A-shares have welcomed another round of delisting, and the survival of the fittest has accelerated under the comprehensive registration system

Author: Huang Siyu ▪ Android

Another batch of listed companies announced the termination of listing or delisting. Under the comprehensive registration system, the construction of a market-oriented new ecology of "entry and exit" and "survival of the fittest" is accelerating.

On the evening of May 5, Ji Tong withdrew and said that the company's shares would be delisted on May 23. On the same day, *ST Yunsheng and *ST Zhongchang announced that they received the exchange's decision to terminate the listing of shares, and they will enter the delisting period on May 5, and the last trading date is expected to be June 24. Just the day before, *ST Furen and *ST Future also issued announcements that they will enter the delisting consolidation period on May 5, and the final trading date is expected to be June 31.

At the same time, as of May 5, *ST Sote has closed below 22 yuan for 20 consecutive trading days and touched the trading delisting indicator, and the company's shares and convertible corporate bonds will be terminated. Sote convertible bonds will therefore become the first convertible bonds in history to be forcibly delisted.

In addition, most companies are waiting for delisting orders, or are already in the delisting consolidation period, or lock in delisting early. Up to now, 2023 companies have been delisted and delisted in 6. Prior to this, in 2020~2022, the number of companies that were forcibly delisted in the A-share market increased year by year, continuously hitting a record high.

Tian Lihui, dean of the Institute of Financial Development of Nankai University, told the first financial reporter that this shows that China's capital market has entered and exited, should retreat, and the survival of the fittest market pattern has basically formed. The survival of the fittest mechanism under the comprehensive registration system is one of the key mechanisms for the high-quality development of the market, which can improve the overall quality of A-share listed companies.

Listed companies have been forcibly withdrawn one after another

*ST Yunsheng, *ST Zhongchang, *ST Furen, and *ST will all be forcibly delisted in the future because they have touched the financial delisting index.

Among them, *ST Future announced that due to the 2021 annual financial report being issued by an accounting firm that could not express an opinion, the company's shares were delisted from July 2022, 7. On April 1, 2023, the company disclosed its 4 annual report, but the accounting firm issued an audit report on the financial report that could not express an opinion. As a result, the listing was terminated.

*The situation of ST Furen is similar, and the company was also forced to delist due to consecutive audit reports issued by accounting firms that could not express an opinion. At the same time, *ST Furen 2022 annual report shows that the audited ending net assets are negative.

*ST Furen and *ST that received the delisting notice will enter the delisting consolidation period on May 5, the delisting consolidation period is 30 trading days, there is no limit on the rise or fall on the first trading day, and the limit on the rise and fall of other trading days is 15%, and the last trading date is expected to be June 10.

"During the delisting period, the company will not plan or implement major asset restructuring matters. Market entities such as investors or custodian brokers are requested to promptly settle stock pledge repurchase, agreed repurchase, margin trading, facility transfer, Shanghai Stock Connect and other businesses before the termination of stock listing and delisting. Both companies said so.

In addition to announcing the delisting, *ST Furen also announced that it learned that Zhu Wenchen, the actual controller of the company, had signed the "Notice of Case Registration" from the China Securities Regulatory Commission on May 5, suspected of information disclosure violations and violations. During the investigation of the case, the company and Zhu Wenchen will cooperate with the relevant work of the CSRC.

At the same time, *ST Sote shares have closed below 20 yuan for 2023 consecutive trading days (April 4, 18 ~ May 2023, 5), and the company's shares and convertible corporate bonds will be terminated from listing when they touch the trading delisting regulations.

From the market open on May 5, *ST Sote stock and Sote transfer bonds will be suspended. During the suspension period, Sote Convertible Bonds will be suspended from equity conversion, and Sote Convertible Bonds will therefore become the first convertible bond in history to be forcibly delisted.

Similar to the situation of *ST Sote and Sote Bond Transfer, *ST Blue Shield and Blue Shield Bond Swap have been suspended from trading since April 4 and have received prior notice from the Shenzhen Stock Exchange that it intends to terminate the listing of *ST Blue Shield and Blue Shield Bond Transfer.

Cai Mengyuan, an analyst at Huabao Securities, pointed out that with the implementation of the comprehensive registration system, A-share listing is more convenient, and the conditions for issuing convertible bonds are also relaxed, but at the same time, stock delisting is also more convenient, and more and more stocks have increased the risk of delisting, which means that the overall credit default risk of convertible bonds has increased, and the problem of convertible bonds such as Blue Shield and Soute has also officially sounded the alarm for the convertible bond market.

There are also a number of stocks that sound delisting alerts

In addition to the above stocks, there are also a number of stocks waiting for delisting orders, or are already in the delisting consolidation period, or locked in early for delisting. Since the beginning of this year, the number of cases such as "1 yuan delisting" and major illegal delisting has increased, and the diversified characteristics of delisting are obvious.

Not long ago, on April 4, the first batch of companies on the science and technology innovation board that fraudulently issued and violated the law were sentenced to forced delisting. On the same day, *ST Amethystum and *ST Zeda received the administrative penalty decision from the China Securities Regulatory Commission and received the prior notice from the exchange that it intends to terminate the listing of the shares, and the shares of the two companies have been suspended from the market open on April 21.

The delisting period has ended and is expected to be delisted on May 5. Jiai is in the delisting period, and the time to enter the delisting consolidation period is May 24. Ji Aihui announced on the evening of May 5 that the last trading date is expected to be May 9.

Among them, the delisting of Jitong was terminated because it touched the situation of major illegal forced delisting, and the withdrawal of Jiai was due to the delisting target of financial and bid farewell to A-shares.

In addition, some companies face risks such as forced delisting and financial delisting in major violations. *ST Botian was investigated by the China Securities Regulatory Commission for suspected information disclosure violations and violations, and also reminded the risk of major illegal forced delisting. *ST Xinhai also warned of the risk that the company's shares may be forced to delist under major violations.

*ST Hongtu also received the "Prior Notice of Administrative Punishment and Market Prohibition" from the China Securities Regulatory Commission, and the company had inflated its debts, sounding the alarm that it touched on major illegal forced delisting. As of May 5, the closing price of the company's stock has been below 23 yuan for 17 consecutive trading days, closing at 1.0 yuan / share, that is, even if the subsequent continuous limit rises can not reach 44 yuan, locking in "1 yuan delisting" in advance.

Previously, *ST Kaile, *ST Xiyuan and *ST Ronghua were also in a similar situation, with major illegal delisting or financial delisting risks, but after the market clarified the delisting expectations, the stock prices of the three companies continued to fall, first touching the trading delisting, and finally delisting and delisting.

Like *ST Hongtu, ST Mei also locked in the "1 yuan delisting" in advance. It was announced on the evening of May 5 that as of that day, the closing price of the company's stock was below 23 yuan / share for 18 consecutive trading days, and it is expected to be below 1 yuan / share for 1 consecutive trading days. In addition, *ST Jiakai also said that as of May 5, the closing price of the stock has been below 23 yuan for 14 consecutive trading days, and it is expected to be below 1 yuan for 20 consecutive trading days.

"1 yuan delisting" has also become the main force in this year's delisting army. In addition to the above-mentioned *ST Sote and companies that lock in "1 yuan delisting", *ST Huge, *ST Yikang, *ST Zhongtian, *ST Blu-ray and other stocks have been below 20 yuan for 1 consecutive trading days, locking in delisting.

The survival of the fittest is accelerated under the comprehensive registration system

Since the reform of the registration system, the capital market has made continuous efforts to improve the delisting criteria, simplify the delisting procedures, diversify exit channels, and strictly supervise delisting, and the normalized delisting pattern of the A-share market has begun to show results.

According to Wind data, since 1999, a total of 198 stocks have been delisted in the A-share market, and 54 companies have been forced to delist except for 144 diversified exits through securities exchange, merger and acquisition, privatization and other means.

Among them, in the 1999 years from 2019~20, only 64 companies were forcibly delisted. Since 2020, the number of companies that have been forcibly delisted in the A-share market has increased year by year, with 2020 in 16, 2021 in 17, and 2022 in 41, continuously hitting a record high.

As of now, 2023 companies have been delisted in 6, and most companies are waiting to be delisted or on the way to delisting. Among the delisted companies, 4 were delisted because their shares were below par, accounting for 67%.

Tian Lihui analyzed that the market withdrawal of "1 yuan delisting" has gradually increased, which means that under the diversified delisting standards, the delisted company can no longer avoid the market withdrawal by means of whitewashing of statements, shrinking shares and shell speculation.

"Escorting the comprehensive registration system and effectively giving full play to the function of resource allocation, the capital market will continue to improve the delisting efficiency, diversify the delisting channels, and continue to build a normalized delisting mechanism." Dai Kang, chief strategist of GF Securities, said.

Dai Kang analyzed that from the perspective of the impact of normalized delisting on the market ecology, on the one hand, the "shell value" is further devalued, which is convenient for the timely withdrawal of inferior assets, forming a market ecology of listed companies "entering and exiting, survival of the fittest", which is conducive to promoting a virtuous cycle in the capital market, improving the quality of listed companies, and promoting the high-quality development of enterprises; On the other hand, rational allocation of market resources will further attract long-term funds into the market and guide long-term value investment.

Some insiders also analyzed that the implementation of the registration system is conducive to realizing the two-way smooth flow of the "entry gate" and "export gate" of the capital market, and accelerating the formation of an orderly virtuous circle of advance and retreat. Among them, the system of forced delisting of major violations has effectively identified a number of "zombie enterprises" stranded in the capital market, and cleared them out in a market-oriented and law-based manner, effectively maintaining the order of the capital market. (CBN)