(Yicai) Aug. 5 -- The fact that more and more companies are getting delisted shows that the Chinese mainland’s stock market is improving, according to an associate professor at China’s Central University of Finance and Economics.

Delisting is gradually becoming a standard practice in China, Liu Chunsheng told Yicai. This reflects the improvements in the stock market’s “survival of the fittest” mechanism, which will help enhance the overall quality of listed firms, he explained.

A total of 312 companies were delisted from the Chinese mainland’s three stock exchanges as of yesterday, according to data from Wind Information. 186 of them, or 60 percent, were delisted after 2021, including 52 last year and 23 so far this year, 10 of which in the past month.

Jinzhou Port, the company operating the namesake port in China’s northeastern Liaoning province, was delisted from the Shanghai Stock Exchange on July 25 because regulators found it had falsified its annual financial statements for consecutive years, including inflating profits.

Power equipment manufacturer Qingdao Zhongzi Zhongcheng Group and internet marketing service provider Hubei Geoway Investment got delisted on July 21 from the Shenzhen and Shanghai bourses, respectively, for their deteriorating financial condition that could not be improved.

Zhongzi Zhongcheng and Geoway Investment had negative net assets at the end of 2023 and received delisting risk warnings last year. They were forced to delist last month because they failed to improve their situation.

Nearly 100 companies listed in the Chinese mainland have received regulatory delisting risk warnings so far this year, most of which are related to poor financial conditions. Many of them are in the red and have operating income below CNY300 million (USD41.8 million), which are two main delisting red flags.

Others, such as information service provider Shenzhen Suntang High-Tech [BSE: 839680] and drugmaker Jiangsu Wuzhong Pharmaceutical Development [SHA: 600200], are facing forced delisting risks due to major illegal incidents.

Editors: Tang Shihua, Futura Costaglione