On July 23rd, *ST Shen Tian once again hit the daily limit down, and by the close of trading, the company's latest market value stood at 251 million yuan.
That evening, *ST Shen Tian issued its 11th risk warning announcement. Since June 27th, *ST Shen Tian has closed below the 300 million yuan market value mark for 19 consecutive trading days. Even if the company's stock hits the daily limit up in the next trading session, its market value will not be able to surpass the 300 million yuan threshold, thereby locking in a market value delisting and becoming the first delisted stock in the A-share market due to market value.
In fact, since June of this year, several A/B-share listed companies have warned of the risk of delisting due to market value. Among them, Jian Che B became the first "market value delisted B-share" in the entire market.
According to the revised delisting standards, the market value delisting standard for mainboard companies has been raised from 300 million yuan to 500 million yuan to increase the intensity of market-oriented clearance, and the new rules will be implemented from October 30th of this year. During the transition period, the market value delisting standard remains at 300 million yuan. Additionally, the market value delisting standards for B-shares, the ChiNext board, and the STAR Market remain unchanged at 300 million yuan.
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Violation of regulations by major shareholders in the occupation of funds
*ST Shen Tian entered the capital market in 1993 and has been listed for more than 30 years. Its main business is commercial concrete. In 2020, *ST Shen Tian began to incur losses and has been in the red for four consecutive years, with a total loss of nearly 500 million yuan.
This year, *ST Shen Tian continues to suffer losses. According to the 2024 semi-annual performance forecast, the company's net profit attributable to the parent company for the first half of the year is a loss of 80 to 100 million yuan, a decrease of 59.69% to 99.62% compared to the same period last year.
In response, *ST Shen Tian stated that, firstly, the company's concrete business was affected by the market, with sales revenue declining year-on-year. Secondly, the company and its controlling subsidiaries and grand subsidiaries have a large number of lawsuits and arbitration matters due to economic disputes, leading to the judicial freezing of some bank accounts, i.e., some assets being frozen and sealed, which has had a certain impact on the company's production and operations. Thirdly, during the reporting period, the four concrete stations that were shut down in 2022 have not yet resumed production and sales, the increase in the age of accounts receivable has led to a significant increase in the provision for credit losses; the company has provided for expenses related to lawsuits and arbitration matters, resulting in a decrease in operating profit.
On May 5, 2023, *ST Shen Tian was subject to other risk warnings by the Shenzhen Stock Exchange due to the net profit being negative for the latest three fiscal years, both before and after deducting non-recurring gains and losses, and the latest annual audit report showing uncertainty about the company's ability to continue as a going concern, as well as the internal control audit report for the latest year being issued with a negative opinion.
On September 27th of the same year, the company was again subject to additional risk warnings because the balance of funds occupied by the controlling shareholder or related parties of the controlling shareholder was more than 10 million yuan, accounting for more than 5% of the company's latest audited net assets, and it was expected that it would not be resolved within a month.The issue of capital occupation has always been a focal point of regulatory concern. On April 12th of this year, the China Securities Regulatory Commission (CSRC) issued the "Opinions on Strictly Implementing the Delisting System," and the stock exchanges simultaneously revised and improved the relevant delisting rules. The revised delisting rules include serious capital occupation that is not rectified as a normative category for delisting. Companies with ineffective internal controls and existing controlling shareholders' capital occupation will be strictly subject to delisting. Especially for those who repeatedly occupy funds and refuse to rectify, or occupy funds again after rectification, they will be resolutely cleared out.
*ST Shen Tian disclosed the capital occupation situation in detail in its 2023 annual report: On April 30, 2023, *ST Shen Tian's wholly-owned subsidiary, Tian Di Shun Ming, signed a "Sales and Purchase Contract" for cement, mineral powder, and sandstone with Shenzhen Qian Hong Trading Co., Ltd. On May 4, 2023, Tian Di Shun Ming transferred 137 million yuan from its Bohai Bank Beijing Wanshou Road branch account to Shenzhen Qian Hong Trading Co., Ltd. in the form of a prepayment. The above non-operational capital occupation formed in the name of prepayment for materials amounted to 137 million yuan, accounting for 685% of the company's most recent audited net assets.
Confirmed by the actual controller of the company, Lin Hongrun, there was no substantive transaction in the aforementioned contract and fund transactions. The controlling shareholder, Guangdong Jun Hao, used this to form a 137 million yuan transaction to repay its debts, constituting non-operational capital occupation by the controlling shareholder of *ST Shen Tian. As of the report date, the above non-operational occupation has not been returned.
On May 10th of this year, the Shenzhen Securities Regulatory Bureau issued a penalty decision, ordering *ST Shen Tian and Lin Hongrun to take corrective regulatory measures. They were also required to take active measures to recover the occupied funds and protect the interests of the listed company and small and medium shareholders; Lin Hongrun should fulfill the main responsibility and actively raise funds to repay the occupied funds.
On May 6, 2024, *ST Shen Tian was issued a delisting risk warning. During the period from June 4th to June 25th, *ST Shen Tian's closing market value was below 300 million yuan for 15 consecutive trading days, approaching the brink of delisting. However, on June 26th, it rose back above 300 million yuan. As of the latest, the company has 8,029 shareholders.
With the new regulations imminent, 10 stocks are on the brink of delisting due to market value.
Since the beginning of this year, more than a hundred listed companies on the A-share market have been issued risk warnings, and the types and number of delisted companies continue to increase.
In terms of trading-related delistings, most listed companies delisted due to their stock closing prices being below 1 yuan for 20 consecutive trading days. However, starting in June, many listed companies began to frequently warn of market value delisting risks.
On June 19th, Jian Che B announced that it had received a prior notice of stock termination listing. The company's market value was below 300 million yuan for 20 consecutive trading days from May 17th to June 14th, and the exchange decided to terminate the company's stock listing and trading. Jian Che B was listed on the Shenzhen Stock Exchange B-shares in 1995 and is also the first B-share to delist due to market value.
On June 22nd, Hui Li B announced that the company's stock closed at a total market value of 291 million yuan on June 21st, which has been below 300 million yuan for 14 consecutive trading days. In addition, Ning Tong Xin B announced on July 8th that the company's closing market value on that day was 298 million yuan, falling below 300 million yuan for the first time.In addition to B-shares, A-share listed companies have also begun to announce the risk of delisting due to market value. For instance, *ST MeiXun has successively disclosed the risks of delisting due to market value and par value since June. However, the company's stock price has recently rebounded, with its market value standing above 300 million yuan, and its par value also above 1 yuan.
In April of this year, the revised delisting criteria raised the market value delisting standard for mainboard companies from 300 million yuan to 500 million yuan, thereby increasing the probability of companies touching the market value delisting threshold in the future.
On April 16th, Guo Ruiming, the director of the Listed Company Supervision Department of the China Securities Regulatory Commission (CSRC), stated in response to reporters' questions that currently, only four mainboard companies in the Shanghai and Shenzhen stock markets have a market value below 500 million yuan, and there are no companies on the STAR Market or the Growth Enterprise Market that are close to the 300 million yuan market value delisting threshold.
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