(Yicai) March 12 -- Guirenniao, a struggling Chinese sportswear brand, was removed from the Shanghai Stock Exchange due to its share price breaching the bourse rules.

Guirenniao [SHA: 603555] closed below CNY1 (14 US cents) on Feb. 1 and failed to recover by March 7, triggering the mandatory delisting condition, it announced late yesterday, citing a notice issued by the SSE on the same day. It closed at 67 Chinese cents (9 US cents) on its final trading day on March 7 with a market capitalization of less than CNY1.1 billion (USD153.1 million).

Stocks should be booted from Chinese mainland exchanges if their price stays below CNY1 for 20 straight trading days, according to regulations.

Set up in 1987, Shanghai-based Guirenniao was once a well-known sportswear brand that went public in 2014. However, because of over-expanding after its listing, it had a net loss from 2018 to 2020, leading to a bankruptcy crisis.

Taifujingu Network Technology, a Heilongjiang province-based grain giant, bought a 20 percent stake in Guirenniao for CNY417 million (USD58 million) in April 2021 to help the sportswear firm complete its bankruptcy reorganization while shifting its business focus to grain trading from clothing.

Guirenniao swung into the black in 2021 with a net profit of CNY361 million but turned a loss of CNY9.4 million the next year. According to a performance warning issued in January, its net loss widened to CNY485 million in 2023.

In addition to its poor performance, Guirenniao also faces regulatory risks. In late February, the China Securities Regulatory Commission probed its de facto controller and Chairman Li Zhihua, who is also the owner of Taifujingu, for alleged information disclosure violations.

The SSE also issued a regulatory notice to Guirenniao yesterday, requiring its major shareholders and executives to continue to fulfill their previous commitments to increase holdings and performance compensation after the company’s delisting. If they fail to do so within the time limit, the bourse will punish the relevant responsible persons, it noted.

Editors: Dou Shicong, Martin Kadiev