Recaps

Chen Xi reported Henglong Capital’s 648 million yuan profit from Shunxin Agriculture and presented a proposal for Henglong Group to invest one billion yuan in Bidiya. She defended the investment against the company’s poor short-term results, then began answering questions about institutional support.

• Chen Xi told the board that Henglong Capital had sold its Shunxin Agriculture shares for about 648 million yuan in gross profit, earning over 300% on its own capital.
• The directors praised Chen Xi’s Shunxin Agriculture results and approved her report.
• Chen Xi proposed injecting one billion yuan into Henglong Capital to buy Bidiya shares below 40 yuan, with a holding capped at 4% of total share capital.
• Chen Xi acknowledged Bidiya’s falling profits and subsidy cuts, then argued that its long-term prospects remained strong and cited Buffett’s unchanged stake.
• Wu Hongyuan asked whether other institutions besides Buffett were bullish, and Chen Xi moved to the next slide.

Chen Xi won unanimous board approval for Henglong Capital to invest 2.5 billion yuan in Bidiya using leverage, building a long-term position below 40 yuan. Afterward, Zhao Chen advised her to buy patiently and wait for the market’s greatest panic, while Bidiya’s share price continued to fall.

• Chen Xi proposed investing one billion yuan of Henglong Capital’s funds with 2.5-times leverage to buy Bidiya shares in batches below 40 yuan.
• Shen Jue challenged the comparison with Buffett’s holdings, and Chen Xi explained that Buffett’s low cost basis made his decision different from opening a new position.
• Sun Zhengping questioned the risks of further declines, and Chen Xi said Henglong Capital would buy at lower price levels while maintaining its collateral safety margin.
• Wu Hongyuan, Xu Yong, and Shen Jue agreed to the proposal, and the board approved it unanimously.
• Zhao Chen praised Chen Xi’s presentation and told her to hold Bidiya as a long-term investment, buying patiently as the market panicked.
• Chen Xi filed the board resolution and watched Bidiya’s share price continue to slide toward the anticipated buying opportunity.

Zhao Chen reviewed Henglong Group’s interim results, which showed a much healthier balance sheet but half the core business profit of the previous year. He directed the team to explain the decline as a deliberate strategic contraction and prepare the market for Henglong Capital’s planned investment in Bidiya.

• Chen Qiming reported that Henglong Group’s debt ratio had fallen from 49% to 33%, while cash and cash equivalents totaled about five billion yuan on the consolidated statements.
• Chen Qiming said core real estate profit had fallen to about 200 million yuan because Henglong scaled back launches, discounted inventory, and sold non-core assets.
• Zhao Chen told the team to emphasize debt reduction and cash reserves in the interim report rather than the profit decline, and to release it at the end of July.
• Zhao Chen asked Chen Xi to add a vague notice about Henglong Capital’s planned investment in a leading new-energy vehicle company and to build a position in Bidiya gradually.
• Zhang Qingxue asked whether Zhao Chen was worried about profits being halved, and he said the decline was a deliberate choice.
• After the others left, Zhao Chen reflected that the interim report might unsettle the market but that Henglong’s strong balance sheet and future investment income mattered more.

Chen Xi gradually built Henglong Capital’s position in Bidiya while its share price fluctuated around 40 yuan, following Zhao Chen’s advice to buy patiently. Zhao Chen reviewed Bubble Mary’s unexpectedly strong interim results and anticipated further growth, while its overseas Mololoy licensing rights remained undeveloped.

• Chen Xi used Henglong Capital’s 2.5 billion yuan in available funds to begin buying Bidiya shares after the price fell below 40 yuan.
• Chen Xi continued buying Bidiya gradually as its price fluctuated, and she noticed other accounts were also purchasing shares.
• Chen Xi told Zhao Chen that their Bidiya position was growing slowly, and Zhao Chen advised her to keep buying patiently while the market absorbed subsidy cuts.
• Zhao Chen reviewed Bubble Mary’s interim report, which showed 315 million yuan in revenue and 41.2 million yuan in net profit for the first half of 2018.
• Su Wantang and Zhao Chen discussed Bubble Mary’s store expansion, rising Mololoy sales, and prospects for more than 700 million yuan in annual revenue.
• Chen Xi reminded Zhao Chen that Henglong Capital held Mololoy’s overseas licensing rights, and Zhao Chen said they would focus on the domestic market for now.

Zhao Chen reviewed Yunnan Agriculture's weak interim results and defended its long-term potential, then Tongce Medical and Pianzaihuang reported strong growth. Henglong Capital's new stakes in those companies and its disappearance from Shunxin Agriculture's shareholder list sparked debate over whether Zhao Chen would hold or sell his latest investments.

• Cheng Jiaxun told Zhao Chen that Yunnan Agriculture's interim report showed falling profits, and Zhao Chen said its expanding sow inventory made the company valuable despite the industry downturn.
• Zhao Chen asked Chen Xi to compare Yunnan Agriculture's results with those of its peers so the board could judge the company against the wider industry.
• Tongce Medical and Pianzaihuang released interim reports showing strong revenue and profit growth.
• Investors noticed Henglong Capital had become a major shareholder in Tongce Medical and Pianzaihuang but no longer appeared among Shunxin Agriculture's top shareholders.
• Retail investors speculated that Henglong Capital had made hundreds of millions of yuan by selling Shunxin Agriculture and debated how long Zhao Chen would hold the two new investments.

Investors coined the term “Henglong concept stocks” and speculated that Zhao Chen’s investments would keep doubling. Zhao Chen ignored the hype and criticism, leaving Henglong Capital to follow its investment plans while the market guessed at its next moves.

• Investors debated Henglong Capital’s profits on Shunxin Agriculture and whether it would hold Tongce Medical and Pianzaihuang for the long term.
• A Snowball user listed Shunxin Agriculture, Tongce Medical, Pianzaihuang, Yunnan Agriculture Group, and Bubble Mary as “Henglong concept stocks,” prompting widespread speculation about Zhao Chen’s investment strategy.
• Chen Xi showed Zhao Chen the list, and Zhao said Henglong would not respond to the market’s speculation or clarify which investments belonged to Henglong Group rather than Henglong Capital.
• Su Wantang asked whether copycat investors might blame Henglong for losses, and Zhao said each investor was responsible for their own decisions.
• Zhao instructed Chen Xi to keep buying Bidiya, leave the Tongce Medical position untouched, and continue holding Pianzaihuang.

Chen Xi anxiously waited for Bidiya’s half-year report, and Zhao Chen and Su Wantang reassured her that the investment plan would not change. The report appeared late that night with results slightly worse than expected, and Chen Xi went to bed without calling Zhao Chen or checking the figures again.

• Chen Xi repeatedly refreshed Bidiya’s announcements page, worrying that its half-year report had not appeared.
• Zhao Chen and Su Wantang joined Chen Xi at the office, and Zhao explained that the market already expected poor results and that they would build their position as the share price fell.
• Su Wantang offered to monitor funding arrangements while Chen Xi handled trade execution, and Zhao took both women to dinner.
• Chen Xi agreed to focus on building the position, though she admitted she might check for the report at home.
• Chen Xi found Bidiya’s report posted at 11:47 p.m. and saw that its figures were a few percentage points worse than brokerage forecasts.
• Chen Xi decided not to call Zhao Chen or reopen her laptop, and went to bed to discuss the report at work the next day.

After Bidiya reported plunging profits and a large adjusted loss, Zhao Chen directed Chen Xi and Su Wantang to buy shares as panic selling pushed the price down. Trading opened sharply lower, and Chen Xi waited for the first wave of selling to pass before placing orders.

• Chen Xi reviewed Bidiya’s half-year report with Su Wantang, noting that revenue and vehicle sales had grown while net profit collapsed and adjusted losses worsened.
• Chen Xi and Su Wantang brought the report to Zhao Chen, who viewed the poor results and subsidy cuts as an opportunity to build a position at lower prices.
• Zhao Chen ordered Chen Xi to buy below 40 yuan without waiting for a lower limit, and assured her that the leveraged position remained above its collateral safety threshold.
• Before the open, Bidiya’s premarket quote showed 39.5 yuan amid heavy selling, and the call auction set an opening price of 39.2 yuan.
• As regular trading began, sell orders drove Bidiya down to 38.8 yuan, and Chen Xi waited for panic selling to push the price lower.

Chen Xi and Su Wantang bought Bidiya shares through a day of panic selling after its weak half-year report drove the price down. Chen Xi ended the day committed to buying more, while Henglong Capital held about 1.1% of the company at a roughly 7% unrealized loss.

• Chen Xi waited for the first wave of panic selling to ease, then began buying Bidiya shares in one-million-share orders.
• By the morning close, Chen Xi had bought ten million shares, but Bidiya's price kept falling as heavy sell orders overwhelmed the purchases.
• After Financial News publicized Bidiya's 673-million-yuan loss excluding nonrecurring items, panic selling intensified in the afternoon and Chen Xi continued buying.
• Chen Xi bought twenty-four million shares during the day at an average price of 37.2 yuan, bringing Henglong Capital's holding to thirty million shares, or about 1.1%.
• Su Wantang calculated that the share price had fallen to 35.6 yuan and Henglong Capital faced an unrealized loss of nearly 7%; Chen Xi told her they would keep buying.
• Chen Xi messaged Zhao Chen with the day's results, received his reply, "Good," and left the trading room prepared for another day of falling prices.

Chen Xi increased Henglong Capital’s BYD holdings as the stock recovered, while Zhao Chen considered future investment opportunities. The chapter ended when Lin Shicheng called Zhao in the middle of the night with an urgent report.

• Chen Xi read Bidiya’s announcement of record market share and sales growth, while investors argued online over its interim losses.
• Chen Xi bought sixteen million BYD shares on August 2 as the price rose, bringing Henglong Capital’s holdings to forty-six million shares.
• Over the following trading days, Chen Xi continued buying BYD shares, increasing Henglong Capital’s holdings to fifty-eight million.
• Zhao Chen considered future investments in Dening Times, Mairui Medical, and other companies he expected to rise.
• Lin Shicheng called Zhao Chen at two in the morning and said he had an urgent matter to report.

After Lin Shicheng told Zhao Chen that Elon Musk had announced plans to take Tesla private at US$420 a share, Zhao Chen feared the news meant history was changing. He calmed himself by deciding Tesla’s long-term prospects remained strong either way and saw a possible investment opportunity.

• Lin Shicheng told Zhao Chen that Elon Musk had tweeted about taking Tesla private at US$420 a share with funding secured, prompting Nasdaq to halt trading.
• Zhao Chen struggled to remember whether the tweet had happened in his previous life and worried that his actions since being reborn had changed the future.
• Zhao Chen recalled that Musk’s 2018 privatization attempt had ultimately been abandoned amid shareholder opposition and regulatory pressure.
• Zhao Chen steadied himself by focusing on long-term investment trends and reasoning that he could profit whether Tesla went private or remained listed.
• Zhao Chen checked that Tesla trading was still halted and decided not to call Lin Shicheng or read the news analysis, considering the situation a possible investment opportunity.

Zhao Chen decided to hedge his Tesla shares with put options, betting that Musk’s privatization plan would fail and the stock would fall. After Su Wantang backed his judgment, Zhao asked Lin Shicheng to obtain options quotes, then sat with Su waiting for news.

• Zhao Chen concluded that Tesla’s privatization would likely fail and its share price would fall, so he planned to buy put options while keeping his common shares.
• Zhao Chen told Su Wantang about Musk’s tweet and his assessment, and she told him to do what he thought he should.
• Zhao Chen called Lin Shicheng and asked how to hedge his 16.6 million Tesla shares with put options.
• Lin Shicheng explained strike prices, expiration dates, and premiums, and recommended building the position in batches.
• Zhao Chen asked Lin Shicheng to get Goldman Sachs quotes for options with $350–$380 strike prices and one-to-three-month expirations, covering 166,000 contracts.
• After the call ended, Zhao Chen sat beside Su Wantang and waited.

Zhao Chen planned to hedge his Tesla shares with in-the-money put options, seeking protection rather than leverage. After Lin Shicheng delivered banks’ quotes and described the market’s confidence in Musk’s buyout, Zhao Chen recognized that the banks expected the options to expire worthless and awaited his decision.

• Zhao Chen explained to Su Wantang why he wanted to buy in-the-money puts expiring within three months as insurance for his 16.6 million Tesla shares.
• Zhao Chen and Su Wantang waited while Tesla resumed trading, and the share price closed at $378 after falling from $379.
• Lin Shicheng told Zhao Chen that Goldman Sachs, JPMorgan Chase, and Morgan Stanley had quoted premiums for puts with strikes of $350 and $340.
• Lin Shicheng reported that the banks were eager to sell the options because they believed Musk’s buyout was likely to succeed and the puts would expire worthless.
• Zhao Chen considered the market consensus and realized the banks viewed selling the puts as easy profit, while Lin Shicheng asked for his decision.

Zhao Chen arranged a $160 million hedge against his 16.6 million Tesla shares by buying three-month put options. The deals were finalized at a $350 strike price and a $10 premium, leaving him confident that gains on either the common stock or the puts would offset losses on the other.

• Zhao Chen instructed Lin Shicheng to buy 160,000 three-month Tesla put contracts with a $350 strike price and a premium capped at $10.50.
• Zhao Chen explained to Su Wantang that the puts would hedge delays or setbacks in Tesla’s privatization and benefit from share-price fluctuations.
• Lin Shicheng negotiated 80,000 contracts with Goldman Sachs, 50,000 with JPMorgan Chase, and 30,000 with Morgan Stanley, all at a $10 premium.
• Lin Shicheng informed Zhao Chen that the three agreements totaled $160 million and would settle the next day.
• Zhao Chen calculated that if Tesla fell to $330, the puts’ $320 million intrinsic value would exceed their $160 million cost and help offset the common shares’ losses.

Zhao Chen hedged against the fallout from Tesla’s failed take-private plan by buying put options as Elon Musk’s claims drew scrutiny and the stock fell. Musk later explained his funding discussions, but legal experts said his “funding secured” tweet had overstated the facts, leaving the SEC investigation and market uncertainty unresolved.

• Zhao Chen completed $160 million in put-option agreements with Goldman Sachs, JPMorgan Chase, and Morgan Stanley, setting a $340 break-even point.
• Elon Musk said the take-private proposal still required shareholder approval, while Tesla shares cooled and closed near $370.
• The SEC began questioning whether Musk’s statements and Tesla’s actions complied with federal securities law, and Tesla shares fell below $346 during trading.
• Elon Musk mocked short sellers as two more lawsuits accused him of inflating Tesla’s share price, and the stock closed at $352.45.
• Elon Musk published a Tesla blog post describing Saudi Arabia’s sovereign wealth fund’s interest and estimating the take-private plan would require about $20 billion.
• Keith Higgins and John Coffee said Musk had overstated or failed to secure funding when he made his tweet, while the SEC declined to comment.

Zhao Chen’s Tesla put options became highly profitable as Elon Musk abandoned his plan to take Tesla private and the share price fell. In early September, traders at the banks that sold the options began realizing the scale of their losses.

• Tesla’s board formed a special committee as the SEC escalated its investigation, and Tesla shares fell below the $350 strike price of Zhao Chen’s puts.
• As Tesla shares slid, Zhao Chen held his position, expecting Musk’s eventual abandonment of the take-private plan to push the price lower.
• On August 24, Elon Musk announced that he was abandoning the plan, and Tesla shares continued falling in the following days.
• By August 29, Tesla shares had dropped to $298, giving Zhao Chen’s put options a net profit of $672 million while his common shares still showed an unrealized gain.
• In early September, Michael Chen, James Holbrook, and Sarah Wu recognized that their banks’ jointly sold put options had become a major liability.

As Tesla’s share price continued to fall, Goldman Sachs, JPMorgan Chase, and Morgan Stanley asked Era Vanguard to close out its put options at $295 per share. Zhao Chen refused, expecting Tesla’s decline to continue, and said Era Vanguard would not sell any of its 16.6 million shares.

• The banks’ hedging losses grew as Tesla’s falling share price forced them to sell stock, while market rumors claimed Era Vanguard might use its put options to exit its Tesla position.
• On September 10, Michael Chen asked Lin Shicheng to contact Zhao Chen about closing all 160,000 put-option contracts at $295; JPMorgan Chase and Morgan Stanley made similar requests.
• Zhao Chen considered Tesla’s ongoing investigations, production problems, and financial strain, and concluded its share price was likely to fall further.
• Zhao Chen told Lin Shicheng to reject the offer, deciding to keep the put options and hold all of Era Vanguard’s Tesla shares.

Zhao Chen reassured Elon Musk that Era Vanguard would not sell its Tesla shares, explaining that its put options were only a hedge. He then closed all 160,000 contracts at $270 for a net profit of $1.12 billion, leaving Tesla’s bulls free of fears that its second-largest shareholder would soon sell.

• Elon Musk called Zhao Chen to ask whether Era Vanguard’s put options meant it planned to sell its Tesla holdings.
• Zhao Chen promised Elon Musk he would not sell any of Era Vanguard’s 16.6 million Tesla shares and said the puts were a hedge against volatility.
• Zhao Chen weighed Tesla’s production, financial, legal, and bond-related troubles and instructed Lin Shicheng to negotiate a closeout at $270.
• Lin Shicheng negotiated with Goldman Sachs, JPMorgan Chase, and Morgan Stanley, and all three banks agreed to the terms.
• On September 18, Zhao Chen closed all 160,000 put option contracts at $270, earning $1.12 billion net and reassuring Tesla’s bulls that Era Vanguard would not reduce its stake in the short term.

Zhao Chen reaffirmed his commitment to Tesla and sought to have Era Vanguard lead SpaceX’s new funding round. After Elon Musk said Tesla was expected to turn a profit in the third quarter, Zhao instructed Lin Shicheng to prepare up to two billion dollars for SpaceX shares.

• Elon Musk thanked Zhao Chen for keeping Era Vanguard’s 16.6 million Tesla shares while closing out its put options.
• Musk invited Era Vanguard to participate in SpaceX’s roughly five-hundred-million-dollar funding round, and Zhao asked to lead it.
• Musk said Tesla’s Model 3 production had improved and predicted the company would turn a profit in the third quarter.
• Zhao told Su Wantang he would keep holding Tesla shares and expected the coming financial report to change the market’s view.
• Zhao instructed Lin Shicheng to prepare to lead SpaceX’s round and said Era Vanguard could use its two billion dollars in cash to buy shares.

At Henglong Group’s shareholders’ meeting, executives reported improved finances and gains from the group’s stock investments, while Zhao Chen proposed transferring assets to Henglong Capital and injecting it with another 2.5 billion yuan. The chapter ended with Shen Jue challenging his plan to invest the money in baijiu.

• Chen Qiming reported that Henglong Group had reduced its liabilities, increased its net assets, and earned 1.78 billion yuan in net profit during the first three quarters of 2018.
• Chen Xi detailed Henglong Capital’s holdings in Tongce Medical, Pianzaihuang, and Bidiya, which together had about 834 million yuan in unrealized gains.
• Zhao Chen proposed transferring Henglong Group’s Bubble Mart and Yunnan Agriculture Group stakes to Henglong Capital, and the board approved the transfer.
• Zhao Chen proposed injecting 2.5 billion yuan from group headquarters into Henglong Capital to invest in the baijiu industry.
• Shen Jue questioned Zhao Chen’s reasoning, noting that the consumer sector and baijiu stocks had been declining, and Zhao Chen glanced at Su Wantang without answering.

Su Wantang and Zhao Chen argued that baijiu stocks were undervalued despite weak market sentiment, and Chen Xi presented a 6.25-billion-yuan investment allocation. The directors unanimously approved the plan, leaving Henglong Capital set to build stakes in Bidiya, Shanxi Fenjiu, and Wuliangye.

• Su Wantang presented data showing falling baijiu production but rising industry concentration, and Zhao Chen argued that the sector’s fundamentals remained strong despite falling share prices.
• Zhao Chen recommended Shanxi Fenjiu, citing China Resources’ investment and the opportunity to buy below its acquisition price before pessimistic third-quarter results were fully priced in.
• Chen Xi proposed spending 3.27 billion yuan to raise Henglong Capital’s Bidiya stake to 4.99%, 1.86 billion yuan on Shanxi Fenjiu, and the remaining 1.12 billion yuan on Wuliangye.
• Chen Xi said the purchases would be made gradually, while Zhao Chen set target costs below 40 yuan for Fenjiu and below 45 yuan for Bidiya and proposed reassessing Wuliangye after its third-quarter report.
• Wu Hongyuan endorsed the plan, and Liu Mingyu called a vote that passed unanimously.

Chen Wei proposed and won unanimous approval for a transparent, steep National Day promotion to clear Henglong’s housing inventory and recover cash. The campaign brought in 750 million in recovered funds, while Henglong’s strategic focus remained on other businesses.

• Chen Wei argued that the real estate downturn was long-term and proposed 15% discounts, with up to 20% off slow-selling projects; Zhao Chen, Shen Jue, Sun Zhengping, and Wu Hongyuan supported the plan, which passed unanimously.
• Chen Wei took the approved plan to the marketing center, requiring clearly marked discounts with no price manipulation, and Henglong launched its promotion across Chongqing and Chengdu on October 1.
• Henglong recorded 113 million in reservations on the first day, while competitors debated matching its discounts and struggled to compete with its prices.
• Henglong’s seven-day campaign produced 780 million in transactions and recovered about 750 million, far exceeding competitors’ results.
• Chen Wei reported that the promotion shortened the inventory sell-through period by six months, and Zhao Chen told her to accelerate construction and improve turnover.

Henglong Group's Q3 report showed that Zhao Chen's investment business had generated nearly 1.5 billion yuan in profit, far exceeding the shrinking real estate business. The market began valuing Henglong as an investment platform, and investors started copying its trades.

• Henglong Group reported that real estate net profit had fallen by more than 40% year on year, while its debt-to-asset ratio had dropped below 25%.
• The report revealed that Henglong had sold its Shunxin Agriculture stake for 648 million yuan in investment income, prompting investors and financial media to praise Zhao Chen's timing.
• Henglong disclosed more than 834 million yuan in unrealized fair-value gains from Tongce Medical, Pianzaihuang, and Bidiya holdings.
• The report showed that investment income made up about 1.48 billion yuan of Henglong Group's 1.78 billion yuan in net profit for the first three quarters.
• A brokerage recommended valuing Henglong as an investment platform, and long-term investors began copying its trades.

Henglong Group’s shares surged after its Q3 results, pushing Zhao Chen’s reported wealth above RMB10 billion and attracting intense media and public attention. Zhao Chen and Su Wantang discussed the valuation while keeping his Era Vanguard holdings secret, and Zhao Chen looked ahead to future gains from Tesla and SpaceX.

• Henglong Group’s share price climbed to a record HK$33.88 before closing at HK$31.2, up 43% for the day.
• Domestic media and social platforms highlighted Henglong’s transformation and Zhao Chen’s reported fortune, while investors debated the company’s valuation and remaining upside.
• Zhao Chen reviewed Henglong Capital’s holdings and noted that he was waiting for Q3 reports before investing in Shanxi Fenjiu or Wuliangye.
• Su Wantang asked about Zhao Chen’s wealth and his US stock holdings, and Zhao Chen said Era Vanguard’s assets were separate from Henglong and not yet ready to be cashed in.
• Zhao Chen anticipated that Tesla reaching US$1,000 and SpaceX going public could dramatically increase his wealth.

Chen Xi steadily increased Era Vanguard’s position in Bidiya while Zhao Chen learned that Era Vanguard would lead SpaceX’s latest funding round. The round was finalized with Era Vanguard’s stake set to rise to 5.4%, while the fund’s ownership remained secret.

• Chen Xi bought Bidiya shares gradually, raising the holding from 65 million to 85 million by around October 20 while keeping the overall average cost below 40 yuan.
• Chen Xi told Zhao Chen that Bidiya had stabilized above 48 yuan, and he said he trusted her to handle the investment.
• Lin Shicheng told Zhao Chen that SpaceX finalized a US$500 million funding round at a US$30.5 billion valuation, with Era Vanguard investing US$300 million as lead investor and Fidelity investing US$200 million.
• Lin Shicheng reported that Era Vanguard’s SpaceX stake would rise from about 4.47% to 5.4% after the round closed in mid-November, making it one of SpaceX’s top three shareholders.
• Zhao Chen learned that Wall Street was asking who owned Era Vanguard, but its offshore structures and Elon Musk’s silence had kept his identity hidden.
• Zhao Chen told Su Wantang the SpaceX investment was settled and said Elon Musk’s trust mattered more than the size of a stake.