Following the “face value delisting”, “market value delisting” will also become a powerful tool to promote the survival of the fittest in the market.
Recently, Jianche B announced that the company’s closing market value has been less than 300 million yuan for 20 consecutive trading days, triggering the market value delisting indicator in the mandatory delisting indicator for trading, and will be suspended from the opening of the market on June 17. Jianche B became the first stock to be delisted due to market value. It is reported that the stocks of companies that are forced to delist due to trading will not enter the delisting settlement period. The first stock to be delisted due to market value is here
The above announcement shows that as of June 14, 2024, the closing market value of Jianche B’s stock was RMB 133 million, and the daily closing market value of the stock has been less than 300 million yuan for 20 consecutive trading days. According to relevant regulations, if the daily closing market value of the stock of a listed company that only issues B shares on the Shenzhen Stock Exchange is less than 300 million yuan for 20 consecutive trading days, the company’s stock will be delisted.
According to relevant regulations, Jianche B’s stock will be suspended from the opening of the market on June 17. The Shenzhen Stock Exchange will issue a prior notice to the company within the prescribed time after the company triggers the mandatory delisting situation of trading. If the company applies for a hearing to the Shenzhen Stock Exchange, the Shenzhen Stock Exchange Listing Review Committee will hold a hearing and form a review opinion on whether to terminate the company’s stock listing within fifteen trading days after the hearing procedure. The Shenzhen Stock Exchange will make a decision on whether to terminate the company’s stock listing based on the review opinion of the Listing Review Committee.
Jianche B said that the company requested investors or custodian brokers and other market entities to promptly settle stock pledge repurchase, agreed repurchase, margin trading, refinancing, Shenzhen Stock Connect and other businesses before the stock listing is terminated and delisted. For judicial freezing businesses that expire from the termination of stock listing and delisting to the entry into the delisting sector to handle share registration and listing, it is recommended that the competent authorities handle the renewal procedures in advance through the original assistance execution channel before the stock listing is terminated and delisted.
Public information shows that Jianche B is a listed company under China North Industries Group Corporation. It was established on July 1, 1995 and listed on the Shenzhen Stock Exchange B shares in 1995. From 1995 to 2015, the company was mainly engaged in the production and sales of motorcycles. In 2015, the company implemented a major asset reorganization, divested the main assets and liabilities involved in the motorcycle business, and completed the structural adjustment of the main business. From 2015 to the present, the company has mainly produced and sold automotive air-conditioning compressors.
In 2023, Jianche B achieved operating income of 464 million yuan, a year-on-year decrease of 2.12%; the net profit attributable to shareholders of the listed company was -69.3313 million yuan, a year-on-year decrease of 74.49%.
Shareholders once increased their holdings to save
It is worth noting that Jianche B once tried to boost investor confidence by increasing its holdings by important shareholders, but ultimately failed.
According to the increase announcement issued by Jianche B on May 26, the company’s controlling shareholder, China Ordnance Group’s concerted action person Zhonghui Futong and Southern International plan to increase their holdings of the company’s shares within 6 months from May 27, 2024 in a manner permitted by the Shenzhen Stock Exchange (including but not limited to centralized bidding transactions, etc.). The total amount of the proposed increase in holdings is not less than 1.5 million yuan (inclusive) and not more than 3 million yuan (inclusive).
On June 13, Jianche B received a notice from China United Fortune and Southern International that China United Fortune and Southern International had accumulated 1.6632 million shares of the company through centralized bidding from May 31, 2024 to June 13, 2024, accounting for approximately 1.39% of the company’s total share capital, and the total amount of the increase was approximately HK$3.2158 million (RMB 2.9276 million). This increase has been completed within the commitment period. The main parties to the increase are China United Fortune and Southern International, the joint actors of the company’s controlling shareholder, China North Industries Group. Before the implementation of the increase plan, China North Industries Group held 71.13% of the company’s total share capital, and China United Fortune and Southern International did not hold any shares of the company.
Judging from the current results, the above measures have failed to prevent Jianche B from triggering the market value delisting indicator.
Previously, some investors also asked the management of Jianche B whether the company’s management has specific measures for this urgent issue since the market value and various indicators have met the delisting standards? Jianche B said that the company will unswervingly transform and upgrade to the automotive new energy thermal management industry and fully implement the “Three-Year Revitalization Plan. Regarding the B-share reform, the company is continuing to explore and research. Obviously, when competing with the delisting speed, Jianche B’s B-share reform has been aborted.
Market value delisting alarm sounded
In fact, in addition to Jianche B, which has been locked in delisting, since April this year, *ST Shentian, *ST Meixun, Ningtong Communication B, and Huili B have issued delisting risk warning announcements due to triggering market value delisting indicators.
Among them, as of the close of June 14, *ST Shentian’s market value was 282 million yuan, and its market value has been less than 300 million yuan for 8 consecutive trading days; *ST Meixun’s market value was 288 million yuan, and its market value has been less than 300 million yuan for 7 consecutive trading days.
For a long time before, it was very difficult to delist by market value and par value in my country. According to industry insiders, whenever a listed company is on the verge of delisting due to market value or par value, acquisitions, reorganization, change of control, introduction of strategic investors and other “shell protection” operations are carried out in droves, and the stock prices of companies on the verge of delisting can always be pulled up again, and the “black sheep” cannot be removed and the “zombie shells” cannot be eliminated.
Today, with the new “Nine National Regulations” cracking down on “shell protection” speculation and market manipulation, the above chaos has been significantly reduced, and market value delisting and par value delisting have taken shape.
Tian Xuan, dean of the National Institute of Finance at Tsinghua University, predicts that with the implementation of the new delisting regulations next year, the number of listed companies delisting will further increase, especially the number of small-cap stocks with poor performance and poor liquidity will further increase.
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