ZS | Chapter 26

On Saturday morning, Gu Zheng casually put on a tracksuit and did not bring his guzheng.

Last night Zhuo Hang had clearly stated that their relationship was only one of cooperation. Since the other man had no such intention, why should he stick a hot face to a cold ass? Three-legged toads were hard to find, but two-legged living people were everywhere.

Zhuo Hang had a bad family background, a dark and twisted personality, and almost no social skills... he only had a face that was barely passable.

Gu Zheng had a good family background, a cheerful and open personality, flawless manners, and he was handsome too... why should he hang himself on that crooked-neck tree, it was not as if he could not find anyone else.

A Cayenne was parked downstairs, Gu Zheng opened the car door and saw a McDonald's breakfast on the seat. He did not eat offal or liver, rarely ate pickled foods, and did not want a bacon egg burger, so he put the bag on the back seat.

Zhuo Hang said softly, "It's a five-hour drive from here to Beishi, you should still eat a little."

Gu Zheng ignored him, locked the car door, and prepared to catch a little more sleep.

Zhuo Hang said, "There is a blanket in the drawer up front."

Gu Zheng waved his hand, signaling that he did not want to talk.

Getting up early on a workday was one thing, but not being able to sleep in on the weekend too, it was infuriating.

Yesterday I gave you a chance and you did not cherish it, today you bought breakfast like a bootlicker, who cared about the lousy thing you bought.

Putting on a cold act, who could not do that.

When they waited at the traffic light, Zhuo Hang opened the drawer, took out the blanket, and draped it over Gu Zheng. Gu Zheng pretended to sleep, but in fact even after the Cayenne got onto the highway he still had not fallen asleep.

Zhuo Hang drove very well, and there was almost no bumping along the road.

Gu Zheng rested his head against the car door, his eyes on the window.

Half an hour passed, and the real cold one still had not spoken, while the fake cold one was starting to lose it.

Gu Zheng stretched lazily and indicated that he had woken up.

Zhuo Hang did not expose him, and gave him his breakfast sandwich from McDonald's.

Seeing the green Rolex Submariner on his wrist, Gu Zheng turned toward the car door and ate the McDonald's breakfast sandwich without any backbone. After taking a sip of soy milk, his stomach warmed, and he felt better too.

They were only cooperating partners, and Zhuo Hang could buy breakfast for a partner, so he had no reason to be angry on his own.

"Here, want some?" After taking someone else's food, Gu Zheng gave him his bacon egg burger.

"Mm." Zhuo Hang took the burger and drove one-handed.

So the no-brain and the sulker made up again.

Zongxing Wood Industry was founded by the Liao brothers, named after Liao Zong and Liao Xing, and the two had come under the guise of a business inspection.

The older brother, Liao Zong, led the two of them on a tour of the factory, speaking softly, "This room at the entrance is the raw material warehouse, the base materials are all stored here, and to prevent the materials from getting damp, the temperature has to be kept around 20° all year round."

There were many large shelves in the warehouse, different kinds of flooring were displayed on the shelves, and the raw materials in the stacking area were piled two or three meters high, obviously showing that there were unsold goods.

Gu Zheng and Zhuo Hang exchanged a look, and at a glance each knew what the other was thinking.

The two of them said nothing, left the warehouse, and continued forward along the gravel ground, while Liao Zong kept introducing, "The left side is the production and processing workshop, the right side is the quality inspection center, and ahead are the finished goods warehouse and packing area..."

As a factory area integrating raw material processing, production and processing, and warehousing logistics, Zongxing Wood Industry had a reasonable facility layout, and if it were operating normally it would definitely generate considerable revenue, but now the factory should have run into problems.

Gu Zheng pointed at the huge workshop diagonally ahead and asked, "Can we take a look here?"

Liao Zong nodded and brought the two of them to the wood drying and processing workshop.

Liao Xing turned on the lights, and they saw that the drying kilns, humidity controllers, planing machines, and other large equipment were all not running.

It seemed Zongxing Wood Industry not only had goods that were not selling, even production had problems.

There was no need to continue the inspection.

Gu Zheng said, "We have disturbed you a lot with our visit today, night roads are not easy to travel, and it is getting late, so we should head back to Yucheng."

Liao Zong lowered his head, his tone humble, "We did not receive you well, and made the two of you run this trip for nothing."

Liao Xing knitted his brows, his voice rough, "If it were not for Rongyuan saying it wanted to acquire Zongxing, we would not have invested more than a billion to bring in equipment. Now all the money is tied up in the equipment, Rongyuan has been dragging its feet and not signing the acquisition agreement, the funds are not turning over, the warehouse has to keep its temperature, and we cannot even pay the heating bill."

Gu Zheng was surprised, "Why did Rongyuan not issue a statement about acquiring Zongxing?"

Liao Zong explained, "Rongyuan Group wanted to tilt toward end consumers seeking whole-home customization, and needed flooring manufacturers to provide market support. Chairman Jiang Yongyuan of Rongyuan had said before that he would sign the acquisition agreement after New Year's Day, but..."

"It is all that Niuteng messing things up!" Liao Xing said bitterly. "They are just a shell company that ships goods through third-rate suppliers, exports garbage flooring to Japan, slaps the label of a foreign company on it and ships it back to sell domestically, they are nothing compared to us!"

Hmm? So there was inside information.

Gu Zheng and Zhuo Hang became interested, and signaled the two brothers to continue.

Liao Zong said, "Niuteng Wood Industry's shareholder is Haonan Industrial. The domestic high-end consumer group trusts 'imported flooring' more than domestic flooring. Niuteng has backing from a famous company, and Boss Bi is on good terms with Chairman Jiang, besides..."

Liao Xing took up the thread, "Besides, who knows what evil wind was blowing in the stock market. Our company's share price had been falling all the way since the beginning of the year. In order to improve the returns on individual stocks, my brother and I bought back nearly 80% of the shares, but it was still hard to stop the losses. Now the leverage is too high, and if the share price keeps falling, we will be liquidated."

Gu Zheng was outraged, "Flooring made by second- and third-tier domestic factories, shipped to the Japs and given a label, and it becomes high-end goods, isn't that hanging a sheep's head and selling dog meat?"

"Exactly!" Liao Xing pointed at the dust-covered production line, his eyes red, "Zongxing had been a small workshop twenty years ago, we took on a few contracts and gradually expanded the scale, and after the market feedback from old customers turned out good, the company only then set up a management team. Twenty years ago we did not have such advanced production equipment, it was market demand forcing us to expand, now the company's capital chain is broken, there is market demand and we still have no money to produce flooring, letting such good equipment gather dust, it is truly a waste of something precious!"

"Zongxing developed into its current form in ten years, achieved systematic management in fifteen years, and went public through financing in twenty years. It was the lifelong effort of my brother and me. Jiang Yongyuan was just blind, which was why..."

"Ah Xing!" Liao Zong cut off his younger brother, his tone no longer gentle, "My younger brother's words were too extreme, the two of you please don't take it to heart."

Gu Zheng said, "Jiang Yongyuan wasn't a good egg, and Bi Haonan wasn't much better either. Haonan Industrial, in order to buy Zhuo Hang's mall at a low price, joined with investors to set a trap, and we were deeply harmed by it too. The enemy of my enemy is my friend, we won't mind."

Zhuo Hang, who had not said anything the entire time, finally spoke, "Shareholder buybacks are good for a company, they would draw some funds back in, and the fewer stocks circulating on the market, the greater the room for manipulation. Haonan can short Zongxing's stock price through capital, and we can also inject capital to drive the price up. Jiang Yongyuan would definitely do due diligence before acquiring a company, and before Rongyuan signs an acquisition agreement with Niuteng, things still have a chance to turn around."

*

The city culture and tourism bureau chief was only a bureau-level official, and Gu Zheng could only be a young master in Yucheng, in Beishi he was nothing.

Three to five hundred million could move the share price of Baiyuan New Materials, but for Haonan Industrial, with assets in the tens of billions, it was nothing more than a drop in the bucket.

Gu Zheng had no identity boost, and Zhuo Hang had no capital advantage either, resources were stretched thin, and they could only win by using their brains.

"Zhuo Hang."

"Mm."

"It's freezing, and we've already walked several thousand steps out in this wilderness, can you stop dragging me around first and tell me what you're thinking?"

Zhuo Hang stopped walking and said, "First, my goal was to get money before the Zhuo asset restructuring in June."

Gu Zheng had both hands in his pockets and said deliberately, "Mm, I know you only cared about money, Zongxing Wood Industry's life or death had nothing to do with you. Salesmen's mouths were full of lies, that was exactly what I meant just now, do not really take me for a hero who punishes evil and promotes good."

Zhuo Hang did not refute him. After a while, he continued along his original line of thought, "Second, shorting would cause panic among stockholders, seriously damage the company's interests, and the risk on the short side was very high. I would not use this aggressive way to make money again in the future."

"Heh, when you shorted Baiyuan New Materials you told me 'the stock market is like a battlefield,' and now you have had a change of heart and want to wash your hands of it?" Gu Zheng kept on speaking in a sour tone, "You can decide the strategy, I do not understand the stock market, I am very easy to fool. But you had better make your pitch airtight, and after you fool me, do not let me catch you again."

Zhuo Hang's lips parted, as if he wanted to explain something, but in the end he chose silence.

The cold wind was bleak, messing up his hair, and frost settled on his long, dense eyelashes, making the cold and beautiful ice sculpture look even better.

Gu Zheng turned his head away and did not look at that face that was disturbing his heart.

Zhuo Hang stepped forward half a step, lifted his arm, then put it down again, very restrained as he kept social distance.

Gu Zheng suddenly turned around and ran straight into those deep eyes.

A surge of darkness flickered briefly in Zhuo Hang's eyes, and the sorrow of wanting something but not being able to get it was swallowed by deathly stillness.

The wind howled, blowing away the emotions that could not be put into words, and only the surging hatred remained stubbornly.

Zhuo Hang said, "Lastly, I want to take on Haonan Industrial."

Haonan Industrial had abundant funds, and opposing it was not something that could be done just by having hot-blooded enthusiasm. Taking on a listed company worth tens of billions was absolutely no joke.

Gu Zheng knew exactly how strong the opponent was, but rarely did not talk back, and with a slight lift of his brows, he asked, "How do you want to take it on?"

Zhuo Hang said, "Once news of a corporate merger or acquisition is announced, trading is usually halted. After trading resumes, there is generally a series of daily limit-ups for several days, leaving the short sellers who borrowed shares before the halt with no chance to buy them back. This phenomenon, where stockholders and short sellers on a strong stock prevent the short sellers from buying cheaply and force them to cover before the market closes because of insufficient funds, causing the stock price to rise sharply, is called a short squeeze."

Gu Zheng said excitedly, "So your strategy is to get Rongyuan to acquire Zongxing, make Zongxing's stock soar, and squeeze Haonan!"

Zhuo Hang nodded.

The former short seller had suddenly turned into a righteous avenger chasing down short sellers. This madman really would do any job for money.

Gu Zheng could not help laughing.

Zhuo Hang said, "A long position looks at the long term. This time we need to enter the market early. If Rongyuan ultimately does not acquire Zongxing and we short-squeeze Haonan, there will be a great risk."

"I will first formulate the strategy, then according to the strategy I will make the plan, calculate how much investment is needed, estimate the return on investment... in the end, you will evaluate whether to cooperate with me."

"Rest assured, the data will not be faked." Zhuo Hang looked into his eyes and said solemnly, "I will not lie to you again, not this time, and not in the future."

Gu Zheng suppressed the corners of his mouth from lifting, stepped forward half a step, and his posture turned ambiguous, "Oh, then since there is a great risk, there is no need to waste time on a report."

This time he had learned to be clever, saying the ugly words first to advance by retreating, first lowering his head to admit fault and then luring me onto the hook. If he really lost money in the end, it would all be my own fault.

Gu Zheng said deliberately, "Then I will not cooperate with you this time, if there are suitable low-risk projects later, we can talk then."

Zhuo Hang immediately stepped forward and wrapped his arm around his waist, not letting him run.

"Not done speaking yet, what are you in a hurry for."

The two of them leaned together in the cold wind, Gu Zheng's ears turned red, and he did not know whether it was from the cold wind or from the little deer in his chest.

Zhuo Hang said, "We can, while short-squeezing Haonan, also short Haonan."

Gu Zheng: ?

Every word I could understand, how did these words together become incomprehensible?

"Haonan Industrial has no import-export trade business under it. Based on the Liao brothers' description, I guessed that the company shipping second- and third-tier flooring to Japan was Longwan Trading. In order not to affect the main body of Haonan, Bi Haonan moved the black-hearted industry to Longwan Trading, and the shareholding of the two companies does not overlap."

Gu Zheng suddenly understood, "You want to use Zongxing Wood Industry to short-squeeze Haonan while also using Haiwan Technology to short Haonan, a two-pronged approach, forcing Bi Haonan to suffer serious capital losses and cut off the tail to survive!"

Zhuo Hang nodded and said, "This strategy of using long and short trades at the same time to hedge risk and gain returns is called..."

"Long-short hedge."

Under the winter sky, cold air surrounded Zhuo Hang, and his voice was low and forceful, "These years Haonan Industrial, for its own selfish desires, had maliciously acquired and shorted, dragged capital along to exclude同行, and caused dozens of companies to go bankrupt and employees to lose their jobs. Zhuo Real Estate was my father's lifelong effort, Zongxing Wood Industry was the Liao brothers' lifelong effort, Bi Haonan earned black money and washed dirty money, transferred assets and disregarded the law, and with a light flick of his hand set the hard work that entrepreneurs had fought for their entire lives on fire."

"I am not a hero who punishes evil and promotes good. I cannot help every victimized company. Only in this long-short hedge will I stake everything."

Zhuo Hang clamped down on Gu Zheng's waist so tightly that he gave him no chance to run or refuse. More than seeking his opinion, it was closer to coercion, "You will cooperate with me, you will stand with me, right?"