Zhonghong Holdings Group is the first listed company in China to be forced off the country’s stock markets by regulators owing to consistently low share prices and a poor financial outlook.
The company will have 30 days of trading left before being scratched from the Shenzhen Stock Exchange, the bourse said on Thursday.
China’s recent market rout has put pressure on financial authorities to take a tougher line with weaker companies that have accumulated on its stock exchanges. According to Caixin, Zhonghong posted a net loss of RMB 558.5 million for the third quarter- a RMB 60 million downturn from the same time last year.
With over RMB 80 billion in outstanding debt as of the end of 2017, half of which maturing by the end of the year, Zhonghong’s share price was stunted beneath 1 yuan for 20 consecutive trading days before being suspended mid-October.
And this may just be the start. Data from state media shows that there were nearly 40 Chinese stocks trading at less than 2 yuan on Thursday.