Stock suspension will likely reach an all-time high in Hong Kong this year, as more Chinese firms miss reporting deadlines due to audit issues and worsening liquidity, according to analysts at Bloomberg Intelligence.

“We've tracked at least 64 suspensions so far, and there’s been a rise in cases among consumer discretionary and financial firms,” say Lu Yeung, an ESG analyst, and Sin Yee Cindy Lam, an associate analyst, at Bloomberg Intelligence. “More than 100 names remain suspended since 2021, and many could be delisted soon.”

The number of suspensions could accelerate through the second half of this year and reach an all-time high in 2023, they note, as geopolitical and deflation risks continue to mount. Stock suspensions so far already rival 2022’s 64 cases, surpassing 57 in 2021 and about nine in 2020. ( According to HKEX rules, a company’s shares will be suspended if it doesn’t release audited results three months after the end of a fiscal year. )

Although most firms can remain suspended for more than a year, MSCI, the analysts warn, could drop firms from its indexes if their stocks are suspended for more than 50 days. Bank of Jinzhou and CIFI Holdings Group, they add, were suspended this year while China Evergrande has been halted since 2022. Companies like Logan Group and Kaisa Group have resumed trading.

“Hong Kong-listed firms currently suspended could be halted for more than a year, given the fact that 67% of those suspended in 2022 have yet to resume trading,” Yeung and Lam point out. “A prolonged pause increases the risk of large price movements upon resumption in trading. Delisting is also possible if a suspension lasts 18 months. Kaisa Group’s shares plunged 21% following an 11-month halt, while Sunac China’s stock sank 55% when trading resumed after a year-long stoppage.”

Chinese developer Shimao Group, Yeung and Lam share, remains suspended as it faces difficulty in liquidating assets after it failed to find a buyer at a forced auction last week. Resumption in trading might stay slow until the government announces stimulus measures.

As China reopened late last year, more firms have cited liquidity issues or valuation problems instead of Covid-related reasons for delaying their reporting.

“Our analysis shows that about one-third of trading suspensions were due to the need for financial re-evaluation or specific liquidity issues like bankruptcy, restructuring and winding-up petitions,” say Yeung and Lam. “China Renaissance Holdings has halted trading and postponed releasing its results because its auditors were not able to get in touch with chairman Bao Fan, who is being investigated by government authorities. Certain bank accounts belonging to Huafang Group have also been frozen and the firm has paused trading.”