Chongqing Dima Industry Co., Ltd. (Dima Co., Ltd.) suspended trading of its stock on June 24th due to the company’s decision to delist. Dima Co., Ltd. was the first privately-owned enterprise in Chongqing to be listed on the stock market.
On June 22nd, Dima Co., Ltd. issued a notice titled “Announcement Regarding Receipt of Regulatory Work Letter on Termination of Listing of Company Stock.” The announcement stated that the company’s stock had been trading below 1 yuan (RMB, same below) for 20 consecutive trading days from May 24th, 2024 to June 21st, 2024, triggering the delisting condition. The Shanghai Stock Exchange issued a pre-notification letter of compulsory delisting, leading to the suspension of the company’s stock from the market starting June 24th.
According to the news from Daily Economic News on June 25th, on January 16th of this year, Dima Co., Ltd. issued a warning about anticipated losses. Subsequently, the company’s stock price continued to decline and dropped below 1 yuan on February 7th, closing at 0.95 yuan per share. Despite a brief recovery above 1 yuan, the stock price fell again on April 24th.
The stock of Dima Co., Ltd. had its longest period below 1 yuan on April 30th. At that time, the company released its 2023 annual report, showing a revenue of 18.301 billion yuan and a net loss of 3.651 billion yuan. The company’s continuous losses for three years, highlighted in the audit report with a section of “significant uncertainties related to continued operation,” added a risk warning to the stock (designated as ST). When trading resumed on May 6th, the stock price dropped limit down, below 1 yuan, for 8 consecutive trading days.
Despite efforts to prevent delisting, such as increased holdings by executives, active restructuring applications, and a cooperation agreement with Chongqing Development Investment Co., Ltd., Dima Co., Ltd. ultimately failed to save its stock.
Founded in 1997, Dima Co., Ltd. went public on the Shanghai Stock Exchange in 2002 as Chongqing’s first privately-owned listed company, marking it as the first listed company in China’s specialty vehicle industry.
Real estate operations were a significant part of Dima Co., Ltd.’s revenue structure, consistently contributing over 80% of the income. However, due to the continuous slump in the real estate market in recent years, Dima Co., Ltd. recorded ongoing losses due to inventory markdown provision and credit impairments.
According to the annual report of Dima Co., Ltd., from 2021 to 2023, the company had net attributable losses of 2.054 billion yuan, 3.497 billion yuan, and 3.651 billion yuan respectively; excluding non-recurring gains and losses, the net loss amounts were 2.093 billion yuan, 3.135 billion yuan, and 2.98 billion yuan. In the first quarter of this year, the net attributable loss was 143 million yuan, and after adjusting for non-recurring gains and losses, the net loss was 14.2433 million yuan.
In early May, Dima Co., Ltd. failed to fully repay its bond “21 Dima01” on its maturity date of April 30th, 2024, marking its first public bond default.
By the end of 2023, Dima Co., Ltd. had a cash and cash equivalent balance of only 1.3 billion yuan on its consolidated balance sheet, while short-term bank and other borrowings totaling 10.366 billion yuan were due within a year, with outstanding loan principals of 1.95 billion yuan awaiting extension.