From November 6 to December 25, 2024, *ST Zhuo Lang issued 14 delisting risk warning announcements, and announced the suspension and termination of listing on December 26. It's a classic textbook perfect delisting operation. However, before the "9.24" New Deal, the majority of small and medium-sized investors who have suffered from the delisting of five non-ST companies at face value should still be given an explanation, and the new "National Nine Articles" and the "New Rules for Delisting" emphasize that "strengthening the protection of investors of delisted companies" must be implemented.

Puzzles

Professor of Finance, Zhejiang University of Finance and Economics, doctoral supervisor

Researcher at the Institute of Public Policy, Zhejiang University

Entering 2025, it means that the "new rules for delisting" will be put into effect.

On April 12, 2024, the China Securities Regulatory Commission (CSRC) issued the Opinions on the Strict Implementation of the Delisting System (i.e., the above-mentioned "New Delisting Regulations"), aiming to increase the clearance of "zombie shells" and "black sheep" and reduce the value of "shell" resources through strict delisting standards. At the same time, we will broaden diversified exit channels and strengthen investor protection for delisted companies.

On December 23, 2024, there were market rumors that 66 listed companies had the hidden danger of being implemented "*ST", that is, these listed companies had the possibility of delisting with information disclosure warning, and 36 listed companies that had already implemented "*ST" would be delisted. There is also a rumor that 900 stocks will be delisted, resulting in more than 4,800 stocks falling in the A-share market. On the same day, a spokesperson for the China Securities Regulatory Commission characterized the above-mentioned market rumors as "misleading the market" and refuted them.

After looking at the fundamentals of 66 companies that are rumored to be implementing "*ST", the author found that in the first three quarters of 2024, Claus (600579) has net assets per share of -1.15 yuan and earnings per share of -2.17 yuan, Dongyi Risheng (002713) has net assets per share of -1.23 yuan and earnings per share of -1.39 yuan, King Kong Photovoltaic (300093) has net assets per share of -1.61 yuan, earnings per share of -1.62 yuan and undistributed profit per share of -6.20 yuan, and Huitian Thermal Power (000692) has net assets of -0.52 yuan per share, earnings per share of -0.85 yuan and undistributed profit per share of -4.69 yuan. These are typical non-ST companies with poor performance, and their stock prices have experienced a round of skyrocketing after the "9/24" New Deal, but because the financial indicators are so poor, it is understandable that some research reports point out that they will be implemented "*ST".

As for the 36 companies that have already implemented "*ST", their financial performance is even less optimistic. Among them, 18 companies have negative net assets. For example, *ST Hetai (002217) has net assets of -6.517 billion yuan in 2023 and -7.728 billion yuan in the first three quarters of 2024 300208 600083 600898; *ST Jingfeng (000908) and *ST Ningke (600165) still did not meet the requirements in the first three quarters of 2024, and if there is no improvement in the fourth quarter, they will be delisted because the performance in 2024 is not up to standard.

Although the operating conditions of the "66+36" delisting warning company are very bad, it has brought negative sentiment to the market. But that's not the worst, as it doesn't include Cambrian (688256) and Lingnan (002717), which are doing worse.

In the first three quarters of 2024, Cambrian's net profit attributable to its parent was -720 million yuan, and since its establishment in 2016, Cambrian has lost net profit attributable to its parent for 8 consecutive years, and since its listing in 2020, its cumulative loss of net profit attributable to its parent company has been as high as 4.1 billion yuan. However, since being transferred to the Shanghai Stock Exchange 50 Index, on December 23, 2024, Cambrian's share price reached a maximum of 700 yuan, and the stock price has skyrocketed 15 times in two years.

In June 2024, Lingnan shares had a week of trading time when the stock price was below 1 yuan, reaching a minimum of 0.77 yuan, and a loss of 348 million yuan in the first three quarters of 2024. On August 13, 2024, Lingnan Co., Ltd. announced that Lingnan convertible bonds (128044) could not be exchanged for principal and interest on time when it expired, becoming the first default case of state-owned enterprise convertible bonds in China, but the stock price continued to soar, hitting a new high of 5.67 yuan on December 20, perfectly avoiding the delisting at face value, and at the same time setting a precedent of default on the default of the underlying stock without being "ST".

If you are not afraid of not knowing the goods, you are afraid of comparing goods. The five non-ST companies that the author has written about were hastily delisted just because their stock prices were less than 1 yuan in 20 trading days, which is contrary to the spirit of the regulator's emphasis that "*ST companies still have one year to improve their operations, improve their quality, and resolve the risk of delisting".

From the perspective of operating performance, compliance status, asset quality and information disclosure quality, among the five non-ST delisted companies, except for Zhengyuan Shares, which did not file a complaint, the other four are stronger than the above-mentioned delisting early warning companies. For example, Guanghui Automobile also has convertible bonds, and the AA rating of Huiche 5 (400245) (rated AA + before the delisting of the underlying stock) and Huiche Surrender Bond (404004) suffered from the non-ST delisting of the underlying stock, and the price of investment-grade bonds with a fair value of more than 100 yuan reached as low as more than 20 yuan, and because of the complex trading rules, small and medium-sized investors are almost impossible to trade; Zhongyin Cashmere, the first non-ST delisted company on the Shenzhen Stock Exchange, not only insists on releasing the third quarter report in 2024, but also has a strategic quiet period with the support of the "six mergers and acquisitions" inclusive policy.

It is worth noting that on the interactive platform in April and May 2024, Zhongyin Cashmere has repeatedly clearly replied that investors will not be "ST". Since it is not even ST stock, how can Zhongyin Cashmere be delisted? In addition, Zhongyin Cashmere also replied to investors: "The special graphite products produced by the subsidiary Wanguan Industry have been put into the market for sales one after another. At the same time, with practical actions to repurchase 40 million yuan of more than 1 yuan, releasing the information of "improving operation, improving quality, and resolving the risk of delisting". But it is such a company that has suffered a delisting of the stock price below the face value of 1 yuan for 20 consecutive trading days.

The author does not oppose the delisting of *ST shares with delisting risk warning, but does not approve of the delisting of non-ST companies regardless of the par value of specific circumstances.

On December 25, 2024, Zhuo Lang Technology (600225) announced that it was fined 10 million yuan by the China Securities Regulatory Commission for false records in its financial reports and failure to disclose external guarantees as required, and the stock will be forced to delist due to major violations. In fact, in March 2024, due to suspected violations of information disclosure laws and regulations, the China Securities Regulatory Commission (CSRC) filed a case for investigation into Zhuo Lang Technology, and on October 31, Zhuo Lang Technology was implemented "*ST", and the stock abbreviation was changed to "*ST Zhuo Lang". From November 6 to December 25, 2024, *ST Zhuo Lang issued 14 delisting risk warning announcements, and announced the suspension and termination of listing on December 26. It's a classic textbook perfect delisting operation. However, before the "9.24" New Deal, the majority of small and medium-sized investors who have suffered from the delisting of five non-ST companies at face value should still be given an explanation, and the new "National Nine Articles" and the "New Rules for Delisting" emphasize that "strengthening the protection of investors of delisted companies" must be implemented.

Edited by Li Li

Review Miao Xi

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