Smooth and diversified delisting channels, A-share metabolism accelerates
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The results of the A-share market’s delisting in 2023 are “released”. Wind data shows that a total of 45 A-share companies will be delisted and delisted in 2023, of which 43 companies will be forced to delist, setting a record high. Overall, since the third anniversary of the implementation of the new delisting regulations, the normalized delisting mechanism has continued to be consolidated and optimized, delisting has become increasingly normalized, diversified delisting channels have continued to become unblocked, and the survival of the fittest in the market has accelerated. Industry experts believe that as the registration system reform deepens and becomes more stringent and the delisting system becomes increasingly strict, market metabolism will further accelerate and the overall quality of the market will also improve.
The number of companies forced to delist hits new highs
The new year is coming, but a group of companies will sadly bid farewell to the A-share market.
On the evening of December 28, 2023, *ST Oceanwide disclosed that the company received a “Prior Notification” issued by the Shenzhen Stock Exchange. The Shenzhen Stock Exchange pointed out that the company’s stock price increased from November 30, 2023 to December 27, 2023. During this period, the daily closing price through the Shenzhen Stock Exchange trading system for 20 consecutive trading days was less than 1 yuan, which triggered the stock termination situation stipulated in the Shenzhen Stock Exchange’s “Stock Listing Rules (Revised in August 2023)”, and the Shenzhen Stock Exchange planned to decide to terminate the stock. The company’s shares are publicly traded. *ST Oceanwide has been suspended from trading since the market opened on December 28, 2023.
In addition, *ST Bailong and *ST Huayi also received advance notices from the exchange a few days ago. Because the company’s stock reached the “1 yuan delisting” standard, the exchange made a decision to terminate the listing of the company’s stock. .
Since December 2020, it has been the third anniversary of the implementation of the new delisting regulations. Over the past three years, the A-share market has accelerated its metabolism, and the number of companies forced to delist has repeatedly hit record highs. Wind data shows that in 2020, the number of A-share companies delisted was 16. In 2021, the number of A-share market delisting companies was 20, of which 16 were forced delisting; in 2022, 46 companies withdrew from the A-share market. The number of companies that have been forced to delist is 42; in the past year of 2023, a total of 45 A-share companies were delisted and delisted, of which the number of companies that were forced to be delisted reached 43, once again hitting a record high.
“Since the third anniversary of the implementation of the new delisting regulations, the A-share market has undergone gratifying changes. The delisting mechanism, delisting efficiency, delisting warnings and market ecology have significantly improved. The market has been able to metabolize and the overall quality has improved.” Nankai University Financial Development Research Institute Dean Tian Lihui told a reporter from the Economic Information Daily that under the new delisting regulations, the delisting mechanism will be more standardized and strict, the efficiency of delisting will be improved, and low-quality companies can exit the market in a timely manner. The implementation of delisting risk warning and other systems has better protected investors. At the same time, the implementation of new delisting regulations has prompted investors to pay more attention to the company’s fundamentals and long-term value rather than short-term speculation. The market investment style has been optimized, and a new ecology of value investment is expected to be formed.
Chen Li, chief economist of Sichuan Securities and director of the research institute, also believes that since the third anniversary of the new delisting regulations, the delisting mechanism of the A-share market has been continuously consolidated and optimized, delisting has become increasingly normalized, and the survival of the fittest style has become more obvious. The “shell protection” behavior of previously listed companies to avoid delisting has also received regulatory attention, further protecting the rights and interests of market investors.
Diversified delisting channels continue to be smoothed
With the continuous advancement of the comprehensive registration system and the strict implementation of new delisting regulations, the diversified features of delisting in the A-share market have become increasingly obvious. Especially from 2023, cases such as transaction delisting, financial delisting and major illegal delisting will continue to emerge. Among them, the number of trading delisting companies, especially the face value delisting companies that meet the “one-yuan delisting” standard, has increased significantly.
Specifically, among the 45 companies that will be delisted in 2023, except for Jingwei Textile Machinery and AVIC Electromechanical, which are delisting voluntarily, the remaining 43 companies are compulsorily delisted. The reporter noticed that these delisted companies often have problems such as deteriorating fundamentals or major uncertainties in their ability to continue operating. They have hit financial delisting indicators or have risks such as major violations of the law and forced delisting, and have been “used by investors”. “vote” or be forced out by the delisting system.
Judging from the specific causes of delisting, the number of face value delisting companies has increased significantly in 2023, including *ST Haitou, *ST Honggao, ST Sunshine City and other 20 companies, all of which have met the “1 yuan delisting” standard. “Non-standard delisting” has also become an important reason for the delisting of listed companies in 2023. Wind data shows that among the more than 20 listed companies that have met the financial delisting standards in 2023, the most companies that have met the standard of “non-standard” annual reports (that is, the annual reports have been issued non-standard audit opinions by accountants) are Blue Shield Delisting and Yishang Delisting. The reasons for the delisting of more than ten companies including Guangyihui and Guangyiwei were negative opinions issued on financial reports or the inability to express opinions. The number of companies forced to delist due to major violations has further increased. *ST Zeda and *ST Amethyst were forced to delist for multiple illegal activities such as fraudulent issuance and financial fraud, becoming the first batch of delisted companies on the Science and Technology Innovation Board. In addition, there are some delisting companies that have met multiple delisting standards at the same time. For example, *ST Kaile has met three types of delisting standards: trading, financial, and major violations. *ST Hongtu has involved both major violations and transactions. Delisting standards.
“In 2023, the number of delistings in the A-share market has increased, diversified delisting methods have gradually emerged, the delisting risk warning system has also been gradually improved, and investors’ risk awareness has increased significantly. In addition to financial indicators for delisting, trading indicators, Illegal red lines such as ownership structure and information disclosure have also become important reasons for delisting,” Tian Lihui said.
Yang Delong, chief economist of Qianhai Kaiyuan Fund and member of the Chief Economist Committee of the Securities Association of China, said that since the implementation of the new delisting regulations, the number of A-share delisted companies has increased significantly, and some malicious shell-keeping behaviors have also been severely cracked down. The market The trend of shell speculation has been significantly curbed. In the future, delisting in the A-share market will be more stringent, the delisting rate will continue to increase, and the quality of the overall listed companies will be improved through the big waves.
The delisting mechanism continues to improve
Since the implementation of the new delisting regulations, regulators have also been continuously improving the delisting mechanism.
On January 13, 2023, under the overall guidance of the China Securities Regulatory Commission, the Shanghai and Shenzhen Stock Exchanges issued a notice on strengthening the disclosure of information in the 2022 annual reports of companies with delisting risks, increasing the frequency and pertinence of risk disclosures for financial *ST companies; 2023 On the evening of December 29, the Shanghai and Shenzhen Stock Exchanges issued delisting risk information disclosure guidelines respectively, clarifying the time point and frequency of disclosure of financial delisting risks, standardizing the information disclosure behavior of delisting risk companies with stock closing prices below 1 yuan, and Companies that may be involved in forced delisting due to major violations are required to disclose in a timely manner the specific circumstances in which violations of laws and regulations involve forced delisting.
“With the new delisting regulations, the regulatory authorities have continuously strengthened their supervision of the annual report information disclosure of companies with delisting risks. Improper ‘shell’ transactions or abnormal financial treatments have become areas of focus in delisting supervision. Various fancy guarantees have The difficulty of shelling is continuing to increase. Restoring sustainable operating capabilities and improving performance are the correct ways to avoid delisting.” Kaiyuan Securities said.
Experts analyze that the regulatory authorities’ continuous improvement of the delisting mechanism has further demonstrated their determination to strictly implement the delisting system and protect the interests of investors. With the continuous advancement of the comprehensive registration system, the joint efforts of all parties to regulate the A-share market continue to be exerted, and the A-share market is delisted. The number will continue to increase, a normalized delisting mechanism of “in and out, survival of the fittest” will gradually take shape, and the overall quality of the market will continue to improve.
“In the future, the A-share delisting system will become increasingly strict as regulatory policies continue to be optimized and improved, market metabolism will be further accelerated, and the overall quality of the market will also improve.” Chen Li said.
Tian Lihui also believes that in the future, more companies will be delisted in the A-share market because they do not meet the listing requirements, which is expected to form a trend of strict, normalized, diversified and international development. Correspondingly, the overall quality of the A-share market will It will also be continuously improved by eliminating inferior companies.
But experts also said that from the current point of view, there is still room for further development in the delisting of the A-share market. Tian Lihui said that the A-share market still needs to further broaden delisting standards, continue to improve delisting efficiency, strengthen the supervision of information disclosure of listed companies before delisting, and fully protect the legitimate rights and interests of investors. The self-discipline and self-purification capabilities of the A-share market need to be further improved to gradually form a market environment of survival of the fittest, prompting listed companies to focus on their own quality and guiding investors to carry out value investments.
Chen Li also believes that the starting point for improving the A-share delisting mechanism is to protect the rights and interests of investors. Investors’ right to know, their right to trade, and how to protect investors after delisting may become the focus.
“In the future, relevant laws and regulations need to be further improved to protect small and medium-sized investors and ensure that the damage to small and medium-sized investors caused by delisting is minimized, rather than ‘getting out of the way.'” Yang Delong said.
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