(Yicai) July 17 -- Grand Automotive Services Group, China's largest car dealer, will be removed from the Shanghai Stock Exchange because its share price breached the bourse rules.

Grand Auto [SHA: 600297] closed at 87 Chinese cents (12 US cents) yesterday, remaining below CNY1 (14 US cents) for 19 consecutive trading days.

Even if the stock soars by the 10 percent exchange-imposed daily trading limit the next trading day, it will not exceed CNY1, triggering the mandatory delisting condition, the Shanghai-based company said in a statement yesterday. Anyway, Grand Auto's share price plunged 10 percent today on the delisting news.

Stocks should be booted from Chinese mainland exchanges if their price stays below CNY1 for 20 straight trading days, according to regulations.

The main reason for the low share price is that Grand Auto has carried out multiple stock splits and new share issuance since its listing in 2015, a company representative told Yicai. Grand Auto had 3.7 billion shares when it went public through a backdoor listing, compared with 8.3 billion now.

Another reason is the operating pressure. Grand Auto's new vehicle sales and gross margin have recently plunged because of the price war in the Chinese automobile market. The firm said on July 12 that it expects a net loss of CNY583 million to CNY699 million (USD80.2 million to USD96.2 million) in the first half of the year, compared to a profit of CNY601 million a year earlier.

Grand Auto announced on July 10 that its major shareholder Xinjiang Guanghui Industry Investment was planning to sell a controlling stake in the company to maintain its listing status. But given Grand Auto's delisting condition, it is unsure whether the deal will be completed.

Guanghui held a 32.5 percent stake in Grand Auto as of June 30.

Editors: Dou Shicong, Futura Costaglione