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The first A-share delisting stock due to market value is here! On July 23, *ST Shentian’s stock price hit the limit down again, with a total market value of 251 million yuan. This is the 19th consecutive trading day that the company’s closing market value has been below 300 million yuan. Even if the stock price hits the limit up on the next trading day, the company’s total market value will hardly return to above 300 million yuan. The delisting due to market value has been locked in in advance, which is also the first case in A-shares. The emergence of the first delisting stock due to market value has also attracted the market’s attention to low-market-value stocks. According to statistics from iFinD of Tonghuashun, as of the close of July 23, there were 19 stocks in the A-share market with a total market value of less than 500 million yuan.

Less than 300 million yuan for 19 consecutive trading days

On the evening of July 23, *ST Shentian disclosed an announcement stating that the closing market value of the company's stock has been less than 300 million yuan for 19 consecutive trading days from June 27, 2024 to the present. According to Article 9.2.4 of the "Shenzhen Stock Exchange Listing Rules (2024 Revision)", if the company's stock closing total market value is less than 300 million yuan for twenty consecutive trading days, the company's stock will be at risk of being delisted.

Trading data showed that on July 23, the stock price of *ST Shentian hit the daily limit. As of the close of the day, the company's stock price was 1.81 yuan per share, with a total market value of 251 million yuan. It is worth mentioning that, according to calculations, even if the stock price of *ST Shentian hits the daily limit on the next trading day, its market value will hardly return to more than 300 million yuan. The company has locked in the market value delisting in advance, and is also the first A-share company to be delisted by market value.

Judging from the stock price performance, *ST Shentian’s stock price has continued to fluctuate downward this year, and the company’s stock price has fallen by more than 70% since January 2, 2024.

Behind the continuous decline in stock prices, *ST Shentian has poor fundamentals and has been losing money for many years.

According to the annual report, *ST Shentian is a listed company with commercial concrete as its main business and real estate as its pillar industry. Its main industries include the production and sales of commercial concrete, real estate development and property management. From 2021 to 2023, the company's attributable net profits were approximately -53.0343 million yuan (adjusted), -271 million yuan (adjusted), and -160 million yuan, respectively. In the first quarter of 2024, the company's net profit has not yet turned a profit. During the reporting period, the company achieved operating income of approximately 17.1498 million yuan, a year-on-year decrease of 59.93%; the corresponding attributable net profit was approximately -15.7308 million yuan, a year-on-year increase of 15.67%.

*ST Shentian, which is about to face delisting by market value, has a large amount of funds occupied by its controlling shareholder. The announcement shows that on April 30, 2023, Shenzhen Tiandi Shunming Enterprise Management Co., Ltd. (hereinafter referred to as "Tiandi Shunming"), a wholly-owned subsidiary of *ST Shentian, signed a "Purchase and Sale Contract" for cement ore silt and sand with Shenzhen Qianhong Trading Co., Ltd. On May 4, 2023, Tiandi Shunming transferred 137 million yuan from its account of Wanshou Road Branch of Bohai Bank Co., Ltd. in Beijing to Shenzhen Qianhong Trading Co., Ltd. in the form of prepayment. Non-operating funds occupied by 137 million yuan were formed in the name of prepayment of materials. As of August 28, 2023, the accumulated balance of non-operating funds occupied was 137 million yuan. Confirmed by the company's actual controller Lin Hongrun and the controlling shareholder Guangdong Junhao Equity Investment Holding Co., Ltd. (hereinafter referred to as "Guangdong Junhao"), there was no substantive transaction in the above-mentioned contract and capital transactions. The controlling shareholder Guangdong Junhao used this to form 137 million yuan of current funds to repay its debts, constituting the controlling shareholder's occupation of the company's non-operating funds.

It is worth mentioning that according to the latest announcement disclosed by *ST Shentian on the evening of July 23, the balance of non-operating funds occupied by Guangdong Junhao in the company is still 137 million yuan.

Regarding the relevant issues, a Beijing Business Daily reporter sent an interview letter to *ST Shentian, but as of press time, the other party had not responded.

19 stocks with a total market value of less than 500 million yuan

The emergence of the first case of delisting of a stock due to market value is of great significance to the A-share market, and it has also attracted the market's attention to low-market-value stocks.

According to iFinD statistics from Tonghuashun, as of the close of July 23, there were 19 A-share tradable stocks with a total market value of less than 500 million yuan. Among them, in addition to *ST Shentian, which is about to be delisted, the company with the lowest total market value is *ST Meixun, with a total market value of about 325 million yuan at the close of the day. Previously, *ST Meixun also disclosed an announcement, warning that the company's stock may be delisted due to a market value of less than 300 million yuan.

In addition to the above two stocks, there are 17 other companies in the secondary market whose latest total market value is less than 500 million yuan, including Henghe Co., Ltd., Chunguang Pharmaceutical, and Haomiao Technology.

Financial commentator Zhang Xuefeng told Beijing Business Daily that the implementation of the "market value delisting" mechanism in the A-share market is of great significance in improving market health, protecting investor interests, optimizing resource allocation, and strengthening corporate governance. The emergence of the first stock with a locked market value delisting marks the official launch and implementation of this delisting mechanism in the A-share market, which serves as a warning to the market.

Zhang Xuefeng further stated that the emergence of the first delisted stock with a locked market value is an important step for the A-share market to mature and standardize, and will help improve the health of the market and investor confidence.

Beijing Business Daily reporter Ma Huanhuan and intern reporter Wang Manlei