Chapter 23 - invest in film-making

"Brother Lu, you're a total legend!" As they were going through the procedures, Zhao Haisheng brought up the recent market performance of Baofeng Technology. The Thursday after Lu Liang had liquidated all his positions, Baofeng Technology had pulled another stunt, swinging from a daily limit high to a daily limit low intraday. With a trading volume of 1.85 billion yuan and a turnover rate of 65.7% that day, it was simply incredible for a newly listed stock. It wouldn't be an overstatement to call it a complete change of controlling shareholders. This also lured in more aggressive investors, with everyone eagerly anticipating the continuation of the Baofeng myth. But on the second and third days, the stock crashed hard, hitting the daily limit down for five consecutive sessions before finally bouncing back slightly just yesterday. From its peak price of 327.15 yuan, the stock had plummeted sharply, closing at 191.14 yuan yesterday. The market was in total despair. Not everyone had bought in at a low price; far more investors had caught the falling knife at the peak. Zhao Haisheng was among them. If it hadn't been for the exceptionally strong market this year, which had multiplied the incomes of brokerage professionals several times over, he would have been kicking himself for a long time. "Who would've thought I was so foresighted?" Lu Liang looked smug, acting like a Monday-morning quarterback as he shared his wisdom. "I had a hunch back then—what goes up must come down." "Absolutely! Brother Lu's got a real knack for this stuff." Zhao Haisheng forced a smile and flattered him, but he was silently rolling his eyes to himself. He'd originally wondered if Lu Liang had gotten some inside information, but now he'd completely dismissed that thought. It was pure luck, plain and simple. After all, everyone gets lucky a few times in their life. Some people seize those opportunities and get rich overnight; others let them slip by and remain mediocre. As noon approached, Lu Liang finished opening his new account. His trading commission was reduced to 0.012% per transaction, and the account also granted him access to international trading channels for Hong Kong stocks, US stocks, foreign exchange, precious metals, and more. Additionally, the account came with an annual foreign exchange quota of 1 million US dollars, which he could convert independently through the account without having to visit a bank branch. However, if he needed a higher US dollar conversion limit, he would have to apply for it at a bank. After all, foreign exchange controls in China are relatively strict, with the average person only allowed an annual quota of 50,000 US dollars. Finally, there was the margin trading service that Lu Liang cared most about: by freezing 2 million yuan in collateral, he could obtain a trading line of credit worth 10 million yuan. This capital could only be used for investment in the market and could not be cashed out, effectively granting him a credit line of 8 million yuan. The daily interest rate was 0.04%, translating to a monthly rate of 1.2% and an annual rate of 14.4%—just 1% shy of the legal threshold for usury. Strictly speaking, though, the actual annualized interest rate was even higher than 14.4%, since it required locking up 2 million yuan in collateral. One had to hand it to the brokerages and banks—they always found ways to exploit loopholes in the law to maximize their profits. "Brother Lu, if everything looks good, please sign here. The account will be ready for use next Monday." Lu Liang saw through this scheme but didn't raise any objections. It was a willing buyer, willing seller situation—there was nothing more to say. Later, Zhao Haisheng took Lu Liang to the nearby Bank of China branch to apply for an international bank card. Renminbi could be withdrawn from any domestic bank, but for US dollar transactions, it was best to have an international card. Only US dollars deposited in an international card belonged to you outright; if they were held in a domestic card, they were just a line of credit. Every time you used that credit line, the amount would fluctuate based on the daily exchange rate, thanks to the domestic bank acting as an intermediary. But Bank of China was different. It had an independent international division, which had been granted extensive authority to facilitate its global expansion and gain recognition from countries around the world. Zhao Haisheng explained it with an analogy: "If a domestic bank card is like an open book that any branch manager can easily access the transaction details of, a Bank of China international card is the opposite—no ordinary manager has the authority to pull up those records without official documentation." After all, when dealing with international clients, you have to respect human rights and privacy; otherwise, you'd be facing a storm of criticism from foreign media at any moment. It was around 2 p.m. when Wu Tianzheng called, informing Lu Liang that the Mahua FunAge team had arrived in Shanghai and were waiting for him in the Tianshui Private Room at Linjiang Pavilion. Lu Liang had just finished setting up his account and international card. He said to Zhao Haisheng, "Sorry, I've got something to take care of later, so I can't treat you to lunch. Rain check, okay?" "Brother Lu, you're the one helping me hit my performance targets—how could I let you pay? Let me treat you next time instead!" Zhao Haisheng grinned from ear to ear. Lu Liang was registered under his name, so the more trades Lu Liang made, the higher the commission fees, and the bigger Zhao Haisheng's bonus would be. "Alright then, next time it's your treat. I've got to run now." Lu Liang didn't stand on ceremony any longer and drove off. As a seasoned former middleman himself, he understood that this was a mutually beneficial arrangement—no one owed the other a thank-you. Besides, if he really wanted to be picky about it, Zhao Haisheng should've treated him to a full meal and spa package. After all, Lu Liang was the investor with the capital—the "father" in the client-broker relationship—while Zhao Haisheng was just one of countless service providers vying for business. Shortly after 3 p.m., Lu Liang arrived at Linjiang Pavilion, located in the southern part of Shanghai, near the Expo Park. He gave his name at the front desk and followed a restaurant attendant up to the Tianshui Private Room on the second floor. There were six people already waiting inside. "Mr. Lu, you're here!" "Let me introduce you. This is Mr. Zhang Chen from Mahua FunAge, this is Director Yan Fei… and this is the renowned sketch actor Mr. Shen Teng, as well as Ms. Ma Li." Seeing Lu Liang walk in, Wu Tianzheng beamed and introduced everyone one by one—they were essentially the core creative team of Mahua FunAge. "Mr. Shen, nice to meet you. I watched your sketch last year; it was fantastic." Lu Liang smiled warmly and shook hands with everyone. Out of the whole group, though, Shen Teng was the only one he recognized. In that moment, he suddenly understood why Wu Tianzheng and so many other investors were skeptical about this movie. Ever since Uncle Zhao Benshan retired from the stage, the Spring Festival Gala had only gotten worse each year, with its influence waning steadily. If it weren't for the bitter cold in northern China that kept people stuck indoors on New Year's Eve, the gala would've lost its last shred of credibility long ago. Sketch actors who rose to fame through a declining gala—99% of them simply couldn't carry a movie at the box office. While there was a 1% chance of hitting it big as a dark horse, investors weren't gamblers. You could tell everything you needed to know from the film's funding structure. Of the 15 million yuan currently raised for production, 10 million came from Mahua FunAge's own theater chain. The remaining 5 million was contributed by independent investors, a list that notably included Shen Teng, Ma Li, and even Director Yan Fei themselves. When a movie's cast and director have to put up their own money to fund it, it's a clear sign that no professional investors have any faith in the project. The rustling sound of paper filled the private room as Lu Liang flipped through the detailed screenplay and business plan. Everyone except Wu Tianzheng watched him with bated breath, waiting for his final decision. They were truly out of money; otherwise, the entire creative team wouldn't have made the long trip from Beijing to Shanghai just to have lunch with Lu Liang. More than ten minutes later, Lu Liang closed the documents, his expression calm. Everyone's hearts sank to the bottom of their stomachs. They'd seen that exact look countless times these past few weeks, and they could already guess what Lu Liang was about to say. "You're 5 million yuan short, right? I'll invest." Lu Liang curled the corners of his mouth into a faint smile. "I think this story has real potential. Make a good movie, and it could be a huge hit." Shen Teng, Ma Li, and the others froze in shock. Shen Teng was the most emotional, stammering out, "Mr. Lu… you're really going to invest in our film?" "What? Are you guys turning down investors now?" Lu Liang joked, amused. "No… no, not at all! You misunderstood—I'm just so excited!" Shen Teng was tongue-tied. As a core creator of Mahua FunAge, an investor in the film, and its leading man, this movie meant everything to him. It wouldn't be an overstatement to call it the most pivotal moment of his career. But ever since the project was greenlit, it had been nothing but one setback after another, getting rejected by investor after investor. So much so that the entire team had started to doubt themselves—was their screenplay really that bad?