A shares accelerate the formation of a new ecology of survival of the fittest

　　Entering June, the news of delisting is still one after another.

On June 1, *ST Jintai and *ST Jitang received the decision of the Shanghai Stock Exchange to terminate the listing of stocks.

On June 2, Julong, Bangxun Technology, and Contemporary Oriental were officially announced to be delisted by the Shenzhen Stock Exchange.

According to the reporter's statistics, in the past month, the number of stocks that have been terminated from listing on the Shanghai and Shenzhen Stock Exchanges has reached 31, which shows the intensity of delisting.

The big waves wash away the sand, and A shares under the registration system are accelerating the formation of a new ecology of survival of the fittest with "in and out".

　　One after another, A-shares welcome the "New Year of Delisting"

　　June 2, 3; May 30, 2; May 27, 3; May 26, 4; May 24, 2; May 23, 3; May On the 18th, 1... After the annual report season, in the past two weeks, the Shenzhen Stock Exchange has intensively announced the delisting of 18 stocks.

At the same time, since May 10th, as many as 13 companies have received the decision of the Shanghai Stock Exchange to terminate their listing.

　　At the beginning of last year, a new round of reform of the delisting system was officially launched, and the normalized delisting mechanism was accelerated.

This year is the second year of the implementation of the "strictest delisting regulations in history", and the news of delisting has landed one after another, making this year a veritable "delisting year".

　　With the conclusion of the 2021 annual report disclosure, a group of companies with poor performance have entered the compulsory delisting procedure one after another.

According to statistics from China Merchants Securities, 42 companies will be delisted in Shanghai and Shenzhen this year, including 18 in Shanghai and 24 in Shenzhen.

This data doubles the number of A-share delistings in 2021, hitting a record high for A-shares.

　　Judging from the delisting process, companies that have been forced to delist have entered a 15-day delisting consolidation period.

Within 5 trading days after the expiry of the delisting arrangement period, the exchange will delist the stocks of the relevant companies.

　　The main business is sluggish and the curtain call enters the countdown

　　The long list of delisted companies includes the old-fashioned real estate company LVGEM Holdings, the former well-known TV brand Xoceco, the artificial diamond giant *ST King Kong, the well-known dairy company *ST Cody, etc., as well as the first batch of companies listed on the Growth Enterprise Market. One of the 28 constellations *ST Baode.

　　The reasons for the forced delisting of enterprises are divided into compulsory delisting of transaction type, compulsory delisting of financial type, compulsory delisting of normative type, and compulsory delisting of major illegal type.

The most common one is "compulsory financial delisting". When the relevant provisions of compulsory financial delisting are touched in the first year, the company will be "delisted risk warning", that is, "*ST", and the financial delisting will be triggered again in the following year. Relevant terms enter the compulsory delisting process.

This is also the main reason for the recent forced delisting of stocks.

　　For example, *ST Baode, this company has created many firsts in China and even the world in the field of automatic oil drilling and production electronic control system.

According to the announcement of the Shenzhen Stock Exchange, since the company will deduct non-net profit losses in 2021 and the deducted revenue will be less than 100 million yuan, it will be terminated in the financial category.

*ST Xoceco has been issued a delisting risk warning since May 6, 2021 due to the fact that its audited net profit in 2020 was negative and its operating income was less than 100 million yuan.

In 2021, the company's net profit after deducting non-recurring gains and losses will be -6.2377 million yuan, operating income will be 152 million yuan, and the amount after deducting income unrelated to the main business or without commercial substance will be 0 yuan.

The dismal performance has made it impossible for these companies to live in A shares.

　　At that time, it was listed on the market, but now it has left the market sadly.

Although the specific reasons for each company's delisting vary, the failure of the main business is a fairly common problem.

"These companies did not make their main business bigger and stronger, or even hollowed out their main business, and eventually became shell companies." Dong Dengxin, director of the Institute of Finance and Securities at Wuhan University of Science and Technology, analyzed that the industry leaders in the past, whether it was a well-known company in the past, If it lacks R&D and innovation capabilities, it will eventually lose its core competitiveness and be easily eliminated.

　　Survival of the fittest to purify the capital market ecology

　　Survival of the fittest, with both in and out, is a mature and healthy market ecology.

The delisting system of listed companies, as an important basic system in the capital market, plays an important role in optimizing resource allocation, promoting the survival of the fittest, improving the quality of listed companies, and protecting the legitimate rights and interests of investors.

　　Listing is difficult, and delisting is even more difficult. In the past, the stubborn problem of “only entering but not entering” A shares was deeply criticized by investors.

Since the reform of the registration system in 2018, the threshold and cost of listing new shares have been significantly reduced. In the past, the "buying and backdoor" that was popular in A-shares has lost the market, and investors' enthusiasm for speculation has dropped sharply.

At the same time, the new delisting regulations have greatly improved the efficiency of delisting by abolishing the listing suspension and reinstating the listing clauses, and shortening the delisting arrangement period to 15 days, which has reduced the operating space for companies to "protect the shell".

　　Dong Dengxin said that the new securities law has greatly increased the cost of illegal securities, especially the illegal cost of financial fraud, which will make some "junk stock" companies reveal their true colors more quickly.

These institutional changes have accelerated the withdrawal of "shell companies" and "zombie companies" from the market, allowing the market ecology to continue to be purified.

　　In recent years, the number of A-share listed companies has continued to expand. About 300 to 500 companies are listed each year, and the current total has reached 4,830.

Industry insiders believe that the market of "only entering but not" will definitely not work, and A-shares should at least maintain the number of delistings of 30 to 50 companies each year, in order to effectively play the role of the capital market.