A-share "metabolism" speeds up four listed companies have delisted this year

Abstract The reason for the suspension of listing and delisting of listed companies this year is no longer a single profit factor. This is the policy signal that the regulatory authorities have clearly released the optimized increments, reformed the stocks, and put the A-share market entry and exit. With the tightening of supervision, the delisting mechanism is gradually improved, and the investment of poor performance stocks...

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The reason why listed companies have been suspended from listing and delisting this year is no longer a single profit factor. This is a policy signal that the regulatory authorities have explicitly released optimized increments, reformed stocks, and improved the import and export of the A-share market. With the tightening of supervision, the delisting mechanism will gradually improve, the investment risk of the poor stocks will increase, and the market investment style will gradually return to value investment.

Recently, the Shanghai and Shenzhen Stock Exchanges decided to terminate the listing of shares in four companies, such as *ST Hairun, *ST Shangpu, *ST Huaze, and *ST Zhonghe, in accordance with the law. Wind information statistics show that the A-share delisting has increased significantly this year. As of May 22, four listed companies were delisted, nine companies were suspended, and 68 were specially handled (wearing "ST"). Last year, delisting, suspension, and "wearing caps" were implemented. The number of companies is 0, 1 and 39 respectively.

The normalization of the delisting system is a policy signal that the regulatory authorities have clearly released the optimized increments, reformed the stocks, and put the A-share market entry and exit. Through the strict delisting system, the “zombie enterprise” and “empty shell company” will be promoted in time to clear the quality of listed companies and achieve market-based survival of the fittest.

Delisting is different

The delisting this year has increased significantly. In the year of 2018, only five companies including Sinotrans Development, Zhonghong Retreat, Ethylene Carbon Retreat, Delisting Kunji, and Delisting Jean were delisted. Throughout the decades-long development history of A-shares, there are only 101 companies that have withdrawn from the market for various reasons, of which 34 are due to the merger and delisting, and 45 are delisted for three consecutive years. Delisting due to reasons such as securities replacement, suspension of listing and failure to disclose periodic reports.

Although the number of delisting companies has increased significantly this year, the specific reasons are different. *ST Hairun is the three mandatory delisting standards that touch on net assets, net profit and audit report opinions; *ST Huaze belongs to the first annual report after failing to disclose the suspension of listing within the statutory time limit; *ST Zhonghe belongs to The first annual report after the suspension of listing shows that the company's net profit and net assets are negative, and the financial accounting report is issued an audit report that cannot express opinions; *ST Shangpu is decided by the shareholders' meeting to deliberately decide to terminate its listing.

Due to the different deductions from the delisting, the follow-up process of the four companies is different. Specifically, *ST Hairun, *ST Huaze, *ST Zhonghe and other three companies will enter the delisting period, the trading period is 30 trading days, *ST is a voluntary termination of listing, according to regulations Enter the delisting period transaction. According to the relevant regulations, after the expiration of the delisting period, the Shanghai and Shenzhen Stock Exchanges will delist the *ST Hairun, *ST Huaze, *ST Zhonghe shares. The company's shares will be listed in the national SME share transfer system within 45 trading days after the expiration of the delisting period.

Among the 68 companies that have implemented special treatment this year, there are several reasons for implementing ST: First, an audit report issued by a certified public accountant that cannot express opinions or negative opinions. For example, *ST Pengqi, *ST Huaye; second, other abnormal conditions. For example, ST Fenghua, ST Dazhou; third is to resume listing and implement ST; Fourth, the results of the recent two fiscal year audits show that the net profit is negative, which is the type that is currently being treated the most. For example, *ST Busen, *ST Renzhi; Fifth, the shareholder's equity of the most recent fiscal year is lower than the registered capital, that is, each share is lower than the face value of the stock. For example, *ST Xiagong.

From the perspective of the company industry that has been specially treated, non-ferrous metals, computer manufacturing, electric power production and other industries have become "wearing caps". Among them, 7 and 6 listed companies in the automobile manufacturing and computer manufacturing industries were “capped”.

Release strong regulatory signals

In the past, there were several reasons why A-share listed companies were delisting. Ying Xiang Securities analyst Hui Xiangfeng believes that first, the past A-share delisting system needs to be improved, and the delisting mechanism that relies on a single financial indicator is relatively difficult to implement. Second, the A-share market is full of expectations for the "ST-like stocks" speculation, and the market is not tired and harmful.

In October 2014, the regulatory authorities issued the “Several Opinions on Reforming and Perfecting the Delisting System of Listed Companies”, clearly indicating that the delisting system will be strictly implemented thereafter, and “one delisting one” will be implemented. The ways and methods of active delisting. In addition, for listed companies that are fraudulently issued and listed, and major information disclosure is illegal, it is clear that the mandatory delisting procedure will be implemented.

In addition to systematically checking for vacancies, the regulatory authorities have also strengthened day-to-day supervision. Therefore, it is not accidental that the “wearing caps” and delisting stocks have increased significantly this year. Recently, the chairman of the China Securities Regulatory Commission, Yi Huiman, pointed out at the 2019 annual meeting of the Association of Chinese Listed Companies that listed companies and major shareholders must firmly hold the "four bottom lines": not to disclose false information, not to engage in insider trading, not to manipulate stock prices and not Damage to the interests of listed companies. He pointed out that the supervision will continue to increase, and the focus of supervision is mainly on information disclosure and corporate governance.

From April 30 to May 5, the Shanghai and Shenzhen Stock Exchanges successively issued the "Shenzhen Stock Exchange Council 2018 Work Summary and 2019 Key Work Report" "Shanghai Stock Exchange Listed 2018 Annual Report Overall Analysis Report", covering Strictly implement the delisting system, promote the normalization of the delisting of the rule of law, improve the market survival of the fittest mechanism, unblock the export channels of the capital market, and accelerate the clearing of inferior enterprises such as major illegal and illegal companies, zombie enterprises, and shell companies.

Xu Peidong, an analyst at BOC International Securities, believes that the suspension of listing and even delisting measures for a number of listed companies has released a strong regulatory signal. Different from the past, the reasons for the suspension of listing and delisting of listed companies this year are no longer a single profit factor. The tightening of supervision on delisting, the suspension of listing and deregulation conditions will become a new trend.

"shell resource" logic changes

In addition to stricter regulation, the difficulty of IPO listing is also decreasing, which also led to the cooling of the backdoor listing operation and the decline in the value of the ST-type shell. Since the beginning of this year, the IPO approval rate has increased significantly. Especially since the establishment of the new audit committee, the over-representation rate has exceeded 90%. In terms of IPO filings, the number of new applications for IPO queuing sequences has been 53 this year, significantly less than in previous years.

In addition, the success of the science and technology board has provided another listing channel for enterprises. Since the first batch of science and technology companies accepted the disclosure of the company on March 22, within two months, the number of enterprises accepted by the Shanghai Stock Exchange has reached 110.

Lei Hao, a researcher at the Good Buy Fund Research Center, believes that the establishment of the science and technology board and the pilot registration system will bring more market-oriented pricing and placement mechanisms for new shares, increase direct financing channels, increase the stock supply of listed companies, and also hope to adopt a new top-level design. Change the problem of delisting in the past, frying the shell fever, and queuing the “single bridge” of listed companies.

Yang Delong, chief economist of Qianhai Open Source Fund, said that in history, A shares have a tradition of speculating ST. The ST sector is a long-term hot spot in the A-share market. Most of them are poor performance stocks, there are shell expectations, and speculation is high, in some The annual increase can even exceed the White Horse stocks. The imperfect delisting mechanism of A-shares used to be beneficial to invest in ST stocks. The implementation of a strict delisting system will help to weaken the speculative sentiment of short-term investors. In the future, with the tightening of supervision, the delisting mechanism will gradually improve, the investment risk of the poor stocks will increase, and the market investment style will gradually return to value investment.

According to industry insiders, investors should polish their eyes on stocks that have been specially treated, and carefully step on the junk stocks and the stocks of the stocks. Some types of stocks should be avoided as much as possible. One is to evade the ST and *ST stocks that are wearing caps. The second is to circumvent stocks that the Shanghai Stock Exchange has publicly condemned and notified criticism. The third is to circumvent stocks that have not been disclosed in the statutory time limit and the financial statements have been issued with an audit report that cannot express opinions or negative opinions. The fourth is to avoid the main business is not good, the operating cash flow continues to be negative, relying on the extension of mergers and acquisitions and restructuring of the stocks.

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