Chapter 39 - Huayang Group
Fang Hong spent some time browsing the forum posts and comments before closing the page. The A-share market would be closed for the next nine days, and the first trading day after the break would not occur until October 6th.
With schools on holiday, there would be no classes in the coming days. This break was a great opportunity for Xu Jingren and the Quantum Beat team to fully dedicate themselves to their work. Fang Hong, with little to do, decided to visit Quantum Jump Studio to help with development. Although his programming skills weren't as advanced as Xu Jingren's and the others, he was familiar with computer programming and could write algorithms.
This skill was something Fang Hong had inherited from the original owner of the body he now occupied.
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In the eastern part of Xincheng, within a luxurious villa in Xinhewan District, the head of Huayang Group resided. Huayang Group was the largest corporate conglomerate in Xincheng. In its early stages, the group took many risky and unconventional paths, but through perseverance, it became a formidable presence. Today, its net assets had surpassed 37.5 billion, with its core business focused on real estate and finance. The group also operated in a wide range of industries, including some gray areas such as usury. However, the proportion of business in these questionable sectors had fallen below 10% and continued to decline year by year.
"Old Zhang, what brings you here?" Hua Yongming, the head of Huayang Group, asked, looking at the man beside him with a smile. Zhang Qi was from Xinhong Securities, a local securities firm in Xincheng, though it was not publicly listed.
"A talented trader by the name of Fang Hong," Zhang Qi replied with a sip of tea, smiling.
"A genius trader?" Hua Yongming raised an eyebrow in surprise. At that moment, a man in his thirties entered and started preparing tea for the two of them. Hua Yongming immediately told him, "Yu'er, go downstairs and ask if there's a trader named Fang Hong in the company."
"Yes, father," Hua Yu replied before leaving. He was Hua Yongming's third and youngest son, the one he favored most and planned to groom as his successor. Hua Yu also held a vice-presidential position at Huayang Capital.
After a brief silence, Hua Yongming turned back to Zhang Qi, still curious. "You came all the way here for this?"
Zhang Qi smiled, "Indeed, I did."
Hua Yongming's expression remained calm. "You're really interested in this person?"
"You don't know about him?" Zhang Qi raised an eyebrow, suspecting that Hua Yongming was pretending to be unaware. But he quickly realized it wasn't unusual for someone in Hua Yongming's position, as the capital market was only one part of Huayang Group's vast business empire. The group also had many other divisions.
Zhang Qi continued, "Our internal data shows that Fang Hong opened an account with Xinhong Securities two years ago. By July this year, the account had suffered significant losses, but in the past two months, the account's yield curve has skyrocketed at an extraordinary rate."
Securities firms can view retail investors' positions and trading information internally. This means that brokerage employees are restricted from trading in the market, although some may still engage in underhanded activities.
Zhang Qi elaborated, "Based on the last two months of data, Fang Hong appears to be an ultra-short-term trader. He rarely holds stocks for more than two or three trading days. His longest-held stock recently was Zhongxin Securities, which he bought at the daily limit price on September 18th. Over the seven days he held it, the stock price fluctuated by 61%, and Fang Hong made a profit of 77% from this trade."
Hua Yongming remained calm, showing no great surprise. While impressive, this type of return was achievable for skilled traders. However, when Zhang Qi continued, Hua Yongming's expression changed.
Zhang Qi said, "In July, Fang Hong had less than 70,000 yuan in his account. By the end of the holiday season, he had made over 9 million yuan in profits within just 55 trading days. Even factoring in 960,000 yuan in transfers, his return on investment over 50 trades was more than 145 times. To put it in perspective, in just 50 trading days, he earned nearly 10 million yuan in profits."
Hua Yongming's eyes widened in disbelief. "More than 145 times return in just two months?"
Zhang Qi nodded confidently. "Yes, that's right. He made nearly 10 million yuan from less than 100,000 yuan in just over two months. I've seen the historical data, and it's simply astounding. In those 50 days, he caught nearly every daily limit. If the T+0 mechanism were available, his profits could have been even higher, reaching hundreds of millions. The sharpness of his trading tactics is something I've never seen before in my career."
Just as they were speaking, Hua Yu returned and informed his father, "Father, I asked around, but no one in our company knows of a trader named Fang Hong."
Zhang Qi was stunned for a moment, then looked at Hua Yongming and said, "You mean, it's not from your group? Is it really just a retail investor who suddenly found success?"
Hua Yongming made a firm decision. "Old Zhang, I want this person. Don't let anyone else try to recruit him."
Zhang Qi chuckled. "Of course."
They exchanged a knowing smile, both understanding the unspoken deal.
After some more casual conversation, Zhang Qi left.
Hua Yongming immediately called for his son, Hua Yu. "Yu'er, go find out more about this Fang Hong. I want him, and I want him recruited under our group as soon as possible."
"Understood. I'll get started right away," Hua Yu nodded and turned to leave. Just before he left, Hua Yongming added, "Wait, don't just find him—invite him personally. I'll make sure to recruit him myself."
In just over two months, Fang Hong turned a small investment into tens of millions. Anyone who could achieve this was bound to be sought after.
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The next few days went by during the long national holiday. While the domestic market was closed, foreign markets continued to operate. During the holiday, the US stock market experienced significant drops, which led many investors to believe that a major decline in the A-share market was inevitable.
When the A-share market reopened on October 6th, after the long holiday, it gave investors a rude shock. The market opened with a 1.15% drop. The sharp decline was blamed on the crashing US stock market, providing an excuse for the A-shares' poor performance.
By the close of trading on the first day after the break, the Shanghai Stock Exchange Index had plunged by 5.23%, closing at 2,173.75 points. The index had dropped by 120 points in a single day, and there was no sign of recovery. Analysts predicted the decline would continue the following day.
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End of Chapter 39
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