China boots record number of companies from its bourses

A RECORD number of companies got the boot from Chinese mainland stock exchanges last year and that number could double in 2023, as regulators ramp up efforts to cull poorly performing firms and those that violate the rules or break the law.

A total of 42 companies were kicked from either the Shanghai or Shenzhen stock exchange in 2022, the highest ever and more than double the figure in the previous year, according to public information compiled by Caixin. The vast majority were delisted due to poor financial performance.

The trend is expected to pick up further in 2023. At least 80 public companies are in danger of triggering delisting thresholds linked to finances, according to Caixin calculations based on their third-quarter earnings reports. A company can be expelled from mainland stock exchanges based on certain parameters, which are grouped into four indicators — financial performance, share performance, compliance and violations of law.