Cutting-edge technology: Starting with individual stealth equipment

Chapter 97 DeepBlue Technology's Financial Performance Report

With the Spring Festival holiday over, DeepBlue Technology's employees have gradually returned to their jobs.

Monday, August 18st.

At this moment, Lin Chuan is in a warehouse of the "Shadow" project department.

"What is the current monthly production capacity?" Lin Chuan asked, casually opening a box, inside which was a set of stealth combat suit.

This warehouse already contains hundreds of stealth combat suits, all of which were recently manufactured.

Cheng Siyuan, who was standing next to him, replied, "We can produce 112 sets a month now. Production capacity will pick up in the second half of the year, and there will be no problem in delivering all 1850 sets required by the military by the end of the year."

Lin Chuan nodded and closed the box again.

He clapped his hands, glanced around the warehouse, and asked, "How many finished sets are there in the warehouse right now?"

Cheng Siyuan replied, "132 sets."

Lin Chuan immediately said, "Seal it with tape and deliver this batch of goods to the military."

Cheng Siyuan nodded: "OK".

This order is not manufactured all at once and then delivered in batches, but rather delivered monthly.

After getting off work, Lin Chuan went to Su Qingyue's villa.

The two started by playing a game of chess. After a long while, Lin Chuan came out of the bathroom wearing a bathrobe and went to the sofa in the living room.

After a while, Su Qingyue also came out of the bathroom.

Lin Chuan immediately asked, "How's the share pledge going?"

Su Qingyue sat down next to Lin Chuan: "I talked to securities firms and banks during the day, and they gave very low valuations and only a 25% collateral ratio, on the grounds that Deep Blue Technology is a high-risk stock."

DeepBlue Technology's stock price has indeed plummeted during this period, having been halved.

Generally speaking, the pledge ratio is around 40%, with a maximum of 60%.

DeepBlue Technology's current total market capitalization is slightly over 1020 billion. Su Qingyue pledged 10% of her shares, based on a 25% valuation at the current market capitalization.

With such a low loan-to-value ratio, only about 25 billion yuan in cash flow can be raised.

Financial institutions are unwilling to offer high collateral ratios, fearing that DeepBlue Technology's stock price will fall further.

According to regulations, a public announcement must be made after a pledge occurs. The listed company must be notified within two days of the pledge, and the listed company must then disclose the announcement to the public.

Once the pledge announcement is released, the stock price will definitely plummet again.

DeepBlue Technology was once a hot commodity in the market, but it has suddenly fallen out of favor. If Su Qingyue, the company's second-largest shareholder, were to pledge 10% of her shares at this time, it would definitely be interpreted by the market as a major shareholder's indirect cash-out and escape.

Lin Chuan thought for a moment and said, "Let's not talk about it for now. Anyway, it will take another two months for the lock-up period to expire. Let's talk about it again in May. The company's stock price will definitely rise by then."

Su Qingyue raised an eyebrow and looked at Lin Chuan: "Are you so confident that DeepBlue Technology's stock price can quickly recover in the short term?"

Lin Chuan smiled and said, "Our company has crossed over into the photovoltaic new energy sector and made a revolutionary technological breakthrough last year. However, we are currently laying out our technology patents, which needs to be kept confidential. Once it is officially announced, the stock price will definitely take off."

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Su Qingyue immediately asked, "When will the layout be completed?"

Lin Chuan pondered for a moment: "It will be soon, within the next month or two. The plan is to hold a press conference during the May Day holiday to announce the major technological breakthroughs achieved in the new business."

Su Qingyue nodded: "Then let's wait until May to talk about it. As for the start-up capital required for the Qingwu Forest Park project, the amount in the early stages is not too large. I can ask Shenhong Group to provide the advance funding, so it will not affect the progress of the project."

Lin Chuan: "That's excellent."

The following afternoon at around 13:30 p.m., a rumor suddenly circulated in the capital market.

According to sources, DeepBlue Technology's second-largest shareholder is pledging 10% of the company's total shares.

Upon hearing this news, DeepBlue Technology's stock price plummeted.

In less than three minutes, it was pushed to the daily limit down, hitting a new low for the year.

This news was rumored to have been deliberately leaked privately by financial institutions, in order to allow the market to digest the negative news in advance.

Because accepting equity pledges after a sharp drop results in less cash flow and lower potential risks for financial institutions, they intentionally release negative news in advance.

But investors in the secondary market were completely dumbfounded.

Hit by this news, DeepBlue Technology's stock price continued to decline over the next two weeks.

The stock price has been steadily declining, constantly hitting new lows, without even a decent rebound. It opened lower every day.

It was Wednesday, March 13th, at Zichen Bay Villa.

Lin Chuan finished his breakfast and was about to go to the company when Zhong Chu took his coat.

Lin Chuan, taking the coat from Zhong Chu, glanced at him and reminded him, "Oh, by the way, you guys can buy the dip today. Remember to go all in, preferably at the end of the trading day."

The initial plan was for them to buy it as soon as they received their salaries, but recently the company's stock price has been plummeting, so Lin Chuan asked them to wait for a while.

The reason I'm reminding them to buy at the bottom today is because the annual report results will be released tomorrow.

"Okay, I understand." Zhong Chu nodded, then couldn't help but ask, "Brother Lin, is this alright? I checked online, and strictly speaking, telling us this information in advance constitutes insider trading—"

Upon hearing this, Lin Chuan smiled and calmly said, "Then don't spread it around, just make your fortune in secret."

Compared to those who actually engage in insider trading and fleece investors, Lin Chuan's so-called violations don't even come close, and he didn't profit from them.

Moreover, with the limited funds of the six sisters, they can't make a ripple in the market at all.

Even if we take it out and put it on the scale, it wouldn't weigh more than four ounces.

Around 10 a.m., Zhong Chu, Qiu Mengtang, and the other six women were sitting together, using the Tonghuashun app on their phones to check the stock price of DeepBlue Technology.

"Should I really buy at the bottom? The ones I bought before have already lost so much that I'm down to nothing."

Their cost price is all above 30 yuan, and the current floating loss rate has reached -73%, with an average loss of 18 to 20 yuan per person, which is equivalent to losing three or four months' salary.

"I trust Brother Lin. He said we can buy it today, and I'm definitely buying it!"

"Then let's buy it."

"I'll buy it too, I trust Brother Lin Chuan."

Should we use all the money we have to buy it?

"Of course I'll buy them all."

After chatting for a while, the six sisters all decided to use all their remaining money to buy stocks at the end of the trading day.

DeepBlue Technology closed at 7.91 yuan today, which was also the lowest price of the day, forming a bearish candlestick with no lower shadow. The company's total market value has shrunk to 500.62 billion yuan, barely holding the 500 billion yuan mark.

In the past two weeks, this stock has suffered a 14-day losing streak, with a cumulative drop of 78% from its peak. It was halved, then dropped to the knee, and then dropped to the lower leg.

At approximately 16 PM, DeepBlue Technology.

Jiang Miaolan pushed open the door to Lin Chuan's office, holding a document in her hand—the 2012 financial report of DeepBlue Technology.

Report.

"The annual report is out."

She placed the materials on her desk, and Lin Chuan picked them up and flipped through them, scanning several important data points.

截止2012年12月31日，深蓝科技全年营收总额为72.42亿元，较之上一年同比增长+284.8%；净利润36.76亿元，同比增长+379.89%。

Last year's revenue was entirely contributed by the plasminogen lysate business. The "Shadow" project only saw the military make a small purchase of 60 sets in 2011, and there were no orders in 2012.

This year, they placed a large order worth 270 billion yuan, and this revenue was included in 2013.

The company's net profit margin last year was 50.759%, which is quite remarkable.

It's worth noting that in 2012, the overall net profit margin of China's manufacturing industry was only 2.91%, and the average net profit margin of the top 500 manufacturing companies was even lower, at only around 2.65% to 2.9%.

DeepBlue Technology's net profit margin of over 50% is still based on its significantly higher human resource costs and exceptionally high salaries and benefits compared to its peers.

In addition, a new headquarters was under construction last year, and some of the expenses were included in 2012.

If the company had not built its headquarters and had maintained employee salaries at a level slightly above the industry average, DeepBlue Technology's net profit in 2012 could have reached a staggering 58.93 billion yuan.

The corresponding annual net profit margin could soar to an astonishing 81.37%.

The gross profit margin of the phagocytic microbial community business reached 92.52%, a level that only a few leading products in high-barrier industries can achieve, indicating that the product has extremely strong competitiveness.

They either possess exclusive patents or technological barriers, or they have extremely high brand premiums.

Without a doubt, DeepBlue Technology's bio-plastic microbial community business has extremely strong technological barriers and is a business with exclusive monopoly.

Lin Chuan turned a page and looked at the company's cash flow reserves.

Data shows that the company has cash reserves of 137 billion yuan, indicating extremely abundant cash flow.

This is mainly because we previously raised more than 119 billion yuan from seven major investment institutions, and earned more than 72 billion yuan last year. After deducting all expenses, taxes and fees and dividends of 17 billion yuan, we still have more than enough.

Finally, Lin Chuan signed and stamped the documents directly.

"Disclose it."

At around 19:50 p.m., DeepBlue Technology released its 2012 financial report.

The annual report results significantly exceeded market expectations, with net profit exceeding the January annual report earnings forecast by 6.76 million yuan.

After DeepBlue Technology's annual report was released, the company's static price-to-earnings ratio plummeted to 13.6 times, while the industry average was 30 times.

Clearly, the current price-to-earnings ratio is far below the industry average, indicating a severe overselling.

However, when this better-than-expected annual report was released, investors were not so excited and most were skeptical.

The market had been so volatile lately, especially with the recent 14-day losing streak, that investors were completely disoriented.

The A-share market clearly stipulates that listed companies whose year-on-year profit increases or decreases by more than 50% must issue a profit forecast in advance, with the disclosure deadline no later than January 31 of the following year.

DeepBlue Technology clearly triggered this condition, releasing a profit forecast report in January.

However, it had almost no effect on boosting the company's stock price at the time, so shareholders did not have high expectations when the official annual report was released. Instead, they felt that if there was a rebound, they should sell quickly.

The next day, when the A-shares market opened, DeepBlue Technology's stock price did not hit the daily limit up. Instead, it opened at 8.29 yuan, up 4.85%.

After the market opened, the price plummeted, falling below 8 yuan and hitting a low of 7.98 yuan.

Many investors were actually hoping that DeepBlue Technology would hit its daily limit today, but the result was disappointing.

After 2:30 p.m., DeepBlue Technology's stock price suddenly surged.

It easily recovered the opening price and continued to rise, finally reaching the upper limit of 8.70 yuan at around 14:39 PM.

Even though the stock hit its daily limit, most investors still believe it's just a rebound, not a reversal.

But in the days that followed, DeepBlue Technology's stock performance stunned all the bears.

Its trend has seen a super "V"-shaped reversal, unlike last year when it bottomed out at 6.88 yuan and reversed, the continuous rise with low volume and limit-up trading prevented those who did not buy in advance from getting on board.

There wasn't a single limit-up day this time, so as long as you wanted to get on board, you could buy it every day.

However, when it was time to get on board, few people dared to. Investors felt that if Deep Blue Technology really turned around, it would be impossible to buy shares at such a low price. It would definitely be like last year, with the stock price rising all the way up with decreasing volume.

If it makes it easy for you to get on board, it's definitely a trap to lure people into buying at inflated prices.

And so, I watched as DeepBlue Technology's stock price continued to rise and hit the daily limit.

Even after three consecutive limit-up days, I still suspected it was a trap to lure in more buyers and decided to wait and see.

When it hit the five-day winning streak, I was a little skeptical, but I still kept an eye on it.

When it hit the seven-day winning streak, DeepBlue Technology's stock price had surged to 15.41 yuan, nearly doubling from its bottom of 7.91 yuan.

At this point, I realized I had missed out and felt extremely regretful for not following along.

Those who had their flesh cut at the bottom were especially angry, slapping their thighs until they swelled up, and deeply regretting not being able to reattach it.

Thus, DeepBlue Technology recorded its eighth consecutive limit-up on the eighth trading day, with both volume and price rising, and the stock price accumulating a gain of +114.29%.

On the ninth trading day, DeepBlue Technology continued its upward momentum, opening at 17.80 yuan, up 5.01%.

At this point, some investors finally couldn't take it anymore.

Shi Xiao, who previously managed to avoid disaster by clearing out his holdings at break-even, was one of them.

He watched the stock rise from the third consecutive limit up to eight consecutive limit ups. During that time, he wanted to get on board several times, but he wanted to wait for a pullback to the 5-day moving average before entering. As a result, the stock rose to the limit up every day.

Today, I finally couldn't take it anymore and decided that I had to get on the bus today.

After the market opened, Shi Xiao did not rush to buy, because based on the intraday trend of the past few days, the market would retrace every day after the opening. He planned to wait for the market to retrace a few points before buying at a low price. However, he did not expect that Deep Blue Technology would open high and continue to rise after the market opened today.

"Wait, why isn't it rebounding?" Shi Xiao was a little confused: "Damn, I should have entered during the opening auction—"

He figured that since the price had already risen so high, he might as well just buy at the limit up price. He figured it wouldn't hurt to buy at a two or three percent higher, as that would give him more certainty.

Six or seven minutes later, DeepBlue Technology's stock price surged again.

At this moment, Shi Xiao was ready to buy at the limit up price with one click. As soon as he saw a large buy order, he would immediately place an order to buy when the price was close to or after it hit the limit up.

At around 9:43 a.m., DeepBlue Technology's stock price surged to 18.64 yuan, a gain of 9.97%, hitting the daily limit.

Shi Xiao decisively bought 30 yuan worth of shares, which is about five-tenths of his portfolio.

Shortly after, his order was executed at the daily limit up price.

Seeing the order book increase to over 7 million yuan, Shi Xiao felt confident that the stock would definitely hit the daily limit and remain there until the close.

Just as he was about to switch to other trading platforms to check out other stocks, he suddenly noticed a sharp drop in the buy orders at the limit-up price of DeepBlue Technology.

The stock price was wiped out in just 37 seconds after it hit the limit up, and the price quickly plummeted by 4%.

The moment Shi Xiao saw the board explode, her heart skipped a beat.

"Oh no, could this be another perfectly timed top?"

Two minutes later, the intraday chart attempted to rally and reclaim the position, but it was pushed back down after reaching +9.34%.

After 10 o'clock, the trend became weaker and weaker. At 11 o'clock, the stock price plummeted and turned green. At 13:40 pm, the stock price of Deep Blue Technology continued to plummet. Finally, at 14:22, the stock price dropped to 15.25 yuan, a drop of 10.03%, and hit the daily limit down.

They walked straight out onto a floor with a ceiling.

"Hesitation leads to defeat, decisiveness leads to surrender, my dear General, you son of a bitch!"

At this moment, Shi Xiao was wearing a mask of pain. He made a move that resulted in a complete loss, with his investment plummeting by 18.18% in one day. His initial investment of 30 yuan turned into 24.5 yuan in the same day, resulting in a loss of more than 5.5 yuan.

He felt numb and began to question the meaning of life.

"Am I just cursed with this stock? Three times I've bought at the absolute peak three times in a row, damn it!"

The more he thought about it, the angrier he became, and the angrier he became, the more he thought about it, until he completely lost his temper.

"Damn it, come on, if you're so capable, then delist." Shi Xiao, who was on the other end of the line, went all in with the remaining 30 yuan at the limit down price, going all in. After buying in, the average cost price dropped from 18.64 yuan to 16.95 yuan.

The unrealized loss on the open positions decreased from -18.18% to -10.03%.

A half-position resulted in a limit-down move, which is equivalent to a full-position position experiencing a limit-down move.

Enraged, Shi Xiao uninstalled the stock trading software, both the mobile and computer versions.

As time went on, at 12:00 noon on April 10, DeepBlue Technology released its Q1 2013 earnings forecast.

According to regulations, if the year-on-year increase or decrease in performance exceeds 50%, a preliminary increase report must be released in advance before the official financial statements are issued.

公司一季度营业收入预计50亿元~55亿元；比上年同期增长309.83%~350.82%：归属上市公司股东的净利润预计9亿元~9.35亿元，比上年同期增长38.03%~43.40%。

The surge in revenue in the first quarter was mainly due to a NT$27 billion order from the military in January for Shadow combat suits and their maintenance kits, which began to be delivered in batches during the first quarter.

Of these, approximately 45.13 billion yuan in military procurement orders were included in the first-quarter results.

In addition, Henghui Group's "plastic-eating bacteria" business procurement orders this year amounted to 10 billion yuan in the first quarter and contributed the most significant source of net profit, reaching 7.22 million yuan.

This first-quarter forecast also revealed an important piece of information for the first time.

That is the first time that DeepBlue Technology has officially disclosed to the public that the company has military business. Because the military has made large-scale purchases of new orders, the revenue accounted for too large a proportion and could no longer be included in the "other items".

We also informed the military authorities in advance before making the disclosure.

However, not many details were disclosed, and all the information disclosed was declassified.

According to national laws and regulations, when disclosing information in the financial reports of military industry businesses, specific projects, products, and profit amounts cannot be described in detail; they can only be referred to by terms such as "Customer A" or "Product A".

Simply put, it's telling the market that DeepBlue Technology has a military business with fairly high revenue, but the exact amount is unknown.

We cannot disclose the specifics of what we do or who our clients are.

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