· How to speed up the implementation of the new "National Nine Articles" ·
Editor's note: Since the State Council issued the "Several Opinions on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Capital Market" in April 2024, the capital market has started a deeper reform, and the "1+N" policy system is also accelerating its implementation. Wu Qing, chairman of the China Securities Regulatory Commission, said: "A strong capital market is the standard of the modern economy. "In this issue, the capital market conducted an in-depth analysis on the strict access to issuance and listing, the acceleration of the delisting process, and the changes in cash dividends, and discussed the reform of the stock issuance registration system and the reform of the independent director system. Experts said that in the next two years, a considerable number of companies will choose to withdraw due to strong supervision, and subsequent IPOs can grasp the rhythm under strict supervision.
■China Economic Times reporter Sun Zhao
With the end of the A-share annual report disclosure season, some listed companies have sounded the "alarm" of delisting. According to incomplete statistics from the China Economic Times, 25 listed companies will be locked in and delisted (including delisted) in 2024, of which 9 have been delisted, more than half of the number in the whole of last year.
Industry insiders interviewed by a reporter from the China Economic Times said that with the advancement of the reform of the delisting system, A-shares will accelerate the "retreat as much as possible", which will help improve the overall quality of listed companies. For investors, it is necessary to make sufficient research preparations before investing, continuously enhance their risk awareness, and remain vigilant against companies with delisting risks to avoid excessive concentration in high-risk stocks.
The diversified delisting mechanism has been gradually improved
Since the beginning of this year, the new delisting regulations have continued to take effect, not only companies have been locked in for delisting, but also companies have been subject to risk warnings due to performance, corporate governance and other reasons, and on May 6 alone, nearly 50 companies' securities abbreviations have been concentrated "hatted".
From the perspective of the type of delisting, "1 yuan delisting" has become the mainstream method. As of April 30, more than 10 companies have locked in "1 yuan delisting" this year. *ST Huayi, *ST Bolong, *ST Oceanwide, *ST Aidi, ST Hongda, ST Xingyuan, ST Guiren and other companies have been terminated from listing and delisted.
There are also many listed companies that have touched the reasons for financial delisting. Since the beginning of this year, among the listed companies locked in for delisting, 10 companies have not improved their performance in their 2023 annual reports, or have been issued with "non-standard" audit opinions, touching the financial delisting situation. In addition, there has also been an increase in the number of cases that hit the mandatory delisting indicators of major violations. Following *ST Xinhai becoming the first case of mandatory delisting due to major violations in 2024, *ST Poten was also forcibly delisted due to major violations and its listing was terminated on April 25.
According to the data, in 2023, a total of 46 A-share listed companies will be delisted. In less than five months so far in 2024, the number of companies locked up and delisted has exceeded half of the number in the whole of 2023.
Liu Chunsheng, an associate professor at the Central University of Finance and Economics, said in an interview with a reporter from the China Economic Times that since the beginning of this year, the A-share delisting mechanism has become significantly stricter, which reflects the determination of the regulator to promote the high-quality development of the capital market, as well as the policy orientation of strengthening the market's survival of the fittest function and protecting the interests of investors.
Liang Jing, a senior researcher at the Bank of China Research Institute, told the China Economic Times that in recent years, the delisting mechanism of the mainland capital market has been continuously improved, and this year it has further strengthened the supervision of the delisting of listed companies. In April, the China Securities Regulatory Commission (CSRC) issued the "Opinions on Strictly Implementing the Delisting System", which further tightened and improved the mandatory delisting standards, smoothed multiple delisting channels, reduced the value of "shell" resources, and strengthened delisting supervision. With the implementation of various reform measures, the delisting process will continue to improve, the efficiency will continue to improve, the market clearance efforts will be increased, and the number of delisted enterprises will increase.
The normalized delisting system continues to improve
Delisting supervision is the top priority of strong supervision, and it is also one of the key directions for the continuous supervision of listed companies, and it is also an inevitable requirement for building a comprehensive and three-dimensional regulatory system for the capital market.
On April 12, the China Securities Regulatory Commission issued the "Opinions on the Strict Implementation of the Delisting System", which made it clear that the exchange should revise and improve the relevant delisting rules, and also include the occupation of funds, internal control audit opinions, and long-term disorderly competition for control into the normative delisting situation. On April 30, at the end of the annual report season, the three major exchanges in Shanghai, Shenzhen and North China officially issued a number of supporting business rules, once again clarifying the strict delisting standards, and accelerating the formation of a normalized delisting pattern that should be withdrawn and cleared in a timely manner.
"With the advancement of the reform of the delisting system, A-shares will accelerate the withdrawal of all that should be withdrawn, which is conducive to improving the overall quality of listed companies." Liang Jing said that on the one hand, this will help accelerate the metabolism of the capital market and increase the intensity of market-oriented liquidation. On the other hand, it will also help guide enterprises to pay more attention to improving the corporate governance structure and improving the ability to continue operations, so as to better enhance the quality and investment value of existing listed companies. In addition, more funds flow to enterprises with good operating conditions, which is also conducive to giving play to the role of the capital market in supporting the real economy.
"The delisting system is a key basic system of the capital market, and the improvement of the normalized delisting system is conducive to the formation of the survival of the fittest mechanism in the capital market, and also helps to stimulate the vitality of the capital market and promote the high-quality development of the capital market. In addition, the exit of companies with low operating efficiency and financial fraud will also help protect the interests of investors and avoid potential financial risks brought by these companies. Liang Jing said.
Liu Chunsheng said that the strict implementation of the delisting system will help eliminate the "zombie enterprises" and problem enterprises in the market, avoid the misallocation of resources, help capital flow more effectively to enterprises with potential and good operations, and promote the healthy development of the overall market. In the long run, this will help enhance the investment value and attractiveness of A-shares. In addition, a strict delisting regime can also encourage listed companies to pay more attention to corporate governance, financial transparency and performance to avoid triggering delisting conditions. This will motivate enterprises to strengthen internal management, improve operational efficiency, promote sustainable development of enterprises, and further enhance investor confidence.
"An orderly delisting mechanism is one of the hallmarks of a mature capital market. With the gradual integration of A-shares with the international market, the improvement of this mechanism will help enhance its international competitiveness and attract more domestic and foreign long-term capital participation. Liu Chunsheng said.
Investor protection should be further strengthened
With the further acceleration of the pace of delisting, many listed companies that have previously "put on stars and hats" have started to save themselves. As of the close of trading on May 8, a total of 43 ST companies or *ST companies have applied for withdrawal of delisting, special treatment and risk warnings including internal control audits this year.
In the face of the current situation where the signal of strengthening delisting supervision is becoming clearer and the underperforming stocks continue to be optimized by the market ecology, some investors may face losses. The "Opinions on the Strict Implementation of the Delisting System" issued a few days ago emphasized that it is necessary to improve the investor compensation and relief mechanism in the process of delisting, and to "retreat" while "retreating".
Liu Chunsheng said that in the face of gradually stricter delisting regulations, investors should make full research preparations before investing to understand the company's business model, financial status and industry status. It is also necessary to continuously enhance risk awareness, remain vigilant against companies at risk of delisting, and avoid excessive concentration in high-risk stocks. In addition, it is necessary to pay attention to the announcements and policy developments issued by regulators and exchanges in a timely manner, and understand the latest situation of listed companies, especially information on financial reports, regulatory penalties and delisting warnings.
"Investors should pay more attention to the company's finances, governance mechanisms, compliance operations, etc., strengthen their understanding and learning of capital market rules, and avoid investing in high-risk listed companies that may trigger delisting conditions. Investor compensation and relief is one of the important contents of the delisting system, and investors should actively use the relevant government relief and compensation mechanism to protect their legitimate rights and interests to the greatest extent. Liang Jing said.
Image source of this article: Authorized by Photo.com
Chief Producer丨Wang Hui and Che Haigang
Producer丨Li Piguang, Wang Yu, Liu Weimin
Editor-in-Chief丨Mao Jinghui Editor丨Cao Yang