest shareholder of Galaxy Entertainment, at the age of 20."

"Stop talking, I'm going to the rooftop for some fresh air."

"Take me with you."

On Baidu Tieba, the post was featured on the homepage.

The headline is in bold red: Breaking News! Leveraged investor acquires 24.01% stake in Galaxy Entertainment, becoming its second-largest shareholder!

The main post included screenshots of the two announcements, along with a brief text:

On November 4, Zhizhou Capital purchased 1.05 million shares of Galaxy Entertainment on the secondary market, representing 4.99% of the company.

On November 5, Zhizhou Capital acquired 840 million shares held by Permira at HK$0.72 per share, increasing its stake to 24.01% and becoming the second largest shareholder of Galaxy Entertainment. The Lui family waived its preemptive right to purchase.

The number of replies to the post was increasing every second: "24.01%? Didn't he just buy 4.99% yesterday?"

"I bought 4.99% yesterday, and today I consumed the entire 20% of Permira, bringing the total to 24.01%."

"Permira? Is that the British private equity firm that invested 65 billion in Galaxy Entertainment in 2007?"

"Yes, 65 billion went in, and 6 million came out. A loss of 59 billion."

"Lu Chenzhou bought it at 0.72? Permira bought it at 8.42 back then."

「0.72，比11月4日的收盘价0.60高了20%，他溢价20%买的。」

"A 20% premium? Is he crazy?"

"Is he crazy? If he were crazy, Lui Che-woo wouldn't have agreed. Lui Che-woo's agreement means he thinks the price is reasonable."

.

Why did Lui Che-woo agree?

"Because he doesn't have the money to buy it; the bank is holding him hostage, and he can't come up with 6 million."

"So he needs a buyer?"

"Yes, a buyer who can take over without threatening his controlling stake. Lu Chenzhou fits the bill perfectly."

"24.01%, the second largest shareholder, and he's only 20 years old."

"At 20, I was the second-largest shareholder in two listed companies. What was I doing when I was 20? Fighting for food in the cafeteria."

"Stop talking, the more you talk, the more useless you feel."

"Did you notice that he also sold all of his China Shenhua shares yesterday, 5602.50 million shares, at an average price of 15.25. His cost was 10.20, so he made 5.05 per share, earning 2.83 million yuan."

"So he sold off his Shenhua shares to raise money to buy Permira?"

"He's getting a long-term loan? 24.01%, locked for six months. He'll have to get a long-term loan whether he wants to or not."

"So he really has high hopes for Galaxy Entertainment?"

「他9月17号在沙龙上说的什幺？2000点以下就是底部」。他10月28号在港股说的什幺？港股的天也要变了」。他说的每一句话，都是真的。他做的每一笔交易，都是算过的。」

"24.01%, I just want to know if he'll get a seat on the board."

"The announcement states that there are no changes to the board seats," meaning that the move is not happening for the time being.

"When will he go in?"

"When he wants to go in."

Messages are also popping up in the alumni group for finance professionals.

Guo Fansheng posted: "Lu Chenzhou has acquired a 24.01% stake in Galaxy Entertainment. This junior is incredibly bold."

Dai Zhikang added, "It's not that he's bold, it's that he's calculated it. He calculated it, that's why he dared to do it."

Qiu Guogen posted a few words: "The price of 0.72 is not expensive, and in the long run, it's very cheap."

The group chat was silent for a moment.

"Mr. Qiu, you're also interested in this?"

"I invested in his private equity fund, and I watched every single one of his trades."

"So what do you think he'll do next?"

"Whether he continues to buy or continues to wait, his rhythm is never chaotic."

At 8:30 a.m., in room 608 of Renmin University, Zhang Yixing said: "Overnight, US stocks plummeted, with the Dow Jones down 5.05%, the S&P 500 down 5.27%, and the Nasdaq down 5.53%."

On the first trading day after Obama's election as president, the market turned its attention back to economic fundamentals, with poor employment data and service sector indices triggering panic.

Hong Kong stock futures opened about 3% lower in pre-market trading, around 14400 points. Galaxy Entertainment was trading at 0.62 pre-market, down from yesterday's close of 0.65.

It opened 4.6% lower.

Lu Chenzhou nodded. Two announcements were issued today, one for 4.99% and the other for 24.01%.

The market will react; some will follow, and some will run away.

But he can't move his assets; they're locked up for six months.

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

The Hang Seng Index opened lower, around 14350 points.

Galaxy Entertainment opened at 0.62, then quickly dropped.

0.61, 0.60, 0.59, 0.58...

"It's 0.58 now." Zhang Yixing's voice was a little strained.

Lu Chenzhou did not move.

0.57、0.56、0.55、0.54、0.53.

"It's down to 0.53, a drop of 18.5%."

On the order book, sell orders are still pouring in.

But someone placed a large buy order at the 0.53 price level, not for hundreds of thousands of shares, but for millions of shares, buying them up one by one.

"Someone is answering," Xia Yaozong said.

At 10:00 AM, Galaxy Entertainment's stock price rebounded from 0.53.

0.54, 0.55, 0.56...

一路往上，0.60、0.65、0.70、0.75、0.80、0.90..

"It's at 1 yuan!" Zhang Yixing's voice cracked. "Galaxy Entertainment has reached 1 yuan, up 88%!"

The entire 608 room erupted in chaos.

"I don't know, but people are buying, and buying a lot."

Lu Chenzhou stared at the betting odds, his fingers resting on the mouse, but he didn't move.

It's not that I don't want to move, it's that I can't.

He was locked up for six months; he could only watch.

Galaxy Entertainment's price surged to 1.00 before starting to fall back, reaching 0.95, 0.90, and 0.85.

However, buying interest remained strong, and the stock price fluctuated repeatedly between 0.85 and 0.95.

SJM Holdings opened at 1.35, driven by Galaxy Entertainment, and continued to rise throughout the day.

1.40、1.45、1.50、1.55、1.60、1.65、1.70..

"SJM Holdings is now at 1.70, up 26%."

China National Building Materials and Conch Cement present a completely different picture.

China National Building Materials opened at 4.00 and then declined steadily, reaching 3.90, 3.80, 3.70...

"Building materials are at 3.70, down 7.5%."

Conch Cement opened at 28.15 and continued its downward trend, reaching 27.50, 27.00, 26.50...

"Conch Cement is at 26.50, down 5.9%."

The market closed at 11:30 a.m.

Galaxy Entertainment closed at HK$0.90 at midday, up 52.5%, with an intraday high of HK$1.00 and a low of HK$0.53.

SJM Holdings closed at HK$1.68 at midday, up 24.4%.

China National Building Material closed at HK$3.72 at midday, down 7.0%.

Anhui Conch Cement closed at HK$26.80 at midday, down 4.8%.

After recording the data in her notebook, Wen Zhiyu looked up at Lu Chenzhou.

"Galaxy Entertainment's stock price has dropped to 1 yuan, you can't sell it, can you?"

"Yes, it will be locked up for six months."

"Aren't you in a hurry?"

"What's the rush? You can't sell it even if you rush, so you might as well not look at it."

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

Galaxy Entertainment fluctuated between 0.85 and 0.95, neither breaking through 1.00 nor falling below 0.85.

SJM Holdings fluctuated between 1.60 and 1.75.

China's building materials index continued its downward trend, hitting a low of 3.70.

Conch Cement's lowest price reached 26.60.

Lu Chenzhou did not make any moves all afternoon.

It's not that I don't want to do it, it's that I can't.

He can't move the locked-up stocks, but he has other uses for the cash in his account.

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