A-shares may be the first shares to be "delisted by market value".

Southern Metropolis Daily

2024-06-12 07:04Published on the official account of Guangdong Southern Metropolis Daily

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　　Shenzhen Tiandi (Group) Co., Ltd. (000023, *ST Shentian) recently announced that the closing market value of the company's shares on the 4th was less than 300 million yuan, according to the relevant regulations of the exchange, the company should disclose the risk warning announcement that the company's shares may be terminated before the market opens on the next trading day. If the total market value of the company's shares is less than 300 million yuan for 20 consecutive trading days, the company's shares will be at risk of being terminated.

　　*ST Shentian will likely become the first company in history to hit the trading delisting target because its market capitalization does not meet the target. Since June, *ST Shentian's share price has fallen for days, and as of the close of June 11, the company's share price was 1.75 yuan / share, down 3.31%. The total market value is only 243 million yuan, which is getting farther and farther away from the "safety line" of 300 million yuan.

　　The company has been listed for more than 30 years, and Shenzhen state-owned assets hold 5.91% of the shares　　

　　According to public information, *ST Shentian is a long-established real estate and commercial concrete production company in Shenzhen, whose main industries include the production and sales of commercial concrete, real estate development and property management, etc., and was listed on the Shenzhen Stock Exchange in April 1993. The actual controller is Lin Hongrun, and the controlling shareholder is Guangdong Junhao Equity Investment Holding Co., Ltd. (hereinafter referred to as Guangdong Junhao).

　　On April 30 this year, *ST Shentian announced that the company's audited net assets at the end of the period in 2023 were negative and Pengsheng Certified Public Accountants (Special General Partnership) issued an audit report on the company's 2023 annual financial report that could not express an opinion, and the company's shares touched the relevant indicators of delisting risk and had been put on delisting risk warning on May 6.

　　Also on April 30, the Shanghai and Shenzhen Stock Exchanges officially released the revised Stock Listing Rules. In terms of market capitalization, the delisting criteria for A-shares (including A+B shares) on the main board have been raised from 300 million yuan to 500 million yuan, aiming to increase the liquidation of market-oriented companies. The revised market capitalization delisting indicator sets a six-month transition period, that is, the new market capitalization delisting rules will apply from October 30.

　　During the period from April 30 to October 30, the market value of the main board is still based on 300 million yuan. *ST Shentian also clearly mentioned in the announcement that if the total market value of the company's shares closes below 300 million yuan for 20 consecutive trading days, the company's shares will have the risk of being terminated from listing.

　　As of the close of trading on June 7, the company's share price closed at 1.81 yuan per share, with a total market value of only 251 million yuan, which was lower than the minimum standard of 300 million yuan stipulated by the exchange. This means that *ST Shentian may become the first company in history to hit the trading delisting indicator because its market capitalization does not meet the standard.

　　It is worth noting that Shenzhen state-owned assets also hold *ST Shentian shares. As of the first quarter of 2024, Lin Hongrun holds 27.39% of the shares of *ST Shentian through Guangdong Junhao; Shenzhen Investment Holdings Co., Ltd. holds 5.91% of the shares, ranking as the second largest shareholder.

　　The performance has been losing money for 4 consecutive years, and the capital occupation situation is serious　　

　　In recent years, *ST Shentian's revenue has continued to decline, and its net profit has continued to lose. From 2020 to 2022, the company achieved revenue of 1.783 billion yuan, 1.48 billion yuan and 363 million yuan respectively, and the net profit loss attributable to the parent company reached 7.954 million yuan, 53.03 million yuan and 271 million yuan.

　　According to the 2023 annual report, *ST Shentian achieved operating income of about 177 million yuan, a year-on-year decrease of 51.06%; The net profit loss attributable to shareholders of the listed company was about 159 million yuan. When explaining the reasons for the loss, *ST Shentian said that during the reporting period, the company's concrete industry was affected by unfavorable factors such as insufficient market demand and increased financial pressure in the industry, resulting in an increase in the operating cost of concrete units and an increasing degree of difficulty in the operation of the enterprise.

　　*Behind the continuous loss of ST Shentian is that a large amount of the company's funds are occupied by the actual controller Lin Hongrun and related parties.

　　According to the company's announcement on May 28, after verification, the company's controlling shareholder Guangdong Junhao has a serious occupation of the company's non-operating funds, with a balance of more than 10 million yuan, and there is no feasible solution, or although a solution is proposed, it is expected to be unable to solve within a month. As a result, the company's shares have been superimposed on other risk warnings on September 27, 2023.

　　*ST Shentian said that in 2024, the company and its actual controller have received corrective measures from the Shenzhen Supervision Bureau of the China Securities Regulatory Commission, and made it clear that if the 137 million yuan of occupied funds cannot be cleared within six months, the Shenzhen Stock Exchange will suspend the company's trading, and if the rectification is not completed within two months after the suspension, the Shenzhen Stock Exchange will implement a delisting risk warning for the company. As of the disclosure date of the announcement, the balance of Guangdong Junhao's non-operating funds occupied by the company was still 137 million yuan.　

　　On April 30, *ST Shentian released its performance report for the first quarter of this year. In the first quarter of 2024, the company achieved revenue of about 17.15 million yuan, a year-on-year decrease of 59.93%; The net profit loss attributable to shareholders of the listed company was about 15.73 million yuan.

　　Backtracking

　　The company experienced a change of actual controller 5 years ago

　　Lin Hongrun's entry into *ST Shentian can be traced back to 5 years ago.

　　On the evening of August 1, 2019, Shenzhen Tiandi A disclosed that Lin Kaixuan, the actual controller of the company, Lin Hongrun (male) and Lin Kaixuan (female), was administratively supervised by the Shenzhen Securities Regulatory Bureau. Due to the circumstances specified in Article 6, Paragraph 2, Item 2 of the Administrative Measures for the Acquisition of Listed Companies, Lin Kaixuan shall not acquire listed companies.

　　Paragraph 2 of Article 6 of the Administrative Measures for the Acquisition of Listed Companies stipulates that "if the acquirer has committed major violations or is suspected of having committed major violations in the past three years, it shall not acquire a listed company".

　　The Lin couple were reluctant to give up control of the listed company. According to the announcement of Shentiandi A, Lin Kaixuan withdrew from Shentiandi A by transferring his equity in Guangdong Junhao to Lin Hongrun, and the transaction price was initially planned to be 595 million yuan, and finally only 10,000 yuan.

　　On the evening of August 4 of the same year, Shenzhen Tiandi A announced that the company received a notice from Guangdong Junhao that Lin Hongrun and Lin Kaixuan signed the "Supplementary Contract to the Equity Transfer Contract of Guangdong Junhao Equity Investment Holding Co., Ltd." The supplementary contract stipulates that Lin Kaixuan will transfer 70% of the equity of Guangdong Junhao to Lin Hongrun. After the completion of the transaction, Lin Hongrun holds 100% of the equity of Guangdong Junhao. The above equity transaction price is 10,000 yuan.

　　After the completion of the above transaction, the actual controller of the company was changed from Lin and his wife to Lin Hongrun.

　　observe

　　How to ensure the power of the delisted "combination punch"?

　　In addition to *ST Shentian, *ST Meixun also issued a delisting risk warning announcement due to a market value of less than 300 million yuan. In the A-share market, since the implementation of the relevant regulations in July 2021, there has been no case of market value delisting. Some people in the industry believe that following the "face value withdrawal", the "market value withdrawal" will also become a major weapon to promote the survival of the fittest in the capital market.

　　The analysis points out that companies that touch the market value delisting index often shrink due to poor fundamentals, which itself hides a lot of hidden risks. Taking *ST Shentian as an example, the company has been warned of multiple risks before, and there are risks such as the audit report of the 2023 annual financial report that cannot express an opinion, the serious occupation of funds, and the regulatory measures taken by the company and the actual controller. At the same time, most of these small-cap companies lack investment value. Therefore, investors "vote with their feet" to directly remove risky companies with very low market capitalization from the market, purify the market ecology, help guide rational investment, value investment, and long-term investment, and accelerate the survival of the fittest in the A-share market.

　　The implementation of the market value delisting mechanism is inseparable from institutional guarantees. In fact, the securities regulatory authorities are also continuing to improve the delisting system and broaden the channels for delisting. The new "National Nine Articles" require "improving the market value standard and other trading delisting indicators". In this context, at the end of April this year, the Shanghai and Shenzhen Stock Exchanges revised and improved the relevant delisting rules, raising the relevant market value index of listed companies on the main board from 300 million yuan to 500 million yuan, which will be implemented from October 30 this year. This further increases market capitalization delisting coverage.

　　It can be said that the delisting of market value has drawn a "market bottom line" for the market value of listed companies. On the one hand, listed companies should abide by laws and regulations, deepen the operation of their main business, create market competitive advantages, enhance profitability and governance capabilities, and improve the company's valuation level; On the other hand, listed companies should also improve their ability to create value, make full use of market value management tools such as buybacks and dividends, actively return investors, interact with investors benignly, and enhance market confidence.

　　It is expected that the "market value withdrawal" will work together with the "financial withdrawal", "face value withdrawal" and "major illegal withdrawal" to play a "combination punch" of delisting, and more vigorously clear the inferior listed companies from the market, purify the market ecology, and promote "metabolism", which will help protect the rights and interests of investors, optimize the allocation of resources, and improve the overall quality of listed companies.　　

　　Integration: Li Bin

　　Written by: Qiu Moshan, reporter of Nandu Bay Finance Agency, comprehensive surging news, Securities Times, China Economic Net　　

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