1988: Back to the human world for a few years

Chapter 672 Double High
In the previous life, starting from mid-August, the stock markets in Shenzhen and Shanghai unexpectedly entered the first bear market since their establishment.
The Shenzhen Stock Exchange fell directly from a high of 2981 points to a low of 1529 points, a drop of 42%;

The Shanghai Stock Exchange was even more severe, falling directly to 11 points in November. Compared with the highest point of 410 points in May, the drop was as high as 5%.

Although this bear market was short, after Shenzhen and Shanghai voluntarily handed over their corporate listing targets, a new round of upward momentum soon began. In just three months, the Shanghai Composite Index rose from a low of 386 points to a high of 1558 points, returning to a bull market.
However, as the saying goes, after a flood there must be a drought, and every market situation has its cycles. Anyone with a discerning eye can see that this bull market, which is supported by a mysterious force, will undoubtedly be difficult to sustain.

So, just when everyone thought that 1558 points was just the waist, as expected, an accident happened.

In February 1993, with the sharp increase in China's foreign investment, the economy once again overheated.
In order to achieve steady economic growth, the regulatory authorities began to gradually raise interest rates through macro-control. As a result, the A-share market, which had just become hot, once again ushered in a bear market.

Not only did it fall by 31% in just one month, but there was no sign of a rebound. It continued to fall until July. The negative sentiment in the market was visible to the naked eye.

However, just when the market broke through the famous key point of 777 points and fell to 750 points, on July 7, the most magical stock in the history of A-shares was born... Shenneng Shares.

If you have experienced that era, or are familiar with the history of A-shares, you should know how awesome this super stock known as the "Maginot Line of A-shares" is.

This is a stock that can firmly fix the bottom line of the share price at 8.18 yuan.

Have you ever seen a situation where there are 8.18 buy orders hanging at the buy price of 99999 yuan, and the buy orders will be filled instantly no matter how many lots you sell?
That’s Shenneng Shares!

Therefore, with the support of Shenneng, a super-heavy stock representing the national team, market confidence finally began to recover, and those stocks whose share prices had been cut in half or even to the ankles also gradually recovered.

Of course, everyone knows that in history, anything called the "XX Maginot Line" has the same solution without exception.
So, after January 1994, 1, with the end of the month-long "Shenneng Defense War", the situation was different again.

........................

However, although Shenneng’s share price of 8.18 yuan was eventually broken through, the stabilizing effect of such a super stock on market confidence is still obvious.

Therefore, Yang Mo, who had "created a mess", came up with the following solution...

Carry out group reform of Dahua Company and list 1 to 3 subsidiaries on the stock market, so as to play the role of Shenneng Shares in the original history... If the number of listed subsidiaries can reach or even exceed three, forming a super stock matrix, then not only will market confidence recover quickly, but under the mutual care, the resistance to the capital shock of the stock market will be much stronger.

"Super Stock Matrix?"

Huang Puping looked at the little fox in front of him meaningfully.

The situation of the A-share market is completely different from that of foreign countries. This kind of "super stock" used to protect the market cannot be achieved simply by the company's own superior history. It also requires the strong support of some mysterious force behind it.

Good boy, you have set your sights on the organization.

I know that Dahua Company is very short of money nowadays, but aren't your calculations too loud?

Thinking of this, he hummed noncommittally: "Give me a reason."

The end of the national team is different from the end of the national team.

The organization has always had risk plans for possible fluctuations in the stock market after the withdrawal of corporate listing indicators, and creating a super stock to protect the market is one of many plans, and is regarded as one of the three most effective methods under the stock market T+0 trading model.

However, there is nothing wrong with the idea itself, but who will be the carrier is an extremely troublesome problem.

The stock market is different from other things. If we only talk about the size of the stock issuing companies themselves, there are countless giants in the country.

However, research on the stock market performance of companies such as Shenzhen Petrochemical, Phoenix Chemical, and Southern Glass shows that in the stock market, it is not enough for your company to be large in size alone.

There is no problem for the domestic giant companies to reorganize and spin off a valuable subsidiary and throw it into the stock market, and it can become a leading stock in the traditional sense. However, there is still a long way to go before it can play the role of protecting the market as a super stock.

But in comparison, although Dahua is only a second-level unit of a central enterprise, it has many characteristics that other super-large state-owned enterprises do not have.
Therefore, although Yang Mo's so-called solution is a far-fetched one, it is not impossible to consider if the reasons are sufficient.

Seeing that the boss did not immediately deny his proposal, Yang Mo smiled modestly and said, "Although Dahua Company is only a second-level unit, the subsidiaries that were listed after the group reform are just ordinary third-level units; compared with other super-large state-owned enterprises in China, they do not have an advantage in terms of size, industry weight and influence... After all, although those super-large state-owned enterprises cannot be listed in the form of their own entities, as long as they are willing to focus on the process of divesting and restructuring their subordinate units, they can create a new giant in minutes."

"but……"

Although Yang Mo's smile was still modest, his words began to become less modest: "However, the stock market is not a regional market or industry market in the traditional sense."

"Given the current domestic situation, no matter how strong the foundation of a company is or how large its size is, the amount of money it can squeeze out to protect the market is just a drop in the bucket compared to the hot money from all walks of life at home and abroad and the funds in the hands of tens of millions of shareholders."

“So, whether or not to use leverage and whether or not one has the conditions to become that leverage point are actually the key to whether or not one is qualified to become a super stock.”

"Excuse me for being blunt, but the vast majority of large domestic companies are not actually qualified to become that leverage point... Unfortunately, unless the organization has some other treasure hidden, Dahua Company is currently the most qualified carrier to become that leverage point!"

As he spoke, Yang Mo glanced at the old man in front of him, his expression full of sincerity and seriousness: "The reason why our Dahua Company never thought about going public before was not because we couldn't, but because we didn't want to... But now that the organization has decided to use the stock market to provide large-scale blood transfusions to those backbone enterprises, then as a member of the central enterprise, it is time for our Dahua Company to fulfill its obligations."

Yang Mo never mentioned the mess he had made from beginning to end, and he didn't even mention the word "responsibility". Instead, he used the word "obligation". His attitude was self-evident.

He knew very well that although the old man in front of him was known for his strictness and dominance, in fact, this was a stereotype caused by the conflict between the Western spirit of contract and the traditional way of doing things within the Chinese system (perhaps it was related to the fact that he had been in charge of work in Shanghai for several years).

If you know something about his life story, you will understand that he will discuss basically all matters with you at the beginning, and he will make many concessions as long as it does not violate the principles and can achieve the goal; but if you agree to it and then fail to do it as agreed, he will definitely scold you until you can't raise your head, or even demote you to the ground... To put it bluntly, he is too serious, which is incompatible with the Chinese style of talking very big but only doing 30% of what they say.

Since Yang Mo knew the old man's style of doing things, he would naturally not hesitate to deal with the villain first and the gentleman later.

I don't think that what I did in the beginning was really a mistake. After the reorganization of Dahua Company, several subsidiaries can be split out and listed to protect the market, but please remember that this is an obligation, not a responsibility... If the conditions are not met, I'm sorry, I refuse to get it for free.

As expected, Huang Puping was not angry at Yang Mo's straightforward attitude, but instead felt a little admiration for him.

As a newly promoted minor department-level official, he actually had the courage to ignore the huge level gap between the two parties and negotiate with me. At least in terms of courage, he was much stronger than those who only knew how to nod and fawn.

However, as a person in a higher position, not showing emotions on one's face is the most basic quality. At the moment, he just glanced at Yang Mo without commenting: "The most qualified?"

"Comrade Yang Mo, as a member of a central enterprise, are you underestimating your fellow units?"

"Let's not talk about anything else. The petrochemical industry has developed extremely rapidly in the past two years. Dahua Company is, after all, a second-level unit under Shengli Petroleum Administration. In the petroleum system alone, there are countless heavyweight second-level units that can be taken out separately or reorganized... They may not have fewer high-quality assets than you, and their potential may not be weaker than your Dahua Company."

Even Huang Puting did not say "stronger than your Dahua Company"... This is unrealistic.

Hearing this, Yang Mo just smiled softly: "Director Huangpu, in terms of the number of high-quality assets, and even the business volume, I believe that after the reorganization and divestiture of those brother companies, they will definitely be able to reorganize a secondary unit that is larger than our Dahua Company;"

"If we list these units, their market value in the short term will definitely exceed that of our Dahua Company."

Yang Mo paused for a moment, his tone revealing strong confidence: "But, Director Huangpu, you should know that in the stock market, it is not enough to have a market value ratio. You also need to have a sufficient price-earnings ratio to support it. When facing the attack of capital, it can achieve the effect of 1+1>3 and stabilize the position."

"Unfortunately, in terms of price-to-earnings ratio, most of the sister companies with sufficient scale do not perform well; and those sister companies with promising price-to-earnings ratios are often not large enough to hold down the overall market;"

"So, to be frank, in the current domestic market, there is no other choice but Dahua Company for a company with high P/E ratio and high P/E ratio, which can continuously create favorable news to push up the stock price and can also play the role of a bridgehead window and use the leverage reaction force from overseas to stabilize the market!"

Both the price-to-earnings ratio and price-to-earnings ratio are high?
Huang Puping's eyes flashed with admiration unconsciously. Dahua Company has always stayed away from financial business. Even with the China-Japan Economic Promotion Association as a powerful tool, Yang Mo rarely interfered in this aspect.
He originally thought that this young man didn't know much about financial business, and he didn't touch unfamiliar industries, so he kept doing this. But now it seems...

It is indeed as Yang Mo said. Dahua Company has never touched upon financial business. It is not because they do not understand or cannot, but because they do not want to.

A little explanation here.

The so-called price-to-market ratio, as the name suggests, is the imagination space that a company can bring to investors. For example, the Internet companies on the Science and Technology Innovation Board in later generations are the best examples.

As long as you can draw a big enough pie and make investors roughly believe that this pie will be baked one day, you can stir up the enthusiasm of investors in minutes... Of course, it doesn’t matter if it can’t be baked, because many investors only care about the gimmick.

The price-to-earnings ratio, on the other hand, is much more realistic. It requires you to produce actual financial statements and dividends in order to get investors to follow you, and then the capital market will continue to support you... For example, a steel plant in an island country that was involved in a financial scandal in later generations is a representative example of this type.

In simple terms, the meaning of the P/E ratio to a listed company is similar to the bank's reserve funds, and the P/E ratio is similar to the money that can be taken out for loan.
Without a sufficient price-to-market ratio, it is difficult for listed companies to push their share prices to a satisfactory level and then raise sufficient funds from the stock market.

But if there is no price-to-earnings ratio to support you, then you have no so-called fundamentals at all, and you have no ability to resist risks. At the slightest disturbance, your stock price can be chopped off in minutes.

Therefore, although under normal circumstances, "ten times the price-to-earnings ratio and three times the price-to-earnings ratio" is regarded as a universal valuation formula by the capital world, when the storm really comes, if you only have the price-to-earnings ratio or only the price-to-earnings ratio, then there is absolutely no way out... If capital really wants to snipe you, there are plenty of ways to defeat them one by one.

So now you know why Sankyo Co., Ltd. and Daiichi Pharmaceutical and other companies in the island country made so many concessions to Yang Mo for the GAP planting project of authentic medicinal materials and the artificial Coriolus versicolor project, right?

If a large listed company wants to thrive in the stock market, it must have a high price-to-earnings ratio and a high price-to-earnings ratio so that it can withstand the dangerous financial undercurrents. The GAP project and the artificial mulberry fungus project in cooperation with Yang Mo are treasures that can satisfy these two points at the same time. Compared with the stock price, which can affect the entire body, some concessions in reality are nothing.

But the problem is that the A-share market in the 90s was completely different from the overseas stock markets, and today, domestic companies that are eligible for listing are no longer comparable to those listed overseas.

To put it bluntly, it is not difficult for most domestic companies to obtain a satisfactory market value ratio due to their state-owned enterprise nature and industry status.

But when it comes to price-to-earnings ratios…

I'm sorry, that's really unsatisfactory.

Therefore, in this case, an enterprise with both highs and lows like Dahua becomes particularly valuable, especially since the basic scale of Dahua's various investments and leading projects connected together is in the tens of billions, and the market scale that can be leveraged is several times that.

But since Huang Puting took the initiative to find Yang Mo in the first place, he must have known the double high attributes of Dahua Company very well, so what really refreshed him was...

“Using overseas leverage to counterballast?”

Huang Pushing was a little surprised.

Yang Mo smiled reservedly: "Director Huangpu, I heard that... a certain automobile factory in the Northeast is going very smoothly in its overseas listing. It probably won't be long before they can ring the bell?"

The automobile factory here naturally refers to the Jinbei factory.

And if history does not deviate too much, Kingbei will be listed in New York and Hong Kong simultaneously in September.

Huang Puping understood the meaning of the song and finally showed a hint of surprise on his face: "Are you planning to follow suit?"

Yang Mo smiled slightly: "Why not?"

"Besides, unlike Jinbei, Dahua's Second External Comprehensive Department is not only closely connected with the island country's business, but also has established in-depth cooperative relations with a number of local companies in the island country. More than 100 self-owned brands that have been exported have opened up a consumer market worth tens of billions of yen in the island country market... Seeking to go public in the island country not only has a much more solid market foundation and capital base than Jinbei, but can also have a counter-effect on those self-owned brands that have successfully entered the island country market, allowing them to take root deeper. Why not do it?"

"In this way, as long as the Second External Comprehensive Department is split into 6 to 8 subsidiaries, some of which are listed in Tokyo and some in the A-share market, with their close business relationships, even if someone wants to attack the super stock matrix formed by these subsidiaries in the A-share market, with the support of the subsidiaries listed in the Tokyo Stock Exchange, how can it be so easy to penetrate the stock prices of these subsidiaries?"

At this point, Yang Mo pursed his lips and said, "With the support from Tokyo, and the current economic closeness between China and Japan, it is not difficult for the super stock matrix on the A-share market to release some good news from time to time."

"If it really doesn't work, they are all subsidiaries of the same company. Isn't it difficult to find a gimmick and opportunity to exchange shares?"

"With the world's second largest economy, the island nation, as a support pool, with the amount of funds in the A-share market today, it's not that easy to break through their stock prices!"

This is the truth. Although Dahua's independent overseas brands are extremely expensive for Chinese people, they are real substitutes for developed countries like island countries... and they are substitutes that are full of creativity, culture and practicality.

However, although substitute products are good, they face some huge risks that ordinary people cannot detect.

The most direct point is that although the island country's economy is in a downturn, its overall income and economic vitality are still maintained at a passing level, so everyone is naturally happy to see such imported and affordable products.

However, if the economic situation of the island country further deteriorates and officially enters a cold winter, then out of considerations of interests, even for the sake of those domestic companies that are already struggling to make ends meet, all sectors of the island country will tacitly join hands and use public opinion, policies and other means to squeeze out these foreign substitute products that have occupied a large market space... Even if they are not squeezed out, they will secretly significantly increase the various transaction costs of these foreign independent brands.

Don't think this is nonsense. Island countries, South Korea, America, India, and even the European countries that once advocated free trade have all done this kind of thing. It's just that if you are not engaged in international trade or brand expansion, people don't pay much attention to it on a daily basis.

Therefore, if the Second External Comprehensive Department is separated as a subsidiary, and then divided into several subsidiaries, and after joint ventures with enterprises in the island country, it is listed in Tokyo, it can avoid the impact of such incidents on those overseas brands to a large extent... Although it is unrealistic to completely avoid the impact of such incidents when the time comes, at least it will not force those overseas brands to withdraw from the island country market in disgrace.

But after hearing this, Huang Puping's brows were still furrowed.

Dahua's brand overseas expansion plan is very famous. With the scale of this business, even if it is split into several subsidiaries and placed in the A-share market, it is definitely qualified to build a super stock matrix, but he cares about something else.

You should know that Jinbei took out 40% of its shares for overseas listing. For this purpose, it registered another automobile company (CBA, that is, Brilliance) in the Bermuda Islands, and injected these 40% of the shares into the name of CBA. At the same time, it donated all the shares of CBA to a domestic foundation. Then a certain Mr. Yang arranged a stock swap, so that CBA obtained 51% of Jinbei’s shares, realizing absolute control and consolidated financial statements. This cleared the obstacles for listing in the United States, and this led to the feat of being listed in New York and Hong Kong at the same time.

If there were people from later generations present, they would definitely exclaim how similar this method is to the Irish-Dutch sandwich!
But at the same time, everyone is well aware of the risks of this model, which is similar to the Irish-Dutch sandwich.

Seeing this, Yang Mo did not explain to the old man how to plug those loopholes from the mechanism like a technician, but just added lightly: "I forgot to tell Director Huangpu that the person in charge of the Second External Comprehensive Department is my wife Mu Liya, and my father-in-law is Mu Siyuan, the director of the Organization Department of the Dongying Command... Therefore, if you just want to build a super stock matrix to temporarily stabilize the market sentiment of A shares, there is not much risk."

This sentence may sound confusing to most people, but people within the system will instantly understand the key.

So Huang Puping's brow finally relaxed.

Very good, as long as the direct person in charge and related family members are within the system and their level is not low, that is enough.

Thinking of this, he finally showed a satisfied smile on his face: "Comrade Yang Mo, your solution is still quite feasible... Not bad, not bad."

He said "good" twice in a row, which shows that he is very satisfied with Yang Mo's plan.

After nodding, Huang Puping, who was always resolute and swift, did not hesitate and said directly: "In this case, I wonder what Comrade Yang Mo's request to the organization is?"

Yang Mo hesitated for a moment, and finally said, "Actually, there is one thing I hope to get support from the organization."

Seeing that this young man, who was known for his strength and determination, was a little hesitant when facing his conditions, Huang Puping couldn't help laughing and said, "What is your request? Tell me first."

Yang Mo glanced at him, and some scenes of his time at the grassroots level flashed through his mind. He sighed silently, and then spoke without hesitation: "I would like to request the organization..."

(End of this chapter)