Tech Giants: Starting from Bankrupt Companies

17: Chapter 17: Financial Report Shocks, the King’s CoronationAs time entered April, spring was in full bloom, but the temperature of the tech capital market had long been ignited to a boil by one company. Everyone’s eyes were focused on the upcoming 2016 Q1 financial report to be released by Spark Technology. This was not just a report card; it was the most powerful counterattack against the recent clamorous ’capital expenditure skepticism’ and ’alliance siege theory.’

In Spark Technology’s futuristic data center, on a massive electronic screen, numbers were flashing at a dazzling speed as the final verification procedures ran. Su Chen, Lin Wan, Shen Nanpeng, Wang Ming, Evan Chen, Wu Hao, Yang Yang, and other core management members gathered together, the atmosphere serious yet filled with irrepressible anticipation.

’President Su, the final data has been confirmed.’ Shen Nanpeng pushed up his gold-rimmed glasses. Despite trying to maintain his usual composure, his slightly trembling fingertips betrayed his inner excitement. He handed the final version of the financial report summary to Su Chen.

Su Chen’s gaze swept over those few decisive numbers:

[Spark Technology 2016 Q1 Key Financial Data]

xinghuo no. 2 Drone:

Domestic Market: 500,000 units, Price: 7,000 rmb

Overseas Market: 1,000,000 units, Price: 9,000 rmb

Lingmou 1 Panoramic Camera:

Domestic Market: 150,000 units, Price: 1,400 rmb

Overseas Market: 350,000 units, Price: 2,100 rmb

[Key Indicators]

Quarterly Total Revenue: 10.535 billion rmb

Net Profit Attributable to Parent Company Shareholders: 4.75 billion rmb

Net Profit Margin: Approximately 45.1%

Single-quarter revenue exceeded 10 billion! Net profit nearly 5 billion!

Despite having expectations, when this set of numbers truly appeared before their eyes, a collective gasp of air echoed in the conference room. Lin Wan covered her mouth with her hand, her eyes filled with shock; Wang Ming grinned, laughing silently, though his eye sockets were a bit red—he remembered the dilapidated office at the beginning of the year and the thirty-some confused faces; Evan Chen was full of disbelief; even at Apple, he had never seen such a terrifying growth curve; Wu Hao and Yang Yang exchanged glances, both seeing the excitement and determination in each other’s eyes—following such a company, their technical aspirations finally had a stage to be realized!

’Release it.’ Su Chen’s voice was steady, yet carried an unquestionable power. He had waited too long for this moment. This was not just a counterattack against external skepticism, but the best reward for the hard work of all Spark Technology employees over the past year, and it was also the sounding of the loudest prelude for the even greater technical storm he was about to unleash in May!

April 1, 2016, 3:00 PM, Spark Technology’s 2016 Q1 financial report appeared punctually on the Shanghai Stock Exchange’s official disclosure platform.

Giving no one the illusion of an April Fools’ joke, this financial nuclear bomb instantly destroyed all unfavorable rumors in the market!

The fastest to react were the analysts from major financial institutions.

’Jinrui Securities’ urgently released a research report within ten minutes, with a title consisting of only one word: [King!]

The body of the report read: ’Spark Technology’s single-quarter revenue has exceeded 10 billion, with a net profit margin steadily staying above 45%; its growth potential can no longer be evaluated with conventional models! The price war of the ’Star-Hunting Alliance’ appears pale and powerless in the face of its absolute product strength. xinghuo no. 2 overseas sales reached one million units, marking its successful capture of the high ground in the global high-end market. We believe that Spark Technology’s valuation system should move beyond the scope of a hardware company; its technical barriers and brand premium are comparable to top-tier tech giants. Raising the target price to 100!’

The chief economist of ’Zhongzheng Fund’ stated bluntly at an internal meeting: ’Stop obsessing over the details of those capital expenditures! In front of a company that can earn you nearly 5 billion in profit every quarter, those investments are just necessary fuel! Spark Technology’s moat is even more unfathomable than we imagined! Increase allocation immediately!’

The media frenzy followed closely behind.

’Caijing.com’ front-page headline: [Spark Technology Q1 Rakes in 10 Billion: Drone Overlord Officially Crowned!]

The article compared Spark Technology’s quarterly revenue with that of competitors like Lingyun Technology and Yihang, either announced or estimated, and concluded: ’Spark Technology’s first-quarter revenue and profit far exceed the sum of the industry’s second to tenth place combined!’ ’The so-called ’alliance siege,’ in the face of the ruling-level strength displayed by Spark Technology, looks more like a clumsy imitation show.’

’Global Science’ magazine commented from a technical perspective: ’The market performance of xinghuo no. 2 proves that true technological breakthroughs cannot be blocked by price wars. Users are willing to pay a premium for excellent performance and experience; Spark Technology’s success is a perfect paradigm of technology-driven commerce.’

And in the stock forums where ordinary retail investors gathered, it was already an ocean of celebration.

’10 billion revenue! 5 billion profit! My god! Spark is awesome! President Su is awesome!’

’Hahahaha! It’s at 60! Who still dares to say Spark’s stock price is inflated? This is value investing!’

’Held from 1 to 60, sixty times in a year! The most correct decision of my life, bar none!’

’Those who followed Zhou Tianyu in shorting must be dumbfounded, right? In the face of absolute strength, all conspiracies are paper tigers!’

’King of Drones! No, it’s the coronation of a new consumer electronics emperor!’

The reaction of the capital market was the most real and the craziest. The day after the financial report was released, Spark Technology’s stock price opened with a direct gap up, like a rocket breaking free from all gravitational constraints, breaking through upwards all the way!

52! 55! 58! ... Driven by countless frenzied buy orders, the stock price soared throughout April, finally standing firmly at the historic 60 mark! The company’s total market value also broke through the 60 billion rmb mark!

From 8 at the beginning of the year to 60 now, in just three short months, an increase of over seven times! Spark Technology, the ’abandoned child’ that was still wearing the ST label a year ago, has now grown into the most dazzling behemoth in the A-share market, officially cementing its undisputed position as the overlord of the global drone industry!

In this carnival of capital, different people had different states of mind.

Inside the Spark Technology campus, every employee’s face was brimming with pride and excitement. The company’s success was closely linked to everyone’s efforts, and that heavy sense of achievement was irreplaceable by any reward. A young R&D engineer who had been with the company for half a year looked at the company’s stock price and exclaimed to a colleague: ’I really came to the right place! This isn’t work; this is like getting on a rocket!’

Meanwhile, at the Lingyun Technology headquarters, Chen Yonghao looked at the glaring stock price and financial report data of Spark Technology on the screen, feeling as if he had aged ten years in an instant. He waved his hand weakly, dismissing the reporting executive, and sat alone in the dim office. A deep sense of powerlessness gripped him. Price war? Supply chain blockade? In the face of the other party’s terrifying profitability and technical advantages, all of this seemed like children’s play. For the first time, he felt shaken about the ’Star-Hunting’ alliance he had led.

The most stifled and angry was none other than Zhou Tianyu. He sat in his office, which overlooked the masses, with the news of Spark Technology’s stock price breaking through 60 on the screen in front of him. The public opinion harassment he had meticulously planned, those ’rigorously’ worded inquiry letters, had turned into an utter joke in the face of this explosive financial report. The capital market voted with real money; no one cared about his so-called ’capital expenditure skepticism’ anymore.

’Su Chen...’ He gritted his teeth as he uttered the name, his eyes filled with unwillingness and resentment. This financial report not only shattered his public opinion offensive but also pushed Spark Technology’s market value to a height that made it even harder for him to attack. He felt like a hyena barking at a giant elephant; although ferocious, it was hard to truly shake the other party. But this sense of frustration did not make him retreat; instead, it stirred up an even stronger desire for destruction.

Su Chen stood in front of the floor-to-ceiling window in his office; below was the bustling traffic, and in the distance were the unextinguished lights of the construction site of the new Spark Technology campus. A stock price of 60 and a market value of 60 billion did not make him feel complacent; instead, they made the responsibility on his shoulders even heavier. He knew this was just a node in the journey of Spark Technology.

The May storm, the ’micro-technology revolution’ that he would truly lead, was the key to testing whether Spark could transform from a ’King’ to a ’Legend.’ He took a deep breath, cast his gaze toward the battery factory in the distance that was being built day and night, his eyes becoming increasingly profound and determined.

The thunderclap of the financial report had already resounded through the skies, and the King’s crown had already been donned. But Su Chen and his Spark Technology had never stopped their forward march.