Nearly 50 A-shares collectively "wore hats" today, 4 stocks were hit by the 20CM "large" drop limit, and a number of ST companies have been "delisted at face value" during the year

National Business Daily

2024-05-06 21:27Published on the official account of Sichuan Daily Economic News

Every reporter: Wang Haimin Every editor: Xiao Ruidong

As the second trading day after the release of the 2023 annual report, today (May 6), another batch of A-share companies have been officially put on risk alert (commonly known as "wearing hats"). According to statistics, there are 48 listed companies that are "wearing hats" today. In the context of a strong market rebound, these companies performed dismally, and 4 of them suffered a 20CM "large" fall limit.

In fact, since last week, a total of 79 A-shares have been "capped", and many of them have seen continuous declines since the "cap".

It is worth noting that, compared with other delisting indicators such as financial delisting, par value delisting has become a major reason for the delisting of A-share listed companies. According to statistics, the number of companies delisted at face value in 2023 will hit a record high, reaching 20, and almost all such stocks are ST companies. Since the beginning of this year, 7 ST companies have been delisted due to the triggering of par value delisting.

Since last week, nearly 80 A-shares have been "capped"

Recently, the A-share market has ushered in a round of "hatting" waves. According to Choice data, today, a total of 48 listed companies are collectively "hatted" (ST or *ST).

Since last week, a total of 79 A-shares have been "capped". According to statistics, a total of 87 A-share listed companies have been "hatted" since the beginning of this year. Among these companies that have been "hatted" recently, there are some "old fritters" who have repeatedly "worn hats" and "taken off hats" in history, such as *ST Wentou, *ST Kexin, *ST Boxin, etc.

It is worth mentioning that some A-shares that have recently been "hatted", such as *ST East Park (formerly Oriental Garden), *ST Pengbo (formerly Dr. Peng), etc., used to be star stocks in the market, and now the share price of some stocks such as *ST East Park has fallen below par value, which can not help but sigh.

Affected by multiple positive factors, the overall performance of the market today is strong, and the number of stocks that have risen has exceeded 4,400, but the overall performance of the companies that have been "hatted" is not good, and there are 4 stocks that have just "worn a hat" such as *ST Baan, *ST Yinjiang, and *ST Kaiyuan, which have just encountered a 20CM "large" drop limit. Judging from the large number of sealed orders on the fall limit of these companies, the pressure for further decline in the short term is still greater.

In addition, since last week, there have been many "hat-wearing" ST stocks that have seen a continuous downward trend. For example, on April 22, *ST Renle, which was hatted, has walked out of 8 consecutive down limits, and ST Zhongnan, which was "hatted" on April 24, has walked out of 6 consecutive down limits.

In terms of the overall performance this year, the ST sector has significantly underperformed the market. According to Choice data, among the more than 170 ST stocks in the Shanghai and Shenzhen markets this year, the cumulative proportion of ST stocks has fallen by more than 90%, of which as many as 98 ST stocks have fallen by more than 30% during the year.

In fact, at the market level, once an A-share listed company is "capped", it will face many unfavorable factors.

For example, once a listed company is "capped", the bullish power from mainstream institutions will be reduced. It is understood that ST stocks are usually excluded from the stock pools of mainstream institutions such as public funds. The person in charge of a branch of a leading brokerage told the reporter of "Daily Economic News", "We stipulate that we cannot recommend stocks outside the coverage of the research institute to customers, and ST stocks are generally outside the coverage of the research institute." ”

At the same time, in terms of capital, ST stocks cannot be compared with normal listed companies. In addition, according to the current regulations, the number of single risk warning stocks purchased by investors through auction trading and block trading on the same day shall not exceed 500,000 shares. This makes it difficult for the bulls to gather strength for a counterattack when ST stocks are faced with a bearish trend such as a continuous falling limit.

The delisting of the face value has become the main reason for the delisting of A-shares

According to the latest amendments, the delisting criteria for A-share listed companies will be further tightened in the future. On April 30, the Shanghai and Shenzhen Stock Exchanges officially issued 9 business rules, including the Rules for the Review of Stock Issuance and Listing, among which the revisions to delisting mainly have four major highlights:

The first is to expand the scope of application of mandatory delisting for major violations. Increase the number of serious fraud for one year and continuous fraud and delisting for many years. For those who have been fraudulent for one year, the amount of financial fraud in the current year reaches more than 200 million yuan, and the proportion of fraud reaches more than 30%, it will be delisted.

The second is to add three new normative delisting situations: the new controlling shareholder occupies a large amount of funds and does not rectify the delisting, the new multi-year internal control non-standard opinion delisting, and the new control disorderly competition for delisting.

The third is to tighten the financial delisting indicators. Raise the operating income delisting target of loss-making companies on the main board, increase the operating income in their "negative net profit + operating income" from the current "100 million yuan" to "300 million yuan", and increase efforts to eliminate companies that lack the ability to continue operations.

Fourth, improve the market value standard and other trading delisting indicators. The market value of A-share listed companies on the main board will be increased from 300 million yuan to 500 million yuan.

According to the above-mentioned business rules newly released by the Shanghai and Shenzhen Stock Exchanges, the overall target of the revision of the delisting rules is accurate, aiming at "shell zombies" and "black sheep", reflecting the "retreat as much as possible", highlighting the quality and value of listed companies, not targeting "small-cap stocks".

On April 30, the Shanghai and Shenzhen stock exchanges issued the above-mentioned new regulations, adding situations where cash dividends do not meet the standards for the implementation of ST. However, the exchange specifically emphasized that, unlike the "delisting risk alert" (*ST), listed companies will not be delisted simply because the dividend does not meet the standard.

In addition, the newly revised delisting rules have been implemented with a segregation arrangement between the old and the new to ensure a smooth transition. For example, the amendment to the new listing rules for mandatory delisting of financial products requires the 2024 annual report of a listed company to be the first applicable annual report.

It is worth noting that compared with financial delisting, a more important reason for the delisting of A-share listed companies is the delisting of par value. According to Choice statistics, the number of delisted companies with par value in 2023 will hit a record high of 20 (accounting for 43.5% of all delisted companies that year), and almost all such stocks are ST companies. In comparison, the number of companies delisted at par value in 2022 was only one.

Since the beginning of this year, 7 companies have been delisted due to the triggering of par value delisting, and these 7 companies are all ST companies. As of today's close, the number of companies whose stock prices fell below par value in Shanghai and Shenzhen A-shares reached 8, and the number of companies with stock prices of 1 yuan ~ 2 yuan reached 109.

Screenshot from: Industrial Securities Research Report

Some analysts believe that with the tightening of the delisting system, the delisting of A-share listed companies will become normal in the future. According to the statistics of Industrial Securities, since the reform of the delisting system in 2020 (the statistical interval is January 1, 2021 ~ April 12, 2024), 117 A-shares have been delisted in Shanghai and Shenzhen, and the normalized delisting has been opened smoothly. Among them, the number of A-share delisted companies in 2022 and 2023 will exceed 40, the highest level in history.

National Business Daily

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