Black technology: a super empire spanning two worlds

Chapter 395 [Lingjing Technology's First Quarter Report]

As time went by, after the short holiday, the A-shares market ushered in its first trading day after the holiday on Monday, April 7.

Despite adequate anticipation management during the holiday period, the A-shares market still experienced a sharp drop at the opening today, suffering a "Black Monday" with an epic plunge. Major indices suffered heavy losses across the board, and the market performance was extremely dismal.

This was inevitable. With such a major black swan event and such a significant negative factor, the market was bound to react negatively.

However, without advance planning and careful timing, the defeat will only be more devastating.

By the close of trading, the Shanghai Composite Index fell 7.34% to 3096.58 points, marking its largest single-day drop in nearly five years; the Shenzhen Component Index plummeted 9.66%, its largest drop since 1996; the ChiNext Index plunged 12.5%, its largest single-day drop in history; and the Beijing 50 Index suffered the most severe decline, falling 17.95%.

In terms of individual stocks, more than 5200 stocks fell in the market today, of which more than 2900 hit the daily limit down, accounting for 55% of all stocks. Only 106 stocks rose.

Likang Technology, listed on the Beijing Stock Exchange, once suffered a 30.00% limit down during the day, but recovered somewhat at the end of the day. After the close, the stock fell by 26.05% to 2924.33 yuan, and its market value shrank to 1.359 trillion yuan.

Lingjing Technology also plummeted by 15.57% today, closing at 528.30 yuan, with a market capitalization of 45.85 trillion yuan.

Despite the release of liquidity by the bank, market concerns about this unexpected event far outweighed the positive effects of the policy, and offshore exchange rate volatility intensified.

After the market closed that day, a series of major policies were introduced, such as encouraging listed companies to repurchase shares.

The market experienced a sharp drop on the first trading day after the holiday. Just when everyone thought the decline would continue the following day, April 8, the market rebounded. However, on the morning of April 9, panic broke out again, causing the market to fall rapidly.

……

"Release the first quarter report. Zhou Chengyang faxed over the information yesterday, and their first quarter report is out. Call your cousin-in-law immediately. Likang's first quarter report will also be released today." Sitting in his office, Xiao Yu picked up the landline and called Yun Shu.

Lingjing Technology's first-quarter report was released on April 6th, and it is ready to disclose it to the public at any time.

Upon receiving Xiao Yu's call, Yun Shu immediately made arrangements. Just five minutes later, the company released its Q2 25 financial report during trading, immediately attracting the attention of the capital market.

According to financial reports, Lingjing Technology's total revenue in the first quarter was RMB 13706.29 billion, a year-on-year increase of 153.99%; net profit was RMB 5150.82 billion, a year-on-year increase of 323.5%, and a quarter-on-quarter increase of 25.24%.

The company's cash reserves exceeded 2.1 trillion yuan, setting a new historical record.

Upon the release of this news, Lingjing Technology's stock price quickly strengthened during the trading session, with the intraday chart showing a strong reversal.

Investors were already waiting for Lingjing Technology's first-quarter report, but they didn't expect it to be released during trading hours at this crucial moment. Everyone knows that this is to boost market confidence, which couldn't be more obvious.

Under normal circumstances, such an action indicates that there is a high risk at present and that there is a problem in the market, so it is even more appropriate to leave.

However, Lingjing Technology's first-quarter report was truly explosive.

With a total revenue of 1.37 trillion yuan and a net profit of 5150 billion yuan in a single quarter, does that mean that the annual revenue is likely to reach 5 trillion yuan, with a guaranteed net profit of over 2 trillion yuan?

With such strong expectations for its first-quarter financial report, if Lingjing Technology maintains this momentum, it is very likely that it will dethrone Walmart, which has been at the top of the Fortune Global 500 for eleven consecutive years, this year.

Shortly after Lingjing Technology released its first-quarter report, Likang Technology also released its first-quarter report during trading, showing that the company's net profit in the first quarter of this year reached 106 billion yuan.

It's important to understand that this achievement was made despite tens of millions of Flowing Star Language simulation robots awaiting delivery.

Although Likang Technology received the money, as the consumers paid in full for their orders, the money was reflected as a liability on the financial statements because the goods had not yet been delivered. The profit would only be reflected on the income statement once the goods were delivered.

The fact that it could still generate billions in profits under these circumstances is not due to the personal consumer version of the Flowing Star Language simulation robot, but rather to the enterprise version. It is almost the same product, but the price has been raised to 18.3 yuan. The cost is the same as the personal consumer version, and the price increase is all profit.

Even with a 30/70 profit split, Likang Technology would still make a killing with 30%.

As soon as the financial report was released, Likang Technology's stock price soared. Six minutes later, the company's stock price rose to 4102.42 yuan, a gain of 30.00%, hitting the daily limit. At the same time, it also boosted the Beijing Stock Exchange 50 Index by more than 10 percentage points.

The 30cm limit-up of Likang Technology not only completely reversed and repaired the large negative line and gap on April 7, but also increased by 3.74 percentage points compared to the closing price before the holiday.

On the other hand, Lingjing Technology, listed on the ChiNext board, also surged, reversing the large negative candlestick on April 7th and recovering the 600 yuan price level. Its market value returned to the 50 trillion yuan mark. On that day, it closed up 10.15% at 601.81 yuan, with a market value of 52.23 trillion yuan.

If it weren't for the black swan event that occurred, Lingjing Technology's first-quarter report would definitely have driven the company's stock price to a 20cm limit up.

This performance is truly phenomenal and far exceeds market expectations. Previously, it was generally believed that Lingjing Technology's annual revenue in 2025 would be good enough to reach 3 trillion yuan, so investors lowered their valuation expectations for Lingjing Technology.

Unexpectedly, it reached 1.37 trillion in just one quarter.

At this rate, achieving revenue exceeding 5 trillion this year is not a low-probability event, but a very high probability one. If we calculate based on a projected net profit margin of 40%, this year's net profit could reach 2 trillion, which would be absolutely unprecedented.

Before the release of its first-quarter report this morning, Lingjing Technology's stock price dropped to 528 yuan due to market panic, corresponding to a static price-to-earnings ratio of 52.37. If this year's net profit can reach 2 trillion yuan, the corresponding price-to-earnings ratio will only be 22.91.

Even with such a simple and rough calculation, everyone realized how cost-effective this price was, so funds immediately rushed in to buy.

Even if the market closes with a significant gain today, based on this expectation, the corresponding dynamic PE ratio would only be around 26 times.

After the market closed, Xiao Yu glanced at his company's stock performance and couldn't help but chuckle to himself, "Looks like we won't need to pull out the big guns of stock buybacks and cancellations..."

With the release of the company's first-quarter report, investor confidence in Lingjing Technology has truly returned.

After several days of sharp market fluctuations, the panic has subsided, and Lingjing Technology's stock price has begun to rise, once reaching a level close to its previous historical high of 673.37 yuan.

However, it did not break through to a new historical high, but instead pulled back again and fluctuated at a high level.

The main issue is that there's still a less-than-ideal expectation hanging in the balance, and this expectation isn't from the mainland, but rather from the US.

In June, there's a bombshell that everyone's watching: $6.5 trillion in US Treasury bonds are due to mature and need to be redeemed.

If Amei (US) is unable to repay its debts by the due date, or defaults on its payments, the credibility of the US dollar will collapse overnight, and the global financial market will definitely experience severe fluctuations.

Therefore, funds did not dare to launch a multi-pronged attack on Lingjing Technology.

However, they did not sell off to avoid risk because the expectations for the first quarter report were too strong. Although the company's market value is close to 60 trillion, with such strong profit expectations, the price valuation bubble is not that big.

Currently, funds are hesitant to push for a breakthrough of the previous historical high because they are waiting for the outcome of the US Treasury bond issuance in June. Once the issue is resolved, the stock will definitely break through the 673.37 yuan high in the second half of the year, reaching a new historical high and starting a new round of main upward trend.

……

(End of this chapter)