Tianlong Optoelectronics and other four GEM companies are closest to delisting standards

The GEM is subject to a historic plunge. Some insiders believe that the concept of restructuring in the A-share market will cool down, and more companies will be delisted from the GEM.

According to the statistics of 21st Century Business Herald, from 2009 to 2011, the annual report of the GEM listed company showed that only one company of Dangsheng Technology (300073.SZ) had a loss of 739,000 yuan in 2011, and since 2012, there have been many The company's performance has begun to decline, and there are four companies that have suffered losses for two consecutive years in 2012 and 2013.

"There is only one month left in 2013. If you can't improve your business, you will not be able to improve your business in 2014. If you can't sell your shell and survive, you will probably be delisted." A Shanghai brokerage investment banker told the 21st Century Business Herald.

“The decline in the GEM is clearly just beginning.” Chen Yu, general manager of Beijing Shennong Investment Management Co., Ltd. believes that because the valuation of the GEM itself is too high, technically, the GEM index on October 21 has already peaked. It simply cannot withstand any turmoil, and it is normal for the IPO to restart.

"Second because the supply and demand situation in the stock market is changing." Chen Yu analysis, the opening of the IPO will inevitably increase the supply of new shares, and some stocks that do not have long-term investment value will fall worthless.

According to the latest data from the China Securities Regulatory Commission, there are 83 companies that have not yet been listed, and 43 of them are going to be listed on the GEM, accounting for 51.81%.

“Once the registration is made, the new shares will become wholesale, the overall P/E ratio of the GEM will be lowered, and the situation of new shares being squandered may improve.” Haitong Securities Baodai Hanlong said in an interview with the 21st Century Business Herald.

Many interviewees including Chen Yu believe that the CSRC’s proposal not to allow the GEM to be listed on the backdoor will also bring bad results to the market on December 2. “Continuously losing stocks may eventually be withdrawn from the market,” said the Shanghai brokerage.

According to the “GEM Listing Rules” (revised in 2012) issued by the Shenzhen Stock Exchange on April 20, 2012, the main reasons for the suspension of the listing of GEM companies are: the financial accounting report of the most recent year shows the end of the year. The audited net assets were negative and the consecutive three consecutive years of losses (based on the audited net profit for the year disclosed in the annual financial accounting report for the last three years). In this rule, the Shenzhen Stock Exchange also clarified the lack of support for the resumption of listing through “backdoor”.

According to the statistics of Huashun in the 21st century economic report, as of the third quarter of 2013, the net assets of GEM companies were all positive, but a few companies lost their money. Since 2012, there have been 13 companies with losses on the GEM, including Tianlong Optoelectronics (300029.SZ), Dongfang Risheng (300118.SZ), and Sunflower (3000111.SZ). Tianlong Optoelectronics has a net profit of -511.1 million yuan. In the same year, the GEM was the first to lose money.

Among them, Tianlong Optoelectronics expects to turn losses in 2013, and it is estimated that the annual net profit will be 5 million yuan to 10 million yuan. The remaining four companies are likely to lose money for two consecutive years.

The 21st Century Business Herald reporter also learned that Baode shares, Tianlong Optoelectronics, Jintongling, and Wanfushengke all have cases where the proceeds from fundraising projects or super-raised funds investment projects are not up to expectations.

"It is possible for some companies with poor business capabilities to withdraw from the market. After all, the main business of the GEM companies is relatively simple." Han Long told the 21st Century Business Herald.

Jianrui Fire is currently undergoing major asset restructuring, and the company stated in the announcement on December 2 that the restructuring was postponed. On December 2, when the reporter asked if the Jianrui fire reorganization constituted a backdoor and a 2013 performance forecast, the person in the securities department told the reporter, “It is inconvenient to disclose the company’s losses this year, and the performance should be seen at the time of performance; The current restructuring plan has not yet been determined. The results of the reorganization and the current SFC regulations are inconvenient to express, and this provision has no way to assess our impact."

Wanfushengke, Tianlong Optoelectronics, and Jintongling public telephones were not answered on the afternoon of December 2, and the people of Baode Securities Department expressed inconvenience to accept interviews on the grounds of the Secretary-General’s meeting and the evidence.

"Considering that there are a large number of small and medium-sized shareholders, the CSRC will not allow a large number of enterprises to directly withdraw from the market, and enterprises also have self-help methods, such as major asset restructuring, temporarily reorganizing the party as a second or third shareholder, not necessarily one step. Major shareholders can slowly borrow money.” Han Long believes that “in addition, some local governments will not allow listed companies to delist quickly, and they can choose subsidies to help listed companies.”

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