Original title: The delisting system continues to exert influence. The atmosphere of survival of the fittest in the A-share market is gradually becoming

Economic Information Daily reporter Luo Yishu reports from Beijing

The delisting system continued to exert influence. The atmosphere of survival of the fittest in the A-share market gradually became the continuous influence of the delisting system. Since May, another listed company has been locked out of the market. At the same time, in May, a number of listed companies issued a risk warning that they might be terminated because their share prices continued to be lower than 1 yuan or their market values were lower than 300 million yuan, and more than 70 listed companies were given "other risk warnings". The insiders said that the delisting system is the key basic system of the capital market. Normalized delisting can better realize the survival of the fittest in the market, optimize resource allocation, and attract more domestic and foreign long-term funds.

Another A-share "Immortal Bird" is locked in delisting

On the evening of May 21, * ST Mall announced that it had received the Self regulatory Decision on Terminating the Listing of Shares of Shenyang Commercial City Co., Ltd. issued by Shanghai Stock Exchange and decided to terminate the listing of shares of the company.

According to the announcement, * ST Mall shares will be subject to delisting risk warning since March 31, 2023, because the audited net profit in 2022 is negative and the operating revenue is less than 100 million yuan, and the audited ending net assets in 2022 are negative. On April 30, 2024, * ST Mall disclosed the 2023 annual report, which showed that the company's audited net profit in 2023 was negative and the operating revenue was less than 100 million yuan. The 2023 financial accounting report was issued with an audit report that could not express opinions, triggering the delisting situation in the listing rules.

According to the data, * ST Mall, whose full name is Shenyang Mall Co., Ltd., is mainly engaged in department stores and was listed in 2000. Since 2006, * ST Mall has lost its non net profit deduction for 17 consecutive years, and has worn hats for many times. During this period, it became an "immortal bird" of A-share by selling assets to protect its shell. At the beginning of this year, * ST Mall had just completed a bankruptcy reorganization, but before it had time to "transform and reborn", it fell into the shell preservation war again, and finally locked out of the market.

On January 30 this year, * ST Mall disclosed the performance forecast for 2023. It is estimated that the company's operating income in 2023 will be about 139 million yuan after deducting the business income unrelated to the main business and the business income without real commercial income. At the same time, it mentioned that there is a large amount of abnormal income in the sales of proprietary gold and household appliances, which attracted regulatory attention.

On March 11, the audit institution Dahua Certified Public Accountants disclosed a special statement. Dahua said that it would issue a non unqualified audit report to the company if it could not obtain sufficient and appropriate audit evidence. On the following March 14, * ST Mall issued an announcement on the proposed change of audit institution, dismissing Dahua Certified Public Accountants and hiring UniTax Zhenqing Certified Public Accountants. For this reason, the Exchange issued an inquiry letter at the first time, asking for explanations on the rationality of the exchange behavior, verification of disputed income and other issues.

On March 18, UniTax Zhenqing Certified Public Accountants replied to the inquiry letter, which was similar to the statement made by Dahua, saying that the audit work had significant uncertainties. If sufficient and appropriate audit evidence could not be obtained, it was proposed to issue an audit report with unqualified opinions. Later on the evening of April 29, UniTax Zhenqing Office officially issued an audit report on the financial statements of * ST Mall in 2023. So far, the delisting of * ST Mall is almost certain, and the company's shares have been suspended since April 30.

The "delisting alarm" sounded frequently during the year

Under the heavy blow of the supervision, many listed companies issued risk warnings that may be terminated due to the stock price being less than 1 yuan or the market value being less than 300 million yuan, and the "delisting alarm" sounded frequently.

On the evening of May 21, * ST Gaosheng and ST Aikang released the risk warning announcement that the company's shares may be terminated from listing. Among them, ST Aikang issued delisting risk alerts respectively because the closing price of the company's stock was lower than 1 yuan for the first time, while the closing price of * ST Gaosheng stock was lower than 1 yuan for ten consecutive trading days.

On the evening of May 20, Nanjing Telecom B, ST Futong, and Zhengyuan Shares also issued a risk warning announcement that the company's shares may be delisted, of which Zhengyuan Shares has issued for the fourth time. The reason is also related to the market value of the stock. The closing market value of Ning Telecom B's shares on May 20 was 286 million yuan, which was less than 300 million yuan for the first time. The closing price of ST Futong stock was 0.96 yuan/share, which was lower than 1 yuan for the first time. The closing price of Zhengyuan shares on May 20 was 0.93 yuan/share, which has been lower than 1 yuan/share for 12 consecutive trading days.

At the same time, since the new "National Ninth Article" and delisting series of regulatory policies were unveiled on April 12, the number of listed companies with risk warnings in the A-share market has soared. In the past month, more than 100 listed companies have been subject to regulatory penalties for touching the "red lines" such as false records in the financial indicators of the annual report, and the securities abbreviations have been intensively labeled "ST".

Wind data shows that since the beginning of May, more than 70 listed companies have been given "other risk warnings" due to the inability to express their opinions on the annual statements, continuous losses in the last three years, negative audited net assets at the end of the period, etc.

Normalized delisting and continuous optimization of resource allocation

With the continuous improvement of the delisting system, the A-share market is accelerating its liquidation, and the market atmosphere of survival of the fittest is gradually forming.

As of May 22, 9 companies including ST Xingyuan, delisted Poten, Xinhaigui, and ST VIP have completed delisting of A-share this year, due to the fact that the share price is below the par value, losses for three consecutive years, and other circumstances that do not conform to listing. In addition, there are more than ten companies locked in delisting. The delisting reform continued to make a big impact and attracted extensive attention from the market.

On May 15, the CSRC issued a summary of law enforcement in 2023 and announced the priorities of law enforcement in 2024. The summary shows that in 2023, 32 listed companies investigated and dealt with by the CSRC have been forced to delist, and 42 listed companies have been transferred to the public security organs for related crimes. The CSRC said that in 2024, it will focus on combating illegal acts, including fraudulent issuance, financial fraud, occupation of guarantees and illegal share reduction, while maintaining a high pressure on market manipulation, insider trading and other acts that disrupt market order.

Wu Qing, chairman of the CSRC, said that more strict institutional arrangements were being established from the "entry" of listed companies to continuous supervision and then to "export". The purpose is to resolutely keep counterfeiters out, implement the requirements of openness and transparency in the whole process of company information disclosure, integrate the concept of respecting investors and rewarding investors into various mechanisms of corporate governance, and resolutely remove "zombie enterprises" and black sheep from the market.

Tian Xuan, Vice Dean of Wudaokou School of Finance, Tsinghua University, believes that the survival of the fittest will enable scarce public resources to be allocated to good enterprises. An orderly delisting mechanism is one of the symbols of a mature capital market. As A-share gradually integrates with the international market, the improvement of this mechanism will help to enhance its international competitiveness and attract more domestic and foreign long-term funds.

Guoyuan Securities also said that the delisting system is a key basic system in the capital market. As an important part of deepening the comprehensive registration system, regular delisting can better realize the survival of the fittest in the market and optimize resource allocation. By eliminating non-performing enterprises, market resources will be more concentrated on high-quality enterprises with competitiveness and growth potential, thus promoting the healthy development of the overall market.