Beijing Zuojiang Technology Delisted from Shenzhen Stock Exchange Due to Financial Fraud
Beijing Zuojiang Technology, previously seen as a potential rival to Nvidia, is set to be removed from the Shenzhen Stock Exchange after failing to provide an accurate audit report for its 2023 financial results. The delisting is scheduled for July 26, following the company’s inability to meet the exchange’s requirements.
Established in 2007, Zuojiang Technology initially focused on cybersecurity hardware before transitioning to the development of data processing units (DPUs) in late 2022, capitalizing on the artificial intelligence (AI) boom in China. Despite claiming that its NE6000 DPU could rival Nvidia’s Bluefield-2 DPU, the company struggled to generate significant sales in 2022, with only one contract for 400 units, most of which went unused by the buyer.
CSRC Discovers Financial Misrepresentation
The China Securities Regulatory Commission (CSRC) identified significant inaccuracies in Zuojiang’s 2023 financial reports, leading to the decision to delist the company. The failure to present a clean audit report prompted the Shenzhen Stock Exchange to take action, impacting investor confidence and resulting in a sharp decline in Zuojiang’s stock value.
Rise of Bankruptcies in China’s Semiconductor Industry
The delisting of Zuojiang Technology is part of a larger trend within China’s semiconductor sector, where bankruptcies among smaller firms are becoming more common. Notably, twenty-three semiconductor companies have withdrawn their IPO applications since last year, reflecting a growing sense of caution among investors.
Starting in 2020, the semiconductor industry in China has witnessed a wave of closures, with over 10,000 chip-related companies shutting down between 2021 and 2022. In 2023 alone, a record 10,900 semiconductor-related firms deregistered, indicating the challenges faced by companies in this sector.
Source : www.tomshardware.com