May 23, Wednesday, 10 a. m.
Securities Regulatory Commission's official website released an announcement titled "Investigation Conclusion on Henglong Capital Co., Ltd.'s Suspected Insider Trading Case."
The text of the announcement is not long, but every word has been carefully considered.
When Chen Xi read this message in Trading Room, his hands shook and he almost spilled coffee on the keyboard.
She took a deep breath and began to read down word by word.
"After investigation, Henglong Capital Co., Ltd. (hereinafter referred to as Henglong Capital) between March 23 and April 4, 2018,
Purchase Shunxin Agriculture Co., Ltd. (hereinafter referred to as Shunxin Agriculture) shares through Secondary Market, holding a total of 4.99% of the shares.
There is some market suspicion that Henglong Capital bought shares of Shunxin Agriculture before the release of its first quarter report, and is suspected of insider trading."
"I will launch the investigation process in early May 2018.
By retrieving transaction records, communication records, Board of Directors resolution documents, and questioning relevant personnel, the verification situation is as follows."
The announcement sorted out the whole story in chronological order.
Chen Xi Looking at those familiar dates and data, the sweat on my back started to dry unconsciously.
"On March 20, 2018, Henglong Group Chairman Zhao Chen had a phone call with Yunnan Agriculture Group Chairman Cheng Jiaxun.
The call lasted about 18 minutes. The call record showed that the two parties mainly discussed Yunnan Agriculture Group's production capacity planning and Live Pigs's breeding industry trends.
At the end of the call, Cheng Jiaxun mentioned that Shunxin Agriculture and Animal Husbandry was rapidly building a pig farm and suggested that Zhao Chen pay attention.
This information does not constitute inside information, and Cheng Jiaxun has no knowledge of Shunxin Agriculture's Baijiu business."
"On the evening of March 20, 2018, Zhao Chen instructed General Manager of Henglong Capital Chen Xi to investigate Shunxin Agriculture.
Chen Xi began to collect public information on the next day, including but not limited to Shunxin Agriculture's annual reports, brokerage research reports, channel research data, and industry analysis reports."
The announcement lists the brokerage research reports collected by Chen Xi one by one.
"On March 2, Pacific Securities released a research report "Baijiu continues to improve, and operations gradually improve." Citing channel survey data, Baijiu's business is expected to grow in the first quarter.
On March 13, Shenwan Hongyuan released a channel research report, pointing out that the growth rate of Niba Mountain Erguotou in the Yangtze River Delta region exceeded 70%.
On March 14, Dongxing Securities released a research report, predicting Shunxin Agriculture's net profit in 2018 would be 577 million yuan.
On the same day, Guosen Securities released a research report, which estimated that Net Profit Attributable to Parent would be 5.77/7.81/996 million yuan in 18-20 years.
On March 15, BOCI released a research report, saying that 'Volkswagen is the wine king and Baijiu is the long-distance running champion'.
On March 16, Zhōngtài Securities released a research report, saying that "the performance is accelerating and the market value is still undervalued."
The above reports are based on public channel research and company disclosed information, and there is no non-public inside information."
Chen Xi Looking at these contents, his eyes suddenly felt a little hot.
She downloaded these research reports from the Internet one by one.
That week, she sat in the office every day, flipping through reports, drawing tables, and doing cross-verifications. Sometimes she was so busy that she didn't leave until after ten o'clock in the evening.
After Zhao Chen read the materials she compiled, she submitted them directly to Board of Directors, which made her feel that all her efforts were in vain.
The announcement continues below.
"On the morning of March 22, 2018, Henglong Group convened Board of Directors to review the Shunxin Agriculture investment proposal.
Zhao Chen submitted the "Shunxin Agriculture Investment Feasibility Study Report" at the meeting.
The content includes Shunxin Agriculture's business structure analysis, Baijiu's business market performance data, brokerage survey summary, management changes, state-owned enterprise reform expectations, etc.
All data comes from public sources, and an index of all data sources is attached at the end of the report.
After discussion, Board of Directors unanimously passed the investment resolution, authorizing Henglong Capital to purchase Shunxin Agriculture shares in Secondary Market, with a total investment amount not exceeding 520 million yuan."
"From March 23 to April 4, 2018, Henglong Capital bought Shunxin Agriculture shares through Secondary Market, holding a total of 4.99% of the shares, with an average transaction price of 18.2 yuan, and a total investment of 517 million yuan.
During the buying period, the daily trading volume of Henglong Capital accounted for no more than 5% of the total Trading Volume of Shunxin Agriculture on that day, and there was no manipulation of stock prices."
The last paragraph of the announcement is the conclusion of the investigation.
"After investigation, Henglong Capital's decision-making basis for buying Shunxin Agriculture stock came from public information and independent research.
The content of the call between Zhao Chen and Cheng Jiaxun does not involve the inside information of Shunxin Agriculture.
Henglong Capital's position opening time, position opening price, and position opening quantity are all reasonably supported by Business Logic, and there is no use of insider information for trading.
Henglong Group Board of Directors The resolution procedure is in compliance and the relevant documents are complete and available for inspection.
In summary, I will conclude that Henglong Capital Co., Ltd. does not engage in insider trading and this case will be closed."
Chen Xi read this announcement of less than a thousand words three times.
The first time is tension, the second time is confirmation, and the third time is relief.
Then she stood up, walked out of Trading Room with her mobile phone, walked to the door of Zhao Chen's office, and knocked on the door.
"Come in." Zhao Chen's voice came from inside.
Chen Xi Push the door open.
Zhao Chen was sitting behind the desk, holding a tea cup in his hand, with a calm expression, as if he already knew what the announcement would say.
Su Wantang was sitting on the sofa with several documents spread out in front of him. He raised his head and glanced at Chen Xi.
"Zhao Zong, Securities Regulatory Commission announcements are out."
Chen Xi handed over the phone, "There is no insider trading. The case is closed."
Zhao Chen took the phone, looked at it once, and then returned the phone to her, with no change in the expression on her face.
He picked up the teacup and took a sip. "Got it."
Chen Xi was stunned for a moment. "Zhao Zong, are you unhappy?"
Zhao Chen Put down the teacup.
"What's there to be happy about? There is no insider trading.
They completed the investigation and proved their innocence. This is what it should be, not a surprise."
Chen Xi looked at him and suddenly smiled.
"Zhao Zong, you are so boring. You don't even have a smile for such a big thing."
Zhao Chen also smiled. "Okay, I'm happy. When you're done, go back to work."
Chen Xi turned around and walked out. When she walked to the door, she heard Su Wantang say behind her:
"That's just him. It's not the first day you've met him."
Chen Xi didn't look back, but the corners of her mouth turned up.
An hour after the announcement was issued, the stock price of Henglong Group began to rise.
At ten o'clock in the morning, when the announcement first came out, the stock price of Henglong was still fluctuating around 23.8 Hong Kong Dollar.
At 10:15, the first wave of buying orders came in, and the stock price jumped from 23.8 to 24.5.
At 10:30, the second wave of buying orders followed up, and the stock price broke through 25 Hong Kong Dollar.
At 11 o'clock, the stock price hit 26.2 Hong Kong Dollar, an increase of more than 10%.
Before closing at noon, the stock price continued to rise, reaching a maximum of 27.8 Hong Kong Dollar, an increase of more than 16%.