INDEBTED commercial property developer Zhonghong Holding Co. has become the first firm in China to be delisted by regulators due to its poor share price performance amid a company debt crisis.

The Shenzhen Stock Exchange announced the delisting Thursday as Zhonghong’s shares closed below the par value of 1 yuan (14.5 U.S. cents) for 20 consecutive days, triggering one of the causes of a delisting.

“Zhonghong will become the first company to be forced to terminate its listing because its share price has been continuously trading below par value,” the Shenzhen exchange said on its website, without specifying the delisting date.

Shares in Zhonghong, which were halted after trading at 0.740 yuan Oct. 18, will enter a delisting period of 30 trading days from Friday and will be delisted thereafter.

A par value is the per-share amount appearing on stock certificates. It is also an amount that appears on bond certificates.

Zhonghong said in a filing that it will strictly follow regulators’ requirements and complete the delisting and follow-up work.

The government is trying to clean up the corporate sector by improving the quality of listed companies and in July its securities regulator amended rules on the criteria for delistings to beef up corporate governance.

Zhonghong’s shares have crumbled 62 percent in value this year, reflecting investor fears over its weakening profitability. The Beijing-based property developer forecast a loss of 2.1 billion yuan for the first three quarters this year, citing decreased sales amid the government’s crackdown on rising home prices. It reported a full-year loss of 2.51 billion yuan in 2017.

Zhonghong and its units had overdue debts totalling 7.77 billion yuan as of Oct. 22.

In the third quarter, the company’s results showed it swung to a net loss of 558.5 million yuan, from a net profit of 53.4 million yuan a year earlier.

The developer floated its shares in 2000 and has 8.39 billion outstanding shares, valuing the company at 6.21 billion yuan.

Of all the 97 companies to have been expelled from the Shanghai and Shenzhen stock exchanges so far since China started stock trading in 1990, none was because of low share prices. Most were deprived of their listing status after posting annual losses for three consecutive years. (SD News)