After Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) ( Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) . SH) was forced to delist, Xin Jiang Ready Health Industry Co.Ltd(600090) ( Xin Jiang Ready Health Industry Co.Ltd(600090) . SH) with many high delisting risks has become the focus of the market and is afraid of the same outcome.
Up to now, Xin Jiang Ready Health Industry Co.Ltd(600090) has indicated the risk 21 times that the company’s shares may touch major illegal compulsory delisting and be terminated from listing.
This is due to the prior notice of administrative punishment and market entry ban issued by the CSRC in October 2021. 6 Xinyangfeng Agricultural Technology Co.Ltd(000902) 0172019 falsely increased net profit. After deducting the falsely increased net profit, the company’s net profit was negative for four consecutive years from 2017 to 2020, which may touch on major illegal forced delisting.
In addition, Xin Jiang Ready Health Industry Co.Ltd(600090) also has high transaction delisting risk and financial delisting risk. Recently, the share price of Xin Jiang Ready Health Industry Co.Ltd(600090) has been lower than 1 yuan for several consecutive trading days. On March 22, the share price rebounded and stood back 1 yuan. However, without excluding many risks, subsequent investors voted with their feet, making the company’s share price less than 1 yuan for 20 consecutive days.
consecutive years of financial fraud
On October 24, 2021, Xin Jiang Ready Health Industry Co.Ltd(600090) announced that it had received the prior notice of administrative punishment and market prohibition from the CSRC (hereinafter referred to as the “prior notice”).
According to the prior notice, 6 Xinyangfeng Agricultural Technology Co.Ltd(000902) 0172019 fictitious sales and procurement business falsely increased the net profit by 701 million yuan, 608 million yuan and 299 million yuan, accounting for 120.65%, 107.61% and 226.52% of the net profit disclosed in the current period respectively.
After deducting the inflated net profit, the actual net profit of 6 Xinyangfeng Agricultural Technology Co.Ltd(000902) 0172019 is negative. In addition, the net profit disclosed by the company in 2020 is negative, and the net profit of the company is actually negative for four consecutive years.
If the facts identified in the subsequent administrative punishment decision of the CSRC are the same as those in the prior notice, according to the rules, Xin Jiang Ready Health Industry Co.Ltd(600090) will involve major illegal compulsory delisting.
According to the supervision work letter issued by Shanghai Stock Exchange to Xin Jiang Ready Health Industry Co.Ltd(600090) the Xin Jiang Ready Health Industry Co.Ltd(600090) shall give special risk warning about the possible implementation of major illegal compulsory delisting of shares. At the same time, if the relevant administrative punishment decision is received and the situation of major illegal compulsory delisting is involved, it shall apply for suspension of trading and disclose relevant contents in time. The exchange will make a decision on whether to terminate the listing of the company’s shares within 15 trading days after the disclosure date.
Xin Jiang Ready Health Industry Co.Ltd(600090) was listed on the A-share market through restructuring in 2016. After the listing, Xin Jiang Ready Health Industry Co.Ltd(600090) achieved a surge in performance through financial fraud. However, after the financial fraud was exposed, Xin Jiang Ready Health Industry Co.Ltd(600090) ‘s revenue fell to 894 million yuan from 10.842 billion yuan in 2018, and its net profit fell from 529 million yuan to -2.262 billion yuan, resulting in a cliff like decline in performance.
At the same time, Xin Jiang Ready Health Industry Co.Ltd(600090) governance is chaotic, there is a large amount of capital occupation and illegal guarantee by the controlling shareholder, and the internal control is ineffective.
Early Xin Jiang Ready Health Industry Co.Ltd(600090) self inspection found that the controlling shareholder and its related parties occupied a total of 1.047 billion yuan of the company’s funds through suppliers and other non related parties, and the company provided illegal guarantees for the controlling shareholder and its related parties totaling 1.2 billion yuan.
In addition, 6 Xinyangfeng Agricultural Technology Co.Ltd(000902) 019 and 2020 have been denied by the annual audit accountant for two consecutive years, and the company has successively lost its control over several subsidiaries. There are major defects in the company’s internal control.
multiple delisting risks are high
In addition to major illegal compulsory delisting, Xin Jiang Ready Health Industry Co.Ltd(600090) may also touch the delisting of trading and finance.
Since November 2021, Xin Jiang Ready Health Industry Co.Ltd(600090) share price has repeatedly fallen below the face value, hovering around 1 yuan for a long time. From March 14 to March 21, 2022, Xin Jiang Ready Health Industry Co.Ltd(600090) share price was lower than 1 yuan for six consecutive trading days, and then stood back to 1 yuan on March 22. At present, the company’s stock continues to struggle on the edge of trading delisting.
Considering that the company’s current fundamentals are poor and there is a major risk of illegal delisting, it is not ruled out that investors vote with their feet, which makes the company less than 1 yuan for 20 consecutive days and touches the compulsory delisting of trading.
In addition, Xin Jiang Ready Health Industry Co.Ltd(600090) because the 2020 financial accounting report was issued and unable to express opinions, the stock continued to be subject to delisting risk warning. If the 2021 annual report touches any financial index again, it will be delisted after the disclosure of the annual report.
A senior financial expert said that since the company is unable to express its opinions and the matters involved have not been eliminated, the probability of the company will touch the financial delisting, and the cross application of financial indicators will greatly reduce the space to avoid delisting.
According to the new regulations on delisting, if there are more than two risk warnings and termination of listing, the risk warning and termination of listing of its shares shall be implemented in accordance with the principle of “touch first, apply first”. Judging from the current situation, Xin Jiang Ready Health Industry Co.Ltd(600090) may have been delisted for less than 1 yuan in a row before waiting for the decision.
In recent years, regulators have repeatedly stressed that there is “zero tolerance” for major illegal forced delisting.
The new delisting regulations issued by Shanghai and Shenzhen Stock Exchange at the end of 2020 added the delisting standard of “amount of fraud + proportion of fraud” on the premise of retaining the original major illegal delisting standard. The opinions on cracking down on illegal securities activities in accordance with the law issued in July 2021 clearly pointed out that illegal acts such as false statements and financial fraud should be investigated and dealt with strictly, quickly and severely in accordance with the law.
“Since 2022, a number of listed companies have been investigated or punished for financial fraud, and Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) has become the first share of compulsory delisting in 2022 due to financial fraud. All these send a signal to crack down on financial fraud.” Insiders said.
The above insiders also said that in this case, investors should pay full attention to investment risks and stay away from Xin Jiang Ready Health Industry Co.Ltd(600090) and other companies that are likely to touch the compulsory delisting standard due to financial fraud. They should not take chances, believe in the so-called “good” information and hope that the company can avoid delisting and speculation, which will only bring unnecessary losses. Once the company touches the mandatory delisting standard, the stock will be delisted and the market value will shrink significantly. In the early stage, the share prices of many delisting companies fell all the way to about 0.2 yuan like a roller coaster during the delisting consolidation period, and investors suffered heavy losses.
It is worth noting that after the implementation of the new delisting regulations, according to the new trading mechanism, the delisting consolidation period will be shortened from 30 trading days to 15 trading days, and there will be no rise or fall on the first trading day. At the same time, there will be no delisting consolidation period arrangement for transaction compulsory delisting, which will accelerate the return of the market value of delisting companies.
In this regard, the industry suggests that investors should be fully aware of the risks, adhere to the value investment concept, adjust the investment strategy in time, and stay away from companies with delisting risk.
