Hong Kong Stock Exchange: 31 listed companies delisted

In 2020, 31 listed companies were delisted by the “Listing Rules” of HKEx, with a total market value of HK $100.8 billion before delisting. According to the statistics of the securities times, 72 listed companies have been delisted from the Hong Kong Stock Exchange since 2010. Only in 2020, 43% of them have been delisted. At the same time, it also sends a signal to the market that more and more listed companies will be delisted in the future. In fact, those stocks that have been ignored all the year round and whose performance is not up to the standard have lost their financing ability. In addition, the difficulty of backdoor listing is also increasing, and the value of shell stocks has been greatly reduced. It seems that it is better to go to Hong Kong for IPO than to go to Hong Kong for backdoor listing. Therefore, these shell companies which occupy the listing resources will be delisted in the future. < / P > < p > according to the website of HKEx, 31 listed companies will be cancelled according to the delisting procedure of the Listing Rules in 2020, including 23 on the main board and 8 on the gem. According to the statistics of wind, the total market value of these 31 delisted listed companies before delisting is HK $100.8 billion, of which four have a total market value of more than HK $10 billion. In December 2020 alone, seven companies were delisted. According to the statistical data, since 2010, 72 listed companies have been delisted according to the listing rules. In August 2018, the amendments to the delisting provisions of the Listing Rules officially came into effect, prompting issuers who no longer meet the continuous listing criteria to delist in time and providing certainty to the market on the delisting process. < / P > < p > the amendments to the listing rules include adding a new delisting criterion to the main board, so that the stock exchange can delist the issuers after 18 months of continuous suspension. After the delisting procedure takes effect, if there are not enough business operations or assets, the issuers will no longer need to go through the three-stage delisting procedure, but will directly delist and delist. The GEM listed companies have the right to delist after 12 months of continuous suspension. < / P > < p > as a result, the number of delisted companies has soared from one of the few before 2018 to 19 in 2019, and then to 31 in 2020. In 2020 alone, the number of delisted companies accounted for 43% of the total in the past 10 years. < / P > < p > according to the latest data released by the Hong Kong stock exchange a few days ago, as of December 31, 2020, 8 main board companies have been placed in the delisting process due to the failure to maintain sufficient business operations or assets, and have issued a delisting notice to 1 company. A total of 81 delisting companies have been approved by the listing committee, including 64 main board companies and 17 GEM companies. There are 16 companies in suspension, 13 on the main board and 3 on the gem. According to the relevant provisions of the Listing Rules of the SEHK, the listing status of the company will be cancelled if the main board company is suspended for 18 consecutive months or the gem company is suspended for 12 consecutive months. < / P > < p > in addition, the Listing Rules amended by the Hong Kong Stock Exchange in October 2019 on the criteria of backdoor listing and continuous listing further hit the investors’ willingness to “buy the shell”, and made the “White Knight” have little interest in rescuing the suspended companies or the companies with poor business ability, resulting in a sharp drop in the shell price. Many stocks have lost their ability to refinance because no one cares about them all day. According to the statistics of wind, as of January 12, 2021, there are 436 individual stocks with no turnover in the whole day, and 655 stocks with turnover below HK $10000. According to the statistics of interval turnover, since January 1, 2021, the turnover of 144 stocks has been zero. < / P > < p > “these” zombie stocks “have no investment value, and there is almost no shell buying and selling behavior recently.” Yan Zhaojun, an analyst at Zhongtai International (Hong Kong), told reporters. < / P > < p > the reporter previously reported that the “shell price” of the “shell stock” of the Hong Kong main board was as high as HK $700 million to HK $800 million from 2015 to 2018. At present, no one wants the “shell price” of the main board of HK $200 million. “Too much, any kind of intermediary you want can tell you a lot of codes. The key is what do you buy for? Backdoor listing tightening, basically difficult to operate space Yan Zhaojun said. < / P > < p > previously, the Hong Kong Stock Exchange criticized the “shell stock” activities in the market, and the stock price was easy to be manipulated, so the Hong Kong stock exchange took multiple measures to curb the backdoor speculation. < / P > < p > 1. After buying a shell, the term of injecting assets is increased to three years. That is to say, if you spend real money and silver to buy a listed company, you can’t implement major asset restructuring other than the main business within three years. Otherwise, it will be judged as “reverse takeover” by the Hong Kong Stock Exchange and will be treated according to the IPO standard. < / P > < p > 2. It is prohibited for issuers to finance through large-scale issuance of Securities for acquisition or new business. This means blocking the source of funds for issuers. < / P > < p > 3. The company needs to have enough business operation and assets to support its continued listing. In other words, the ability to continue to be listed, if the ability is not good, the shell will be probably delisted. < / P > < p > in the past 12 months, the Hong Kong Stock Exchange has ruled 18 transactions as anti takeover activities or extreme transactions, which are intended to circumvent the new listing requirements. In some cases, the quality of the target assets is questionable. For example, the newly launched business has no performance record, and the business has applied for new listing, but the doubts of the Listing Committee of the listing section have not been fully explained. According to the reporter, the HKEx will take further measures to deal with “shell stocks”. Recently, the Hong Kong Stock Exchange has also published a consultation document (the consultation document on the profit requirements of the main board) proposing to amend the qualification requirements for new listing applicants to deal with the issue of shell activities through new listing. < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.