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

The online forum was in an uproar.

"The announcement is out: Huaxin Taifu suffered a loss of 155 billion yuan, compared to a profit of only 152 billion yuan for the entire year last year. They've worked for nothing and are even losing money. Brother Lu's short position cost is 17.15 yuan, for over 900 million shares. How much do you think it will drop when trading resumes tomorrow?"

"Citigroup's target price is $5, Goldman Sachs' is $6, and Morgan Stanley's is $4.5. Before the trading halt, it was $14.52. A drop of half would be considered small. If it drops to $7, Lu Ge will earn $10 per share. With more than 900 million shares, that's more than 9000 million. Adding the unrealized gains from China National Building Material, the total unrealized gains could exceed 1.5 million."

"150 million, my goodness. Do you guys remember? At the salon on September 17th, Brother Lu said 1929 was a golden opportunity, and Zhao Xianglong immediately mocked him: 'If you're so optimistic, why don't you buy it? Stop just talking.'"

Brother Lu said, "Okay, I'll buy it."

The next day, he borrowed money at exorbitant interest rates and used all 60 yuan of his capital to buy CITIC Securities shares at the limit-down price. Everyone thought he was crazy.

"And what happened? That very night, three major positive developments were announced: a one-sided stamp duty levied, Huijin's intervention in the market, and state-owned enterprises' share buybacks. The market nearly hit its daily limit on the third day, and he made 95,000 yuan in one day. From that day on, it was like he had a cheat code."

"On September 23, the fundraising account used 500,000 yuan to buy CITIC Securities at the opening, and made 27,000 yuan that day. On September 24, it continued to hold the position and made another 21,000 yuan. On September 25, CITIC Securities hit the daily limit, and the fundraising account made 55,000 yuan in one day, with total unrealized gains exceeding 100,000 yuan."

"September 26th was the most outrageous day. He sold all his CITIC Securities shares at 24.80 and then went all in on BYD in Hong Kong, buying in at HK$8. The stock closed at 8.40 that day, making a profit of HK$750,000 in one day."

Then, over the weekend, Buffett announced that Berkshire Hathaway had subscribed to 2.25 million shares of BYD at HK$8 per share—a day earlier than Buffett!

"Zhao Xianglong chased CITIC Securities that day at a cost of 24.80, but CITIC Securities fell all the way to just over 20, and his 10x leverage was wiped out."

I heard he was so angry he vomited blood on the spot and was later expelled from school.

Meanwhile, Lu Ge's BYD shares surged to HK$16, at which point he liquidated his long positions and simultaneously went short with his entire portfolio, earning HK$2175 million in a single day.

"Needless to say, he shorted BYD Electronics, China National Building Material, and CEFC China Energy. His account grew from 150 million to 1.6 million in less than a month."

"Do you know what's the most amazing thing? He already registered a company in Hong Kong called Zhizhou Capital, and he's already got SFC License No. 9. Those who reported him for illegal fundraising, their complaint letters are still on their way. He's already in compliance with regulations."

"My biggest regret now is that when he asked for money on September 18th, I hid in the bathroom and didn't dare to come out. If only I had lent him 9 yuan then..."

"Stop talking, the more you talk about it, the more you regret it. I'm just waiting for his company to open up. I'm willing to invest at least HK$100 million, even if it means selling everything I own."

"Huaxin Taifu resumes trading tomorrow. On which day do you think he will liquidate his position?"

"I'm keeping an eye on the group right now. If Brother Lu isn't satisfied, I won't be satisfied either."

"To be honest, from September 17th until now, every step he's taken has been perfectly timed, and every prediction has been made in advance. He's been talking about valuation, policy, cycle, and human nature for a month, and only now do I truly understand it."

"What's the use of understanding it? While others are turning 1 into 1.6 million, you're still looking at candlestick charts."

That hurts.

On October 21st, Room 608 of the Renmin University Cultural and Technological Park was crowded with people early in the morning.

When Xia Yaozong came in, he was carrying a pile of newspapers.

He excitedly placed it in front of Lu Chenzhou's computer desk: "Brother Lu, you're in the newspaper again. Although the market is concerned about how much Huaxin Taifu will drop at the opening today, everyone is more interested in your story."

Take a look at the 21st Century Business Herald: Renmin University student Lu Chenzhou, nicknamed "Leverage Bro," made 2 million yuan a month by profiting from both long and short positions, igniting the financial world.

China Securities Journal: "King of Bottom Fishing" or "God of Short Selling"?

Hong Kong Economic Journal: Mainland students shorted CEFC China Energy, making a paper profit of nearly HK$100 million. "Do you think Hong Kong is still the Hong Kong before 1997?"

Southern Metropolis Daily: From "Madman" to "God": A Student's 1 Yuan Comeback.

The Beijing News: Lu Chenzhou, the "Leverage Guy": A student's 2 million yuan legend.

The China Times: From 1 to 1.6 million in 27 days, Lu Chenzhou's wealth secrets.

Sina Finance: Lu Chenzhou's 2 Million Yuan Investment Philosophy

Hexun.com: A live look at Room 608 of the National People's Congress building following the announcement by Huaxin Taifu.

Lu Chenzhou glanced at it and then continued staring at the computer screen.

Wen Zhiyu quietly reported the pre-market situation for today:

The Dow Jones Industrial Average closed at 8852.22 points, down 127.04 points, or 1.41%.

The S&P 500 closed at 940.55, down 0.62%.

The Nasdaq Composite Index closed at 1567.40 points, down 0.37%.

U.S. stocks fell for the fifth consecutive trading day as concerns about a global economic recession continued to escalate.

Despite the US government's $7000 billion bailout package, investors remain pessimistic about the prospects for the real economy.

Financial stocks led the market decline, with Citigroup and Bank of America both hitting multi-year lows during the session.

In European markets, the FTSE 100 index in London closed at 3982.18 points, down 1.32%.

The Frankfurt DAX index closed at 4522.18 points, down 1.56%.

The Paris CAC40 index closed at 3322.30 points, down 1.31%.

European stock markets closed lower for the third consecutive day, as investor concerns about the health of the banking sector persisted.

In pre-market trading in the Asia-Pacific region, Nikkei 225 futures fell 2.1%.

South Korean KOSPI futures fell 1.8% in pre-market trading.

Australian S&P/ASX 200 futures fell 1.5% in pre-market trading.

Asian markets were under pressure across the board, dragged down by overnight U.S. stocks.

In pre-market trading, Hang Seng Index futures opened about 3.2% lower at 14820 points, a significant drop of over 500 points from yesterday's closing price of 15323 points.

The market focus is on CITIC Pacific's resumption of trading today. The market generally expects CITIC Pacific to open significantly lower today, with a potential drop of 30%-50% on the first day.

However, since Hong Kong stocks do not have daily price limits, the decline could be even greater in extreme cases.

Lu Chenzhou nodded and continued to quietly watch the game board.

Looking at Lu Chenzhou's profile, Wen Zhiyu sighed inwardly. He truly remained calm even when Mount Tai collapsed before him. Facing the explosive bombshell of CITIC Pacific and the hundreds of millions in unrealized profits, he still maintained his composure.

"What do you think is the pre-market price for CEFC China Energy?"

Lu Chenzhou brought up the market data page.

Huaxin Pacific, pre-market price: HK$9.00.

It fell 38% from HK$14.52 before trading was suspended.

Xia Yaozong leaned back in his chair: "Citigroup's target price is $5, Goldman Sachs' is $6, and Morgan Stanley's is $4.5. If it opens at $9, it will still be a long way from their target prices."

Lu Chenzhou didn't speak. He picked up the soy milk, took a sip, and his gaze fell on the screen.

At 9:30 a.m., the Hong Kong stock market officially opened.

The Hang Seng Index opened 412 points lower at 14911.

Huaxin Pacific's opening price: HK$9.00.

It plummeted 38.02% compared to before trading was suspended.

At the moment the market opened, a massive amount of sell orders poured out from all directions like a flood bursting its banks.

The order book was filled with green sell orders, and the buy orders were instantly swallowed up. The stock price barely stayed at HK$9.00 before plummeting straight down.

8.90, 8.80, 8.70, 8.60...

Everyone in the conference room held their breath, staring intently at the computer screen, at the minute chart line plummeting straight down.

8.50, 8.40, 8.30, 8.20...

At 10:00 AM, Huaxin Pacific fell below HK$8.

7.90, 7.80, 7.70, 7.60...

Foreign institutions' selling shows no signs of abating.

At the trading desks of Morgan Stanley, Goldman Sachs, and Citigroup, sell orders were being dumped one after another.

Xia Yaozong's voice was deep: "Those foreign investors are dumping shares in a concentrated manner. Since the market opened today, they have dumped at least HK$30 billion worth of shares."

Zhang Yixing looked at Lu Chenzhou: "Brother Lu, are you unhappy with your short positions?"

Lu Chenzhou was silent for a moment: "No rush."

At 10:15, Huaxin Pacific fell below HK$7.

6.90, 6.80, 6.70, 6.60...

The decline has exceeded 50%.