Chinese solar manufacturer Akcome Technology could be delisted from the Shenzhen Stock Exchange because 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 faces delisting.
The company resumed trading on May 6 after a brief suspension. Its stock price tumbled 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 implies that even after delisting, the company and responsible parties may face civil, administrative, or criminal liabilities for any pre-delisting misconduct.
Akcome Technology has a history of misleading disclosures. In late February, shortly after the Chinese New Year, its controlling shareholder, Akcome Industrial, and its affiliates announced plans to increase their holdings by up to CNY 200 million over six months to boost the stock price. The stock briefly rose, but the plan never materialized, and the company soon entered a delisting tunnel.
On April 15, when investors inquired about the risk of special treatment (ST) due to three consecutive years of losses, Zou assured them that there was no such risk. However, just half a month later, the Shenzhen Stock Exchange designated Akcome Technology as an ST stock following the disclosure of its 2023 annual report.
The company's 2023 annual report, released at the last possible moment on April 30, came with an auditor's report from Suya Jincheng CPA LLP, expressing a reserved opinion and uncertainties about Akcome's ability to continue as a going concern. The audit report also issued a negative opinion on the company's internal controls for 2023.
Founded in 2006, Akcome Technology initially focused on manufacturing 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 China's stock market.
In 2021, Akcome started making significant investments in heterojunction (HJT) cell technology, establishing multiple HJT manufacturing bases in eastern China. However, this period also marked the beginning of continuous financial losses. The company reported audited net losses of CNY 406 million, CNY 833 million, and CNY 826 million for 2021, 2022, and 2023, respectively, totaling approximately CNY 2.065 billion over three years.
The company's actual controller continued to cash out by selling shares despite the losses. According to the 21st Century Business Herald, major shareholders reduced their holdings by 627 million shares from 2017 to 2022, cashing out CNY 2.054 billion. Initially holding 43.63% of the company, the Zou family’s stake had fallen to below 7% by the first quarter of 2024.
The actual controller also leveraged share pledges and related-party transactions to extract funds from Akcome Technology, including obtaining external guarantees.
On May 31, Akcome said that some of its subsidiaries' bank accounts had been frozen due to overdue debts, affecting the company's capital operations and business management.
On June 7, Akcome announced a temporary halt in operations for 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 so far not responded to pv magazine‘s request to provide a comment on the matter.
The delisting and associated violations will directly impact over 270,000 investors, with platforms such as Sina offering online registration for a potential class-action lawsuit.
In May, Akcome was listed in Bloomberg New Energy Finance’s (BNEF) tier-1 global PV module manufacturers for the second quarter of 2024.
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