Back from the brink
Discussing the king of China's demon stocks
Demon stocks, or 妖股 yāo gǔ in Chinese, are companies whose shares buck market trends despite the tough global environment.
China’s latest demon stock is Andon Health (九安医疗 jiǔ ān yī liáo), a producer of electronic health products and medical hardware, including rapid coronavirus antigen test kits for use at home.
The company published its quarterly results last week, with estimated net profits for the first quarter of 14-16 billion yuan ($2.19-2.51 billion).
Andon, which had previously been loss-making for a number of years, has enjoyed a dramatic turn-around thanks to the pandemic.
It’s been called the king of China’s demon stocks, or 妖中之王 yāo zhōng zhī wáng (Caijing, Chinese).
Taking advantage of the need for covid testing, Andon Health has become the ‘king of the demon stocks’. The share price of any one of these companies will have increased by many times, sometimes with growth of over ten-times, which is a result of emotion-driven market dynamics.
However, some observers in China note that Andon’s reporting is not good enough and too vague:
How was the net profit of RMB 14 billion to 16 billion in the first quarter delivered? The performance forecast is unclear.
These observers reckon its overnight success will not last. And although Andon has made some fast cash in recent months, its high share price is unstable, unsustainable and has already started to fall.
So, this week we follow the highs and lows of one of China’s most volatile stocks this year.
The favourite five: my top five words and phrases of the week - including neologisms and slang, a Cantonese idiom and an ancient phrase about warfare.
Consuming the conversation: useful investment words, and idioms about coming back from the certain death.
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1. The Favourite Five
Here are my favourite five words and phrases to discuss Andon’s meteoric rise - some of which we’ve discussed before in Slow Chinese.
妖股 yāo gǔ
有人调侃道：以前叫人家“大妖股”，现在叫人家“现金牛” - Some people joke that it should no longer be called a demon stock; instead it should be called a ‘cash cow’.
妖王之王 yāo wáng zhī wáng - king of all demon stocks
大妖 dà yāo - big demon stock
老韭 lǎo jiǔ
‘old leeks’, experienced individual investors
九安医疗扣非净利润也仍是负值，你说他基本面有多扎实，老韭可能都不信 - Andon Health is making a net loss. Even if you say its fundamentals are good, investors wouldn’t believe you.
Note: related to the phrase, cutting leeks 割韭菜 gē jiǔ cài, which began its life describing gullible individual investors. ‘Old leeks’ are experienced investors.
凡尔赛 fán 'ěr sài
Versalles literature - having a high quality or first-world problem, ‘humble-bragging’
超百亿元的海外大单，更“凡尔赛”的是频频发布大涨的风险提示 - With large overseas orders exceeding RMB 10 billion, Andon frequently release cheeky risk warnings of high growth.
盆满钵满 pén mǎn bō mǎn
making pots of cash
疫情在某些程度上让一些企业起死回生，甚至赚得盆满钵满 - To a certain extent, the pandemic has allowed some companies to come back from the brink of collapse and in some cases, even make a huge amount of money.
天时地利人和 tiān shí dì lì rén hé
favourable conditions, in the right place at the right time
沉寂多年，一朝爆发，九安医疗吃尽了天时地利人和的红利 - After years of inaction, the company has become an overnight success. It has benefitted from being in the right place at the right time.
Background: this is from one of Mencius’ teachings, and also credited to the Art of War (兵法 bīng fǎ), but not by Sūn Zi 孙子, but Sūn Bìn 孙膑, a decendant of the original Sun and also a revered military strategist.
2. Consuming the Conversation
This week’s words and phrases can be used to discuss investment and the markets in depth. There’s also some colourful idioms about coming back from the dead, uncertainty and lack of detail.
卖爆 mài bào
九安医疗美公司iHealth新冠抗原检测试剂盒产品在美国卖爆了- Covid antigen test kits made by iHealth, a US branch of Andon Health, have enjoyed phenomenal sales in the US.
卖火 mài huǒ - sell out
席卷 xí juǎn - engulf the market
捧红 pěng hóng
rise up, increase the share value
除了九安医疗，新冠抗原检测生意已经捧红了一批IVD企业 - In addition to Andon Health, the need for Covid antigen testing equipment has lifted the value of a lot of diagnostics companies.
陡峭 dǒu qiào
九安这样“陡峭”的增长倍数却仍然难以突破 - The steep climb in Andon Health growth is still hard to beat.
芸芸 yún yún
九安医疗只是芸芸医疗器械厂商中并不起眼的一家 - Andon Health is just one of the many medical device companies, and is nothing special.
招惹 zhāo rě
董秘辛勤回复，属实招惹不少吃瓜群众 - The board secretary tirelessly responded to enquiries, which really upset a lot of onlookers.
Note: 吃瓜观众 chī guā guān zhòng - onlookers, or people who watch on social media as a scandal unfolds; first discussed on xxx newsletter.
骂爹 mà diē
swear at your dad; be really angry about something
股价涨是如此，而一旦跌起来，可能又开始骂爹了吧 - The share price has gone mad. But as soon as it starts to fall, investors will be fuming.
Related: 骂爹骂娘 mà diē mà niáng - go completely crazy
落袋 luò dài
get in the bag, land or confirm something
总额17.75亿美元的政府大单相继落袋，实现净利润暴增也在行业意料之中 - Large government orders totaling 1.775 billion US dollars have been pocketed one after another. The surge in net profit was expected by the industry.
Related: 落袋为安 luò dài wéi ān - a bird in the hand is worth two in the bush
妥妥的 tuǒ tuǒ de
算下来，公司每天赚超1.5亿，妥妥的印钞机 - Based on calculations the company is making RMB 150 million each day. It’s simply a money printing machine.
Note: to express emphasis
黑天鹅 hēi tiān'é
black swan event
新冠疫情这个黑天鹅事件上次股价起伏是因为测体温的额温计 - During the Pandemic, which is an extremely rare event, the last time the share price fluctuated was due to sales of forehead thermometers for measuring body temperature.
Note: the Chinese is from the English phrase, ‘black swan event’, but ironically it seems to be used much more in Chinese.
天地板 tiān dì bǎn
fall from highest to lowest price
“妖股”九安医疗上演“天地板” - Demon stock, Andon Health, stock price has fallen precipitously.
Related: 地天版 dì tiān bǎn - go from the bottom to the top share price (opposite meaning)
生死攸关 shēng sǐ yōu guān
be at a juncture of life and death
多位高管出走，在生死攸关的时刻，2018年，美国PE巨头凯雷入局，成为第一大控股股东 - Many executives left the business, and at its moment of life and death, in 2018, American PE giant Carlyle Group bought into the company and became the largest controlling shareholder.
起死回生 qǐ sǐ huí shēng
come back from the brink of collapse
在某些程度上让一些企业起死回生，甚至赚得盆满钵满 - To a certain extent, the pandemic has allowed some companies to come back from the brink of collapse and in some cases, even make a huge amount of money.
语焉不详 yǔ yān bù xiáng
not in detail
其一季度140-160亿的净利是怎么取得的呢?业绩预告语焉不详 - How was the net profit of RMB 14 billion to 16 billion in the first quarter delivered? The performance forecast is unclear.
一窥端倪 yī kuī duān ní
glimpse a clue
我们只能从其最近发布的公告中一窥端倪 - All we can do is glimpse clues from the company’s most recent published report.
Related: 管中窥豹 guǎn zhōng kuī bào - which we discussed on 9 April newsletter just a few weeks ago.
摇摇欲坠 yáo yáo yù zhuì
公司股价目前处于历史高位，摇摇欲坠 - Although the company is enjoying its highest share price in its history, it is still on shaky ground.
绞尽脑汁 jiǎo jìn nǎo zhī
rack one’s brains
在A股里，真不缺绞尽脑汁蹭热点地上市公司，但能否蹭上，能否得到市场认可，完全就靠命 On the A-Market there is no shortage of companies that will do anything to try to grab media attention. But whether or not it actually works is another thing and mainly down to luck.
Related: 命运 mìng yùn - fate, which we analysed in some detail in 18 December newsletter last year.
逆天改命 nì tiān gǎi mìng
change your fate against God’s will
再配合着一些宏大的故事，还真有可能逆天改命 - Adding on some grand vision stories, it’s entirely possible that the company change its fate against all odds.
- Members Updates
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This week we learn the difference between two ancient works called ‘The Art of War’ (兵法 bīng fǎ); one by Sun Tzu (孙子 Sūn Zi) which is the one everyone’s heard of and does cheesy quotes from, and another by Sun Bin (孙膑 Sūn Bìn) - a descendant of the original Sun.
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- A Recommended Substack
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The deadline to get the early bird discount of £88 / year is 30 April 2022, which you can grab here:
I’ve already signed up as a founding member, and cannot recommend it enough!
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