Chapter Summaries

Zhang Qingxue and Lin Shicheng negotiated off-market purchases of SpaceX shares from early investors whose funds were nearing the end of their terms. After reaching deals with Robert Harrington and Patricia Vance, Era Vanguard’s stake approached 2%, and Zhao Chen directed them to pursue more sellers.

• Zhang Qingxue and Lin Shicheng agreed to buy Robert Harrington’s 0.8% SpaceX stake for $192 million, with a three-year lockup and SpaceX’s right of first refusal.
• Harrington introduced Zhang Qingxue to two other early investors whose funds were nearing their terms’ ends.
• Zhang Qingxue and Lin Shicheng reported the deal to Zhao Chen, who told them to contact the two leads and arrange meetings.
• Zhang Qingxue negotiated with Patricia Vance and agreed to buy her 0.5% stake at a $24.8 billion valuation, with a three-year lockup and restrictions on transfers.
• Era Vanguard’s SpaceX holding came close to 2% after the agreements with Harrington and Vance.

Zhao Chen directed Zhang Qingxue and Lin Shicheng to acquire more SpaceX shares, and they negotiated purchases from Crescent Capital and Meridian Ventures. With both deals agreed, his SpaceX stake reached 4%, leaving the U.S. trip more than accomplished.

• Zhang Qingxue reported that Harrington and Vance had agreed to sell 1.3% of SpaceX, and Zhao Chen authorized more flexible terms for Crescent Capital and Meridian Ventures.
• Zhao Chen said Era Vanguard should acquire as many SpaceX shares as possible as long as its stake did not threaten Elon Musk's control.
• Zhang Qingxue and Lin Shicheng agreed with Thomas Grant to buy Crescent Capital's 1.2% stake at a 15% premium, with a five-year lockup and closing within two weeks.
• Zhang Qingxue agreed with Sophia Chen to buy Meridian Ventures' 1.5% stake at a $24 billion valuation, with a three-year lockup and a commitment to support management in major Tesla-SpaceX decisions.
• Zhang Qingxue and Lin Shicheng reported the agreements to Zhao Chen, bringing his secured SpaceX stake to 4%.

Zhao Chen finalized a $1.036 billion investment that would give Era Vanguard a 4.47% stake in SpaceX and instructed Lin Shicheng to pursue more shares discreetly. After signing the agreements and preparing to return home, Zhao Chen met Musk at a Lower Manhattan cafe.

• Zhang Qingxue and Lin Shicheng reviewed the SpaceX deals, which combined existing-share purchases and a new-share subscription for a 4.47% stake.
• Zhao Chen told Zhang Qingxue to monitor Tesla's upcoming earnings and production figures while keeping its shares.
• Zhao Chen signed the four existing-share transfer agreements and the SpaceX new-share subscription agreement.
• Zhao Chen instructed Lin Shicheng to seek more SpaceX shares, aiming for 7% to 8% while staying below 10%, and to keep the negotiations confidential.
• Zhao Chen met Musk at a cafe in Lower Manhattan.

Zhao Chen secured Elon Musk’s approval to keep buying SpaceX shares while staying below a 10% stake, then watched Tesla’s price fall after repeated failures to break $300. He decided to return to Shan City and wait rather than respond to the criticism or sell his Tesla shares.

• Zhao Chen told Elon Musk that Era Vanguard held about 4.47% of SpaceX and would keep buying, with Musk’s approval for purchases below a $25 billion valuation.
• Zhao Chen promised that Era Vanguard would remain a passive, long-term investor in SpaceX and would not exceed a 10% stake, and Musk agreed to those terms.
• Tesla repeatedly failed to break through $300 and fell to $286.5 over three trading days as institutional selling and bearish media coverage grew.
• Zhang Qingxue asked whether Era Vanguard should respond to the criticism, but Zhao Chen refused and said he would keep holding his shares.
• Zhao Chen told Zhang Qingxue to pack for their return to Shan City, leaving the ongoing SpaceX share purchases to Lin Shicheng.

Zhao Chen reviewed Henglong's investments and directed the company to shift from property expansion toward systematic investment. He left Chen Xi to track existing holdings and build a research team as he planned further investments in Shunxin Agriculture and SpaceX.

• Chen Xi reported that Henglong had built a 4.99% position in Shunxin Agriculture for 518 million yuan at an average price of 18.17 yuan, and that the company had made a routine inquiry about the purchases.
• Chen Xi said Wang An had persuaded Bubble Mary's remaining shareholders not to sell, so Zhao Chen suspended efforts to acquire more shares and kept Henglong's 26.3% stake.
• Zhao Chen told Chen Xi to reduce property debt, stabilize cash flow, and establish a small research team producing weekly industry reports and monthly in-depth reports.
• Zhao Chen told Chen Xi that Henglong had acquired a 4.47% stake in SpaceX for 1.036 billion US dollars and would continue buying toward a 7% to 8% target, below 10%.
• Chen Xi agreed to track Shunxin Agriculture, Bubble Mary's quarterly figures, and Haoyu Construction's fund allocation as Zhao Chen considered his next investment plan.

Henglong Group’s board unanimously approved its 2017 annual report, first-quarter 2018 financial report, business separation plan, and personnel appointments. Zhao Chen left the meeting to discuss the company’s next steps with senior executives, while the executive meetings remained Henglong’s real decision-making center.

• Chen Qiming reported Henglong Group’s 2017 and first-quarter 2018 financial results, including lower debt and contributions from Haoyu Construction.
• Zhao Chen proposed splitting Henglong’s operations between the core real estate business, managed by Chen Wei, and external investments under a new wholly owned subsidiary, Henglong Capital, managed by Chen Xi.
• The directors unanimously approved the annual and first-quarter financial reports and the establishment of Henglong Capital and its business separation plan.
• Chen Wei and Chen Xi addressed the directors before their appointments as vice president overseeing real estate and general manager of Henglong Capital, respectively, were unanimously approved.
• Zhao Chen congratulated Chen Wei and Chen Xi, then asked them and other senior executives to stay for further discussions.

Zhao Chen directed Henglong to accelerate deleveraging and prioritize cash flow as property regulations tightened. The management team agreed to sell inventory and non-core assets at discounts, finish ongoing projects, and postpone new development while Henglong Capital continued its separate investment strategy.

• Zhao Chen told Henglong's management that tightening property regulations were a long-term policy shift and that the company should prioritize cash flow and debt reduction over profits or its share price.
• Song Zhongping proposed packaging slow-moving inventory for agencies to sell at 80% of book value, and Chen Qiming estimated the plan could recover about 1.2 billion yuan.
• Chen Wei proposed postponing development of Haoyu Construction's Banan plot, and Zhao Chen agreed while requiring the six projects under construction to be completed and delivered on schedule.
• Chen Qiming proposed selling non-core assets at 75% to 80% of book value, and Zhao Chen approved the discounted asset sales and inventory clear-out.
• Zhao Chen told Chen Wei, Song Zhongping, and Chen Qiming to develop the plans and reaffirmed that surviving and reducing debt were Henglong's priorities.
• Chen Xi asked about Henglong Capital, and Zhao Chen instructed it to keep its Shunxin Agriculture position and pursue consumer, technology, and pharmaceutical investments independently of property.

Zhao Chen explained Henglong’s shift toward low debt and high-quality development, arguing that real estate’s boom had ended and the company needed to diversify. He relied on Shunxin Agriculture’s upcoming first-quarter report to provide short-term returns for Henglong, leaving Su Wantang hopeful about the results.

• Zhao Chen told Henglong’s executives to reduce debt, build cash reserves, and pursue high-quality development as the company moved away from its old real estate model.
• Zhao Chen told Su Wantang that he had begun preparing Henglong’s transformation when he took over, and explained that his past-life experience had informed his plans.
• Zhao Chen assessed Yunnan Agriculture and Bubble Mary as long-term investments that would not deliver significant short-term returns.
• Zhao Chen said Shunxin Agriculture’s upcoming first-quarter report could lift its share price and demonstrate short-term gains to Henglong’s board and shareholders.
• Su Wantang supported Zhao Chen, and the two left the meeting room for dinner while awaiting Shunxin Agriculture’s report.

Henglong Group released its 2017 annual report and 2018 first-quarter results, showing a sharply improved balance sheet as Zhao Chen continued to contract its real estate business and invest in other sectors. Financial media and investors praised the transformation, while the company’s future as an investment platform remained to be tested.

• Henglong Group reported that its 2017 net assets rose to 11.65 billion yuan, off-balance-sheet liabilities were cleared, and its debt-to-asset ratio fell to 49%.
• Zhao Chen said Henglong had begun transforming from a real estate company into an investment platform, using real estate’s remaining favorable years as a window for change.
• Henglong Group reported lower real estate revenue and profit in the first quarter of 2018, while Haoyu Construction contributed to consolidated results and the debt-to-asset ratio fell to about 48%.
• Henglong Capital completed registration with 500 million yuan in registered capital, and Henglong Group completed investments in Yunnan Agriculture Group, Bubble Mary, and Shunxin Agriculture.
• Investors on Snowball and financial media highlighted Henglong’s improved balance sheet, strategic contraction, and diversified investments, while noting that the success of Zhao Chen’s transformation remained uncertain.

Henglong’s share price surged after investors embraced Zhao Chen’s transformation strategy, and Chen Xi presented promising investment targets in technology and healthcare. Zhao Chen identified several as future high-growth companies and began explaining their potential, especially Dening Times and Bidiya.

• Henglong’s shares rose 11.3% on April 9, lifting its market capitalization from HK$10.4 billion to about HK$11.6 billion after its annual and first-quarter reports.
• Zhao Chen told Chen Xi that the market was revaluing Henglong as a property-plus-investment platform, making future financing and partnerships more favorable.
• Chen Xi described her research into potential investments, including Dening Times, Bidiya, Tongce Medical, Pianzaihuang, and Mairui Medical.
• Zhao Chen recognized the companies Chen Xi had identified as likely major winners over the next five years and praised the quality of her research.
• Zhao Chen explained Dening Times’ prospects as an EV battery leader and Bidiya’s potential as a diversified industry-chain company, noting that the old stock market sage also held Bidiya.

Zhao Chen reviewed Chen Xi’s five shortlisted companies and heard her summarize their valuations, upcoming reports, brokerage forecasts, and recent developments. He noted that disagreement over Tongce Medical could create either a buying opportunity or a serious risk, then considered which company to invest in next.

• Zhao Chen praised Chen Xi for selecting Dening Times, Bidiya, Tongce Medical, Pianzaihuang, and Mairui Medical from just over two hundred companies, while Chen Xi credited his industry guidance.
• Chen Xi reported that Dening Times and Mairui Medical were still awaiting IPOs, and outlined their prospectus updates, planned fundraising, and market prospects.
• Chen Xi described Bidiya’s upcoming annual and first-quarter reports, noting that analysts expected subsidy cuts to sharply reduce first-quarter earnings before a possible recovery later in the year.
• Chen Xi summarized Tongce Medical’s expected growth and reported allegations involving concealed related-party ties, reliance on one hospital, and a high-premium acquisition; Zhao Chen said the market divide might signal either opportunity or danger.
• Chen Xi presented bullish forecasts for Pianzaihuang and described Mairui Medical’s position in domestic medical equipment, then Zhao Chen fell into thought about the next investment target.

Zhao Chen instructed Chen Xi to use leverage to build positions in Tongce Medical and Pianzaihuang, and Henglong Capital secured a 1.25-billion-yuan financing facility. Chen Xi and Su Wantang began arranging the purchases after reviewing the brokerage’s risk-control terms.

• Zhao Chen allocated 300 million yuan of Henglong Capital’s funds to Tongce Medical and 200 million yuan to Pianzaihuang, directing Chen Xi to seek 2.5-times leverage and keep each stake below 5%.
• Chen Xi and Su Wantang divided up trade execution, brokerage coordination, fund allocation, and compliance work before the market opened on April 10.
• Chen Xi asked Manager Wang to arrange 1.25 billion yuan in financing, and the brokerage approved the facility at 5.8% annual interest.
• Manager Wang explained the facility’s margin, concentration, warning, and forced-liquidation requirements, along with the conditions for withdrawing excess collateral.
• Chen Xi calculated that a 40% rise in the shares could raise the collateral ratio enough for Henglong Capital to withdraw profits as cash or securities.

Chen Xi and Su Wantang began using Henglong Capital’s approved 1.25 billion yuan credit line to build positions in Tongce Medical and Pien Tze Huang. After three trading days, they had invested 366.46 million yuan and decided to keep buying at roughly 120–130 million yuan per day.

• Chen Xi confirmed the margin-account procedures and asked Zhao Chen whether the 140% initial maintenance collateral ratio provided enough safety; Zhao Chen approved proceeding as planned.
• On April 11, Chen Xi and Su Wantang bought 2 million shares of Tongce Medical and 400,000 shares of Pien Tze Huang for a combined 121.22 million yuan.
• On April 12, they bought another 2.4 million shares of Tongce Medical and 400,000 shares of Pien Tze Huang, bringing their cumulative purchases to 261.05 million yuan.
• On April 13, Tongce Medical’s annual report met and slightly exceeded expectations, and Chen Xi bought its shares after the price pulled back while also purchasing Pien Tze Huang.
• After three trading days, Chen Xi and Su Wantang had invested 366.46 million yuan, and they decided to continue buying 120–130 million yuan daily the following week.

Chen Xi and Su Wantang continued building positions in Tongce Medical and Pien Tze Huang, adjusting their schedule when the remaining Pien Tze Huang target proved too large for the original plan. On April 23, they bought 1.25 million Pien Tze Huang shares and 300,000 Tongce Medical shares, bringing their total investment to about 1.0473 billion yuan with two trading days left.

• From April 16 to April 20, Chen Xi and Su Wantang bought shares of Tongce Medical and Pien Tze Huang, investing a combined 921.64 million yuan over eight trading days.
• Over the weekend, Chen Xi calculated the remaining targets and asked Zhao Chen for an extra trading day to complete the positions; Zhao Chen approved.
• Chen Xi revised the plan to buy about 110 million yuan of stock each on April 23, 24, and 25, and she and Su Wantang agreed to arrive early Monday.
• On April 23, Chen Xi paced her Pien Tze Huang orders according to the order book and bought 1.25 million shares at an average price of 89.62 yuan.
• Chen Xi also bought 300,000 Tongce Medical shares, bringing the combined investment to about 1.0473 billion yuan and leaving roughly 202.7 million yuan to invest over two days.

Chen Xi and Su Wantang completed their planned positions in Tongce Medical and Pianzaihuang, then reviewed both companies’ strong first-quarter results. They prepared their findings for Zhao Chen while awaiting Shunxin Agriculture’s report, the last outstanding report for his key short-term investment.

• Chen Xi finished buying Tongce Medical shares and continued building the Pianzaihuang position, bringing their combined investment to 1.14907 billion yuan.
• Chen Xi and Su Wantang bought the remaining Pianzaihuang shares, completing their positions at 16.85 million Tongce Medical shares and 5.63 million Pianzaihuang shares.
• Chen Xi informed Zhao Chen that the positions were complete, and Zhao Chen asked him to track fundamentals weekly and analyze the first-quarter reports.
• Chen Xi and Su Wantang reviewed Tongce Medical’s report, noting rising revenue, profits, and operating cash flow, and discussed possible short-term profit-taking.
• Chen Xi and Su Wantang reviewed Pianzaihuang’s report, which showed revenue and profit growth above 40%, and Su Wantang prepared a summary for Zhao Chen.
• Chen Xi and Su Wantang waited for Shunxin Agriculture’s report, which remained the last outstanding report for Zhao Chen’s short-term investment.

Chen Xi briefed Zhao Chen on Shunxin Agriculture’s first-quarter results, which showed baijiu revenue surging, profits nearly doubling, and substantial advance receipts and cash reserves. The report strengthened Zhao Chen’s confidence in his investment and eased concerns about winning approval for future external investments.

• Chen Xi read Shunxin Agriculture’s first-quarter report and brought Zhao Chen a briefing on its results.
• Chen Xi explained that net profit rose 94.61% year on year as baijiu’s share of revenue increased and expense ratios fell.
• Chen Xi reported that advance receipts reached 3.701 billion yuan, operating cash flow rose, and cash reserves remained ample.
• Chen Xi summarized brokerage estimates that baijiu revenue grew more than 40%, while Zhao Chen concluded the company was a hidden champion in the low-end baijiu market.
• Zhao Chen told Chen Xi the report would ease resistance from the board and shareholders, strengthening his confidence in Shunxin Agriculture as his first major investment success.

Zhao Chen reviewed Shunxin Agriculture’s strong first-quarter results and the research supporting its value, then set a plan to sell if its share price rose above 40 yuan. He left the position intact while waiting to see how the market would respond after the May Day holiday.

• Chen Xi presented brokerage recommendations and forecasts showing strong support for Shunxin Agriculture, while noting Henglong Capital’s nearly 5% stake had put it among the company’s top ten shareholders.
• Zhao Chen said Henglong Capital’s disclosed investment would demonstrate its research capabilities and that the first-quarter results validated its decision to buy before the report was released.
• Zhao Chen told Chen Xi to monitor the share price after the holiday and not panic if the market initially reacted weakly.
• Chen Xi explained that baijiu made up 80% of Shunxin Agriculture’s first-quarter business and that a possible property divestment could change how the market valued the company.
• Zhao Chen agreed that Chen Xi should sell the position decisively if the share price rose above 40 yuan, then recorded that the first-quarter report had validated his judgment.

Henglong Capital’s Shunxin Agriculture investment surged after a strong first-quarter report, and Zhao Chen decided to keep holding as the market reassessed the company. Lu Shen was sentenced to twelve years for embezzlement, while Lin Wanqing’s company entered bankruptcy liquidation; Zhao Chen dismissed the fallout as no obstacle to Henglong’s plans.

• Investors discovered that Henglong Capital held 4.99% of Shunxin Agriculture, and Zhao Chen’s investment drew praise as the share price jumped after the company’s strong first-quarter report.
• Zhao Chen told Chen Xi that Henglong would keep holding Shunxin Agriculture until the market finished reassessing its valuation.
• Investors learned that Lu Shen had been sentenced to twelve years for occupational embezzlement and ordered to compensate Blackstone, which said it would not appeal.
• News spread that Lin Wanqing’s construction company had entered bankruptcy liquidation after losing Lu Shen’s financial backing, and Lin Wanqing’s whereabouts were unknown.
• Zhao Chen told Chen Xi and Su Wantang that Lu Shen’s case would not affect Henglong and instructed them to keep tracking Shunxin Agriculture, Tongce Medical, and Pien Tze Huang.

After Shunxin Agriculture hit its daily upper limit, online investors questioned whether Henglong Capital had used inside information to build its position before the company’s strong earnings report, and one person reported the firm under a real name. Zhao Chen said Henglong had relied on public information and would cooperate with any investigation, then turned his attention back to the performance of its investments.

• Investors on East Money and Snowball questioned Henglong Capital’s Shunxin Agriculture investment, citing its position-building before the company reported first-quarter profit growth of 94.61%.
• Online users debated Zhao Chen’s investment record, with some suspecting inside information and others defending his research capabilities.
• A Stock Bar user said they had reported Henglong Capital to the Securities Regulatory Commission under their real name for suspected insider trading.
• Chen Xi told Zhao Chen that the report could trigger a time-consuming verification process, and Zhao explained that Henglong’s research and trading decisions relied on public information and said the firm would cooperate.
• Zhao Chen decided against issuing a public statement, while Su Wantang asked whether anyone would really report them.
• Zhao Chen reflected that Shunxin Agriculture, Tongce Medical, and Pianzaihuang had all reported first-quarter results that met expectations, strengthening Henglong Capital’s investment outlook.

After the Securities Regulatory Commission opened an insider-trading investigation into Henglong Capital’s Shunxin Agriculture investment, Zhao Chen rejected Shen Jue’s offer to use her connections and said the company would withstand scrutiny. The investigation began with questioning Chen Xi, who explained that the investment relied on public information and provided her records to investigators.

• Shunxin Agriculture’s rising share price prompted investors to accuse Henglong Capital and Zhao Chen of insider trading, and the Securities Regulatory Commission announced a formal investigation.
• Henglong Group issued a brief statement welcoming the investigation, and its share price dropped sharply when the investigators arrived.
• Shen Jue asked Zhao Chen whether he had engaged in insider trading and offered help through her Beijing connections, but Zhao said Henglong had nothing to hide and declined.
• The five-person investigation team collected Henglong’s trading records, board resolutions, and communications, then began interviewing employees.
• Chen Xi told Team Leader Zhou that Henglong’s Shunxin Agriculture purchases were based on public research and a board-approved strategy, and she handed over her phone and laptop for examination.