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text｜"caijing" reporter zhang jianfeng wang ying

editor｜yang xiuhong

since 2024, the "metabolism" of the a-share market has accelerated, and the number of delisted companies has hit a new historical high.

on september 13, the voluntary delisting of *st yaxing (600213.sh) reached a critical point. on that day, the company submitted an application to the shanghai stock exchange to withdraw the company's shares from trading on the shanghai stock exchange, and the shanghai stock exchange still needs to decide whether to accept it. if it is successfully delisted this year, the company will become the first voluntary delisting case of a shares this year.

prior to this, on september 5, st dinglong (002502.sz) was delisted due to its closing price being below 1 yuan for 20 consecutive trading days. with the exit of st dinglong, 47 a-shares (excluding b-shares, the same below) have been delisted in 2024. this number has exceeded the whole year of 2023, setting a record high. among them, guirenniao (now st guiren (delisted), 603555.sh), guanghui automobile (600297.sh) and other companies were once star companies in the industry.

(data source: wind; 2024 as of september 13)

in addition, there are st xudian (000413.sz), haiyin (000861.sz), *st weichuan (002308.sz) and other companies in the market, which have clearly received the delisting notice issued by the exchange and are waiting for delisting. *st yaxing also plans to terminate its listing by resolution of the shareholders' meeting due to its continued poor performance.

according to the current trend, the list of a-share delisted companies in 2024 may continue to grow.

hou dawei, an investment banker, told caixin that the continuous increase in the number of delisted companies is a reflection of the strengthening of the management and implementation of the delisting system in recent years. "the increase in the number of delisted companies means that the a-share market is accelerating the speed of survival of the fittest. more companies with poor performance are eliminated, and most of those left are blue chip stocks or potential companies on the science and technology innovation board. this is conducive to the flow of market funds to industries and companies that are in line with the national strategic direction, and is conducive to the healthy development of the investment and financing market."

in terms of the reasons for delisting, among the above-mentioned companies that have completed the delisting process since 2024, 31 companies have delisted due to par value, accounting for about two-thirds. in terms of industry classification, the power equipment industry (shenwan first-level industry classification, the same below) has six delisted companies, becoming the largest delisting company since the beginning of this year.

some securities firms pointed out that there were no relevant rules on the delisting system in the early days, which led to some companies being stagnant but not dead, and stagnant but not delisted. now, with the breaking of the delisting system and the emergence of delisted companies, supervision has continued to promote the institutionalization and normalization of delisting, which is in line with the development trajectory of the capital market and also sets the tone for the future development of the capital market.

since the delisting reform in 2020, the regulatory authorities have continued to increase the intensity of delisting. the new "nine national regulations" in 2024 clearly define the policy orientation of "all delistings should be made", starting from five aspects: strict mandatory delisting standards, unblocking multiple delisting channels, and strengthening delisting supervision. at the same time, the china securities regulatory commission and the shanghai and shenzhen stock exchanges have also issued new delisting regulations.

the new delisting rules have been optimized in four major aspects, including broadening the scope of application of forced delisting for major violations, adding three new regulatory delisting situations, tightening financial delisting indicators, and improving market value standards and other trading delisting indicators.

"as the enforcement of the new delisting rules increases, 'zombie companies' with poor operating performance and liquidity, as well as 'black sheep' that disrupt market order will be cleared out of the market. and because the regulatory transition arrangements are relatively sufficient and according to observations, listed companies facing delisting risks have adopted self-rescue measures such as increasing holdings and repurchases, subsequent delisting will gradually enter a normalized rhythm." tian xuan, dean of the national institute of finance at tsinghua university, told caixin.

some market insiders said that the new delisting rules have set up a certain transition period, and it is expected that the number of delisted companies will not increase significantly in the short term. in the long run, a market mechanism of survival of the fittest is gradually taking shape.

delisting at par value becomes the main force

compared with previous years, delisted companies since 2024 have shown two new signs: the number of delistings at par value has set a new record, and delistings at market value have appeared for the first time.

2024 has become the year of "1 yuan delisting". in terms of the reasons for delisting, par value delisting is the main reason, that is, the daily closing price of the stock is less than 1 yuan for 20 consecutive trading days. there are 31 listed companies delisted at par value, accounting for about two-thirds. in addition to par value delisting, other reasons for delisting include four consecutive years of losses, failure to disclose regular reports after suspension of listing, and major violations.

among the companies that were delisted at par value, guanghui auto, a giant auto dealer with an annual revenue of over 100 billion yuan, has attracted much attention. when the company was locked in for delisting, its total market value was still 6.5 billion yuan. in 2015, guanghui auto went public on the a-share market through a backdoor listing, and its share price once reached a high of 32.12 yuan per share, and then fell all the way.

since 2024, due to the operating pressure and debt problems, guanghui auto's stock price has been halved again, triggering the exchange's mandatory delisting clause. although the controlling shareholder and management have tried to increase their holdings to save themselves, they are still unable to turn the tide. in the nine years since its listing, guanghui auto's stock price has fallen by more than 90%.

in 2024, there was also the first delisting due to market value. *st shentian (000023.sz) is the first a-share company to be delisted due to market value. on the evening of july 26, *st shentian announced that it had received a "preliminary notice" issued by the shenzhen stock exchange, and the shenzhen stock exchange intends to decide to terminate the company's stock listing. because the closing market value of *st shentian's stock was less than 300 million yuan for 20 consecutive trading days from june 27 to july 24, 2024, it triggered the market value delisting situation. the company's stock was delisted on september 2, 2024.

it is worth mentioning that this year, the shanghai and shenzhen stock exchanges further revised the market value delisting standards: the market value delisting standards for a-share (including a+b-share) companies on the main board will be increased from 300 million yuan to 500 million yuan starting from october 30, 2024. in other words, there is a trend that more companies will face the risk of delisting by market value in the future.

in addition, there are companies that intend to voluntarily delist this year. according to the announcement of *st yaxing, the company intends to voluntarily withdraw its a-share listing on the shanghai stock exchange through a resolution of the shareholders' meeting, and instead apply for transfer on the national equities exchange and quotations. the company's delisting was approved by the shareholders' meeting in august 2024.

*st yaxing previously announced that the controlling shareholder proposed to voluntarily withdraw the company's stock listing based on the current market environment and the company's situation. according to the delisting plan, the company's controlling shareholder weichai (yangzhou) provides cash options to all registered a-share shareholders of the company, including dissenting shareholders. during the cash option declaration period, the number of validly declared shares was approximately 96 million shares. based on the exercise price of the cash option of 6.42 yuan per share, weichai (yangzhou) is expected to need to prepare funds of more than 600 million yuan.

*st asiastar is a bus manufacturer with poor operating performance in recent years. there is also competition between asiastar bus and zhongtong bus, a listed company under shandong heavy industry group. compared with the two, zhongtong bus is better than *st asiastar in sales and performance. *st asiastar's controlling shareholder said that in order to protect the interests of small and medium-sized investors, it plans to provide other shareholders with cash options, with an exercise price of 6.42 yuan per share.

in recent years, the delisting efforts of the a-share securities market have been further strengthened. in april 2024, the new "national nine articles" proposed to increase the supervision of delisting and deepen the reform of the delisting system. at the same time, the china securities regulatory commission issued the "opinions on strictly implementing the delisting system", requiring strict implementation of delisting standards and gradually broadening diversified exit channels. subsequently, the three major exchanges in shanghai, shenzhen and beijing revised and issued the new "stock listing rules", further tightening the mandatory delisting standards.

under this series of measures, the a-share market has accelerated the survival of the fittest. according to wind data, before 2021, the number of a-share delisted companies never exceeded 20 per year. in 2022, the number of delisted companies reached 46, almost the sum of the past three years. in 2023, the number of delisted companies was 45. so far in 2024, there have been 47 companies. if the companies that have been locked in for delisting but have not yet been delisted are included, the number of delisted companies this year may exceed 50.

guo ruiming, director of the listed company supervision department of the china securities regulatory commission, said at a press conference in early 2024, "in the three years since the reform, a total of 127 companies have delisted, of which 104 were forced to delist. the number of forced delistings is nearly three times that of the decade before the reform, showing two characteristics: first, the number of par value delistings has increased significantly. in 2023, the number of par value delistings was close to half of all delisted companies; second, the number of delistings due to major violations has increased. in 2023, eight companies entered the delisting process due to major violations."

regarding the view in the market that "the delisting rate of a-shares is not high", guo ruiming pointed out that the delisting in overseas markets represented by the united states is mainly privatization, mergers and acquisitions by other listed companies, and voluntary delisting. in some markets, voluntary delisting accounts for more than 90% of the total delisting, and the proportion of real forced delisting is not high. there are many companies that are forced to delist from the a-share market, but the cases of restructuring delisting and voluntary delisting are much less than those in overseas markets.

power equipment has the most delistings

from the industry perspective, as of september 13, a-share companies that have delisted since 2024 are mostly concentrated in the power equipment, real estate, and textile industries.

wind data shows that unlike the distribution of delisted companies in 2023, the power equipment industry, with six delisted companies, surpassed real estate to become the largest delisting industry. in 2023, there were three delisted companies in this industry.

(data source: wind)

six delisted power equipment companies were delisted because their stock prices were lower than their face value. general losses have been the norm for the above companies in recent years. among the above companies, five companies suffered losses in 2022, and all six companies suffered losses from 2023 to the first half of 2024. among them, st aikang (002610.sz) suffered losses of more than 800 million yuan in both 2022 and 2023, ranking first.

as the first listed photovoltaic accessories company in china, st aikang has undergone several strategic transformations and developments. in 2023, the company's main products include high-efficiency solar cells and modules, aluminum frames for solar modules, and photovoltaic support systems. in the current period, the gross profit margin of the manufacturing business of solar cells and modules, which accounts for more than 90% of the company's revenue, is less than 6%. combined with management expenses and financial expenses totaling more than 500 million yuan, the company lost 826 million yuan. in the first half of 2024, the company lost 600 million yuan.

st aikon, which had poor performance, also faced difficulties such as overdue external guaranteed loans, freezing of some bank accounts of the company and its subsidiaries, and suspension of production of a wholly-owned subsidiary that provided the company with its main source of income before delisting.

some power equipment companies or shareholders have also been investigated by regulatory authorities.

st aikang, whose stock was delisted on august 12, 2024, received a "notice of case filing" from the china securities regulatory commission on june 12, 2024, due to suspected illegal information disclosure. *st tiancheng (600112.sh), whose stock was delisted on august 15, 2024, was filed by the china securities regulatory commission in january 2024 for suspected illegal information disclosure.

poor performance and constant negative news about the company led to a continuous outflow of market funds, which became the main reason for the above-mentioned power equipment companies to be delisted because their stock prices were lower than the face value.

as the industry has been in a downturn in recent years, many real estate a-share listed companies have not been able to wait for the dawn. as of september 13, five a-share real estate companies have officially delisted, temporarily tied with textiles and apparel for the second place in the industry. in 2023, the number of delistings in the real estate industry will be eight.

among the five real estate companies that have delisted in 2024, except for the delisted tongda (600647.sh), the rest of the companies were delisted at par value.

large losses are a characteristic of the above-mentioned real estate companies. according to wind data, except for the delisted tongda, the net profit attributable to the parent companies of the other four companies will exceed 3 billion yuan each year from 2022 to 2023.

since the audited net profit in 2022 was negative and the operating income was less than 100 million yuan, the delisted tongda shares were issued a delisting risk warning from may 5, 2023. on april 30, 2024, the company's 2023 financial report was issued an "unable to express an opinion" audit report by the auditing agency, triggering the delisting regulations.

as a former real estate star company, *st oceanwide (000046.sz) had a net profit attributable to its parent company of over rmb 900 million from 2015 to 2019. after entering 2020, it began to suffer continuous losses, and from 2021 to 2023, the company's losses continued to exceed rmb 10 billion. in the first half of 2024, the company continued to lose rmb 7.7 billion.

on february 7, 2024, *st oceanwide's stock was delisted because the daily closing price of the company's stock was less than 1 yuan for 20 consecutive trading days from november 30 to december 27, 2023.

among other industries, five and three companies have been delisted from the textile and apparel and automobile industries respectively since 2024, while three and one companies have been delisted from the above two industries respectively in 2023. in addition, the computer industry, which had seven delisted companies in 2023, has only one delisted company so far this year.

there are still companies facing delisting

as the list of delisted a-share companies continues to grow, there are still many companies at risk of delisting.

a-share delisting types include forced delisting and voluntary delisting. forced delisting is divided into four categories: transaction-related forced delisting, financial-related forced delisting, regulatory-related forced delisting, and major illegal-related forced delisting. among them, financial-related forced delisting and regulatory-related forced delisting both have corresponding indicators for implementing delisting risk warnings.

wind data shows that as of september 13, there are more than 80 companies in the a-share delisting risk warning that are at risk of delisting due to trading, financial, and regulatory reasons. among them, there are more than 40 companies at risk of delisting due to financial reasons and more than 10 companies at risk of delisting due to trading reasons.

according to the stock listing rules (revised in 2023), in the financial mandatory delisting of the main boards of the shanghai and shenzhen stock exchanges, the situations in which stock trading is subject to delisting risk warnings include: the audited net profit (the lower of the net profit before and after deducting non-operating items) in the most recent fiscal year is negative and the operating income is less than 100 million yuan; the audited net assets at the end of the most recent fiscal year are negative; the financial accounting report of the most recent fiscal year is issued with an audit report that cannot express an opinion or a negative opinion. the same applies to the science and technology innovation board and the growth enterprise market.

caijing compiled data from wind and found that according to the above regulations, there are about 46 a-share companies with financial delisting risks. among them, about 17 companies with operating income less than 100 million yuan and net loss in 2023 have been issued delisting risk warnings. among them, about 12 main board companies are *st companies, accounting for more than 70%.

zhongdi investment (000609.sz), whose business includes real estate development and equity investment, was issued a delisting risk warning because its operating income in 2023 was 60 million yuan and its loss was 180 million yuan. its stock abbreviation was changed to *st zhongdi.

ligong navigation (688282.sh), which is mainly engaged in the research and development, production and sales of inertial navigation systems and their core components, is a company listed on the science and technology innovation board. because its operating income in 2023 was less than 100 million yuan and its net profit was negative, the company's stock was issued a delisting risk warning and the stock abbreviation was changed to *st navigation.

in april 2024, the shanghai and shenzhen stock exchanges amended the aforementioned "stock listing rules" to modify the income and profit indicators of financial mandatory delisting risk warnings. among them, the profit indicators of the main board companies of the shanghai and shenzhen stock exchanges have been increased to total profit, and the operating income has been increased from less than 100 million yuan to less than 300 million yuan. the science and technology innovation board and the growth enterprise market have also added a total profit indicator.

it is worth noting that the above-mentioned indicator modification will be first applicable in 2024. with the substantial increase in the operating income indicator for the main board delisting risk warning, it is expected that the number of companies subject to delisting risk warnings due to financial indicators will increase after the 2024 annual report is released.

wind data shows that in the first half of 2024, there were about 91 companies on the shanghai and shenzhen main boards with operating income of less than 150 million yuan and net losses attributable to their parent companies, an increase of about 7% compared with about 85 companies in the same period last year. during the same period, there were 11 companies on the chinext with operating income of less than 50 million yuan and net losses attributable to their parent companies, an increase of about 175% compared with four companies in the same period last year.

among the regulatory delisting risks, 14 companies were issued with no opinion or adverse opinion in the last two consecutive fiscal years. among the companies with major defects in information disclosure and operation in the past year, many companies had false and misleading statements or major omissions in information disclosure.

in june 2024, guo ruiming answered reporters' questions about delisting and said that according to estimates, the number of companies in the shanghai and shenzhen stock markets is expected to be around 30 companies whose applicable combined financial indicators will trigger delisting in 2025; there are about 100 companies that may trigger this indicator and implement delisting risk warnings in 2025. these companies have more than one and a half years to improve their operations and improve quality. if they still fail to meet the standards by the end of 2025, they will be delisted.