During the May Day holiday, while investors look forward to the “good start” of their individual stocks after the festival, some st stocks may be suspended and enter the delisting process after the festival.
According to statistics, on the last day of the disclosure of the annual report in 2021, 23 companies simultaneously issued the risk warning announcement of stock suspension and possible termination of listing, and some of them also received the advance notice of the exchange’s intention to terminate the listing of the company’s shares. This means that relevant companies have stood on the brink of delisting.
The data show that up to now, more than 40 companies have stood on the edge of delisting, which also highlights the determination of the regulators to completely eliminate the rotten companies and shell companies that have been mixed with A-Shares for many years.
In the view of investment institutions, under the background of fully implementing the stock issuance registration system, the benign market ecology of survival of the fittest in the A-share market has gradually taken shape.
21 companies have received delisting notices
From April 26 to April 26, including April 26 to April 30, which includes the end of the 21companies including , Shangying Global Co.Ltd(600146) , Netposa Technologies Ltd(300367) have received the prior notice of the exchange’s intention to terminate the listing of the company’s shares, waiting for the final decision procedure of the exchange
On April 29, Lanhai Medical Investment Co.Ltd(600896) received the notice in advance on the proposed termination of the listing of Lanhai Medical Investment Co.Ltd(600896) shares from Shanghai Stock Exchange after six reminders of the risk that the company’s shares may be terminated.
According to the notice, Lanhai Medical Investment Co.Ltd(600896) the 2021 annual report disclosed on the same day shows that the company’s annual financial and accounting report has been issued with qualified audit report. According to article 9.3.11 of the stock listing rules, the Shanghai Stock Exchange will make a decision on whether to terminate the company’s stock listing according to the audit opinions of the listing committee within 15 trading days after the company discloses the 2021 annual report. It is worth noting that at the 22nd Meeting of the 10th board of directors to consider the annual report, MI Chunlei, chairman and legal representative of the company, was absent from the meeting because he was temporarily unable to perform his duties.
Similarly, Shanghai Greencourt Investment Group Co.Ltd(600695) in the annual report of 2021 released on April 25, the net profit of the company after deducting non recurring profits and losses is negative and the operating income is less than 100 million yuan. According to relevant rules, the listing of A-Shares and B shares of the company may be terminated, and the trading of the company’s shares will be suspended from April 26. At the same time, the company also received the prior notice of the exchange on the proposed termination of the listing of the company’s shares. Because the company’s shares have touched the conditions for termination of listing, the exchange plans to make a decision on the termination of the listing of the company’s shares.
Statistics show that Shanghai Greencourt Investment Group Co.Ltd(600695) is mainly engaged in investment and asset management business in the field of real estate. In the field of real estate investment, the company invests in the stock property in various ways, transforms and operates it through professional management, and obtains investment income. Since 2020, the company’s investment business has focused on the business direction of non-performing assets, and purchased non-performing assets from non-performing asset markets dominated by banks and AMC by participating in open market auction or agreement transfer.
In recent years, the company has been hovering on the edge of delisting. Before the disclosure of the 2021 annual report, the company’s share price has fallen by 80% since the peak price of 8.72 yuan / share in mid November 2021.
In addition, Shangying Global Co.Ltd(600146) received two “heavy documents” in succession at the end of April. One is that the company received the prior notice of the exchange’s intention to terminate the listing of the company’s shares. Because the company did not disclose the 2021 annual report within the legal period, the company decided to terminate the listing of the company’s shares according to relevant regulations. In addition, the company also received the advance notice of administrative punishment from Ningxia regulatory bureau of China Securities Regulatory Commission. Due to the suspected violation of information disclosure, the company and several responsible persons were punished.
13 companies trigger delisting conditions at risk
In addition to the above 21 companies, 13 companies, including Shenzhen Danbond Technology Co.Ltd(002618) , Henan Kedi Dairy Co.Ltd(002770) and Henan Kedi Dairy Co.Ltd(002770) issued risk warning announcements of stock suspension and possible delisting at the same time on the closing day of the annual report. The company’s shares will be suspended and may be delisted later.
The reporter sorted out the detailed conditions of the company’s annual report, rather than the relevant risks in 2021. If there is no accident, it will be terminated from listing or a high probability event
For example, the 2021 annual report released on Henan Kedi Dairy Co.Ltd(002770) april 30 shows that the company’s revenue is 591 million yuan, a year-on-year increase of 24.22%; The net profit was 69.048 million yuan, a year-on-year increase of 105.69%. Although the company turned losses into profits on a year-on-year basis, due to the audit report of “unable to express opinions” issued by the accounting firm on the annual report, the company may terminate the listing.
Interestingly, for this non-standard opinion audit report, Henan Kedi Dairy Co.Ltd(002770) said in the announcement that the behavior of Tianping certified public accountants did not leave communication time for the company, and the company will reserve the right to investigate its responsibility and report to relevant departments to safeguard the rights and interests of the company and all shareholders.
Shenzhen Danbond Technology Co.Ltd(002618) , Lead Eastern Investment Co.Ltd(000673) , Dynavolt Renewable Energy Technology (Henan) Co.Ltd(002684) three companies are on the verge of delisting, which is also the audit report of “unable to express an opinion” issued by the accounting firm on the annual report. However, Ningbo Sunlight Electrical Appliance Co.Ltd(002473) , Neoglory Prosperity Inc(002147) were respectively issued with “negative opinion” and “qualified opinion” by the accounting firm. According to relevant regulations, the listing of the company’s shares may be terminated by the exchange.
In addition, Dalian Morningstar Network Technology Co.Ltd(002447) , Inner Mongolia Tianshou Technology&Development Co.Ltd(000611) , Bode Energy Equipment Co.Ltd(300023) and other companies triggered the delisting situation because “the net profit after deducting non recurring profits and losses is negative and the operating income is less than 100 million yuan”.
Dalian Morningstar Network Technology Co.Ltd(002447) disclosed on April 30 that the annual report of 2021 showed that the company achieved an operating revenue of 153 million yuan, an increase of 45% year-on-year; The net profit loss was 968247 million yuan, and the net profit loss after deducting non was 105 million yuan. However, the operating income after deducting non recurring profits and losses was only 367772 million yuan. Therefore, the announcement on the risk of suspension and possible delisting of the company’s shares issued by the company at the same time shows that the net profit after deducting non recurring profits and losses in 2021 is negative and the operating income is less than 100 million yuan, touching the situation of delisting of shares in Item (I) of paragraph 1 of article 9.3.11 of the stock listing rules.
It is worth noting that the Shenzhen Stock Exchange issued a letter of concern to the company before the disclosure of the company’s annual report Dalian Morningstar Network Technology Co.Ltd(002447) once disclosed the performance forecast for 2021 on January 29 this year, and it is expected to achieve an operating revenue of 105 million yuan to 140 million yuan in 2021. This means that although the company’s net profit is in a state of loss, its revenue exceeds 100 million yuan, that is, there is still hope to protect the shell.
In this regard, the Shenzhen Stock Exchange learned from the regulatory communication with the company’s annual audit accountant Zhitong accounting firm that the company’s paper business does not have the relevant technology and processing ability; Newly involved in the paper field, there is a significant dependence on suppliers, processing manufacturers and customers, and it is difficult to be sustainable. Based on this, the Shenzhen Stock Exchange said that the company should deduct the operating income from paper related businesses. However, if the paper business is deducted from the revenue, the company’s annual revenue in 2021 is far less than 100 million yuan, which means that Dalian Morningstar Network Technology Co.Ltd(002447) self rescue “shell protection” trick may have failed!
The reporter also noted that four companies, including Zhengzhou Sino-Crystal Diamond Co.Ltd(300064) , Jiangsu Dewei Advanced Materials Co.Ltd(300325) , Lvjing Holding Co.Ltd(000502) and others, touched two delisting indicators at the same time, which not only appeared the situation of “negative net assets” or “negative net profit after deduction and revenue less than 100 million yuan”, but also issued audit reports that could not express opinions, so the prospects of these companies may be bleak.
2022 or delisting tide
Assuming that the above companies are likely to be delisted (it is possible that a few companies can come back from the dead), coupled with Egls Co.Ltd(002619) , TEPCO, Changdong and other companies that have been delisted or entered the delisting consolidation period, up to now, more than 40 companies are on the verge of delisting, which has increased significantly compared with last year.
in recent years, the regulators have been continuously deepening the capital market reform with the full implementation of the stock issuance registration system as the main line, further strengthening the construction of the basic system of the capital market, continuously optimizing the supporting rules, strengthening the main responsibility of listed companies, compacting the “gatekeeper” responsibility of intermediary institutions, and optimizing the mechanisms of issuance and delisting. At present, the normalized delisting mechanism of A-Shares is gradually taking shape
As early as July 2018, the CSRC issued a decision on Amending the opinions on reforming, improving and strictly implementing the delisting system of listed companies. In November of the same year, the Shanghai and Shenzhen Stock Exchange issued the measures for the implementation of compulsory delisting of Listed Companies in major violations, which defined four types of major illegal delisting.
In December 2020, in order to implement the decision-making and deployment of the central Shenzhen Reform Commission and the deployment requirements of the financial commission of the State Council, the Shanghai and Shenzhen Stock Exchange issued the “new regulations on delisting”, comprehensively improved the delisting standards, simplified the delisting process and strictly supervised delisting.
In July 2021, the general office of the CPC Central Committee and the general office of the State Council jointly issued the opinions on strictly cracking down on illegal securities activities according to law, which clearly required that illegal acts such as false statements and financial fraud should be strictly, quickly and severely investigated according to law.
On March 29, 2022, the general office of the CPC Central Committee and the general office of the State Council recently issued the opinions on promoting the construction of social credit system and high-quality development and promoting the formation of a new development pattern, proposing to strengthen the construction of integrity in the capital market. Urge intermediary service institutions to be diligent and conscientious and improve the professional ethics of employees. Strictly implement the compulsory delisting system and establish a virtuous circle mechanism for the survival of the fittest of listed companies. Strengthen the protection of investors’ rights and interests and create an honest and trustworthy financial ecological environment.
In order to meet the requirements of registration system reform and normalized delisting and further improve the post delisting supervision of listed companies, the CSRC issued the guidance on improving the post delisting supervision of listed companies on April 29, 2022, which will be implemented from the date of promulgation.
Market professionals pointed out that the delisting system is a necessary supporting system for the successful implementation of the registration system. Only when the delisting export is smooth, can the benign ecology of survival of the fittest in the A-share market be accelerated.
Haitong Securities Company Limited(600837) believes that in the past, the number of delisting of A-Shares was small, resulting in the occupation of valuable market resources. In recent years, after a series of pilot and system reforms, relevant policies have been continuously improved, and the normalized delisting mechanism of A-Shares is gradually taking shape.
