Chinese developer Languang forced to delist in Shanghai, with peers to follow as property-market crisis reverberates
- Sichuan Languang Development, once hailed as a top investment value, has traded below 1 yuan for more than 20 days and will be delisted on June 6
- Wave of delistings shows some developers are more vulnerable than expected and could further dampen home-buying sentiment, analysts say
The company’s shares closed below 1 yuan (US$0.14) for 20 consecutive trading days starting on April 6, triggering the delisting threshold set by the Chinese stock exchange, which then decides within 15 days whether to delist the stock. On June 6, Languang will lose its listing status after nine years on the Shanghai market, according to a filing on Wednesday.
More could face the same fate. The Shenzhen bourse told Zhongtian Financial Group of Guizhou province and Wuhan-based Myhome Real Estate Development this month that it intends to delist them. Next could be Tahoe Group and China Calxon Group; their shares have closed below 1 yuan for 18 and 20 days straight, respectively. Calxon said trading of its stock will suspend starting on Thursday.
The developers facing delisting are characterised by “high turnover and nationwide expansion”, said Zhang Bo, chief analyst at 58 Anjuke Real Estate Research Institute, adding that a slowdown in sales has put pressure on developers’ liquidity.
