Case Study On "Face Value Delisting" Of Shenwu Environmental Protection

When the actual closing price of a stock for 20 consecutive trading days is lower than the face value,that is,less than 1 yuan,it will be forced to delist.This passive delisting is the face value delisting.China’s delisting system can be traced back to the1990 s.The company law of 1993 roughly mentioned the provisions on the delisting standards of companies.Until 2012,China’s A-share market made clear the delisting standards of listed companies,the delisting system of China’s capital market was initially formed.Under the background of the registration system,there are 71 companies in the A-share market which have been delisted passively.Among them,12 companies are forced to delist because of triggering the delisting conditions of face value,and the number of them is increasing year by year.Why are these companies going to be delisted at face value compared with other fairies hovering on the edge of delisting? Facing the situation of stock price falling,what measures does the company take to avoid delisting? Why didn’t these companies avoid delisting by reducing shares like mincankun B shares? Therefore,it is of great significance to study and analyze the financial situation and business decision-making of domestic delisted companies.This paper first summarizes the relevant basic theory of value-added delisting and the research results of scholars,and then makes a brief analysis on the development of domestic par value delisting policy.On this basis,it selects the first Shenwu environmental protection of gem face value delisting as the research case of this paper,using the method of literature research,case analysis and inductive research Conduct research and analysis.The results show that the ups and downs of Shenzhen Securities Composite Index,financial deleveraging,registration system reform and Xinguan epidemic are the external causes of Shenwu environmental protection’s face value delisting;the continuous deterioration of operating results,solvency near collapse,frequent financing risks,single main business and blind expansion are the internal reasons.After the company’s stock entered the delisting consolidation period,the stock price continued to fall,and investors reduced their holdings to avoid losses.Based on the case study of Shenwu environmental protection face value delisting,this paper finds that the Enlightenment of face value delisting to investors,company management and regulatory authorities is as follows: stock market investors should correctly understand delisting,rationally analyze stock prices and adhere to value investment;managers should have the ability to evaluate the financing,so that the enterprise can operate well;regulatory departments should strengthen the assessment system,and put forward audit opinions and improvement opinions on internal control problems.In view of the increasing wave of face value delisting recently,this study helps listed companies to understand the influencing factors of stock price,understand delisting system and delisting methods,and provide theoretical basis and methods to avoid face value delisting.