The suspension deadlock continues, with delayed annual reports triggering a chain reaction. Since April 1, 2025, Hong Kong-listed GRAND BAOXIN has been forcibly suspended from trading for over seven months due to its failure to disclose its 2024 annual results on time. According to Hong Kong Stock Exchange rules, if a listed company fails to release audited financial statements within three months after the fiscal year-end, trading must be halted.
In a March 31 announcement, GRAND BAOXIN explained the delay as due to "ongoing volatility in the auto dealership industry, requiring additional time for auditors to assess accounting estimates and the group's financial resources." However, the suspension crisis remains unresolved. On November 6, auditor RSM China abruptly resigned, further complicating the resumption process. RSM cited disagreements over audit fees and timelines, as well as delays in document preparation caused by key personnel departures following the revocation of dealership authorizations.
The chain reaction escalated. On the day of suspension, GRAND BAOXIN's stock price plummeted 40% to a historic low of HK$0.08. More critically, BMW China notified the group on March 20 that it would revoke sales authorizations for 10 dealerships for failing to meet commercial terms, effective March 31. By August, all 37 BMW dealerships under GRAND BAOXIN nationwide—including locations in Beijing, Dongguan, and Yantai—had their authorizations terminated, leading to widespread consumer disputes over unfulfilled prepaid deposits and service packages.
Roots of the Collapse: Industry Shifts and Internal Mismanagement GRAND BAOXIN's crisis stems from the clash between traditional auto dealership models and industry transformation. In 2024, China's new energy vehicle penetration rate exceeded 42%, while the traditional fuel vehicle market continued to shrink. Luxury brands like BMW, Mercedes-Benz, and Audi engaged in a price war to retain market share, with BMW’s 3 Series models dropping to around RMB 200,000.
Fierce competition squeezed dealer profits. GRAND BAOXIN’s 2024 interim report showed a 17.88% year-on-year revenue decline, a 119.78% plunge in net profit, and a mere 0.46% gross margin. Meanwhile, its debt-to-asset ratio hit 63.77%, with current liabilities accounting for 72.91% of total debt. Cash flow covered only 0.1x current liabilities, highlighting severe liquidity strain.
Internal mismanagement worsened the situation. In 2025, multiple GRAND BAOXIN subsidiaries faced enforcement actions, with parent company China Grand Automotive Services Group Co., Ltd. pursued by courts over RMB 1.17 billion in debt. Consumer complaints revealed that some stores aggressively promoted high-priced service packages before closures, raising suspicions of cash flow manipulation. For instance, Beijing Baoxin offered unusually low-priced maintenance packages at RMB 298 in 2023 while pushing prepaid services exceeding RMB 10,000—only to leave customers stranded post-closure, forcing costly cross-province arbitration.
Regulatory and Industry Warnings: Dealership Model in Need of Overhaul GRAND BAOXIN is not an isolated case. On April 1, 2025, over 50 Hong Kong-listed companies, primarily in real estate and auto dealerships, were suspended for delayed annual reports. China Automobile Dealers Association data showed 4,419 4S stores exiting the market in 2024, as traditional asset-heavy dealerships struggled under the shift to direct sales by EV makers.
Regulators have stepped in. Dongguan authorities listed Dongguan Baoxin as an abnormal business operator and urged stricter industry oversight. Legal experts note that under China’s auto sales regulations, manufacturers bear supervisory responsibilities, allowing consumers to seek compensation from BMW China. However, with GRAND BAOXIN’s parent already delisted from the A-share market and assets heavily mortgaged, consumer recoveries appear slim.
Outlook: High Bar for Resumption, Potential Delisting To resume trading, GRAND BAOXIN must meet three conditions: complete 2024 audits with a new auditor, demonstrate ongoing operational viability, and disclose BMW’s authorization termination impact. Yet, no new auditor has been appointed, and losing BMW—which contributed over 60% of revenue—casts doubt on its survival.
Industry observers warn GRAND BAOXIN may follow its parent, China Grand Automotive, which was delisted in 2024 after 20 consecutive days below RMB 1. If GRAND BAOXIN fails to resume within 18 months, it faces Hong Kong delisting. Its plight underscores the urgency for traditional dealers to adapt: as EV makers bypass dealers with direct sales, competition shifts from "network scale" to "service efficiency and user experience," leaving slow-to-transform players at risk.
(Note: This article incorporates AI-generated content and does not constitute investment advice. Market risks apply.)