On the afternoon of July 21st, Guanghui Automobile Service Group Corporation (Guanghui Automobile) and Guizhou Changzheng Tiancheng Holdings Co., Ltd. (*ST Tiancheng), two A-share listed companies, announced that they had received a prior notice from the Shanghai Stock Exchange (SSE) about the intention to delist their stocks due to their share prices remaining below 1 yuan (RMB) for 20 consecutive trading days.
Guanghui Automobile issued a public announcement on the afternoon of July 21st titled “Announcement of Guanghui Automobile Service Group Corporation on Receiving Prior Notice of Termination of Stock and Convertible Corporate Bond Listing.” According to the announcement, they received a notice from the SSE stating that their stock and convertible corporate bonds had met the conditions for delisting due to the share price being below 1 yuan for 20 consecutive trading days between June 20, 2024, and July 17, 2024.
On July 18th, the trading of Guanghui Automobile’s stock and convertible bonds had been suspended. On the last trading day before the suspension, July 17th, both stocks experienced limit-down. Guanghui Automobile’s trading volume exceeded 16 million shares with a value of over 1.2 billion yuan, while the trading value of Guanghui’s convertible bonds also surpassed 200 million yuan. By the closing of July 17th, Guanghui Automobile’s stock price was at 0.78 yuan per share, and the price of its convertible bonds was at 45.767 yuan.
According to financial information from Securities Times Wealth on July 21st, Guanghui Automobile’s market value remained at 6.466 billion yuan before the suspension, making it the company with the highest market value at the time of delisting in history. The company’s 2023 annual report showed an operating income of 138 billion yuan, with no recorded losses in net profit.
Public data indicates that Guanghui Automobile is China’s largest passenger car dealership and service group, the country’s most extensive luxury passenger car dealership and service group, the largest passenger car financing and leasing provider among car dealers, and the largest second-hand car trading agent service entity among car dealers.
Regarding Guanghui Automobile’s delisting, Integrity, a consultant from Shanghai financial advisory firm, was quoted by the South China Morning Post as saying, “The company’s stock has been neglected by investors, reflecting their pessimism about the future prospects of car dealership businesses. The increasing adoption of electric vehicles, new sales models, and intensified competition have made survival extremely challenging for gasoline car dealers.”
Another company that announced its delisting on July 21st was *ST Tiancheng.
In its announcement, *ST Tiancheng stated that it had received a prior notice from the SSE regarding the intention to terminate the listing of Guizhou Changzheng Tiancheng Holdings Co., Ltd.’s stock.
The notice indicated that between June 24, 2024, and July 19, 2024, *ST Tiancheng’s stock price remained below 1 yuan for 20 consecutive trading days, meeting the conditions for delisting. The decision was made to delist the company’s stock. The notice also mentioned that if the company applies for a hearing, it should submit a written hearing request within five trading days of receiving the notification.
Public information shows that *ST Tiancheng was listed in 1997, primarily engaged in electrical equipment manufacturing, mineral resource development, and finance.
According to financial information from Securities Times Wealth on July 21st, *ST Tiancheng had annual operating income hovering around over 100 million yuan in recent years, with five consecutive years of losses in net profit, and at least 12 consecutive years of losses in non-net profit.
By July 19th, *ST Tiancheng’s stock price was at 0.73 yuan per share, with a market value remaining at only 372 million yuan.
The delisting of companies generally leads to investors losing their investments, prompting dissatisfaction among many investors towards the delisting of listed companies.
An internet user commented, “Delisting, sounds so easy! What about those small and medium-sized investors who are crying without tears?”
Another user expressed, “Once the money is in hand, it’s not illegal anyway. We can now retire to the mountains and forests.”
A different user emphasized, “The company still has tens of billions, swindling money before delisting, they can’t just escape after delisting, they must compensate!”
Data shows that as of the end of the first quarter of this year, Guanghui Automobile and *ST Tiancheng had 115,800 and 39,900 shareholders respectively.