Chapter 23#

From January 19th to February 1st, 1992, the sale of stock subscription certificates, which took place just before the Spring Festival, ended in a lukewarm fashion. As the first subscription-based new stock issuance in mainland China, the 1992 Shanghai stock subscription certificates were not actually well-received when they officially went on sale. The final sales volume was less than 2.1 million, and there was no talk of panic buying or hot sales, falling far short of the expectations of banks and securities firms. The reason was simply that this subscription method was too peculiar.

The subscription certificates could be used throughout the year, with four lottery draws. Only those who won the lottery could buy newly listed stocks, which meant a huge potential risk. Who could guarantee that every subscription certificate would win? At the same time, the price of 30 yuan per certificate exceeded the affordability of most people, and the purchase was limited to Shanghai citizens, which set a prerequisite at the threshold. In early 1992, only a dozen new stocks were announced for listing. How many people would dare to pour their life savings into these dozen or so stocks…

However, Chen Yuanming knew very well that all of this would turn into a different picture.

Shortly after the Spring Festival holiday, some scalpers looking to buy subscription certificates began to appear at the entrance of the Wanguo Securities Huangpu business department on Guangdong Road. The prices they offered were invariably a few points higher than the original price. They basically bought them in consecutive numbers, with each book of 100 consecutive certificates priced between 3,500 and 4,000 yuan. If it was an unregistered “blank board,” the price could be even higher. After all, an ID card was required to match when actually buying stocks. Shenyin Securities was still okay, allowing a second name change, but a hardliner like Wanguo Securities at that time resolutely did not allow name changes, so even if you got it, you couldn’t sell it smoothly.

But Chen Yuanming remained unmoved. Every day, he just quietly strolled around the entrances of several major securities companies, asking the scalpers about the black market prices, neither buying nor selling, just watching quietly like an ordinary bystander. After half a month of this, even some of the scalpers had become familiar with his face. Some would turn their heads away as soon as they saw him, not wanting to bother with this troublemaking brat.

After wandering around like this for more than half a month, until the end of February, as rumors heated up, the secondary market also began to heat up. The price of a hundred consecutive numbers soared from the original 3,000 yuan to around 20,000 yuan, a tenfold profit in the blink of an eye. It was only then that the entire subscription certificate market became hot. In addition to the scalpers, more and more real buyers also began to appear in person. Well-dressed elites appeared at the entrance of the stock market, hoping to buy one or two “blank boards” and enter the stock market themselves.

However, this still couldn’t move Chen Yuanming. What was a tenfold profit? This was the ‘92 subscription certificate, the first “millionaire wave” that all later stock traders knew about. At this time, selling the subscription certificates at any price was a losing business. Only by properly grasping the four lottery opportunities, constantly circulating funds, selling the stocks in hand, and buying new stocks could the profit be maximized. The winning rate of the ‘92 subscription certificates was not the 30-50% that people guessed, but a cumulative total of over 80%, especially the second lottery, where the winning rate was as high as 50%. How could he possibly hand over such an amazing profit to others?

But at the moment, Chen Yuanming also had his own concerns. For him, the biggest difficulty was not in predicting the development of the stock market, but in his own personal conditions.

At this time, to enter the Shanghai stock market, one could only open a stock account with a Shanghai resident ID card and be at least 18 years old. Both of these conditions were far from what Chen Yuanming could meet. He was a young boy who had come to Shanghai alone, not yet 16 years old. Where could he find a suitable ID agent to protect his legal interests?

At the same time, the actual subscription for new stocks required a considerable amount of funds. However, all his income over the past six months—including the profits from selling watches and the 100,000 yuan red envelope that Scarface had stuffed him with when he left—after sending a portion home, only 390,000 yuan remained. Of this, 360,000 had already been used to buy stock subscription certificates, and some was used to support daily life. There was really not much left to buy new stocks.

With these two major obstacles in the way, he had to come up with a truly reliable solution.

With this in mind, he frequented the small salons on Guangdong Road more and more often. By this time, some people had vaguely guessed that this young man might have something on hand, but was just waiting for the right selling point. More and more eyes were on him. While others were watching him closely, he was also watching these real buyers with large amounts of cash in their hands.

This mutual speculation continued until March 1st. That evening, as Chen Yuanming was walking out of the Palace Hotel towards the hotel he had booked, a voice called out to him.

“Hey, young brother up front, wait a minute.”

The voice was not bad, although it seemed a bit hoarse from overuse. Chen Yuanming turned his head and saw a middle-aged man in his 30s quickly catching up. The man was a dozen centimeters taller than him, wearing a suit that was quite decent for the time. He had two sword-like eyebrows and sharp eyes, which added a bit of seriousness to his expression, giving him the air of someone from a military or political family. He recognized this person. Chen Yuanming narrowed his eyes slightly. He had often seen him at the Palace Hotel in the past ten days, with two followers, seemingly buying up subscription certificates in large quantities. Suppressing the smile that was about to form on his lips, Chen Yuanming stopped in his tracks.

In just a few steps, the man strode up to Chen Yuanming, looked him up and down for a moment, and extended his right hand in a friendly manner. “Little brother, you’ve made me search for you.”

Chen Yuanming did not take it, only raising an eyebrow. “Sir, I don’t think I know you.”

Faced with this somewhat awkward scene, the man showed no embarrassment, simply retracting his hand and laughing heartily. “You’ve been wandering around Huaihai Road and Guangdong Road for quite some time in the past half month. There aren’t many kids dressed like you. So, it’s the night before the lottery, haven’t you found a buyer for your goods yet?”

Chen Yuanming glanced at the other party noncommittally and asked in return, “It’s already this late, haven’t you given up on sweeping up the goods either?”

This was said so bluntly that it made the other person choke for a moment, and then his smile widened. “Since we’re both interested, why don’t we sit down and talk? Which hotel did you book?”

“The Park Hotel.”

As soon as the name was mentioned, the man’s expression changed subtly again. The tallest building in the Far East, even taller than the famous Peace Hotel. Those who could stay there were either rich or noble, not comparable to ordinary hotels. This young man looked well-dressed and his speech was not like that of an ordinary family’s child, but staying at the Park Hotel? This was completely unexpected.

His mind racing, the man smiled. “The Park Hotel? That’s perfect. Why don’t we go to the International Corridor for a casual meal, my treat.”

The International Corridor was one of the well-known restaurants in the Park Hotel, specializing in Western food. If he wanted to confirm his identity, this place was indeed a good choice. Chen Yuanming nodded, accepting the other party’s invitation. The man then suggested, “How about we take a taxi?”

This time, Chen Yuanming did not agree, just said faintly, “I’m not used to Santanas. Let’s just walk.”

At that time, Santana taxis in Shanghai were still few and far between. The man glanced at the boy’s plain expression and also smiled. “Yes, it’s not far anyway. By the way, my name is Xiao Yun, I just came to Shanghai recently.”

“Chen Yuanming, I also just arrived not long ago.”

Chatting casually, the two walked along the road for more than 20 minutes before arriving at the Park Hotel. Seeing Chen Yuanming’s familiar posture, Xiao Yun’s gaze just swept over him, made a gesture of invitation, and the two entered the Park Hotel together. After sitting down in the Western restaurant and ordering two steaks, the conversation slowly turned to the main topic.

“Since we’re both hanging around Guangdong Road, let’s not beat around the bush.” Xiao Yun looked at the young man opposite him with a probing gaze, with a hint of something more. “You should know the current price of blank boards. If you have any, you might as well sell them now, so we can have a quick deal.”

Chen Yuanming smiled. “Brother Xiao, since we’re already sitting here, we really shouldn’t be beating around the bush. Since you’ve come to Shanghai at this time, you must also know the actual value of this subscription certificate. Why is everyone buying, but I should sell now?”

This was not untrue, but how could Xiao Yun be swayed by a few words? He smiled slightly. “If it were anyone else, I might have believed it, but your performance says otherwise, little brother. If you really had no intention of buying or selling, you would be staying in your room right now, waiting for the lottery to be drawn and then going to pay, instead of hanging around the salons every day.”

At this point, he sighed softly. “To be honest, a portion of the people who are really in the business of buying and selling have also reacted. The market is all buying, with no selling at all. I’ve been in Shanghai for so long, and I’ve only managed to get some loose tickets from individual investors. Now I have less than 2,000. Let’s not even talk about the winning rate, the quantity alone is clearly not enough. Since we both have needs, why not sit down and have a good talk? Price is not a problem.”

Chen Yuanming shook his head. “On the contrary, I think price will be the biggest problem.” Seeing the other party’s puzzled eyes, Chen Yuanming’s lips curled up slightly. “Let’s put it this way, I do have blank boards here, but if each book costs 160,000, will you buy it or not?”

Xiao Yun’s sword-like eyebrows shot up, and a surge of anger welled up in him. 160,000? The highest price on the market now was no more than 20,000 a book, and at most it could rise to 30,000. 160,000 was not haggling, it was playing with him, right?!

Seeing the other party’s unfriendly expression, Chen Yuanming didn’t seem to care, just raised his hand lightly. “You see, as soon as the price is mentioned, we can’t agree, can we? But is my price really that high? In other words, why did you come to Shanghai now, and why do I think the blank boards are worth so much? In the end, isn’t it because of the same thing…”

As he spoke, his finger pointed upwards, then towards the south, and his eyes met the man in front of him frankly.

Xiao Yun’s heart trembled. Damn it, this kid…

“The old man is about to return, right? Selling the subscription certificates at this time is not smart at all.”

Indeed… Xiao Yun lowered his eyes to hide the astonishment in them. The reason he came to Shanghai was precisely because he had followed the advice of his family’s elders to come to Shanghai to dig for gold before the news got out. If the old man’s southern tour speech was released, the stock market would immediately be in turmoil, and it would not be a matter of tens of thousands or hundreds of thousands. And the young man in front of him had hit his soft spot. Regardless of the source of the news, he had already placed himself in a position not to be underestimated.

However, in just an instant, the expression on Xiao Yun’s face returned to normal, and he put on a gentle smile again. Doing business is like playing bridge; both sides have a few trump cards in their hands. This kid had revealed his card, but didn’t he have his soft spot in his own hand?

“A hero is indeed born young.” Raising the red wine that accompanied the meal, Xiao Yun showed an appreciative smile. “There are indeed not many who can buy subscription certificates as early as you. I also know a few classmates in the Shanghai banking system. There are only a handful of people who can swipe away ten thousand subscription certificates at once, and to do it so cleverly…”

Heh… Chen Yuanming couldn’t help but sneer inwardly. With the conversation having reached this point, how could he not understand? What was his shortest plank? It was actually clear when he bought the subscription certificates. In order to avoid being too big a target, he chose four sub-branches and invited four Shanghai citizens to help him buy them. This way, he could avoid being targeted at a glance and also avoid the eyes of those professional proxy buyers, hiding himself behind a safety line.

But there were drawbacks. Four different accompanying buyers, four different ID cards, precisely represented his weak foundation in Shanghai. Not only did he not have a suitable proxy buyer, he couldn’t even produce a proper backup identity. And this point was almost fatal. Fundamentally, he was just a grassroots kid. Although he could use his food, clothing, housing, transportation, and his conversation and experience to confuse others, his foundation was too thin, with no power or influence. In this financial wrestling ring, one slip could get him killed on the beach by the big crocodiles. But so what?

A bitter smile appeared on the corner of his mouth, and Chen Yuanming shook his head. “A little trick, I’ve made a fool of myself in front of Brother Xiao. It’s really because my family is very strict and won’t let me take this path.”

This was indeed the truth, but in the ears of different people, it had different meanings.

“You’re young, you should still go out and make a name for yourself.” Xiao Yun smiled, seeming to understand Chen Yuanming’s situation very well. “When I went into business, my old man almost broke my legs. Haven’t I also made a name for myself? In this situation, no one wants to see this happen. Why don’t we think of a solution together and get through this difficult time…”

With both sides’ conditions laid out, it was indeed time to get down to real business. Chen Yuanming put down his wine glass. “To be honest, I do want to sell a portion of the subscription certificates, but there are two points I need to make up front. First, I need a secure local ID card. You understand things like opening an account without me saying it. Second, I don’t want to do a blank board business, I want to sell winning numbers.”

As soon as these two sentences were spoken, Xiao Yun was stunned. The first one was easy to say, he could understand and could do it. But the second one? Not selling the blank boards with an unknown winning probability, but selling the winning numbers? Was this smart or stupid?!

Seeing the astonished expression on the man’s face, Chen Yuanming smiled calmly. “Surprised? I think this is the most beneficial plan for both of us at the moment.”