On the evening of May 7, 2026, * ST Tianlong (300029. SZ) and * ST Sailong (002898. SZ) successively announced that they had received prior notice of delisting. Both companies were unable to express an opinion on their annual financial reports for 2025 due to their unsatisfactory performance in 2024, which touched on the financial delisting indicators.

The A-shares annual report drama is over, and more than ten * ST companies with labels such as continuous losses, internal control failures, and "non-standard" audits are waiting for the exchange to issue the final delisting decision. According to Wind data, from April 1st to May 6th, 128 companies have implemented ST or * ST, of which 80 companies have been issued risk warnings due to touching financial delisting indicators.

Among the stocks that have already been marked as * ST, 11 companies have been locked in for forced delisting due to being unable to express an opinion in audit reports issued by accounting firms for two consecutive years. Among them, 5 companies received prior notice or regulatory work letters for delisting.

Tian Lihui, Dean of the Institute of Financial Development at Nankai University, told reporters from the Economic Observer that this year's clearance wave in the annual report season is a transition in the delisting logic from "looking at price" to "looking at quality". This will fundamentally change the supply and demand structure and pricing logic of A-shares: the survival of the fittest, the recruitment of new talents, the healthy ecology of both in and out, and the ability to rise and fall, is the coming of age ceremony for A-shares to enter a mature market.

'Shell protection' is hopeless

On April 28th, * ST Guandian (688287. SH) announced that the company has received a prior notice from the Shanghai Stock Exchange regarding the proposed termination of the listing of Guandian Defense Technology Co., Ltd. *The delisting of ST Guandian is not without warning. The company's audited net profit for the year 2024 is negative and its operating revenue is less than 100 million yuan, triggering a delisting risk warning. The 2025 annual report disclosed on April 28th presented such a report card: the net profit after deducting non recurring expenses was once again negative. Although the operating income struggled to exceed the 100 million yuan red line, the audit institution issued a qualified audit report.

*ST Guandian was once the "first stock" to be listed on the Science and Technology Innovation Board of the Beijing Stock Exchange, but it hastily exited after only 4 years of listing on the board. Besides delisting, it received a "Notice of Filing" issued by the China Securities Regulatory Commission on April 3 due to suspected violations of information disclosure laws and regulations. Up to now, the investigation results have not been disclosed.

*The experience of ST Guohua (00000 4. SZ) adds a touch of historical weight. This "veteran level" enterprise, which was first listed on the Shenzhen Stock Exchange on December 1, 1990, will exit as a delist after 36 years of continuous losses in recent years. *ST Guohua received a notice of termination of listing from the exchange on April 27th, and one of the oldest listed codes in A-share history may come to an end.

In addition, the year-end net assets of * ST Tianlong in 2024 and 2025 were both negative, and the internal control of the 2025 financial report was audited with a negative opinion. *ST Sailong's 2025 financial accounting report and internal control of financial reporting have both been issued audit reports that cannot express an opinion, touching on the situation of stock delisting.

The spectrum of financial delisting types is becoming more diverse. In the above case, delisting caused by failure to meet revenue and net profit standards is the main force, but issues such as audit firms issuing unable to express opinions or negative opinions, or internal control being identified as having significant deficiencies may become the "last straw" that "crushes" a listed company. Many listed companies that have been locked out of the market are already plagued by multiple risks.

For example, * ST Huke (600608. SH), which has received a notice of termination of listing, has a negative non recurring net profit and revenue of less than 300 million yuan for the year 2025, a qualified opinion audit report on its financial accounting report, and an audit report on its internal controls that cannot express an opinion, which meets the conditions for termination of listing.

From the delisting of a single company to the delisting of a large number of companies, from a single financial loss delisting to a diversified delisting system including trading, auditing, internal control, and major illegal activities, the "export" of A-shares is being systematically expanded. The acceleration of this process is closely related to the comprehensive registration system reform - when the "entrance" is more market-oriented, the "exit" must also be more smooth, so that the capital market can truly achieve the function of resource allocation.

Tian Lihui believes that for the A-share market ecosystem, a triple reshaping is happening: the value of shell resources is accelerating to zero, and the foundation of shell speculation culture is being undermined; Listing is no longer a lifelong commitment, delisting allows listed platforms to return to their tool roots; High quality companies are starting to truly benefit from resource allocation, and the market mechanism of survival of the fittest has moved from paper to reality.

Sharp Teeth

This wave of delisting is not a one-day effort.

In April 2024, the State Council issued the "Several Opinions on Strengthening Supervision, Preventing Risks, and Promoting High quality Development of the Capital Market", which is known as the new "National Nine Articles" by the market. It clearly proposed to deepen the reform of the delisting system and accelerate the formation of a normalized delisting pattern that should be fully withdrawn and cleared in a timely manner. On the same day, the China Securities Regulatory Commission issued the "Opinions on Strictly Implementing the Delisting System". Subsequently, the Shanghai, Shenzhen, and Beijing stock exchanges revised the "Stock Listing Rules" - raising the delisting threshold for loss making companies on the main board from 100 million yuan to 300 million yuan, adding situations for delisting based on internal control audit opinions, and increasing the delisting standard for market value from 300 million yuan to 500 million yuan.

In 2024, 52 A-share companies completed delisting, of which 75% were delisted due to trading type delisting with stock prices below face value and market value less than 300 million yuan, 6 financial type delisting, and 3 delisting due to major illegal activities. In 2025, the A-share market will be active, coupled with early liquidation, resulting in a decrease in trading delisting. A total of 36 companies will complete delisting throughout the year, including 11 companies that have been delisted due to regulatory delisting and major illegal forced delisting.

Entering 2026, as of May 6th, 7 companies have completed delisting, and with the aforementioned locked delisting companies waiting for final judgments, the delisting wave will continue.

Lawyer Xu Feng from Shanghai Jiucheng Law Firm stated that in the past, some problematic listed companies attempted to get away with financial fraud, but now there is a strong "zero tolerance" system for major illegal delisting. Falsification will result in delisting and delisting will not be held responsible, further eliminating the lucky space for illegal arbitrage. This move not only helps to improve the overall quality of listed companies and the investment environment, but also promotes the establishment of a "survival of the fittest" market mechanism, urging listed companies and their "key few" to truly respect the rule of law and the market, and adhere to the bottom line of compliant operation.

Xu Feng reminds that for delisted companies that have not encountered any violations, investors cannot claim compensation. Investors should invest rationally and reduce their speculative nature.

Tian Lihui stated that the speculative path of "speculating on price differentials and shells" has entered a historical dead end, and individual investors must completely abandon the "speculation on price differentials" thinking. The ST sector has become a high-risk area, with little room for competition due to liquidity depletion and rapid delisting mechanisms. Trading delisting does not have a consolidation period and can be directly delisted within 5 trading days, with almost no escape window. On the institutional side, mainstream funds such as social security and public funds have already cleared their holdings of ST stocks, and the liquidity of micro cap stocks continues to dry up, accelerating the concentration of funds towards high-quality top companies. Ordinary investors must stay away from three types of pitfalls: companies with hollowed out main businesses, companies with non-standard audit opinions on annual reports, and small and micro underperforming stocks with a market value approaching the 500 million yuan red line.

It is worth noting that on April 10th, both the Shanghai Stock Exchange and the Shenzhen Stock Exchange publicly solicited opinions on revising their trading rules. One of the revisions is to adjust the price limit of the main board risk warning stocks from 5% to 10%. The new regulations will be officially implemented from July 6th, 2026. This means that the volatility of ST stocks has increased, and for a group of ST stocks with low face value and market value, the risk of triggering delisting in trading has further increased.

Tian Lihui pointed out that this means that the "escape window period" is compressed, and market pricing can quickly eliminate problematic companies. However, it should be noted that the original intention of relaxing the rules is not to make retail investors bear greater losses, but to replace administrative restrictions with a "market-oriented mechanism", making the risk pricing of inferior companies more realistic and delisting more efficient. The ST system is transitioning from a probation period for problematic companies to an acceleration channel for low-quality companies.

Tian Lihui stated that in the next 1-2 years, the pace of delisting will remain high but more precise, with a focus on identifying "false growth" and cracking down on financial fraud. The growth rate of quantity may slow down, but the proportion of illegal delisting is expected to significantly increase. Its core significance lies in breaking the dilemma of "going public is the peak" and building a virtuous cycle of "investment and financing balance" through rigid clearing. When the scale of dividend repurchase continues to exceed the financing amount, A-shares can truly become a value pool serving the real economy, rather than a "blood pumping machine", promoting the market to enter a new stage of institutionalization and maturity.