Today (March 30), A-Shares opened higher all day, and the gem index rose by more than 4%. Real estate stocks set off a wave of trading limits, and securities, building materials and other sectors ushered in a sharp rise. More than 3700 stocks in the two cities were red, becoming the most dazzling trading day in the near future. On the other side of the market, however, there are two days of ice and fire. Today, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) the first day of delisting and consolidation period fell by more than 70%, and the share price also fell below 1 yuan, only 0.28 yuan as of the closing.
Note: delisting Xinyi’s performance today (closing on March 30)
financial fraud is a major violation of the law, and the first share of this year is forcibly delisted
According to the announcement, delisting Xinyi ( Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) ) full name Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) ), the company will trade for 15 trading days during the delisting consolidation period (one trading day as of the announcement date (March 30, 2022), and the remaining 14 trading days). The listing will be terminated at the expiration of the trading period. There is no price rise or fall limit on the first trading day, and the daily rise or fall limit will be 10% thereafter. Within five trading days after the expiration of the delisting consolidation period, the Shanghai Stock Exchange will delist the company’s shares and terminate the listing of the company’s shares.
Previously, the company received a regulatory letter from the Shanghai Stock Exchange in early March. The announcement showed that the company falsely increased its operating revenue in 2018 and 2019. After retroactive adjustment, the operating revenue in 2018 and 2019 was less than RMB 10 million for two consecutive fiscal years, and the operating revenue of the company in 2020 was also less than RMB 10 million, and the accounting firm issued a qualified audit report. The above facts show that the financial indicators from Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) 2018 to 2020 have actually touched the situation of major illegal compulsory delisting stipulated in the original measures for the implementation of major illegal compulsory delisting of listed companies of the exchange.
Due to financial fraud, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) touched on major illegal forced delisting, and the actual controller was also filed for investigation. According to the “prior notice of administrative punishment and market prohibition” disclosed by the CSRC, its financial fraud includes falsely increasing non operating income of factoring business, falsely increasing trade income, illegally confirming property fee income, falsely offsetting rent income, etc Haitong Securities Company Limited(600837) pointed out that the Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) delisting demonstrates the zero tolerance attitude of Chinese regulators towards financial fraud, and also reflects the gradual formation of A-share normalized delisting mechanism.
delisting has gradually entered the normal state and improved the quality of market targets
In recent years, the delisting rate of A-Shares has accelerated significantly. According to the data of Haitong Securities Company Limited(600837) Research Report, the number of delisting companies in 20192021 was 10, 16 and 20 respectively, with a year-on-year growth rate of 100%, 60% and 25% respectively. The number of delisting companies in these three years alone accounted for 31% of the total number of delisting of a shares. Moreover, in recent years, Chinese regulators have severely punished illegal acts such as financial fraud, and the number of companies delisting due to financial fraud is also increasing. From 2019 to 2021, there were 5, 9 and 10 A-share companies delisting due to financial fraud, showing a gradual increasing trend.
In February this year, in order to protect the trading rights of investors and prevent market risks, five departments, including Shanghai and Shenzhen Stock Exchange, Beijing stock exchange, national stock transfer company and China Clearing, issued the implementation measures on the listing and transfer of delisted companies in the delisting sector Shenwan Hongyuan Group Co.Ltd(000166) pointed out that the current stock delisting system in Shanghai and Shenzhen markets has been optimized in terms of delisting standards and delisting processes, and the system design is more operable. Delisting is currently divided into the following four categories: listed companies have major violations, financial indicators will be delisted if they fail to meet the standards, delisting with a share price less than 1 yuan, and major abnormalities in the annual report.
On the one hand, the normalization of delisting is conducive to optimizing listed companies and improving the quality of stock targets in the market; On the other hand, it is conducive to correcting the “small speculation difference” in the market and promoting the market to return to the long-term incremental value investment of fundamentals. For investors, delisting often leads to a decline in securities liquidity. The current delisting consolidation period and the implementation measures on listing and transfer of delisted companies into the delisting sector provide time for minority shareholders to deal with it. In addition, in the case of compulsory delisting of listed companies due to major violations, investors can seek civil compensation through judicial channels.
