For decades, the Shanghai Stock Exchange was home to a peculiar class of corporate entities known as 'immortal birds'—troubled companies that avoided delisting through clever accounting, frequent name changes, and speculative 'shell' value. That era effectively came to a close this month as *ST Yan Shi, a once-prominent player in the baijiu sector, was ordered to delist. It is the first company in the high-margin white spirits industry to be expelled from the A-share market, signaling a fundamental shift in China’s regulatory landscape.
The fall of *ST Yan Shi, formerly known as Shanghai Guijiu, was precipitated by a catastrophic liquidity crisis at its primary backer, Haiyin Wealth. In late 2023, the wealth management platform controlled by the Han family collapsed under allegations of illegal fundraising, leading to the criminal detention of *ST Yan Shi’s actual controller, Han Xiao. This sparked a domestic exodus; within a year, the company’s distributor network shriveled from over 4,400 partners to fewer than 800, causing revenue to plunge by over 97% from its 2023 peak.
Adding to the operational paralysis was a stinging legal defeat in a trademark battle against industry giant Yanghe. The court stripped the company of its right to use the lucrative 'Guijiu' brand name, forcing a desperate and costly rebranding to 'Shanghai Jundao' at a time when its coffers were already dry. By the end of 2025, the company reported annual revenues of less than 40 million yuan (approximately $5.5 million) and total liabilities exceeding 1.6 billion yuan, leaving it in a state of functional insolvency.
Ultimately, it was the 'New Nine Articles'—a set of stringent market reforms issued by China’s State Council—that sealed the company's fate. Under these new rules, the delisting threshold for market capitalization was raised to 500 million yuan, and the criteria for financial health and audit transparency were significantly tightened. *ST Yan Shi triggered three separate delisting triggers simultaneously: failing the revenue-and-profit test, receiving a 'negative' opinion on internal controls, and falling below the market cap floor for 18 consecutive sessions.
This aggressive housecleaning is not an isolated incident. In the first half of 2026, the number of companies facing delisting has accelerated, with dozens of firms across various boards receiving termination notices. Regulators are no longer allowing distressed firms to survive via 'stock shrinking' or other technical maneuvers. The message from Beijing is clear: the A-share market must transition from a speculative playground for 'shell' hunters into a venue for genuine value creation and transparent corporate governance.