WiMi Hologram Cloud Inc (WIMI)

[StockpickerCAPC]

@ Frenchy2016 Unfortunately, WIMI is also in danger of being removed from the New York Stock Exchange.

The second half of 2021 has so far been going differently than planned for investors and shareholders of Chinese companies. Despite strong fundamental data and good growth forecasts, regulatory restrictions imposed by the Chinese government and the fear of delisting on the US stock exchanges keep causing waves of sales and putting enormous pressure on prices. For example, some Chinese companies are now quoting far from being fairly valued and are cheap compared to the competition. The adage of stock market legend Warren Buffett "Buy a dollar but never pay more than 50 cents" seems to have become a reality in China.

After the recent balance sheet scandal involving China's largest coffee shop chain Luckin Coffee, the United States actually focused on the transparency of Chinese companies. The US Senate has passed the "Foreign Company Accountability Act". The aim is that Chinese companies that are listed in the form of American Depositary Receipts (ADRs) in the USA lose this listing if they do not withstand the review by the PCAOB (Public Company Accounting Oversight Board) for three consecutive years. The crux of the matter is, among other things, the condition that the PCAOB should have access to the examination documents of the auditors in China. This in turn contradicts Chinese law - with the result that companies like Alibaba are striving for a second listing in Hong Kong in order to relocate their trade. This also explains why many investors are currently being offered an exchange of their US-listed ADRs for Chinese stocks. Delisting Chinese ADRs is therefore a risk that should not be underestimated. You should therefore consider converting your ADRs into stocks listed on the Hong Kong Stock Exchange, but not without first investigating the conversion costs involved.

Here are some reports on the current situation.
July 30, 2021
US sets new disclosure rules for Chinese IPOs coming to its stock markets.
Securities and Exchange Commission says Chinese firms will be required to divulge the listing of shares through a shell company that is outside China.
The move is a loophole that has been used for years by China’s large tech companies.
https://www.scmp.com/news/china/article/3143265/us-sets-new-disclosure-rules-chinese-ipos-coming-american-stock-markets?module=hard_link&pgtype=article

September 15, 2021
Chinese firms should face faster US stock delisting over audit rules, SEC chairman Gary Gensler tells lawmakers.
The top US securities regulator says he supports a bill in Congress that allows for faster removal from American markets for not complying with disclosure rules.
Lawmakers and the financial industry have pressed the SEC to force Chinese companies to improve disclosure standards.
https://www.scmp.com/news/china/article/3148767/chinese-firms-should-face-faster-us-stock-delisting-over-audit-rules-sec?module=hard_link&pgtype=article

October 27, 2021
U.S. Ban on China Telecom Signals Broad Concern Over Beijing.
A U.S. ban of China Telecom (Americas) Corp. by regulators shows that broad concerns about Beijing persist in Washington, even as the Biden administration takes steps to improve communications between the world’s biggest economies.
https://finance.yahoo.com/news/u-cranks-beijing-tensions-again-202846088.html

November 25, 2021
China wants to end the compulsory delisting of its companies in the USA
China wants to stop the forcible deletion of its companies from the US stock exchanges.
"We are working very hard to resolve the issue with US counterparts," Shen Bing, director general of the international affairs department of the China Securities Regulatory Commission, said Thursday. Communication between the authorities is currently running smoothly and openly. Nevertheless, there is a risk that the companies will forcibly disappear from the course list. "But we are working very hard to prevent this from happening."
The US Securities and Exchange Commission is driving a project by former US President Donald Trump. A law signed by him provides for the compulsory removal of foreign companies from the US stock exchange if they do not meet certain requirements. According to the regulations published by the SEC, companies must prove, among other things, that they are not controlled by a foreign government. How the information from the companies will be checked and the trade in the papers stopped has not yet been finally decided. The Trump law is aimed primarily against Chinese companies.
At the beginning of the year, the New York Stock Exchange initiated the deletion of three Chinese telecom companies from the price list - China Telecom, China Mobile and China Unicom.

December 3, 2021
US moves a step closer to delisting Chinese companies on American stock exchanges.
The SEC is seeking a new law that mandates foreign companies open their books to US scrutiny or risk being kicked off the NYSE and Nasdaq.
China and Hong Kong are the only two jurisdictions that refuse to allow the inspections despite Washington requiring them since 2002.
https://www.scmp.com/news/world/united-states-canada/article/3158245/us-moves-step-closer-delisting-chinese-companies