ST companies have entered the speed of life and death: the risk of delisting of 1 yuan has increased sharply, and there are various measures to protect the shell

CBN

2024-05-17 19:53Posted on the official account of Jiangsu Yicai

Under the new "National Nine Articles", the delisting of A-shares has been strengthened, and the pressure on ST companies has escalated sharply, entering the speed of life and death.

As the annual reporting season comes to an end, the number of companies on risk alert in Shanghai and Shenzhen has skyrocketed. As of the close of trading on May 17, the number of A-share ST companies (including ST shares and *ST shares, the same below) has reached 176, of which the number of *ST companies is 98 and the number of ST companies is 78.

After the introduction of the new "National Nine Articles", the ST sector fluctuated downward, and most ST stocks suffered heavy losses, some stocks fell below 1 yuan, with a risk of delisting at 1 yuan, and some have been sentenced to delisting at face value in this round of decline. Under the pressure of strong regulation and the market voting with its feet, some ST companies are trying to protect their shells through a variety of measures.

Tian Xuan, deputy dean of Tsinghua University's PBC School of Finance, told the first financial reporter that the ST market will enter a new stage of market-oriented stratification: on the one hand, by strengthening the business layout, improving the level of operation and management, the enterprises that reverse the decline of enterprise development will gradually "take off their hats"; On the other hand, companies that continue to fail to meet the performance standards, lose money, and touch the mandatory delisting target face forced delisting. Under the further tightening of delisting standards and strengthening the regulatory requirements for delisting, the number of ST stocks delisted will be further increased.

Tian Xuan suggested that investors should try to avoid investing in companies with poor operating performance, low profitability, and ST or companies that may touch the delisting criteria, and not to invest in ST stocks that are maliciously speculated in the name of shell for speculative considerations.

The risk of delisting of ST companies at 1 yuan has increased sharply

The new "National Nine Articles" make it clear that the mandatory delisting standards will be further tightened, the financial delisting indicators will be tightened, the implementation of standardized delisting will be strengthened, and the value of "shell" resources will be further reduced. Subsequently, the China Securities Regulatory Commission issued the "Opinions on the Strict Implementation of the Delisting System", and the Shanghai and Shenzhen Stock Exchanges revised and introduced new delisting rules.

In this context, starting from April 15, the ST sector fluctuated downward, falling by 22.02% to May 17. During the same period, most ST stocks also suffered losses. During the same period, 138 stocks fell, accounting for 78%; 117 stocks fell for more than 3 days during the period.

Of the 176 ST stocks, 89 stocks have fallen by more than 20%, with 19 stocks being cut in half. *ST Baoli and *ST Meishang have fallen by more than 85%; *ST Yuebo, *ST Sansheng, and *ST Yilian have fallen by more than 60%; *ST Zhongrun, *ST Shimao, *ST Boxin and other 14 stocks have fallen by 50%~60%.

In terms of the number of days of the limit of the limit, during the period of April 15 ~ May 17 (22 trading days), there were 36 ST stocks that had more than 10 days of the limit of the limit. *ST has the largest number of days of falling limit in the sea, reaching 17 days; *ST Shimao and *ST Pengbo have a 16-day down limit; *ST Boxin and *ST have 14 days of high rise and fall limit.

It is also in this round of sharp decline that *ST Baoli will bid farewell to A-shares due to the delisting of 1 yuan. The company's share price fell sharply on April 15, falling below 1 yuan, and as of May 16, the closing price of *ST Baoli shares was below 1 yuan for 20 consecutive trading days, and trading was suspended from the opening of the market on May 17, pending the exchange's decision to terminate the listing.

*ST Meishang and *ST Shimao have received prior notices from the exchange that they intend to terminate the listing of the company's shares because their stock prices have been below 1 yuan for 20 consecutive trading days. *ST Yuebo and *ST Sansheng received a prior notice from the exchange that they intend to terminate the listing and trading of the company's shares due to their failure to disclose their 2023 annual reports by April 30.

After this round of sharp decline, the current share price of *ST Yilian is around 1 yuan; *ST's stock price per share has been below $1 since May 8, and has been below $1 for 8 consecutive trading days as of May 17.

In this regard, Tian Xuan analyzed that the new "National Nine Articles" will further tighten the delisting standards, strengthen the implementation of the delisting of "zombie shell" enterprises, especially the strict supervision of "backdoor listing", and accurately attack the malicious speculation and market manipulation through "shell resources", which will greatly reduce the value of "shell resources", and the market atmosphere such as speculation and speculation will gradually change.

"The era of speculation and profit from speculation on the theme of ST share restructuring is gone. Only by strictly regulating themselves can listed companies survive in the capital market. Jiang Weijia, a senior analyst at the Chongqing Business Department of Jinyuan Securities, said.

Under the tug-of-war of life and death, ST companies are all kinds of shells

Under the multiple pressures of increased delisting and investors voting with their feet, ST companies are facing unprecedented pressure and challenges, and some companies have begun to protect their shells under the sword of regulation.

According to the new rules on delisting, the operating income target for loss-making companies on the main board will be raised from "100 million yuan" to "300 million yuan". This makes some ST companies with revenue of just over 100 million yuan in 2023 once again on the line between life and death, and whether they can make a profit or have a revenue of more than 300 million yuan in 2024 has become the key point of survival.

According to Wind data, among the 160 ST companies that deduct non-net profit and net profit attributable to the parent company, which is in a state of loss, 52 companies currently have revenue of less than 300 million yuan in 2023.

Some of these companies have obvious signs of shelling. In the case of ST Yushun, it only took more than a month to complete the acquisition. On the evening of April 7, it was announced that the existing main business is facing certain pressure and urgently needs to inject high-quality assets, and will invest 74.25 million yuan to acquire 75% of the shares of Shanghai Fubang Industrial Co., Ltd. (hereinafter referred to as "Fubang Industrial"); On April 26, Fubang Industrial has completed the industrial and commercial change registration procedures; On the evening of May 14, it was announced that the first consideration of 63.2444 million yuan had been paid to the counterparty.

However, the scale of Fubang Industrial's performance is not large, with a revenue scale of about 40 million yuan in 2022 and 2023, a net profit of one million, and a commitment to make a net profit of not less than 8 million yuan after deducting non-profits in 2024. ST Yushun's revenue in 2023 will be 155 million yuan, and the net profit attributable to the parent company after deducting non-profits will be -18.478 million yuan.

For the operation of the acquisition target this year, Bao Xiangbing, the person in charge of Fubang Industry, said that before and after the completion of the acquisition process, Fubang Industrial has signed two procurement framework agreements, with an amount of up to 137 million yuan and 76.8 million yuan respectively, totaling more than 200 million yuan, and the cooperative customers are all state-owned enterprises, and Fubang Industrial will bring new profit growth points to listed companies in 2024.

And is it sustainable to sign such large orders? Ji Min, chairman of ST Yushun, told the first financial reporter that chemical products are iterative and customer sticky, and once Fubang Industrial has established a stable cooperative relationship with customers, the business developed has a certain degree of sustainability. In addition, the listed company will work with Fubang Industrial to amplify synergies and empower each other around supply chain management and customer resource sharing. In addition, ST Yushun is also improving the quality of the company's operation through foreign cooperation and investment, reducing costs and increasing efficiency, and extending business areas.

In addition to the acquisition of Fubang Industrial, ST Yushun made a new move on May 16. According to the announcement, Shanghai Fengwang Industrial Co., Ltd. (hereinafter referred to as "Shanghai Fengwang"), the controlling shareholder of ST Yushun, increased its holdings of 300,000 shares of the company on the 16th, accounting for 0.1070% of the total share capital, with an average price of 3.32 yuan per share and an increase of 996,500 yuan. With the addition of this additional shares, Shanghai Fengwang intends to increase the number of shares in the next 6 months with a total of 4,189,700 shares ~ 8,379,600 shares. Regarding this increase, Ji Min said that the increase in the holdings of major shareholders is due to their confidence in the company's future development and to enhance investors' confidence in the company.

There are not a few similar shell moves. Some companies have improved their business conditions by introducing strategic investors, implementing asset restructuring, reorganization, etc.

For example, on May 7, ST Dima fell to 0.90 yuan per share, and on the same day, the company received a notice that the controlling shareholder signed a "strategic investment framework agreement" with Chongqing Jiangnan Urban Construction and Development (Group) Co., Ltd., intending to resolve the debt crisis through judicial reorganization. On the evening of May 14, ST Dima also announced that in view of the company's current stock closing price of less than 1 yuan, the controlling shareholder or its concerted action person plans to increase its holdings by 30 million yuan ~ 50 million yuan within 6 months from May 15.

*ST Dongyuan also recently disclosed that Beijing Chaoyang State-owned Capital Operation and Management Co., Ltd., the indirect controlling shareholder and largest creditor, submitted an application to the court for reorganization and pre-reorganization of the company. The court decided to initiate a pre-reorganization of *ST East Park.

Of course, whether the shell action of ST companies can really bring the company back to life or continue to develop healthily remains to be observed.

How to prevent risks?

Under the various shell measures of ST companies, how can investors distinguish whether listed companies can really improve the quality of operation or lack the ability to recover?

Tian Xuan told reporters that the company's healthy and long-term development measures should be to strengthen its own profitability, strengthen corporate governance, enhance core competitiveness, and improve the quality of the company's development. The behavior of always trying to take advantage of the loopholes of the system and take risks to gain short-term benefits is likely to backfire, will not be recognized by the market, and even lead to the decline of the enterprise.

In terms of the characteristics of ST companies, "the reasons for listed companies to be ST are different, and they need to be analyzed in detail. If the company is occupied by the controlling shareholder and its affiliates for non-operational purposes, the balance reaches a certain scale, there are serious problems in internal control, the company has serious dishonesty, continuous performance losses, there is obvious major uncertainty in the ability to continue operations, and the production and business activities are seriously affected in the long term, etc., and the enterprise cannot return to normal through short-term adjustment, it may directly go to delisting. Tian Xuan said.

In his view, some enterprises may have short-term production problems or supply chain disruptions due to non-standard information disclosure and external environmental impacts, or due to active strategic adjustments, resulting in short-term delisting standards, but in the long term, they can still "take off their hats" by strengthening external support, expanding the stock market, developing new businesses, and strengthening internal governance.

In the past, the mandatory delisting criteria were relatively mild, and the implementation of delisting was insufficient, and enterprises carried out "shell" operations through acquisitions, reorganization, introduction of strategic investment, change of control, etc., resulting in the fact that there are still not many enterprises that are actually delisted. From the perspective of the industry, the new regulations propose to strengthen the implementation of the delisting of "zombie shell" enterprises, although the existing delisting system still has room for "shell", but the standards are more stringent.

A relevant person in charge of ST company told the first financial reporter that the introduction of the new "National Nine Articles" is believed to be a combination of challenges and opportunities for listed companies, and listed companies can only make the company develop with high quality through effective strategic layout and resource allocation under the guidance of the new "National Nine Articles".

So, under ST's shell measures, how should investors avoid risks?

Tian Xuan believes that small and medium-sized investors need to rely on the strength of professional institutions to strengthen the research and judgment of the company's operating ability, pay attention to the long-term development value of the enterprise, and avoid the risk of market fluctuations that may be brought about by the shell behavior, as well as the mistaken entry into junk stocks due to unclear judgment.

(This article is from Yicai)

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