China’s second-largest car dealer faces forced delisting as investors snub its shares

The Shanghai-based company plunged by the 10 per cent daily trading limit on Tuesday, ending at 0.87 yuan (12 US cents). It was the 19th trading session in a row that Grand Automotive saw its shares crash below the 1 yuan threshold.

Even if it were to jump by the daily trading cap of 10 per cent on Wednesday, it would not be able to break through the 1 yuan mark. According to exchange rules, a stock has to terminate trading and face delisting after its shares trade below the 1 yuan face value for 20 straight days.

Grand Automotive would become the second car dealer to be disqualified from the bourse in about a year, following the delisting of Pang Da Automobile Trade in June, 2023.

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Through more than 730 outlets across the country, it sells premium cars under brands such as BMW, Audi and Volvo.

In 2023, Grand Automotive, which is controlled by Xinjiang Guanghui Industry Investment Group, reported deliveries of 713,500 vehicles, which raked in 138 billion yuan. It trailed only Zhongsheng Group Holdings in terms of sales.

The car dealer posted a net profit of 392 million yuan last year, a turnaround from a net loss of 2.66 billion yuan in 2022.

As of Tuesday, Grand Automotive was valued at 7.2 billion yuan based on the closing price of 0.87 yuan.

China’s automotive sector, which is mired in overcapacity woes, is facing an uphill battle to improve profitability amid an escalating price war.

Cui Dongshu, general ­secretary of the China Passenger Car Association, said in February that most mainland carmakers were likely to continue offering discounts to retain market share.