U.S. exchanges delist more Chinese companies over poor performance

Chinese stock values are plummeting, especially when compared to U.S. stocks.

Published: January 30, 2022 4:11pm

Updated: January 30, 2022 4:26pm

More Chinese companies are being delisted from the U.S. stock market due to performing poorly and not complying with Wall Street standards, The Epoch Times reported.

Chinese technology company MMTEC, Inc., announced Friday it had received notification from NASDAQ for failing to meet the minimum bid requirement per share of $1 for 30 consecutive business days. At market close on Friday, the stock was valued at $0.5799 a share. The company has 180 days to comply with the $1 minimum.

Online real estate company FangDD Network and logistics solution business BEST Inc. also face similar challenges. The Epoch Times reported their American depositary shares have dropped below minimum requirements as well.

China Finance Online, a self-described "online financial information/service company," was delisted from NASDAQ on Jan. 21 for failing to meet the $2.5 million stockholders' minimum equity requirement. China Finance was originally given notice of noncompliance in May 2021, Epoch Times reported, but the company was given until Jan. 14 to comply. The company now can only be traded over-the-counter.

Many other businesses based in the Asian nation are facing similar problems. More than 200 Chinese companies are listed in the United States, but 170 had shares fall in 2021, including 40 that plummeted 80%, Epoch Times stated.

The NASDAQ Golden Dragon China index, which weighs Chinese traded stocks in the U.S., fell by 56.26% over the past year. In comparison, the NASDAQ 100, which is an index of the 100 largest traded U.S. companies, is up 9.10% over the last year.

Chinese stocks on U.S. markets lost more than $760 billion in 2021, according to The Epoch Times.

The Wall Street Journal explained, "A company that uses audit firms based in countries with a weak rule of law, such as China, runs a greater risk of accounting problems."

The Securities and Exchange Commission instituted new audit rules earlier this month that could lead to more Chinese companies being delisted starting in 2024.