(Yicai) July 3 -- Chinese real estate companies Shanghai Shimao, Jiangsu Zhongnan Construction Group, and Dima Holdings started the delisting process last month for failing to meet the basic criteria of keeping their stock price above CNY1 (USD0.13) for 20 successive trading days. Last year, eight developers were kicked off bourses for the same reason.

The three developers tried to keep their share price above the redline by buying back shares and releasing good news to cheer up investors, but they failed. The main reason for their delisting is insufficient investment value, analysts said.

The slow progress of debt restructuring, poor operations and other issues are pervasive among property firms that face being kicked off bourses, said Liu Shui, business research director at China Index Academy.

In the short run, share repurchases and bringing in strategic shareholders can, to some extent, boost shareholders’ confidence and push up the share price, Liu said.

But only measures which can improve business operations, including the introduction of a debt restructuring plan and the collection of outstanding sales amounts, can boost investor confidence and lower the risk of delisting risks, he said.

And several other developers are also hovering around the red line and are in danger of being delisted if the property market’s prospects don’t improve. China Fortune Land Development [SHA:600340] stood at CNY1.08 (USD0.14) at the end of trading yesterday, while Jinke Property Group [SHE:000656] and Huayuan Property [SHA:600743] were at CNY1.21, data from Wind Information showed.

And Beijing North Star [SHA:601588], Greenland Holdings [SHA:600606] and RiseSun Real Estate Development [SHE:002146] all closed at about CNY1.50 (USD0.21).

If companies really delist, shareholders may lose everything, a veteran property sector analyst told Yicai. So, investors will opt to escape as soon as possible when stock prices near CNY1.

Editors: Shi Yi, Kim Taylor