Zhonghong Holding [000979:CH] received notice after a 15-day trading suspension from the Shenzhen Stock Exchange (SZSE) on November 8 that the bourse will delist the company. The delisting period of 30 trading days will start from November 16, and SZSE will remove Zhonghong’s stock from the market on the next trading day after the period. Once delisted, Zhonghong’s shares will be transferred to the National Equities Exchange and Quotations (NEEQ) for equity transfers. The company will still be expected to disclose related plans and information to investors.
Zhonghong has become the first A-share listed company to be delisted from the stock exchange due to its share price closing below a par value of RMB1 for 20 consecutive trading days. The delisting system was introduced into the mainland stock market in 2012 starting from the ChiNext Board in the SZSE. In addition to rules related to par value, there is another criterion that if the cumulative transaction volume of a main board listed company’s stock is less than 5m shares during 120 consecutive trading days, the company will be delisted from the exchange as well. For companies listed on the Small and Medium Enterprises Board (SME Board) and ChiNext Board, the quotas are 3m and 1m shares. Before the trading suspension, Zhonghong’s construction projects already had halted due to a liquidity crunch. In addition, both its chairman and general manager both resigned. This November and December, Zhonghong’s non-performance loans worth RMB3.067bn, and 24 sets of its commercial properties, worth RMB90m, will be auctioned separately.