Core Insights - The case of Hongda Xingye represents one of the most severe capital collapses in A-shares history, with a staggering 40 consecutive trading days of price declines, leading to a 99.6% loss for 145,200 shareholders [1][9]. Company Overview - Hongda Xingye, originally Jiangsu Qionghua, was listed in 2004 and initially gained attention as a PVC sheet manufacturer. The company underwent several transformations, including a name change and a shift to hydrogen energy, which saw revenues soar from 1.9 billion yuan to 6 billion yuan between 2012 and 2017 [4][6]. - The company’s peak stock price reached 41.47 yuan during the 2015 bull market, with net profits exceeding 1 billion yuan [4]. Financial Crisis - Starting in 2021, Hongda Xingye faced significant debt defaults, with public bond defaults amounting to 4.45 billion yuan and overdue debts exceeding 12.736 billion yuan. By the end of 2021, the company had overdue short-term loans of 3.046 billion yuan and long-term loans of 1.241 billion yuan [6]. - The company's performance deteriorated sharply in 2022, with net profits dropping by 64.78%, and by 2023, the net loss expanded to 814 million yuan [6][9]. Stock Market Impact - The stock price fell below the 1 yuan threshold, triggering delisting conditions. The final trading day before delisting saw the stock close at 0.58 yuan, with shareholders unable to sell their holdings during the delisting period [9][10]. - Following delisting, the stock continued to decline, hitting a low of 0.12 yuan by March 2025, representing a 79% drop from the delisting price [11]. Investor Behavior and Market Dynamics - The case illustrates a critical lesson for investors regarding the dangers of low-priced stocks, as many investors were misled by the "low price equals safety" mentality. The liquidity in the market for delisted stocks is extremely low, making it difficult for investors to exit their positions [11][13]. - The modification of rules during the delisting period led to an immediate 80% drop in stock price, highlighting the risks associated with investing in stocks that are nearing delisting [13].