Konka Voluntarily Applies for Delisting After 34 Years on Shenzhen Stock Exchange

Source: Times Weekly | Author: Yang Jingpu

After 34 years on the stock market, Konka's delisting is now a foregone conclusion.

On the evening of September 23, ST Konka A (000016.SZ) announced that it had submitted an application for voluntary termination of listing to the Shenzhen Stock Exchange (SZSE). The company has now formally entered the delisting process, pending final approval from the SZSE. Konka shares have been suspended since September 4. On the last trading day, ST Konka A closed at RMB 2.46 per share, while *ST Konka B (200016.SZ) closed at HKD 0.71 per share.

A Bittersweet Farewell

Konka's decision to voluntarily delist has stirred complex emotions in the market. On the day trading was suspended, one B-share investor took to social media, urging others not to vote in favor of the "voluntary termination of listing" proposal. "I believe this veteran company is worth holding for the long term," she told Times Weekly.

However, the fate of the former home appliance giant was sealed. On September 14, the proposal passed without悬念 at an extraordinary general meeting, with dissenting votes accounting for less than 2% of total voting shares. Voluntary delisting appears to have become an acceptable outcome for all parties.

After the A-shares and B-shares are delisted, they will be transferred to the delisting board managed by the National Equities Exchange and Quotations (NEEQ). As a key part of the delisting plan, Konka has offered eligible A-share and B-share investors a cash option at a slight premium. Following this, Konka shares will enter the stages of cash option distribution, exercise declaration, and settlement — with no further trading.

From "First Color TV Stock" to a Fallen Giant

Konka was founded as the first Sino-foreign joint venture electronics company after China's reform and opening-up, initially known for its color TV business. In 1992, both Konka A-shares and B-shares were listed on the SZSE, earning it the title of "China's First Color TV Stock." Its 34 years on the market mirror the transformation of China's home appliance industry.

From "first color TV stock" to "color TV champion," Konka's core competitiveness was gradually eroded by price wars, panel cycles, and the rise of the internet. The company repeatedly attempted diversification to break through, but could only barely sustain scale while profits failed to cover accumulated losses. The halo of its former leadership gradually dimmed.

From OCT Group to China Resources, Konka has always had strong shareholders. Its remaining PCB and semiconductor businesses, along with the brand value of the "Konka" name, provide some foundation for a fresh start. Delisting marks the end of Konka's capital market story. For the company itself, it is more like a voluntary "slimming down" — moving to the delisting board, completing cash option settlements, and clearing historical capital burdens in one go, freeing up space for operational restructuring.

"Mandatory delisting was almost a certainty, so voluntary delisting is better than forced delisting. It helps maintain basic brand credibility and gives small shareholders a clear cash exit channel," said Dong Min, Secretary-General of the China Video Industry Association, in an interview with Times Weekly. What remains uncertain is how Konka will survive under the control of its new owner, China Resources.

The Final Days of Listing

Voluntary delisting may be Konka's dignified way of saying goodbye.

Last year, Konka's audited net assets at year-end were negative, triggering a delisting risk warning. Under SZSE rules, if net assets remain negative at the end of this year, the exchange will terminate its listing. Given current fundamentals, reversing this trend is a major challenge.

Voluntary delisting by A-share companies is rare; maintaining listing status is usually the priority. However, in the view of many, the possibility and necessity of Konka maintaining its listed status have significantly diminished.

The difference between voluntary delisting and mandatory delisting due to financial red lines is stark — in terms of outcomes and investor protections. Passive delisting often leads to stock price crashes, with small investors having almost no early exit channels. "Konka's performance lacks hope and it has lost its financing function. Voluntary delisting is much better for investors and looks better for Konka's image," said Wang Jiyue, a veteran investment banker, to Times Weekly.

Under these circumstances, voluntary delisting became the "least bad" option.

The Cash Option Mechanism

The core supporting mechanism of the delisting plan is the cash option. Under the plan, the exercise price for A-share cash options is RMB 2.48 per share, a premium of approximately 0.81% over the pre-suspension price. For B-shares, the exercise price is HKD 0.73 per share, also a slight premium. These prices are backed by China Resources subsidiaries Panshi Runchuang and He Mao Co., Ltd.

Konka emphasized that shareholders are not forced to accept these prices and may choose to continue holding Konka shares.

Wang Jiyue noted that offering a cash option is a standard approach, with exercise prices generally set based on comparable market premiums and the company's financial capacity. "For the company, it's like buying back shares to a state that no longer meets listing conditions. Shareholders can accept or decline. However, liquidity after delisting will be much lower, making transfers difficult."

The plan is not without controversy. Some investors have questioned the pricing basis of the cash option and the rights of bondholders, but the company has not directly responded. Times Weekly also noted that investors who bought Konka shares at high prices (RMB 9 or 7 per share) expressed unwillingness to accept the delisting outcome, with some considering legal action.

Delisting does not mean Konka's business will cease. "After delisting, Konka's physical business will not shut down. Its brand, TV, and semiconductor operations can continue," Dong Min said. "Without the listed company status, the company can more calmly restructure debt, dispose of inefficient assets, and revitalize existing assets."

How Did the "First Color TV Stock" Fall?

Konka's story began with the wave of reform and opening-up.

In 1980, Konka was established as one of China's early Sino-foreign joint venture electronics companies, initially producing radios and tape recorders. In 1983, led by Lin Zhongqiao, the first generation of Konka management recognized the vast potential of the TV industry and began manufacturing televisions. A few years later, Konka obtained a domestic color TV production license from the Ministry of Electronics Industry and began to grow seriously. In 1992, Konka A and B shares were simultaneously listed on the SZSE, making it one of the earliest listed companies in China and earning the title "First Color TV Stock."

In the 1990s, the domestic color TV industry entered a golden age. Konka proposed a development strategy of "looking inward for growth, restructuring assets for efficiency." From 1993, Konka actively invested in central and western China, expanding production capacity from over 1 million units to over 8 million units. It also aggressively expanded overseas markets. That same year, a design team led by Tao Xianfang and Huang Guoying developed the first fully independently designed color TV model, the T953P3, which set records for single-model sales volume, product lifecycle, and profitability.

In 1998, Konka's color TV sales ranked first nationwide, surpassing the former leader Changhong. In 1999, Konka became the first industrial enterprise in Shenzhen to achieve annual revenue exceeding RMB 10 billion. From 2003 to 2007, Konka was the domestic retail sales champion for five consecutive years.

During that era, Konka TVs were a household name and the first choice for countless Chinese families. On the capital market, Konka was a star in the home appliance sector, with stable growth and regarded as a benchmark for domestic manufacturing.

The turning point came during the critical window of display technology iteration. As the global TV industry shifted from CRT to LCD panels, the industry landscape was reshaped. TCL invested heavily in upstream panels, Hisense focused on picture quality chips, but Konka directed its funds in a completely different direction — into real estate and industrial park development.

Dong Min identified two key inflection points in Konka's decline: first, the industry upgrade from CRT to LCD, where Konka failed to secure a position in the panel supply chain; second, the large-scale diversification launched around 2017, shifting focus from the core TV business to heavy-asset sectors like semiconductors and industrial parks.

"Massive amounts of capital and management resources were diverted, and investment in the core TV business was continuously squeezed, gradually eroding its profitability," Dong Min said. "During the ecosystem iteration windows of TV hardware-software integration and premiumization, the core TV business also failed to keep pace with industry evolution."

Starting around 2010, the growth rate of the color TV industry slowed significantly. National Bureau of Statistics data shows that domestic color TV production growth fell from 12.9% in 2010 to 8.5% in 2011, 7.5% in 2012, and -0.2% in 2013. With the industry trend clear, Konka began to develop new product lines.

In 2018, Konka repositioned itself as a technology-driven platform company, establishing four business groups: industrial products, technology parks, platform services, and investment finance, with a target of RMB 100 billion in revenue. Since then, its business boundaries have continued to expand: supply chain trading, industrial real estate, environmental protection, semiconductor storage, Micro LED, and PCB circuit boards. That year, revenue from supply chain management nearly rivaled that of the core TV business. Konka also established a semiconductor technology division, focusing on semiconductor storage and optoelectronic display.

These efforts ultimately failed to boost performance. From 2022 to 2025, Konka's net losses attributable to shareholders were RMB 1.723 billion, RMB 2.258 billion, RMB 3.726 billion, and RMB 12.582 billion respectively — a cumulative loss of over RMB 20 billion in four years. Another striking figure: Konka's non-recurring-adjusted net profit has been negative for 15 consecutive years.

Dong Min believes that the original intention of home appliance companies diversifying is to find a second growth curve. However, semiconductors and industrial parks are heavy-asset, long-cycle industries. The common reasons for veteran home appliance companies failing in cross-industry ventures include insufficient cash flow, weak technical accumulation, lack of cross-industry management capability, and diversion of core business resources. "Diversification requires companies to base decisions on their own strengths and make prudent choices," he added.

China Resources' Calculations

In July 2025, as part of the central enterprise specialization and integration initiative, OCT Group and its wholly-owned subsidiaries transferred their entire approximately 30% stake in Konka (including A and B shares) to a subsidiary of China Resources, making China Resources the new controlling shareholder.

One month later, a specialization and integration conference was held in Shenzhen, officially making Konka a business unit under China Resources' technology and emerging industry sector. China Resources moved quickly, with multiple senior executives entering Konka's core management after a board reshuffle.

At the industrial level, the synergy logic between China Resources and Konka was once highly anticipated. China Resources Microelectronics has technical expertise in power semiconductors, which could complement Konka's storage controller chip business. Konka's layout in Micro LED and Mini LED semiconductor displays was also seen as potentially strengthening China Resources' overall semiconductor business map.

But reality has been harsher than expected.

In the first year under China Resources, Konka reported a massive loss of RMB 12.582 billion. China Resources provided RMB 3.97 billion in low-interest loans and RMB 5 billion in perpetual bond financing to ease the liquidity crisis, while also pushing for management changes and internal anti-corruption efforts. According to public reports, at least nine former senior executives and key management personnel have been placed under investigation since 2026.

The voluntary delisting under China Resources' leadership may reflect a more detailed cost-benefit analysis.

Dong Min believes that China Resources' push for voluntary delisting is more about optimizing capital structure and revitalizing assets. After delisting, China Resources can provide support in terms of funding, credit, resource coordination, risk management, and industrial empowerment. "The subsequent turnaround will still depend on the effectiveness of business reforms."

After delisting, Konka will no longer face the pressure of quarterly financial disclosures or annual "shell protection" requirements, nor will it need to explain every quarter's operational fluctuations to the secondary market. China Resources can more calmly address debt and legacy issues within its system — divesting inefficient assets, shrinking non-core businesses, and focusing on competitive segments in consumer electronics and semiconductors.

Based on the situation over the past year since China Resources took over, Konka has been comprehensively restructuring its organization, shrinking non-core businesses, establishing four second-level business divisions, and conducting competitive recruitment. Konka has repeatedly stated that it will resolutely exit non-core and non-advantageous assets, focus on core resources, effectively revitalize existing assets, and improve asset quality.

"From China Resources' perspective, it's unlikely they acquired a listed company with the intention of voluntarily delisting it. Restructuring expectations have always existed, but they are not easy to achieve," Wang Jiyue analyzed. "One reason is time pressure; another is the high regulatory requirements for related-party transactions and horizontal competition for listed companies. If Konka retains its listed status, restructuring plans face various constraints. After delisting, those constraints are much fewer."

However, Konka recently stated that it currently has no plans for major asset restructuring and no specific timeline for relisting after voluntary delisting.

Dong Min believes that Konka's voluntary delisting is not only a capital-level adjustment for a single company but also a microcosm of how companies are adapting to changes in the color TV industry. The domestic TV market is in a state of stock competition, and future industry share will continue to concentrate among top players. The market brand landscape will continue to reshuffle, differentiate, and consolidate.

"Konka's home appliance business has limited growth potential and weak market competitiveness. China Resources may consider divesting the inefficient home appliance business. If it divests the home appliance business with negative net assets, it would help China Resources move forward more nimbly," Dong Min said.

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