Akcome says it could be delisted from the Shenzhen stock exchange after the value of its shares fell below CNY1 ($0.14) for 20 consecutive trading days. At the beginning of June, the manufacturer announced a temporary suspension of the operations of its subsidiaries in the Chinese provinces of Jiangxi and Zhejiang.
Chinese solar manufacturer Akcome Technology could be delisted from the Shenzhen stock exchange after the value of its shares fell below CNY 1 for 20 consecutive trading days. Under Chinese securities regulations, a stock that trades below CNY 1 for 20 consecutive trading days will be delisted.
The company resumed trading on May 6 after a brief suspension. The stock price fell from CNY 1.76 per share on April 29 to CNY 0.41 per share on June 14.
The China Securities Regulatory Commission (CSRC) is investigating Akcome Technology and its controlling shareholder, Zou Chenghui, for alleged information disclosure violations. On June 12, the company said it had received a notice from the CSRC. This means that even after delisting, the company and the responsible parties may be held civilly, administratively or criminally liable for misconduct prior to delisting.
Akcome Technology has a history of misleading disclosures. In late February, shortly after the Chinese New Year, the controlling shareholder, Akcome Industrial, and its subsidiaries announced plans to increase their shareholdings by up to CNY200 million in six months to boost the share price. Shares rose briefly, but the plan never came to fruition and the company soon found itself in a delisting tunnel.
When investors inquired on April 15 about the risk of special treatment (ST) due to three consecutive years of losses, Zou assured them that no such risk existed. However, just half a month later, the Shenzhen Stock Exchange designated Akcome Technology as an ST stock following the release of its 2023 annual report.
The company’s 2023 annual report, which was published at the latest on April 30, came with an audit opinion from Suya Jincheng CPA LLP, which expressed a reserved opinion and uncertainties about Akcome’s ability to continue as a going concern . The audit report also gave a negative assessment of the company’s internal controls for 2023.
Founded in 2006, Akcome Technology initially focused on the production of solar frames. It was listed on the Shenzhen Stock Exchange market in 2011 and subsequently diversified into various PV segments, including solar cells, PV modules, frames and mounting systems, and even invested in downstream PV power plants. At its peak, Akcome’s market value reached CNY 27.5 billion, making it a notable player in the Chinese stock market.
In 2021, Akcome began making significant investments in heterojunction (HJT) cell technology, establishing multiple HJT production bases in eastern China. However, this period also marked the beginning of continued financial losses. The company reported audited net losses of CNY406 million, CNY833 million and CNY826 million for 2021, 2022 and 2023 respectively, for a three-year total of approximately CNY2.065 billion.
The company’s de facto controller continued to make money by selling shares despite the losses. According to the Corporate herald of the 21st centurymajor shareholders reduced their holdings by 627 million shares between 2017 and 2022, paying out CNY2.054 billion. Initially, the Zou family’s stake held 43.63% of the company, but by the first quarter of 2024, the Zou family’s stake had fallen to below 7%.
The de facto controller also used equity commitments and related party transactions to extract money from Akcome Technology, including obtaining external guarantees.
On May 31, Akcome said the bank accounts of some subsidiaries had been frozen due to overdue debts, impacting the company’s capital operations and business management.
On June 7, Akcome announced a temporary suspension of operations at its subsidiaries in Ganzhou, Zhejiang and Huzhou for up to three months. The company also withdrew from the SNEC 2024 Photovoltaic Exhibition, avoiding potential confrontations with investors, suppliers and employees.
The company has not yet responded pv magazinerequest for comment on the case.
The delisting and related violations will directly impact more than 270,000 investors, with platforms such as Sina offering online registration for a potential class action lawsuit.
In May, Akcome was included in Bloomberg New Energy Finance’s (BNEF) tier-1 global PV module manufacturers list for the second quarter of 2024.
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