41 endangered stocks
17 November 2018
In our article HKEX: shoot patients to prevent illness (30-Sep-2018) we opposed HKEX's proposed changes to the Listing Rules which would allow it to suspend and subsequently delist companies which receive a disclaimed audit opinion. Our reasons are in the first article, so we won't repeat them here. The deadline for submissions to HKEX on the proposals is soon, 30-Nov-2018. Together, these 2 articles consitute our submission. You can make your submsission using the questionnaire here or simply by dropping an email to firstname.lastname@example.org.
We noted in the first article that HKEX failed to include a list of companies that would have been affected if the policy was already in effect. We invited readers to find them. A number of readers sent us contributions to the following list, which we have enhanced and verified - a special shoutout to the team over at Gekko Lab, which got most of it right.
We exclude stocks which are already in long-term suspension. If the proposed rule is adopted and the companies don't obtain (perhaps by opinion-shopping) a non-disclaimed audit report for their financial year commencing on or after 1-Jan-2019, then they will be suspended. That means we could see the first casualties by 31-Mar-2020 when the 2019 results are due.
It's worth noting that in HKEX's own survey, there were 43 companies (not in long-term suspension) with disclaimed audit opinions in 2017, of which 24 had received disclaimers for 2 or more consecutive years. So the average prospects for a company getting off the endangered list in 2019 are not great. Without further ado, the current 41 endangered stocks that we can identify with a disclaimed audit opinion in the latest financial year are:
* Sun International Group Ltd (8029) was the only one to achieve the accolade of "adverse opinion" - that is, the auditors didn't just disclaim their opinion, but opined that the financial statements do not give a true and fair view.
** Longhui (formerly Daqing Dairy) has recently completed a Reverse Takeover and new listing application, so it may leave the list when its 2018 results are published.
Click the names to find their past financial statements back to 2002. If we have missed any companies on the endangered list, let us know.
© Webb-site.com, 2018
Organisations in this story
- Alpha Professional Holdings Limited
- Amax International Holdings Limited
- ASIA ENERGY LOGISTICS GROUP LIMITED
- Ban Loong Holdings Limited
- China Assurance Finance Group Limited
- China Brilliant Global Limited
- China Energy Development Holdings Limited
- China Finance Investment Holdings Limited
- China Fortune Holdings Limited
- China Health Group Limited
- China Huarong Energy Company Limited
- China Ocean Industry Group Limited
- China Oil Gangran Energy Group Holdings Limited
- China Rongzhong Financial Holdings Company Limited
- China Yurun Food Group Limited
- Chinese Food and Beverage Group Limited
- Code Agriculture (Holdings) Limited
- Energy International Investments Holdings Limited
- EXTRAWELL PHARMACEUTICAL HOLDINGS LIMITED
- GLOBAL BIO-CHEM TECHNOLOGY GROUP COMPANY LIMITED
- GLOBAL DIGITAL CREATIONS HOLDINGS LIMITED
- Global Sweeteners Holdings Limited
- GLORIOUS PROPERTY HOLDINGS LIMITED
- Grand Ocean Advanced Resources Company Limited
- Green International Holdings Limited
- Green Leader Holdings Group Limited
- HangKan Group Limited
- Hidili Industry International Development Limited
- HONG KONG EXCHANGES AND CLEARING LIMITED
- INNO-TECH HOLDINGS LIMITED
- Innovative Pharmaceutical Biotech Limited
- Longhui International Holdings Limited
- Ming Lam Holdings Limited (KY)
- Moody Technology Holdings Limited
- National Investments Fund Limited
- Nimble Holdings Company Limited
- Pearl Oriental Oil Limited
- Shanghai Dasheng Agriculture Finance Technology Co., Ltd.
- SINO OIL AND GAS HOLDINGS LIMITED
- State Energy Group International Assets Holdings Limited
- Sun International Group Limited
- TITAN PETROCHEMICALS GROUP LIMITED