Touch the red line of financial indicators

According to the new rules on delisting, the financial index “net profit is negative before and after deduction + revenue is less than 100 million yuan” is regarded as an important “red line”. Once it reaches the first year, it will be “* ST”, and it will be terminated for two consecutive years

 

According to incomplete statistics, more than 20 companies have announced that they may touch the red line, and half of them are ST companies

Touch the red line of financial indicators

From the perspective of market value, the above-mentioned 20 companies are all small market value companies, with a market value of less than 3 billion yuan, and most companies even have a market value of less than 2 billion yuan

 

Reporter Shao Hao editor Zhu Jianhua

 

The new rules on delisting issued a month ago are having a significant impact on a number of A-share companies.

 

On January 30, huazi industry released a performance forecast, saying that the company expects its revenue to be less than 100 million yuan in 2020, and the net profit after deducting non return parent is about – 118 million yuan, which touches the clause of “the net profit audited in the latest accounting year is negative and the operating income is less than 100 million yuan” in the new delisting rules, and may be subject to delisting risk warning after the disclosure of the 2020 annual report.

 

After the release of the new rules on delisting on December 31, 2020, the financial indicators of “negative net profit before and after deduction + revenue less than 100 million yuan” are regarded as an important “red line”, and a number of shell companies with few main business are expected to be dismissed. Now, the effect is emerging. According to incomplete statistics, at present, more than 20 companies have announced that they may touch the red line of “negative net profit before and after deduction + revenue less than 100 million yuan” (hereinafter referred to as “touch line”), and the number is still increasing.

 

More than ten ST companies touch the line

 

According to statistics, half of the more than 20 companies that have issued the touch line announcement are ST companies, which means that these companies may become “* ST companies” after the disclosure of the 2020 annual report. From the perspective of market value, the above-mentioned 20 companies are all small market value companies, with a market value of less than 3 billion yuan.

 

St Mingke announced on January 29 that the company expects to make a loss in 2020, and the operating income will be less than 100 million yuan. According to the new rules for delisting, the company’s shares may be subject to delisting risk warning after the disclosure of the 2020 annual report.

 

There are many companies like st Mingke. According to the reporter’s statistics, St China Portugal, St youjiu, St Yaxing, St Xiahua, St Mingke, St luodun, St Jinggu, St Jintai, St Changyu, St Baihua and other companies have issued similar announcements, announcing that the company may touch the line.

 

In addition to ST company, there are also a number of companies that have not yet been “star capped” and also announced that they may be “star capped” because they may touch the line. For example, China Real Estate Co., Ltd. announced on January 29 that it is expected that the net profit attributable to the parent company in 2020 will be about – 51 million yuan, and the operating income will be less than 100 million yuan. After the disclosure of the 2020 annual report, the company’s shares may be subject to delisting risk warning.

 

It should be noted that China Real Estate Co., Ltd. has been in the state of “meager profit every other year” for many years before, that is to say, it has a loss every year and a profit every year. Although its main business is facing difficulties, it still maintains its listing status. According to the new rules on delisting, the company’s previous strategy of “meager profit every other year” will no longer work. In 2020, the company’s revenue will be less than 100 million yuan, and the net profit attributable to the parent company will be negative, which will make the company directly “wear the hat”.

 

Interestingly, not only the “shell companies” that have been listed for many years may touch the line, but if the performance of the newly listed companies does not meet the standard, they may also face the dilemma of warning the delisting risk just after they are listed.

 

On the evening of January 28, Xiyu tourism announced that the company’s financial department estimated that the company’s net profit attributable to the shareholders of the listed company in 2020 would be – 43 million yuan to – 55 million yuan (without audit), the net profit attributable to the shareholders of the listed company after deducting non audit income would be – 49.85 million yuan to – 61.85 million yuan, and the estimated operating income would be 49 million yuan to 50.8 million yuan. Western region tourism is a new stock. It has been less than half a year since the company landed on gem on August 6, 2020.

 

The novel coronavirus pneumonia has caused serious impact on the whole tourism industry, and the inter provincial tour in China was limited in the first half of 2020. The epidemic broke out again in Xinjiang during the peak tourist season, and the scenic spots closed down, which had a particularly serious impact. Until early September, the scenic spots resumed opening. According to the strict control requirements of epidemic prevention and control, the scenic spots opened orderly and controlled the flow of tourists. In late October, a local epidemic also occurred in Shufu County, Kashgar, Xinjiang. To sum up, due to the repeated impact of the epidemic, the company’s performance losses. According to the new rules on delisting, as long as the company’s net profit is negative after deducting non tradable shares, and its revenue is less than 100 million yuan, it will directly “wear the hat”.

 

Shell company facing ecological change

 

“The original rules focus on the net profit index, which leads individual companies to make the net profit positive by selling assets and other means to achieve shell protection. The new rules for delisting have adopted the double indicators of net profit and operating income after deducting non tradable shares, so the previous means are difficult to work. ” Some investment bankers said so.

 

The reporter noted that among the more than 20 companies that have issued the touch line announcement, almost all of them are small market value companies, most of which have a market value of less than 2 billion yuan, and many of them are shell companies.

 

For example, Fenghua shares announced on January 30 that it is expected that the net profit of the parent company will be negative in 2020, and the operating income will be less than 100 million yuan, so the company’s shares may be subject to delisting risk warning. According to the company’s performance forecast released on that day, it is estimated that the net profit attributable to the parent company will be about 1.63 million yuan in 2020, and the net profit attributable to the parent company will be about – 14.52 million yuan after deduction.

 

In the previous few years, the net profit of Fenghua shares remained at the level of several million yuan in most years, and the operating income often reached less than 100 million yuan. This has also led to the continuous decline of the company’s stock price. According to the latest stock price, the company’s total market value is only 1.1 billion yuan.

 

From the perspective of A-share history, the new delisting rules have a huge impact on the company’s business logic. Since the company law of 1994 established the basic legal framework of delisting system, it has become a consensus that listed companies must make profits at least every two years. In order to keep the listing qualification, many companies will launch losses within one year to ensure the profits in the following years. Financial bathing and other phenomena are common. This is related to the net profit index of delisting system.

 

In the view of industry insiders, one of the core ideas of the new delisting rules is to allow unprofitable companies to exist in the market. As long as they operate the main business normally and have a certain revenue scale, even if they are unprofitable all the time, as long as investors approve and do not touch other delisting rules, there is no need to worry about the risk of delisting, that is, to open the main door and block the side door.

 

“In one month, more than 20 companies have already touched the line, which shows that the new delisting rules have grasped the pain point of shell companies and played an effective role.” The industry insiders said that once the market realized that shell companies had a great risk of delisting, it would accelerate the decline of stock prices of such companies, and the measures such as market value delisting and 1 yuan delisting would also play an effective role, so as to realize the elimination of the fittest market advantage.

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