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Due to the closing price being below 1 yuan for 20 consecutive trading days, ST Hanggao (002665) was delisted and delisted on August 26. According to iFinD statistics from Tonghuashun, with the delisting of ST Hanggao, 42 A-shares have been delisted this year. From the perspective of the reasons for delisting, the par value delisting accounts for more than 70%. In addition, there are 10 stocks such as Guanghui Automobile that have been declared delisted in the market, and the company is waiting for delisting.

Close to the number of stocks delisted last year

According to statistics from iFinD of Tonghuashun, 42 stocks have been delisted this year, including 28 ST stocks.

In terms of time, the number of delisted stocks in July and August was the largest, with 13 stocks each. Among the stocks delisted in July, the total market value of ST Yili and ST Zhongnan at the time of delisting was more than 1 billion yuan. In addition, Zuojiangtui, which was delisted that month, received widespread attention. It is understood that Zuojiangtui was once the "most expensive ST stock" in A-shares. The company's stock price hit a high of 299.8 yuan per share on July 14, 2023, when the company's stock had been issued a delisting risk warning.

Among the stocks delisted in August, the total market value of ST Aikon and ST Dima at the time of delisting were both over 1 billion yuan.

*ST Huayi is the first delisted stock in 2024. It is understood that from November 28, 2023 to December 25, 2023, the daily closing price of *ST Huayi's stock was less than 1 yuan for 20 consecutive trading days. The company's stock was delisted on January 16, 2024.

It is worth noting that according to the official website of the China Securities Regulatory Commission, in 2023, the China Securities Regulatory Commission accelerated the normalization of delisting, with a total of 47 companies delisting throughout the year, including 44 forced delistings. In the three years since the delisting reform, the number of forced delistings has exceeded the total number of delistings before the reform. This also means that as of now, the number of delisted stocks in the A-share market has approached the number of delisted stocks in 2023.

Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, told the Beijing Business Daily that the number of delisted stocks is approaching the number of delisted stocks in 2023, indicating that the A-share market is accelerating the formation of a normalized delisting pattern, which will help to clear out inferior companies in the market, promote market metabolism, and achieve the survival of the fittest, thereby improving the overall quality of listed companies. This change is in line with the operating experience of mature capital markets, and will help promote the high-quality development of the capital market, protect the legitimate rights and interests of investors, and reduce social instability factors caused by delisting.

In the future, the removal of junk stocks will continue to accelerate. Recently, Wu Qing, secretary of the Party Committee and chairman of the China Securities Regulatory Commission, mentioned that the China Securities Regulatory Commission will steadily promote the optimization and improvement of key systems such as issuance, listing, trading, and delisting. Li Ming, vice chairman of the China Securities Regulatory Commission, also mentioned that the quality of listed companies is an important micro-foundation for high-quality economic development, and it is necessary to grasp the "export barrier" and accelerate the promotion of a normalized delisting mechanism.

Over 70% of stocks delisted at par value

Looking at the reasons for delisting, more than 70% of the 42 stocks that have been delisted this year were delisted at par value.

According to statistics from iFinD of Tonghuashun, 30 out of the 42 stocks were delisted because "the daily closing price of the stock was lower than RMB 1 for 20 consecutive trading days", and the par value delisting accounted for about 71.43%, including *ST Gaosheng, ST Hongda, *ST Bailong, *ST Meiji, *ST Baoli, *ST Aidi, etc.

Financial commentator Zhang Xuefeng told the Beijing Business Daily that par value delisting has become the mainstream among delisted stocks, mainly reflecting investors' disappointment with their expectations for corporate fundamentals and the market's strict constraints on company stock price performance. As a price constraint mechanism, the A-share par value delisting system forces companies to meet certain standards in market value management and operating capabilities, otherwise they will face the risk of being eliminated by the market. This will help curb "shell resource" hype and speculation, curb market bubbles, and promote the healthy development of the capital market.

In addition to the delisting due to par value, 5 stocks were delisted due to the fact that after the implementation of the delisting risk warning, the financial accounting reports of the first fiscal year were issued with audit reports with qualified opinion, disclaimer of opinion or adverse opinion, including the delisting of Zuojiang, the delisting of Xinfang, the delisting of Tongda, the delisting of Yuancheng and the delisting of Taian.

Three stocks were delisted because their audited net profit in the first fiscal year after the implementation of the delisting risk warning was negative and their operating income was less than 100 million yuan, or their net profit in the most recent fiscal year after retrospective restatement was negative and their operating income was less than 100 million yuan. They are Delisted Mall, Midterm Delist, and Delisted Carbon Yuan.

In addition, Yuebo was delisted because the company failed to disclose its annual report for the most recent year within the statutory period after being issued a financial mandatory delisting risk warning; Sansheng was delisted because it failed to disclose an annual report that was guaranteed to be true, accurate and complete by more than half of the directors within the statutory period in the first fiscal year after being issued a financial mandatory delisting risk warning; Xinhai was delisted because the lower of the company's net profit before and after deducting non-recurring gains and losses in the most recent three fiscal years was negative, and the audit report for the most recent year showed uncertainty in the company's ability to continue operating; Botian was delisted because the company had committed fraudulent issuance, major information disclosure violations or other major violations that seriously damaged the order of the securities market, and its shares should be delisted.

There are still 10 stocks waiting to be delisted

In addition to the individual stocks that have been delisted, there are 10 stocks that have received the exchange's delisting decision or delisting advance notice and are awaiting final delisting.

According to iFinD statistics from Tonghuashun, there are currently 10 stocks that are suspended due to delisting, including *ST Asia Star, Guanghui Automobile, *ST Shentian, ST Xudian, Haiyin Shares, *ST Huatie, *ST Weichuang, ST Dinglong, Pengdu Agriculture and Animal Husbandry, and *ST Meishang. Among them, the delisting date of Guanghui Automobile has been determined to be August 28, 2024.

Among the waiting stocks, *ST Shentian, *ST Yaxing and *ST Meishang have attracted widespread attention.

Among them, *ST Shentian is the first A-share company to be delisted due to market value. It is understood that because the closing market value of *ST Shentian's stock through the Shenzhen Stock Exchange trading system was less than 300 million yuan for 20 consecutive trading days from June 27 to July 24, 2024, it triggered the situation of stock delisting stipulated in Article 9.2.1, Paragraph 1, Item 6 of the Shenzhen Stock Exchange's "Stock Listing Rules (Revised in August 2023)", and the Shenzhen Stock Exchange decided to terminate the company's stock listing.

*ST Yaxing took the initiative to delist. According to the company's disclosure announcement, the company's controlling shareholder proposed to voluntarily withdraw the company's stock listing based on the current market environment and the company's situation.

In addition, *ST Meishang is the stock that has been "waiting" the longest among the 10 stocks. The company received a prior notice from the Shenzhen Stock Exchange on May 9, 2024, proposing to terminate the listing of the company's shares. After that, the company has not disclosed the latest progress, and it has been more than 3 months.

Regarding the relevant situation, Zhang Xuefeng pointed out that more companies delisting can make room for new high-quality enterprises, promote the flow of funds to companies with greater development potential, optimize the allocation of market resources, and help improve the overall investment value of A shares. The implementation of the delisting system represents the Chinese capital market moving towards a more market-oriented and standardized direction. By implementing the delisting system, market liquidity and transparency can be enhanced, and enterprises can be encouraged to actively improve their operating capabilities and corporate governance levels.

Beijing Business Daily reporter Ma Huanhuan and Ran Lili