Chapter Summaries

The investigation team questioned Henglong’s staff and directors about the Shunxin Agriculture investment, and their accounts consistently described a compliant decision based on public information and Zhao Chen’s research. Zhao Chen remained composed under questioning and began explaining why he had Chen Xi research the company.

• Su Wantang told the investigators she handled fund allocation and compliance reviews, while Chen Xi placed the orders and Zhao Chen’s report supported the investment.
• Liu Mingyu submitted the complete board-resolution records and said the directors unanimously approved the proposal based on Zhao Chen’s research report.
• Zhang Qingxue, Song Zhongping, and Shen Jue described the proposal as legally sound and said they had supported it based on Zhao Chen’s analysis and track record.
• The independent directors said the data was public, the procedures were compliant, and Zhao Chen had answered their questions before they voted.
• Team Leader Zhou questioned Zhao Chen last, warning him about insider-trading penalties and suggesting voluntary disclosure, but Zhao Chen remained calm and denied wrongdoing.
• Zhao Chen said Henglong Capital’s investment decisions had documented bases, then began explaining why he had asked Chen Xi to research Shunxin Agriculture.

Zhao Chen explained to Team Leader Zhou that Henglong Capital’s investment in Shunxin Agriculture came from public research and independent analysis, not insider information. The investigation verified his account and found no evidence of insider trading, though its results had not yet been announced.

• Zhao Chen told Team Leader Zhou how Cheng Jiaxun mentioned Shunxin Agriculture and how Chen Xi researched the company using public information.
• Zhao Chen explained that he bought Shunxin Agriculture because he judged its liquor business would become a core growth engine, not because of inside information.
• Chen Xi met Zhao Chen after questioning, and he reassured her that telling the truth was enough.
• The investigation team interviewed Henglong executives and examined Zhao Chen and Chen Xi’s messages, call records, and Cheng Jiaxun’s account, which supported Zhao Chen’s explanation.
• After nearly two weeks, the investigation remained unresolved publicly, and Zhao Chen waited at home, confident that the results would clear him.

The Securities Regulatory Commission concluded that Henglong Capital had not engaged in insider trading when it bought Shunxin Agriculture shares, clearing the company after finding its research and decision-making relied on public information. Chen Xi shared the news with Zhao Chen, and Henglong Group’s share price surged after the announcement.

• The Securities Regulatory Commission published its investigation findings, documenting how Zhao Chen and Chen Xi researched Shunxin Agriculture using publicly available information and secured board approval for the investment.
• The Commission determined that Henglong Capital had not traded on inside information and closed the case.
• Chen Xi brought the announcement to Zhao Chen, who calmly accepted the decision before sending her back to work.
• Henglong Group’s share price rose from around HK$23.8 to HK$27.8 by the midday close.

The Securities Regulatory Commission cleared Zhao Chen and Henglong Capital of insider trading, and Henglong's shares surged as investors praised Zhao Chen's judgment. Zhao Chen remained focused on Shunxin Agriculture's future valuation, expecting the stock to rise further before Henglong considered selling.

• The Securities Regulatory Commission announced that Zhao Chen's investment in Shunxin Agriculture involved no insider trading, and Henglong's shares rose 15.2% to HK$26.8.
• Chen Xi wondered whether Zhao Chen had come from the future, and Su Wantang reassured her that he was still the Xiao Chen they knew.
• Investors on Snowball analyzed the commission's timeline and public research reports, defending Zhao Chen's investment decision and criticizing those who had reported him.
• Zhao Chen told Su Wantang that Shunxin Agriculture could rise above 40 yuan as the market reassessed its liquor business, and he planned to wait before selling.

After regulators cleared Henglong and Zhao Chen of insider trading, Zhang Qingxue led Henglong’s legal team in suing five prominent accounts that had spread rumors. With the suits filed and the accusations fading, Henglong’s directors reconvened to discuss another capital injection into Henglong Capital.

• Zhang Qingxue directed Henglong’s Legal Department to preserve evidence of rumors from twenty-three accounts and identify the operators of five key accounts.
• The legal team chose civil reputation-infringement suits, with possible criminal complaints as a deterrent, and prepared five cases.
• Xiao Zhao notarized the online evidence, Lao Liu verified the accounts’ operators, and Zhang Qingxue drafted the complaints.
• Zhang Qingxue filed the first complaint and messaged Zhao Chen that the court had accepted it.
• Henglong filed five complaints, prompting rumor-spreaders to delete posts and ending public accusations that Zhao Chen had engaged in insider trading.
• Henglong’s directors gathered to discuss injecting more capital into Henglong Capital.

After the board gave Zhao Chen broad authority and injected 500 million yuan into Henglong Capital, he directed Chen Xi to add to its Tongce Medical and Pianzaihuang positions. By the end of the first week of buying, Henglong had invested about 1.426 billion yuan in the two stocks and still had 975 million yuan available.

• Henglong Group's board unanimously approved a 500 million yuan investment in Henglong Capital and let Zhao Chen decide how to invest the funds without transaction-by-transaction approval.
• Zhao Chen told Chen Xi to reduce Henglong's Shunxin Agriculture position above 40 yuan and use available funds to add to Tongce Medical and Pianzaihuang, stopping when the money ran out.
• Chen Xi calculated the existing positions' gains and arranged 1.25 billion yuan in margin financing from the brokerage at a 5.8% annual interest rate.
• From May 29 through June 1, Chen Xi bought three million shares of Tongce Medical and 1.35 million shares of Pianzaihuang for about 274.7 million yuan.
• Chen Xi reported that Henglong held 19.85 million Tongce Medical shares and 6.98 million Pianzaihuang shares, with about 160 million yuan in unrealized gains and 975 million yuan left to invest; Zhao Chen told him to maintain the pace.

Chen Xi completed Henglong Capital’s 2.5 billion yuan investment, reaching the 4.99% limit in Tongce Medical and building Pianzaihuang to 16 million shares before funds ran out. Zhao Chen explained why Tongce Medical would be held long term while Pianzaihuang remained available to trim if a better opportunity appeared.

• Chen Xi finished buying Tongce Medical at 22.3 million shares, and Zhao Chen told her to lock the position and leave it untouched.
• Zhao Chen instructed Chen Xi to keep buying Pianzaihuang below 100 yuan and to stop buying if its price rose above that level.
• Chen Xi paused purchases when Pianzaihuang broke 100 yuan, resumed when it fell below 100, and continued buying in batches through June 25 until the remaining funds were nearly exhausted.
• Chen Xi compiled the final holdings, showing 22.3 million Tongce Medical shares and 16 million Pianzaihuang shares from the 2.5 billion yuan investment.
• Zhao Chen explained that Tongce Medical’s hospital network could create long-term growth and network effects, while Pianzaihuang could be trimmed if a better investment opportunity appeared.

Chen Xi reported that Henglong Capital had earned more than 542 million yuan in net profit from selling most of its Shunxin Agriculture shares, with 4.9 million shares still held for gradual sale in July. Zhao Chen praised Chen Xi’s execution and said Henglong would keep its Tongce Medical position, hold Pianzaihuang, and wait for suitable investment opportunities.

• Chen Xi reported selling 23.5 million Shunxin Agriculture shares for about 971.41 million yuan, leaving 4.9 million shares.
• Chen Xi calculated that the sold shares had generated about 542.25 million yuan in net profit after transaction fees, while the remaining shares held more than 114 million yuan in unrealized profit.
• Zhao Chen praised Chen Xi’s judgment and directed her to sell the remaining Shunxin Agriculture shares gradually in July without chasing the highest price.
• Zhao Chen said Henglong Capital had recovered its initial investment and would leave Tongce Medical untouched, hold Pianzaihuang, and wait for reasonable valuations in Dening Times, Bidiya, or Mairui Medical.

Zhao Chen spent a day with Shen Zhiyi before agreeing to arrange internships at Henglong for Zhou Xiaowen and Chen Shuhua, while Li Jing planned to pursue a postgraduate degree. He left the group set to coordinate placements with Chen Xi in mid-to-late August.

• Zhao Chen took Shen Zhiyi to the art museum and lunch, where she noticed he had lost weight and urged him to eat more.
• Zhou Xiaowen, Chen Shuhua, and Li Jing met Zhao Chen at Shen Zhiyi's dorm and asked about interning at Henglong.
• Li Jing said she planned to study for a master's in law focused on fiscal, tax, and financial law, and Zhao Chen praised her choice.
• Chen Shuhua explained she wanted to stay in Shan City rather than intern in Beijing and asked to join Henglong with Zhou Xiaowen.
• Zhao Chen agreed to have Chen Xi arrange suitable Henglong positions for the women in mid-to-late August, after the company's half-year report work eased.

Zhao Chen supported Shen Zhiyi’s decision to seek an internship outside Henglong, while Chen Xi reported that Henglong had made a 648 million yuan gross profit from Shunxin Agriculture. Zhao Chen then instructed the company to watch Bidiya and gradually buy shares if its price fell below 40 yuan.

• At the cafe, Zhou Xiaowen joked about being a concubine and asked whether Shen Zhiyi would mind the other women interning at Henglong.
• Shen Zhiyi told Zhao Chen she did not want to intern at Henglong because she wanted her friends to have a normal workplace and wanted to build a career of her own.
• Zhao Chen supported Shen Zhiyi’s choice, and she leaned into his arms.
• Chen Xi reported that Henglong had sold all its Shunxin Agriculture shares, earning about 648 million yuan in gross profit.
• Chen Xi told Zhao Chen that Bidiya’s share price had fallen to 41.2 yuan amid market concerns over reduced subsidies.
• Zhao Chen instructed Chen Xi to monitor Bidiya and begin buying gradually below 40 yuan, with a target of no more than 4% of its outstanding shares.

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.