Update | This little-known company has smashed the infamous record on China’s stock markets
Jiangsu Protruly Technology drops by the daily limit for 21 straight days, the longest run of such declines among all mainland-listed companies
Jiangsu Protruly Technology Group, a Shanghai-listed company rarely on investors’ radar, is now in the limelight. This time, the little-known firm is setting an inglorious record on China’s stock markets.
Shares of the video products manufacturer have tumbled by the daily limit for 21 straight days on Friday, the longest streak of such declines among the 3,000-plus companies on the Shanghai and Shenzhen exchanges. The stock fell 5 per cent to 3.72 yuan at the close.
Jiangsu Protruly has declined every day since its stock resumed trading on December 29, after a self-check by the board found that its former controlling shareholder had seized funds from the firm and the company was plagued with issues that included problematic outbound investment, huge amounts of account receivables and illegal loan pledges.
Companies like Jiangsu Protruly used to be favourite wagers among local traders as their listing statuses would be targets for companies seeking back-door listings. As China’s securities regulator allows more domestic listings at a faster pace and ratchets up its crackdown on excessive speculations, the enthusiasm for such stocks has quickly evaporated.
A measure of Shanghai-listed companies with losses for two straight years or abnormal financial conditions, previously seen as targets for reverse mergers, has dropped 6.8 per cent so far this year, extending a loss of 17 per cent in 2017, according to Great Wisdom data.
Shares of Jiangsu Protruly are now capped at a 5 per cent maximum daily movement by the Shanghai exchange because of its financial trouble and inability to resume normal business operations. The normal daily cap is 10 per cent for companies trading on the Shanghai and Shenzhen bourses.
The previous record holder for the longest run of falling by the daily cap was Zhonghe, a Shenzhen-listed maker of cotton and fabrics, whose shares fell by the limit for 18 straight days in November. The stock last closed at 4.11 yuan, representing an 11 per cent rise from a low set last month.
