198: Chapter 198 The Global Frenzy of 400 Billion Yuan in Financing

Shenzhen Stock Exchange · April 1st

9:00 AM, Shenzhen Stock Exchange Hall.

A red carpet stretched from the entrance all the way to the bell-ringing platform. On both sides, media crews were armed with cameras and lenses, their flashes creating a continuous sea of light.

Su Chen wore a dark blue suit without a tie—his signature look. Beside him was Zhang Yang, the 45-year-old CEO of Spark Electronic Technology and former General Manager of Xinghuo Electronics.

Over three hundred guests were seated below the stage: investors, partners, employee representatives, and government officials.

The large screen displayed a countdown: 30 minutes until the listing.

Zhang Yang was a bit nervous, adjusting his tie.

"Relax," Su Chen smiled. "We're here to collect money today, not to take an exam."

Zhang Yang gave a wry smile. "Mr. Su, 400 billion... I've never seen so much money in my life."

"You'll see even more in the future."

9:25 AM, the General Manager of the Shenzhen Stock Exchange delivered a speech.

9:28 AM, Su Chen and Zhang Yang walked onto the bell-ringing platform.

The bell was gold and had a modern design.

The large screen switched to trading data:

Company: Spark Electronic Technology Co., Ltd.

Issue Price: 100 rmb/share

Pre-listing: Total share capital of 16 billion shares

Issue Quantity: 4 billion shares, 20% financing, parent company holds 80%.

Post-listing total share capital: 20 billion shares, market value of 2 trillion rmb

Financing amount: 400 billion rmb (approximately 58 billion USD)

Gasps echoed through the audience.

Although they already knew the numbers, seeing them with their own eyes was still shocking.

400 billion.

The largest IPO in A-share history. The largest IPO globally this year. Even in global history, it would rank in the top five.

9:29:59 AM.

"Five, four, three, two, one—ring the bell!"

Su Chen and Zhang Yang struck the golden bell simultaneously.

The bell rang crisp and clear, echoing through the hall.

At that same instant, the numbers on the large screen began to jump.

Opening price: 105 rmb.

Up 5% immediately.

"The buying pressure is too fierce," a trader whispered.

Indeed, sell orders were swallowed up as soon as they were posted. Buyers were like a school of starving sharks, scrambling for shares regardless of the cost.

9:31 AM: 107 rmb.

9:35 AM: 110 rmb.

9:45 AM: 112 rmb.

10:00 AM: 115 rmb, a 15% increase.

This triggered the circuit breaker mechanism—on the first day of a new stock's listing, if the increase exceeds 15%, trading must be suspended for 10 minutes.

The hall quieted down, and everyone stared at the screen.

10:10 AM, trading resumed.

The stock price fluctuated between 115 and 116 rmb. Buying pressure remained strong, but sell orders were almost zero—retail investors and institutions who had won the lottery were reluctant to sell, waiting for it to rise higher.

11:30 AM, midday market break.

Closing price: 115.5 rmb.

Increase: 15.5%.

Total share capital: 20 billion shares

Market value: 2.31 trillion rmb.

In just one morning, Xinghuo Electronics' market value surpassed Sony.

Applause erupted below the stage.

Su Chen and Zhang Yang walked off the stage and were surrounded by the media.

"Mr. Su, the stock price has surged. Any thoughts?"

"My only thought is to thank the investors for their trust," Su Chen answered calmly. "But I must remind everyone: stock prices fluctuate; value is fundamental. The value of Xinghuo Electronics lies in what we can create for our users."

"What are the performance expectations for Xinghuo Electronics this year?"

Zhang Yang took the microphone. "We expect annual revenue to exceed 200 billion and net profit to exceed 60 billion. Specific data will be disclosed in the quarterly reports."

"60 billion in profit, a P/E ratio of less than 40—is it undervalued?"

"That question," Su Chen smiled, "I leave for the market to answer."

Global Financial Institution Trading Rooms

New York, Goldman Sachs headquarters.

David Chen, Head of Asian Operations, stared at the screen, his eyes bloodshot.

He had stayed up all night—when the Chinese stock market opened, it was 9:30 PM in New York.

"We applied for a 10 billion USD quota," David said to his assistant. "And we only got 1.5 billion. 1.5 billion!"

The assistant said cautiously, "Other institutions were even more aggressive. Morgan Stanley only got 1 billion, Citi 800 million..."

"Why? Aren't we the largest underwriter?"

"But Xinghuo Electronics values long-term investors more. When they allocated the quota, they gave priority to institutions that committed to holding the shares for three years."

David slumped in his chair.

He knew what he had missed.

Xinghuo Electronics' business portfolio was too perfect:

Drones: 50% global market share, full series from consumer-grade to military-grade.

Action cameras: GoPro's biggest competitor, will release a revolutionary 360-degree panoramic camera this year.

Wearable devices: Third in the world for smartwatches, currently developing medical-grade health monitoring.

Huaxing Communications holds 50% stake: The most valuable asset. The HX1 series mobile phones have sold over 20 million units globally, and the HX2 has already received a flood of pre-orders.

Also Bluetooth headsets, power banks, and other secondary consumer electronic products.

How is this just one company? This is an all-star lineup of consumer electronics.

And behind it all is the technical support of Xinghuo Chip and the supply chain guarantee of Spark Materials.

"A company like this comes along once in a decade," David muttered. "We should have gone all in."

London, BlackRock Fund.

An emergency meeting lasted until dawn.

Investment Director Emma pointed at the PPT. "Xinghuo Electronics' valuation model shows that a reasonable stock price should be above 150 rmb. At 115 rmb now, there is 30% upside potential."

"But the P/E ratio is already 40," someone questioned.

"For a growth-oriented tech giant, 40 is undervalued," Emma pulled up comparative data. "Apple has a P/E ratio of 35, but its annual growth rate is only 5%. Xinghuo Electronics' projected annual growth rate is over 50%. Using PEG (Price/Earnings-to-Growth ratio), Xinghuo is only 0.8, while Apple is 7."

A PEG less than 1 is usually considered undervalued.

"More importantly," Emma emphasized, "Xinghuo Electronics is only a part of the xinghuo system. The parent company, Spark Technology, also has businesses in chips, materials, automobiles, and batteries. These businesses may all be spun off and listed in the future. Investing in Xinghuo Electronics is investing in the entire Xinghuo ecosystem."

The conference room fell silent.

Then, the Chairman of the Investment Committee raised his hand. "I agree to increase our position. Goal: buy another 1 billion USD."

"Agreed."

"Agreed."

Passed unanimously.

New York, Citibank office.

Investment manager Jack called Shenzhen directly—after being transferred through several layers, he finally reached Su Chen.

"Mr. Su, I'm Jack from Citi. We are willing to pay a 10% premium to acquire the placement shares of other institutions. Can you help facilitate this?"

On the other end of the line, Su Chen's voice was calm. "Mr. Jack, thank you for your appreciation. But the quotas are already set, and it is not appropriate for us to intervene in secondary market trading. Let's cooperate next time."

"When is next time?"

"Xinghuo Semiconductor, Spark Materials, Spark Power... will all be listed one after another. If Citi is optimistic about us, we can cooperate long-term."

Jack hung up the phone and said to his colleague, "He refused."

"As expected," the colleague shrugged. "People wanting to buy Xinghuo stock now line up from Wall Street all the way to Shenzhen. He doesn't lack buyers."

Final data: The international placement portion of Xinghuo Electronics was oversubscribed by 48 times, with frozen funds exceeding 2 trillion rmb.