A-share delisting in the past 30 years

 A-share delisting in the past 30 years

There are advances and retreats, but running water is not rotten. At present, the registration system is smoothly implemented in the science and technology innovation board and the growth enterprise market, and will soon be launched in the whole market. It is more urgent to start a new round of delisting reform.

There has always been a lot of resistance to delisting because a group of shareholders have gone to zero. An industrial capital investor told first finance and economics that compared with the Hong Kong market, the A-share retail market accounts for a relatively high proportion, which means that many bad companies may have investors to listen to the wind to speculate, and then take the initiative to withdraw from the market by fairyland. It is difficult to form naturally. We must strengthen the rules and take the initiative to get rid of the zombie shell.

Will the investors agree to the delisting of listed companies? In fact, after nearly 30 years of development, shareholders, as a major part of the market, are also tending to be rational.

As an investor told reporters, there must be zero tolerance for counterfeiting companies. If such companies can remain listed, it will have a very bad demonstration effect. If I buy my company, I will refund it.

Start with Pt Narcissus

Throughout the 30 years of A-share market, although there are only more than 100 delisting companies, the process of delisting is fierce and controversial.

At present, among the 125 delisted companies, 53 have been delisted due to losses for more than three consecutive years, accounting for nearly half of the total; 35 companies have been delisted due to merger and acquisition; 22 companies have been delisted due to face value and major illegal delisting; 9 have been delisted due to privatization; and 6 have not disclosed their regular reports after suspension of listing.

PT was listed on Shanghai Stock Exchange on April 23, 2001. It became the first delisted stock in A-share market. The situation of only entering but not going out in the A-share market for more than ten years has finally been broken.

By the end of 2000, there were more than 1200 listed companies at home and abroad, and the market value of domestic stocks reached 4.8 trillion yuan.

According to the CSRC at that time, a number of excellent enterprises have become the new force to promote the development of the national economy through the incubation effect of the securities market, and their ability to participate in the international market competition has been significantly enhanced. However, in the increasingly fierce market competition, some listed companies failed to adjust their business strategies and management concepts in time, and gradually lost their business advantages at the beginning of listing, resulting in the dilemma of continuous losses for many years, and no longer have the legal conditions for continuous listing.

Let these companies withdraw from the stock market to realize the survival of the fittest in the stock market. According to the CSRC, the withdrawal of Pt Narcissus shows that the withdrawal mechanism of Chinas securities market has begun to be established, which will be conducive to the improvement of the overall quality of Chinas securities market and the stable and healthy development of the securities market.

The goal is clear, but it is not easy to promote.

The direct impact of delisting is that stock price falls sharply and liquidity disappears. At the beginning of listing, Pt Narcissus stock price was about 24 yuan / share, but before delisting in 2001, the stock price dropped to 4.8 yuan / share. Since then, the company has been listed in the national stock transfer system. As soon as the transfer is started, the stock price will continue to drop.

What is the root cause of immobility

In 2012, the Shanghai and Shenzhen stock exchanges started to improve the delisting system. Companies with negative net assets for three consecutive years, or operating income less than 10 million yuan for three consecutive years, or closing price lower than the par value of shares for 20 consecutive trading days, will be delisted.

In 2014, China Securities Regulatory Commission (CSRC) issued some opinions on reform, improvement and strict implementation of delisting system of listed companies (hereinafter referred to as several opinions), which is known as the strictest delisting new regulation in history, adding the mandatory delisting system for major illegal companies such as fraudulent issuance and illegal disclosure of major information.

In 2018, China Securities Regulatory Commission (CSRC) announced to revise the several opinions to strengthen the responsibility of decision-makers of Shanghai and Shenzhen stock exchanges in implementing compulsory delisting of major illegal companies.

In 2020, the new securities law will come into effect, and the suspension of listing will be abolished for the first time, and there will no longer be a resumption of listing game rules in the A-share market.

In April this year, the reform of the registration system of the gem started. Like the science and technology innovation board, the new delisting rules of gem have made compulsory delisting provisions from four aspects of transaction, finance, regulation and major violations, set up delisting risk warning and * ST system, and optimize the disclosure time and frequency of risk warning announcement for various delisting situations according to the difference of risk degree.

In the view of the investors mentioned above, 4000 companies have been listed only after 30 years of A-share development. After the registration system, there may be 6000 or 10000 companies, but these companies are still core resources. From his point of view, poor business operation, poor performance and even fraud will not make the market value of the enterprise return to zero, and the shell value will still exist for a long time. Only when the enterprise really wants to withdraw from the market, will the market value be really hit to the bottom.

Listing is so difficult, delisting is certainly difficult. A management of a technology company with experience in securities business told first finance and economics that the current A-share listed companies had taken a long time to go public at the beginning. Not only was the threshold of listing relatively high, but some also encountered IPO suspension, which led to the extension of listing cycle to seven or eight years. Such companies would certainly not like to delist.

First of all, shareholders are reluctant to withdraw, because delisting means that there is no liquidity, and there is a high probability that they will lose the opportunity to carry out capital operation and merger and reorganization; secondly, local governments and competent departments are also reluctant to withdraw, especially in some areas where there are few listed companies, so the task of covering is to protect the market; thirdly, investors in the secondary market are also reluctant to withdraw, and delisting means that the return on investment will be greatly reduced To zero. In addition, regulators are more cautious about delisting because of concerns about investor sentiment in the secondary market.

We have been in contact with some Western companies. At the end of the year, even the government departments will come out to cover up, such as giving one-time subsidies to help listed companies avoid financial indicators and delisting. The source told reporters that the number of Listed Companies in some areas is in the KPI assessment indicators of regulatory authorities, and many of them are state-owned enterprises. Delisting is not good, and the burden will be heavier after delisting.

Statistics from the first finance and economics reporter found that the provinces with the largest number of listed companies are also the provinces with the largest number of delisted companies.

Among them, there are 665 listed companies and 18 delisted companies in Guangdong Province. The number of Listed Companies in Jiangsu and Shanghai were 473, 333 and 380, respectively. There are 506 listed companies in Zhejiang Province, and the number of listed companies is the second, but among the top five provinces and cities, the number of delisted companies is the least, with a total of 3 companies delisting.

Improve the back off ecology

In the first half of 2015, the stock price of windstorm Technology (300431. SZ) had 36 consecutive price limits, with an upward movement of 248 yuan / share, and a market value of nearly 30 billion yuan. When Feng Xin, CEO of the company, was interviewed by first finance and economics, he was pleased to say that shareholders know more about the storm than I imagined..

In September 2020, the storm entered the delisting period and was delisted by Shenzhen Stock Exchange on November 10. The companys opening reference price on the first day of delisting consolidation period is only 1.48 yuan / share, which is almost zero compared with the peak of 200 yuan.

Such a shock to the secondary market investors is not small. In this regard, industry insiders believe that while improving the delisting indicators, we should also improve the retreat system, provide a gradient undertaking mechanism, and smooth the price impact brought by delisting.

At present, there are three main aspects of the delisting supporting system: the first is the old three board undertaking listing transfer; the second is the re listing system after delisting; the third is the investor litigation compensation system.

However, due to the small number of delisting companies and the poor quality of companies, the old three board lacks liquidity and attraction.

According to statistics, as of December 1, there were 78 two networks and delisting companies (i.e. the old three board) listed in the national stock to share system, including 69 A-shares. Inquiry transaction situation can see, December 1, all stock trading volume is 0.

These companies certainly dont trade every day, but there will still be investors who pay attention to their bankruptcy or restructuring progress and trade when the opportunity comes out. The management of the above-mentioned technology companies believe that in the future, if the number of old three board companies is enough, similar to the powder Market in the United States, investors will naturally dig out opportunities and form liquidity for a long time.

In addition, the re listing system is an important supporting system in the delisting system. The system was established in the delisting system reform of Shanghai and Shenzhen Stock Exchange in 2012 and revised in 2014. Its main goal is to establish a market mechanism that can go up and down, and provide a re listing path for delisted companies after their sustainable operation ability and corporate governance level are significantly improved.

The re listing of the company on the Shanghai Stock Exchange (SSE) on April, 2018 was the first time the company submitted a re listing application to the Shanghai oil company. In January of the following year, St Changyou (601975.sh, now China Merchants Nanyou) was re listed on the Shanghai Stock Exchange. The opening reference price on the first day of listing was the closing price of the company on the last trading day (February 27, 2017) of the national small and medium-sized enterprise share transfer system, i.e., 4.31 yuan / share. This was 4.19 times higher than that of 0.83 yuan / share when st long oil was delisted.

In March this year, Sinochem heavy equipment Co., Ltd. (the original * ST secondary) was approved to be re listed, becoming the second company in the A-share market to apply for re listing after the oil transportation of Changhang.

In fact, the reporter found in the interview that the improvement of the securities litigation system is an important reason why investors are more indifferent to delisting.

If an enterprise wants to withdraw from the market, the boss may not have no money. There are two reasons. First, the companies we invest in are certainly not companies with poor performance in the industry. This is not the business of professional institutional investors. If the companies we invest in withdraw from the market, it is mostly because of financial fraud, illegal guarantee, fund occupation and other illegal issues; second, the actual controller of the company risks the legal risk to make such occupation and guarantee, which must be for some external purpose, and most of them have assets. The person told reporters that hollowing out listed companies, assets to a place outside the body.

When a company delisted, the actual controllers value may not return to zero. Unless you go gambling, its not He added.

With the promotion of the registration system reform, the efficiency of enterprises listing is speeding up, and the attitude of all parties to delisting is also changing.

An entrepreneur of a technology company preparing to go public told CFI that the possibility of delisting had been considered before the company was listed. One is that if you cant get out of the market, you dont have a face to depend on. Back, and then adjust the direction of entrepreneurship. The other is to do too well, privatization, delisting, and several entrepreneurs sharing money. She said that many continuous entrepreneurs are also continuous losers. If it is difficult for a platform to make a comeback, it is better to change the track and make a new one. There is no historical burden and the probability of success is higher. From the examination and approval system to the registration system, the A-share market has gone for 30 years. Along with the reform of delisting system, it is making great strides towards just quitting. At present, a new round of delisting regulations will be issued soon. Whether the export of Chinas securities market can be really activated remains to be seen. Source of this article: Guo Chenqi, editor in charge of first finance and Economics_ NBJ9931

An entrepreneur of a technology company preparing to go public told CFI that the possibility of delisting had been considered before the company was listed.

From the examination and approval system to the registration system, the A-share market has gone for 30 years. Along with the reform of delisting system, it is making great strides towards just quitting. At present, a new round of delisting regulations will be issued soon. Whether the export of Chinas securities market can be really activated remains to be seen.