Those Years When I Was Forced to Top the Forbes List

Chapter 289 Money on the Road
Describing Beijing (BJ) as bustling or prosperous would be inappropriate.

Newspaper stand, big locust tree, bicycle.

In many places, the places where you can turn into the roadside are called alleys, but in Beijing they are called hutongs.

Of course, such a simple distinction is considered "unrefined" by Beijingers.

Hutong is a Mongolian word. In the old days, hutongs had rules, shaped like a chessboard, and were six steps wide.

The neighborly relations within a courtyard house are known as Hutong culture, and its core spirit is contentment and happiness.

Actually, these things can be found in many places.

But the spiritual high ground of Beijingers is that everything has a "reason" or "standard," and these strange and unusual customs are what make BJ unique.

However, during Chen Xuebing's trip to Beijing, he witnessed a rare historical moment when locals voluntarily relinquished their spiritual high ground.

In the taxi, I saw a group of young people wearing yellow vests doing a race walk on the street.

As soon as I got off the bus at HSBC Garden in Xicheng District, I saw several elderly men and women surrounding a big-nosed foreigner on the street, trying to figure out what he was up to.

"The Forbidden City! He said he wants to go to the Forbidden City!"

An elderly woman immediately stepped forward and volunteered to communicate with the people.

"This! Not the Forbidden City! There! The Forbidden City! No! It's too far! By taxi!"

"Hey! Hey! The taxi isn't coming!"

As soon as Chen Xuebing got out of the car, a group of people swarmed over the foreigner.

"Master! Take him to the Forbidden City!"

The foreigner got into the car looking completely bewildered, and the taxi driver smiled and called out, "Welcome, BJ!"

Fortunately, while Chen Xuebing was waiting for the driver to give him his change, he idly asked the foreigner, "Where are you going?"

The foreigner immediately got excited and started talking non-stop.

Chen Xuebing frowned upon hearing this, then turned to the driver and said, "Sir, if he's not going to the Forbidden City, do you have a place called Fortune Center around here?"

"Oh...yes!"

Is there a Google office center over there?

"Hmm, I think I've heard of him!" The driver asked curiously, "That's quite far! He's going to the Fortune Center, why is he here?"

Chen Xuebing guessed the gist of it without asking the foreigner.

"Maybe it's because this place is called Financial Street. It must have been brought here by a group of well-meaning people who only half understood what was going on."

The driver burst into laughter.

The elderly people on the roadside also laughed, but didn't seem to care at all.

"Old Zhang! They went to Google! Not the Forbidden City! It's the one you mentioned! We almost sent them to the Forbidden City!"

"Hey! Since you're in Beijing, why don't you go check out the Forbidden City? It's so beautiful!"

After the taxi drove away, an older woman patted Chen Xuebing's somewhat expensive suit fabric and scrutinized his profile, saying:
"Wow, this handsome young man speaks English! Where does he live?"

Chen Xuebing smiled and said, "Chongqing."

The middle-aged woman's face fell: "Chongqing? Chongqing won't do, it's too far!"

Only Chinese people understand that in that instant, Chen Xuebing missed an opportunity to become a son-in-law of Beijing.

Chen Xuebing smiled and shook his head, then walked to the right side of the Fenghui Times Building in front of him.

"Mr. Chen!"

Kan Zhidong met Chen Xuebing at the elevator entrance on the seventh floor and took him to the conference room.

The small conference room was filled with two groups of people, and a banner reading "National Science and Technology Major Project Investment and Financing Demonstration Meeting" was solemnly hung on the wall.

Chen Xuebing strode in with a smile and immediately spotted the middle-aged man opposite him with striking features and a simple hairstyle. He reached out his hand as he walked in.

"Chairman Wang, hello!"

The National Council for Social Security Fund does not have a clearly defined administrative rank, but the Chairman Wang in front of us used to be the Party Secretary of Ankang, Shaanxi. After being transferred here, he only served as the head of a department. In the last two years, he was promoted to the position of Vice Chairman.

The Long March team had a tough time. They talked with the investment department and investment decision committee of the council for more than a month before finally meeting the vice chairman, and today they invited people from Central Huijin to listen in.

Wang Zhongmin was slightly surprised for two seconds, then stood up and raised his hand to shake hands across the long table.

"Mr. Chen is so young."

"Full of energy, just like the booming market today!" Chen Xuebing gave himself an assessment: "I have grown up with the secondary market. The market is young, so I am young too."

This statement also serves as a reminder to the other side of the rare opportunity presented by the current booming market.

"Hahaha"

Seeing his composed demeanor, Wang Zhongmin smiled and started the conversation.

"With a P/E ratio of 22, Mr. Chen, do you think the market hasn't peaked yet?"

The Shanghai Composite Index is currently at 1680 points, and the Shenzhen Component Index is at 4000 points. The overall price-to-earnings ratio of stocks in both indices is 20 times, which is far beyond the reasonable lower limit of 14.5 times determined by 30 institutions.

The price-to-earnings ratio (P/E ratio) is quite simple; it's a listed company's market capitalization divided by its earnings over the past year. The multiple it represents indicates how many years it will take to recoup the investment.

This is inherently unscientific—you might make a profit this year but lose money next year, so how can you calculate it like that?

However, since stock prices and market capitalization also change in real time, the price-to-earnings ratio actually reflects market confidence. Moreover, based on the votes of investors, investment institutions have also discovered different industry price-to-earnings ratio patterns.

For example, the highest price-to-earnings ratio (P/E ratio) is currently in the technology and software sector, followed by non-ferrous metals, and then food and beverage. Stocks in these industries generally have a P/E ratio of over 40, which means that most investors believe their profits will continue to grow at a high rate, getting stronger year by year. With a P/E ratio of 40, it may take ten years to break even, so they are given a future-weighted valuation.

The general market expectation for this sector can be seen from the stock price-to-earnings ratio.

The overall price-to-earnings ratio reflects investors' assessment of the future economic situation.

Chen Xuebing took out the data he had prepared beforehand.

“The leading non-ferrous metals and food and beverage sectors have already surged, now at 40-50 times earnings, while the real estate sector has reached over 20 times earnings. However, the related retail, steel, and financial sectors have not yet seen significant gains. This is definitely an opportunity.”

"This round of bull market, in addition to the dividends of institutional reforms, also benefits from foreign hot money driven by the RMB. I believe Central Huijin already has detailed data on this."

"In addition, we also studied the performance of a large number of listed companies. The earnings per share of listed companies increased from RMB 0.16 in 2005 to RMB 0.20 in the second quarter of 2006. 230 companies had profit growth of more than 50%, and blue-chip stocks had an average net profit growth of 30%."

"In addition, the scale of public and private funds has exceeded one trillion yuan."

"The market will rotate along the lines of real estate → finance → cyclical → consumption → individual themes. We are still in the early stages of the rise, and it has not even officially started yet. We believe that the overall price-to-earnings ratio of this round can break through 40 times."

Chen Xuebing, unusually, didn't make any grand pronouncements and instead gave a conservative figure. In fact, at the peak of this bull market, market sentiment pushed the overall price-to-earnings ratio to 70.

Reality is always more surreal than fantasy; if you said it would be 70 times the original value, probably no one would believe it.

"Does Mr. Chen think the market can still rise by about 100%?" someone asked.

Chen Xuebing looked in the direction of the voice and saw a nameplate for "Central Huijin" in front of the person asking the question. He then chuckled softly.
"A doubling is the overall market's expected increase. Our active returns have always been much higher than the market average. If it's just a doubling of returns, I think we can achieve that before the end of the year. Not to mention the long term, we can achieve a return of more than 15% within this month."

When General Manager Chen arrived, his words astonished everyone present.

Wang Zhongmin across from him quickly flipped through the documents in front of him.

"You currently have 14 billion in the market fund. When you mention a 15% return, are you referring to the overall return or the return of a specific fund?"

Upon hearing this, Chen Xuebing also opened a notebook.

He hasn't done his accounts in a long time.

He doesn't need to calculate the accounts anymore; they were already tallied yesterday.

Besides the surge in the market, Oceanwide Holdings also profited handsomely, earning a total of 1.5 million yuan.

Of the 5200 million in profits, which were in Fund No. 3, have already been deducted and cleared.

Then they raised funds again, and 56 merchants in Huaqiangbei raised 3.6 million yuan. They are just starting out and have earned less than 1000 million yuan in revenue.

During this period, Oceanwide's stock price remained almost unchanged, while other stocks continued to rise.

Fund No. 1 had not touched its money in order to maintain its ranking. It had 620 million yuan in May, and bought at the bottom at 1600 points in August, and now it has 750 million yuan.

The profits of Fund No. 2 were all withdrawn in July, leaving 200 million yuan. It is also a major player in Oceanwide Holdings. It made a floating profit of 80 million yuan in that one battle alone, and currently has 310 million yuan.

As of yesterday, the three funds totaled 14.3 billion yuan, which is relatively recent data for the social security fund.

另外最近两个月从2号基金（4800万）、西南证券（1500万）、3号基金（2400万）共提了8700万盈利到集团公司。

Of this money, 5000 million was used to finance the loans of the bond-bearing companies, 2000 million was given to Gu'an Construction to repair the Pangdonglai store, and the total cost of headquarters salaries and daily expenses was more than 500 million. Now the group's account has 1167 million left.

The Southwest Securities account has 2.3 million yuan, of which 3000 million yuan in profits can be withdrawn at any time.

With all recent gains from the stock market, plus 47% of the money in Fund No. 1, Changzheng currently has a total of 4.39 million yuan in stock market assets.

The expenses to come are shockingly high, far exceeding this figure.

This is also why he rushed to Beijing today to persuade the social security and Central Huijin.

Only if this money comes in quickly can he rapidly obtain the figures he needs in the stock market.

“Three funds, 14.3 billion, that’s about right,” Chen Xuebing said.

Upon hearing this, many of those present who were good at mental calculations started doing the math.

It's already the 6th today.

15%? Does that mean they're going to earn 2.14 million in the next 20 days?

Previously, Long March had a small initial investment but a high rate of return, which was acceptable.

Now that it's worth over a billion, how can it still generate such high returns?
“Mr. Chen,” Wang Zhongmin pondered for a moment, then said, “The Banking Supervision and Management Law will be amended next month. The new law grants regulatory agencies the power to investigate related parties. Our contract will not be signed until at least next month.”

He meant to remind us: what you say, we have to keep before we sign the contract.

Chen Xuebing smiled.

If I couldn't keep my promise, I wouldn't have said it in this setting.

It's hard to say whether other stocks can rise by 15%, but he has already received a call from Lu Zhiqiang, who said that Oceanwide Holdings is going to raise its stock price by more than 30% this month to get a foreign shareholder to sell off their shares. He hopes that Changzheng will remain stable for the time being.

He has now invested over 300 million yuan in Oceanwide Holdings. If the price increases by 30%, it will already exceed 100 million yuan.

With total unrealized profits exceeding 200 million, what's so difficult about that?
"If the target cannot be met, you may choose to abandon your investment."

Chen Xuebing spoke with great confidence, anchoring the investment intentions of both parties to the returns for this month.

If this 15% return is realized, the other party will have to seriously consider his promise of "doubling the money by the end of the year".

Such a bold promise caused the people on both sides of the negotiating table to exchange glances. Wang Zhongmin even lit a cigarette on the spot, and after a long while, he looked at the representative of Central Huijin and said:

"If you can achieve such high returns without any 'special operations,' we can sign a contract once the management law is amended."

Chen Xuebing laughed: "Chairman Wang is joking. Our CSRC record is zero violations. If we could operate on dozens of stocks that we've established positions in, the social security fund would probably be begging us to invest today."

“Then I have no objection.” Wang Zhongmin changed his previous cautious tone.

Kan Zhidong cursed inwardly, "Damn it, it was settled in five minutes. If I had known you were so bold, why would I have wasted so much breath?"
I should have invited you sooner!
“However, Mr. Chen,” the representative from Central Huijin said, flipping through the documents in his hand, “you are going to use half of the funds to invest in BOE and this ARM company. We know about BOE, but what is your intention in investing in ARM? I see that their performance has been relatively poor in the past few years.”

"This matter," Chen Xuebing said seriously, "cannot be judged solely on investment returns. It not only has long-term returns but also concerns the strategic foundation of our 3G development. In the investment negotiations, I hope that the Social Security Fund and Central Huijin can step forward to express their support and provide us with strong policy guarantees."

"Policy guarantees? What do you mean by that?"

“For example,” Chen Xuebing said with a hint of ruthlessness, “let them know that if they don’t accept our investment terms, ARM will not be able to survive in China.”

Everyone:.
Wang Zhongmin took a deep drag on his cigarette: "What did you say?"

A dozen minutes later, the group of people came out of the conference room.

Wang Zhongmin lit another cigarette, puffing out smoke as he said:
"Mr. Chen, we all understand the importance of this company, but we still need to be cautious about this matter of threatening foreign investment, especially in the last two years. You should know that the higher-ups attach great importance to international public opinion. If we report to the higher-ups according to your wishes, this investment may fall through."

“I know.” Chen Xuebing thought for a moment and said, “Then let’s change the subject. We’ll say it. I’ll try to be tactful, but we need your support at crucial moments.”

"Let's think about it," Wang Zhongmin said, not rushing to give a response.

The Olympics are a top priority, and people outside the system can't possibly imagine how sensitive the higher-ups are to it.

People at Central Huijin, who have long been involved in foreign exchange investment, did offer their professional opinions:
"Mr. Chen, I recall we had an investment case before. You just mentioned introducing the ARMv7 architecture, which is one of the multi-core technologies, right? The UK's technology export control list explicitly restricts the transfer of multi-core processor technology. How do you plan to circumvent this?"

"This..." Chen Xuebing smiled, "We can just separate the basic instruction set licensing and multi-core optimization technology in the kernel design. Actually, this is not the biggest problem. There are at least several clauses to deal with, such as advanced technology clauses. However, we have been restricted by the international community for so many years, and we have also developed many alternative methods... There will always be a way."

These understated words reveal the immense difficulties Chinese companies face in introducing foreign technology.

Those who work in ministries and commissions have a deep understanding of this.

Some people are born without empathy, while others are instantly captivated.

Wang Zhongmin took another puff of his cigarette, stubbed it out, and reiterated his stance.

“Financial elites like Mr. Chen are contributing to the country’s scientific and technological progress, so we can’t… How about this, I’ll ask Chairman Xiang to hold a meeting this afternoon to help you think of a solution.”

(This chapter is short; I'll add a short chapter later tonight.)

(End of this chapter)