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

Under the watchful eyes of the entire audience, Zhao Xianglong slowly stood up.

"Lu Chenzhou, you overlooked the core concepts we learned in our industrial economics class: the resource-based view of enterprises and the cyclical survival theory."

You have deliberately blurred the essential boundaries between the overall growth of the industry and the risk resistance of an individual company.

You say new energy is a safe haven for capital, but BYD in China is currently the most relevant real-world counterexample to academic cases in the new energy vehicle industry.

After a moment of surprise, everyone looked at Zhao Xianglong thoughtfully.

"First of all, the financial crisis is essentially a systemic credit contraction."

During periods of economic stagflation and recession, the primary principle of the capital market is that cash is king and liquidity is the best form of preservation, not long-term investment.

BYD has adopted a vertically integrated approach, investing heavily in building battery factories, conducting research and development, and setting up production lines in the early stages, resulting in extremely high fixed costs.

Cars aren't selling, resulting in a huge cash flow shortfall every month.

It's not that the new energy vehicle sector has no future; it's that the speed at which car manufacturing burns through cash far exceeds the industry average.

This high-consumption, low-turnover model is completely inconsistent with the bottom line of capital seeking safe haven during a crisis, and no one dares to gamble that it can survive the dead end of a cash flow crisis.

Secondly, from the perspective of industry life cycle theory, China's new energy industry is still in the market introduction stage, and the high growth of the industry is just a superficial manifestation of the increase in penetration rate.

The industry as a whole has not yet formed a stable profit loop, and it is a typical high-growth, high-risk sector.

With battery costs, charging infrastructure, and consumer acceptance looming large, cash flow is the lifeline for businesses.

The faster an industry grows, the safer a company is not necessarily.

Even BYD, which has a first-mover advantage and battery technology backing, is facing enormous financial pressure.

This is enough to show that talking about an industry boom without considering the survival of individual companies is just empty talk that goes against common business sense.

Crises are never catalysts for the rise of new energy sources, but rather touchstones for selecting reliable business models.

If a company doesn't survive this cycle, even the best industry trends are meaningless.

At this point, he recalled his experience at the salon last time, a hint of resentment flashing in his eyes, his tone carrying a touch of interrogation:

"Since you're bullish on new energy vehicles, and BYD's stock has fallen to 8 yuan from 77 yuan, then you should buy it!"

These words caused an uproar in the class, and everyone's eyes were once again focused on Lu Chenzhou, waiting to see how he would respond.

Zhao Xianglong's words both touched upon the previous bet and took advantage of Lu Chenzhou's remarks, clearly indicating his intention to replicate the situation at the last salon and force him to fulfill his promise again.

Lu Chenzhou looked at Zhao Xianglong and said, "Of course I will buy them. Not only will I buy them, but I will also invest in new energy vehicles."

Zhao Xianglong laughed: "BYD is a Hong Kong stock? Tell me, how do you buy it? Can you even get your funds out of the company?"

Just as the atmosphere froze, the 5:30 bell rang suddenly, signaling the end of get out of class.

Chen Ruowei coughed twice: "Classroom debates are about the clash of viewpoints, not a battle of egos."

Zhao Xianglong's discussion of risks from the perspective of the company's survival reflects a pragmatic, bottom-line mentality.

Lu Chenzhou's focus on opportunities in the future of the industry reflects a long-term strategic mindset.

The two are not a simple either-or question of right or wrong.

Real business decisions are about finding a balance between risk and opportunity. You can also think about this case after class.

Alright, get out of class dismissed!

The students packed up their books, but most of their eyes remained on Lu Chenzhou and Zhao Xianglong.

Zhao Xianglong gave Lu Chenzhou a deep look, said nothing more, turned and walked out of the classroom, but a surge of anger was burning inside him.

He wanted to see if Lu Chenzhou would really dare to pour real money into BYD, whose stock price was plummeting.

Lu Chenzhou calmly packed up his textbooks. In 2008, BYD's stock price plummeted from 77 to 8 yuan, and everyone was panic-selling.

But for him, this was precisely a once-in-a-lifetime opportunity to buy at the bottom.

However, the first issue to be resolved is the access to funds; to buy Hong Kong stocks, one needs a channel.

Lu Chenzhou went to a small private room next to Galaxy Securities, where the bald man fawned over him, serving him tea and water.

"Student Lu, no, Brother Lu, your presence in my humble abode is truly an honor."

Lu Chenzhou cut to the chase: "I'm planning to invest in Hong Kong stocks. Can you provide margin financing?"

The bald man's smile froze instantly, and he hesitated for a moment:

"Brother Lu, the Hong Kong stock market is a complex and special market, and I can't make the decision myself. Please wait a moment while I call the boss."

After saying that, he quickly stepped behind the door, lowered his voice, and dialed a number, his tone very cautious.

A moment later, light footsteps could be heard outside the door.

A girl with long, flowing pigtails walked in, her eyes landing on Lu Chenzhou.

"My name is Lin Wan, and I'm the boss of this company. If you want to invest in Hong Kong stocks, just tell me your needs."

As she spoke, she pulled out a chair and sat down, showing none of the awkwardness of a young girl, but rather a strong sense of pressure.

The bald man quickly poured a cup of jasmine tea, bowed, and retreated to a corner to wait for orders.

Lu Chenzhou frowned as he looked at the little girl opposite him, feeling a sense of familiarity: "Have I seen you before?"

Lin Wan smiled slightly: "You helped with the registration when the new students enrolled last year."

Lu Chenzhou paused for a moment before remembering that he had been asked to volunteer during last year's orientation.

"Renmin University is truly a place where hidden talents abound."

Lin Wan smiled and said, "I'm just a small fry, trying to make a living."

However, the National People's Congress is indeed full of hidden talents, with many children of powerful figures, children of high-ranking officials, and children of prominent families.

On the contrary, people with simple family backgrounds like yours, senior, are quite rare.

Lu Chenzhou shook his head. He was the head of the household himself, and his family background was indeed simple.

"Okay, let's get back to the main topic! For Hong Kong stocks, what's the highest leverage ratio, and what are the interest rates?"

Lin Wan stared at Lu Chenzhou for a while and said, "It's still 10x leverage, with a monthly interest rate of 30 cents."

However, since you want to invest in Hong Kong stocks, and you're a long-time client, I'll give you a discount: 25 cents per month.

It's not that I want to charge you more interest, but the channels on both sides are rather special; getting in and out is inconvenient and costly.

Lu Chenzhou didn't make a decision immediately, but instead asked, "Can the money arrive right away?"

Lin Wan frowned slightly: "Funds under HK$5 million can be credited immediately, while those over HK$10 million will take one to three days."

Lu Chenzhou nodded: "Okay, I understand."

After saying that, he got up, pushed open the door, and left.

Watching Lu Chenzhou's departing figure, the bald man hesitated and said, "Why would he be thinking of investing in Hong Kong stocks?"

The current rally in A-shares isn't over yet; switching to other markets prematurely carries significant risk.

Lin Wan picked up her jasmine tea and took a sip: "Water flows downhill, but people strive to climb higher."

A-shares have too many restrictions, while Hong Kong stocks are much freer.

Moreover, once the funds reach Hong Kong, they reach the whole world.

He doesn't want to be confined to the small circle of A-shares; he has a long-term vision.

The bald man asked, "Should we also throw in some?"

His recent trading decisions have been incredibly accurate; following him will definitely make you rich.

Lin Wan glanced at the bald man, who shuddered and quickly lowered his head, cold sweat pouring down his back.

"We only act as a conduit and earn interest; we don't interfere with our clients' trading strategies, and we certainly don't follow trends or copy trades. That's the rule."

Don't be greedy for profits you shouldn't be greedy for, don't try to guess what others are thinking, and stick to your principles; only then can your business last.

"If you blindly follow suit and make investments, and things go wrong one day, it will drag down the entire operation. Can you bear that responsibility?"

The bald man hurriedly nodded and bowed, "Yes, yes, the boss is right. I was confused and will never dare to think about such things again."