Radar Finance presents | Written by Lin Yicai, Edited by Deep Sea
On June 13, ST Yili issued a risk warning announcement regarding the possible delisting of the company’s stock due to the price falling below 1 yuan.
According to Article 9.2.1 of the Stock Listing Rules, for companies listed on the Shanghai Stock Exchange that only issue A shares, if the daily closing price of the stock remains below 1 yuan for 20 consecutive trading days, the company’s stock may be delisted by the Shanghai Stock Exchange.
Since the closing price of the company’s stock first fell below 1 yuan on May 24, 2024 (closing price of 0.98 yuan/share), the stock has continued to decline. As of June 13, 2024, the closing price of the company’s stock was 0.5 yuan/share, with the stock closing below 1 yuan for 14 consecutive trading days. Even if there are six consecutive trading days of limit-up, the stock price cannot return to above 1 yuan/share.
In accordance with the relevant provisions of the Shanghai Stock Exchange’s Stock Listing Rules, the company’s stock has been subject to compulsory delisting.
Other significant risk alerts show that in 2023, the company recorded a net loss attributable to the parent company’s shareholders of 542 million yuan, and a net loss of 675 million yuan after deducting non-recurring gains and losses.
On April 29, 2024, Zhitong Accounting Firm (Special General Partnership) issued an audit report with a paragraph on significant uncertainties related to continued operations.
Due to Zhitong Accounting Firm (Special General Partnership) issuing a negative opinion on the company’s internal controls for the year 2023, the company’s stock was subject to additional risk warnings starting from May 6, 2024.
As of the end of 2023, the company and its consolidated subsidiaries had a deposit balance of 3.906 billion yuan at Yili Finance Company, with an impairment provision of 420 million yuan. The use of the 39.06 billion yuan cash held by Yili Finance Company was primarily for lending to Yili Group and its related parties. Recently, the company learned that these loans had been classified as substandard loans. Due to Yili Finance Company being listed as a dishonest debtor, as well as issues such as inaccurate asset classification and long-term absence of senior management, the company faces significant recoverability risks regarding the funds held at Yili Finance Company.
On June 10, 2024, the company received a “Notice of Case Filing” (No. CSRC Case Filing No. 0182024001) from the China Securities Regulatory Commission, as the company was suspected of illegal information disclosure and the Commission decided to initiate a case against the company.
On September 7, 2023, a high-pressure gas leak occurred in the gasification workshop of Erdos Yiding Ecological Agriculture Development Co., Ltd., a subsidiary of the company. Yiding Ecological is an important subsidiary of the company, with annual operating income of 2.238 billion yuan, accounting for 20.02% of the company’s total operating income. Currently, investigations into the incident are ongoing, and production has not yet resumed.
It is worth noting that on April 23, ST Yili issued a correction notice for the 2023 annual performance forecast.
Previously, on January 31, 2024, the company disclosed a “2023 Annual Performance Forecast Reduction Notice” on the Shanghai Stock Exchange website. Based on preliminary calculations by the finance department, it was estimated that the net profit attributable to the shareholders of the listed company for 2023 would be between 36.45 million yuan and 52.86 million yuan. The corrected performance forecast now indicates that, based on a re-calculation by the finance department, the net profit attributable to the shareholders of the listed company for 2023 is expected to be between -487 million yuan and -596 million yuan.
In response to this, Song Lianmin, Director of Jiangsu Shengheng Law Firm, who has represented many stock compensation cases, told Radar Finance that performance forecasts are crucial for investor decision-making. If there are significant differences in the company’s performance forecasts, leading to misleading decisions for investors and resulting in losses, compensation should be provided. Investors who purchased ST Yili stocks between January 31, 2024, and April 23, 2024, and still held them after the closing on April 23, 2024, or those who purchased ST Yili stocks between April 30, 2022, and April 23, 2024, and still held them after the closing on April 23, 2024, can sign up for free compensation through the “Radar Assistance” official account (Radar Code: 99) before receiving any compensation.
According to Tianyancha, ST Yili was established in 1999 and is primarily engaged in electricity and heat production and supply.