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Official release here:

CSRC Officials Answered Reporter Question

http://www.csrc.gov.cn/csrc_en/c102030/c2052837/content.shtml

Global Times also running a piece:

"We believe that through joint efforts, the two sides will work out cooperation arrangements that meet the legal and regulatory requirements of both countries as soon as possible, while jointly protecting the legitimate rights and interests of global investors and promoting the sound and stable development of the two markets," CSRC said.

https://www.globaltimes.cn/page/202203/1254603.shtml

Jatw, the problem seems to be a physical inspection at the local office which is not allowed under Chinese law.

"Washington is demanding complete access to the books of U.S-listed Chinese companies, but Beijing bars foreign inspection of working papers from local accounting firms - an auditing dispute that puts hundreds of billions of dollars of U.S. investments at stake."

Quite what a physical inspection (if that's the correct) will achieve is questionable, do they want to see till receipts : ))

https://www.nasdaq.com/articles/yum-says-it-may-have-to-delist-from-new-york-by-2024

Its only just come into force and already the SEC are showing signs of making concessions, dropping the review of company audits from three to two consecutive years.

CNBC comment below has a similar view:

"The fundamental value of these companies will not be affected, Issel, head of Asia-Pacific equities and credit at the firm, told CNBC’s “Street Signs Asia” on Friday: “Virtually all of them, the big ones anyway, these ADRs … their business is exclusively in China.”

“Virtually now all of them have also Hong Kong listing,” Issel added. “As an investor you just have to move over if there is an actual delisting [in the U.S.].”

Furthermore, he said: “We do know that the Chinese and also U.S. authorities are in contact, they could salvage it.”

https://www.cnbc.com/2022/03/11/us-delisting-fears-resurface-for-dual-listed-chinese-companies.html

Its worth having a look at the regulatory filing for one of HCM's major holders in HK, JPMorgan Chase & Co.

Whilst they are predominantly long they also have a net short position together with a substantial loan book, volatility in the price up/down will benefit these type of strategies.

https://sc.hkexnews.hk/gb/di.hkex.com.hk/di/NSNoticePersonList.aspx?sa2=np&scpid1=15358&scpid3=0&scpid2=344192&sa1=pl&scsd=12%2f03%2f2021&sced=12%2f03%2f2022&pn=JPMorgan+Chase+%26+Co&src=MAIN&lang=EN&g_lang=en&

The global fund raising back in June of last year; presumably the US funds involved were aware of this impending regulatory hurdle opting to hold their shares in HK rather than New York?

"The Company entered into cornerstone investment agreements with investors affiliated with The Carlyle Group, Canada Pension Plan Investment Board, General Atlantic, HBM Healthcare Investments and CICC Grandeur Fund. Pursuant to such agreements, they subscribed for a total of 63,215,500 Offer Shares, representing approximately 61% of the Offer Shares offered under the Global Offering (assuming the over-allotment option is not exercised)."

https://www.londonstockexchange.com/news-article/HCM/closing-of-global-offering-and-hong-kong-listing/15039436

It seems odd that this has been known about for over a year during an essential fund raising but concerns are only now being raised. Hopefully there can be a compromise as the NASDAQ stand to lose out on important global growth stocks, not to mention fees.

Few points, please correct if wrong;

This has been known about for sometime, yes, recent political events may have altered the tone but essentially its still the same act.

HCM complies even if it has to change auditor locations, PWC is global so New York.

Worst case scenario, HCM delists in 2024 opting for a Premium listing here in UK, by this time company should be at breakeven with less forward risk.

From this mornings RNS;

The submission of form 20F triggered HCM's inclusion, but this was expected?

"On March 8, 2022, as expected in its implementation of the Act, the U.S. Securities and Exchange Commission (the "SEC") provisionally named the Company as a Commission-Identified Issuer, following the Company's filing of its annual report on Form 20-F with the SEC on March 3, 202"

This looks like the crux of the issue:

"Under the current terms of the Act, the Company's American depositary shares will be delisted from the Nasdaq Stock Market in early 2024, unless the Act is amended to exclude the Company or the PCAOB is able to conduct a full inspection of the Company's auditor during the required timeframe. In addition, legislation is being considered in the United States to shorten the number of non-inspection years from three years to two."

Agreed NoS, seems like a bit of a storm in a tea cup but I am sure the short side will try and capitalise as much as possible.

adding a few more to the pot today.

Still can't see an issue with submitting audited results, where do you see the problem?

From results footnote:

AUDIT REPORT ON THE ANNUAL FINANCIAL STATEMENTS


The consolidated financial statements of the Company and its subsidiary companies for the year ended December 31, 2021 have been audited by the Company's auditor, PricewaterhouseCoopers, in accordance with accounting principles generally accepted in the U.S. The consolidated financial statements of the Company and its subsidiary companies for the year ended December 31, 2021 have also been reviewed by the Audit Committee of the Company.

I can't see anything too onerous with the SEC filing, after all HCM are NASDAQ listed to basic admin really.

I think the danger here is to look for reasons other than what is out there already, potential large short position at least in the UK, NASDAQ also has a reasonable amount sold short which may have contributed to the fall?

Six moth chart of iShares Nasdaq Biotechnology, add in the shorts (or guaranteed future buyers) could amount to HCM's current position.

https://uk.finance.yahoo.com/quote/IBB?p=IBB

Basic short tracker https://shorttracker.co.uk/company/GB00BMTV7393/

What will be interesting is if there are any changes on Boo short sellers post today's TU, AHL Partners LLP and D. E. Shaw & Co. LP appear on both Boo and THG as currently over 0.5%

Voleon Capital Management LP under 0.5% as of 9th March

Recent thread here;

Whey prices - two week spot

https://www.lse.co.uk/ShareChat.asp?ShareTicker=THG&share=Thg-Plc&page=2&thread=9EAEFA93-1CE2-4EE5-8515-C550224D8863

I thought so too, outlook may have signalled the worst is over for Boo in which case the shorts may have headed for the door.

THG is stuck on the naughty step similar to Boo say 12 months ago. Board made one or two critical errors and assumptions which has damaged the company's standing and valuation, head down keep going until sorted.

There's no real volume, just market maker trades

Yes, good point on the Boo market cap, embarrassing to say the least.

(robert48 10:57)

I can understand your comments in the context of such a sharp drop in price, however your conclusions are incorrect.

Agree in general although the separation fiasco will in part be down to the board and their strategic advisors.

There does seem to be complete disconnect between the boardroom and what the market expects/wats to see happen, not sure how this has come about but at least they have a daily reminder that all is not well.

Secretly I hoped the low share price had derailed the splitting up of the company, it may well have.

Sofina on the board, these guys are not newbies, must be hurting them too.

https://www.sofinagroup.com/investor-relations/stock-price-and-sofina-share/

There's definitely regular selling pressure form US trackers but probably helped on by the short side, no UK shareholders doesn't help either imo

stockbrokerbelt, agree, they have chosen spot prices as opposed to buying in advance in order to respond quicker to any price drops. Not sure how many of their competitors are still using the old drop shipping model with white labelling but these guys will certainly be feeling the pinch.

THG has economies of scale with the ability to ride this out, many are not so fortunate.

We should get some stabilisation soon, its around this time that farmers plan for the year ahead, typically the balance between dairy and beef.