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SCMP Reporter

Shenzhen-based property developer Gintian Industry (Group) has become the fifth company to be delisted from a mainland exchange after it failed to convince regulators it turned a profit last year.

Yesterday, Gintian's A and B shares were formally delisted from the Shenzhen Stock Exchange after officials denied a request for it to resume normal trading activities, the company said.

Its shares had been suspended from trading since April 26, several days before it announced its results for last year.

Between 1998 and 2000, it had already posted three consecutive years of losses, which earned Gintian the 'particular transfer' or PT designation, and meant the company was in danger of delisting if it failed to make a profit last year.

Mainland market authorities allow PT shares to trade only on Fridays.

On April 30, Gintian posted a net profit of 11.5 million yuan (about HK$10.79 million) for last year and applied to the Shenzhen Stock Exchange to resume trading as normal shares.

On Wednesday, the exchange rejected the request because Gintian's application was missing two documents and its accounting firm had not endorsed the company's annual report for last year, an exchange official said.

Two weeks ago, Gintian said it had posted a net loss of 4.4 million yuan in the first quarter, a 45.8 per cent year-on-year improvement.

Gintian is the second company in three weeks to be removed from the Shenzhen Stock Exchange. Late last month, Nanyang Shipping Group was delisted.

The delistings are a sign of regulatory authorities' resolve to rid the mainland's stock markets of unprofitable, poorly managed companies.

After stricter delisting rules came into effect on January 1, the market has been expecting more unprofitable companies to be delisted.

Analysts said Gintian's delisting was not a factor in yesterday's stock market drop.

The Shanghai composite index, covering both A and B shares, fell 1.16 per cent to 1,494.24 points, below the psychologically important 1,500.

Guosen Securities analyst Xiao Jianjun said: 'Gintian wasn't the first company to be delisted since the delisting system was put in place, and so the market had already expected it.'

Gintian's removal left 12 PT companies on the Shenzhen and Shanghai stock exchanges' rolls.

Already, there is talk that Shenzhen-listed ST Xiamen Marine Industry (Group) may become the sixth casualty.

The frozen fish processing company posted consecutive net losses from 1999 to last year.

At last month's shareholders meeting, the company's general manager, Zhi Zhiqiang, said there was a slight hope that the company could turn a profit in the first six months this year, although it still owed 170 million yuan to creditors.

Four of the five companies to be delisted - Gintian, Nanyang Shipping, Shenzhen Zhonghao Group and Guangdong Kingman Group - were listed in Shenzhen.

So far, Shanghai Narcissus Electrical Appliance, which set the trend as the first firm delisted, remains the sole loss from the Shanghai Stock Exchange.



Shenzhen exchange drops Gintian