Title: Dividends and Delisting: Listed Companies Respond to New Regulations
Author: Ding Shuang
Source: Beijing News
The introduction of the new “National Nine Regulations” has raised concerns among investors regarding the impact on dividends and delisting for listed companies. On April 15, the first trading day after the implementation of the regulations, companies such as Dr. ST Peng, Liuzhou Iron and Steel Co., Ltd., ST Jiuyou, and Kangxin New Materials faced questions from investors about potential delisting.
The State Council’s announcement of “Several Opinions on Strengthening Supervision and Preventing Risks to Promote High-Quality Development of the Capital Market” on April 12 initiated a series of changes in the listing requirements and supervision for listed companies. The Shanghai and Shenzhen Stock Exchanges solicited public opinions on specific business rules, including stricter criteria for dividends, shareholding reductions, mergers and acquisitions, and delisting standards.
Li Xuemei, a partner at PricewaterhouseCoopers China Capital Markets Services Department, emphasized the importance of enhancing the quality of listed companies to ensure long-term stability and high-quality development of the capital market. The new regulations aim to improve the quality of newly listed companies while maintaining a strict control on issuance and listing access.
Many listed companies have responded to the new regulations by focusing on improving dividends and profitability to avoid potential delisting risks. Companies such as Aotejia, Tonghua Jinma, and Tongce Medical have outlined their strategies to meet the new requirements and reassure investors about their stability.
The increased supervision on delisting of listed companies has also prompted concerns among investors. Companies like Dalian Youyi have pledged to enhance their profitability and income levels to reduce the risk of delisting.
Li Xuemei highlighted the importance of the new regulations in enforcing stricter delisting standards and ensuring the fiduciary responsibility of companies towards investors. The differentiation of delisting standards based on sector positioning provides valuable insights for companies planning to go public.
As the capital market evolves under the new regulations, listed companies are urged to prioritize investor returns and compliance with the revised standards. The immediate response of companies to the new regulations will set the tone for their future performance and compliance in the evolving market landscape.