*ST Oceanwide’s stock price has been below 1 yuan for 17 consecutive trading days, raising the risk of delisting
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China Minsheng Trust Co., Ltd. (“Minsheng Trust”), which has suffered losses for three consecutive years due to continuous rain and leakage, and its indirect controlling shareholder *ST Oceanwide, is facing the risk of delisting.
On December 22, *ST Oceanwide issued a risk warning announcement that the company’s shares may be terminated from listing due to the stock price being lower than the face value. The announcement shows that as of December 21, 2023, the closing price of *ST Oceanwide’s stock has been lower than 1 yuan/share for sixteen consecutive trading days. If the closing price of the company’s stock is lower than 1 yuan per share for 20 consecutive trading days, the company’s stock will be terminated from listing and trading. This is also the seventh risk warning announcement issued by *ST Oceanwide this month that the company may be terminated from listing due to the stock price being lower than the face value.
It is worth mentioning that on December 22, *ST Oceanwide opened at the limit of 0.44 yuan. It has dropped 87% from this year’s highest point, and its market value is only about 2.3 billion yuan. *ST Oceanwide’s stock price has been hovering around 1 yuan since last year. In April this year, it fell below 1 yuan for the first time.
According to Article 9.2.1 of the “Shenzhen Stock Exchange Stock Listing Rules”, if the closing price of the company’s stock is lower than 1 yuan/share for 20 consecutive trading days, the company’s stock will be terminated from listing and trading by the Shenzhen Stock Exchange.
Since *ST Oceanwide’s audited net assets attributable to shareholders of listed companies at the end of 2022 are negative, the company’s net profits before and after deducting non-recurring gains and losses in 2020, 2021 and 2022, whichever is lower, are negative, and the company The 2022 annual audit report shows that there is uncertainty in the company’s ability to continue operating. The company’s stock trading has been subject to delisting risk warnings and other risk warnings since May 5, 2023, and the company’s stock abbreviation has been changed to “*ST Oceanwide”.
The company’s net assets attributable to shareholders of the parent company at the end of September 2023 were -12.054 billion yuan (unaudited). Since the court has ruled to terminate the company’s pre-reorganization process, if the company’s asset and liability structure cannot be effectively improved by the end of 2023, the company’s shares will face greater financial risks according to Article 9.3.11 of the Shenzhen Stock Exchange Stock Listing Rules. Risks of forced delisting.
As early as the evening of December 1, *ST Oceanwide issued an announcement stating that it had received a “Decision Letter” issued by Beijing No. 1 Intermediate People’s Court. During the pre-reorganization period, the interim administrator discovered after investigation that Oceanwide Holdings (*ST Oceanwide ) as a listed company no longer has the possibility of reorganization, and applied to the Beijing No. 1 Intermediate People’s Court to terminate its pre-reorganization procedures. Accordingly, the Beijing No. 1 Intermediate People’s Court decided to terminate the pre-reorganization of Oceanwide Holdings. *ST Oceanwide has stated that if the reorganization fails, the company will be at risk of being declared bankrupt. Once bankrupt, the company’s shares will be terminated from listing.
It should be pointed out that *ST Oceanwide is the indirect controlling shareholder of Minsheng Trust. Since its transformation in 2014, *ST Oceanwide’s total liabilities have risen rapidly. In 2018, its assets exceeded 200 billion yuan, but its total liabilities reached 183.67 billion yuan, and the asset-liability ratio remained above 80%. In 2020, Minsheng Trust came under fire with the 8 billion yuan counterfeit gold case of Wuhan Jinhuang Jewelry, which exacerbated Oceanwide’s difficulties and is also considered to be the trigger of the company’s debt crisis.
Public information shows that Minsheng Trust was formerly known as China Tourism International Trust and Investment Co., Ltd., which was established in October 1994. In December 2012, the regulatory authorities approved the company’s restructuring and equity change plan. The re-registration was completed on April 16, 2013, and the name was changed to China Minsheng Trust Co., Ltd. On April 28, 2013, the company officially resumed business. The registered capital is RMB 7 billion. The controlling shareholder is Wuhan Central Business District Co., Ltd., and the company’s controlling shareholder is *ST Oceanwide.
In addition, according to Minsheng Trust’s 2022 annual report, consolidated operating income will be 1.343 billion yuan in 2022, a significant increase compared to the previous year’s revenue of -2.810 billion yuan. However, the net profit during the same period still showed a loss of 3.706 billion yuan. Although the scale of losses was reduced by 9.55% compared with the same period last year, Minsheng Trust suffered losses in both 2020 and 2021. This is now its third consecutive year of losses.
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