The fortunes of former billionaire Wong Kwong Yu have yet to turn around.

Entering 2025, *ST Meixun (GOME Communications, 600898) has seen its share price plummet consecutively. As of the latest close, *ST Meixun traded at 0.9 yuan per share, marking a cumulative decline of 58% from its November 2024 peak and over 96% from its all-time high. Its current total market capitalization stands at just 257 million yuan, and it has remained below 500 million yuan for 14 consecutive trading days, sealing its fate of delisting.

This event not only signals the inevitability of its delisting but also signifies the complete collapse of Wong Kwong Yu's retail empire. Reflecting on the trajectory of GOME Retail, it has incurred consecutive losses since 2017, amassing a total net loss exceeding 38.8 billion yuan in the 3.5 years since Wong Kwong Yu's return.

Amid the comprehensive collapse of its retail business, Wong Kwong Yu abruptly announced his foray into the automotive sector, aiming to establish a "new force in car sales." This decision stands out prominently in the fiercely competitive automotive industry. Whether GOME can carve a niche in the automotive sector and reverse its retail woes has become the focal point of market attention.

Delisting

Since the beginning of 2025, *ST Meixun (GOME Communications, 600898) has witnessed a continuous slide in its share price. As of the latest close, it stood at 0.9 yuan per share, representing a cumulative decline of 58% from its November 2024 peak and a total market capitalization of 257 million yuan. It has lingered below 500 million yuan for 14 consecutive trading days.

According to the new delisting regulations effective from October 30, 2024, the market capitalization threshold for A-share companies listed on the Shanghai and Shenzhen Stock Exchanges has been raised from 300 million yuan to 500 million yuan.

This implies that if a company listed on either exchange has a closing market capitalization below 500 million yuan for 20 consecutive trading days, it will face delisting, constituting a trading-related mandatory delisting.

Based on the current share price, even if *ST Meixun's share price hits the daily limit for the next six trading days, its total market capitalization will still fall short of 500 million yuan.

In other words, *ST Meixun's fate is sealed.

Officially known as GOME Telecommunication Equipment Co., Ltd., *ST Meixun is controlled by the renowned capital tycoon and founder of the GOME Group, Wong Kwong Yu. The company's primary business encompasses the research, development, production, and sales of mobile intelligent devices. Its product line includes self-branded mobile phones, ODM mobile communication devices, ODM mobile communication motherboards, OEM, and smart home electronics trading.

As early as 1996, *ST Meixun entered the capital market but encountered significant challenges three years after its listing, suffering from consecutive operating losses and facing regulatory penalties for financial fraud.

Desperate for a solution, *ST Meixun initiated bankruptcy reorganization and transformed into an electrical appliance chain in 2003, renaming itself Sanlian Commercial. In 2008, GOME Group acquired control of Sanlian Commercial, with Wong Kwong Yu becoming the actual controller of the listed company. In October 2016, the company's primary business shifted to the research, development, production, and sales of smart mobile terminals, with its securities abbreviation changing to "GOME Communications."

However, the reorganization failed to revive the company's performance. Since 2018, *ST Meixun has incurred losses for six consecutive years. In the first three quarters of 2024, *ST Meixun's revenue amounted to only 8.1683 million yuan, with a net loss of -31.1639 million yuan. As of the end of the third quarter, the company's net assets were negative.

Concurrently, irregularities marred *ST Meixun's financial statements. In October 2024, the China Securities Regulatory Commission imposed an administrative penalty for false records in its 2020 and 2021 annual reports and fraudulent issuance in its 2020 private placement. The company was ordered to rectify the issues, received a warning, and was fined 21.56 million yuan. Relevant responsible individuals were fined between 1.7 million yuan and 3 million yuan.

According to Wind data, as of the end of the third quarter of 2024, *ST Meixun had 13,685 shareholders, who may face substantial losses.

Retail Debacle

With *ST Meixun's delisting now inevitable, Wong Kwong Yu's retail empire is also facing significant setbacks.

According to recent financial reports from GOME, it has incurred consecutive losses since 2017. As of the first half of 2024, GOME Retail had accumulated a net loss of over 53 billion yuan in 7.5 years. During the 3.5 years since Wong Kwong Yu's return, GOME Retail's net loss surpassed 38.8 billion yuan.

In 2022, 2023, and the first half of 2024, GOME Retail's revenue continued to decline sharply, with year-on-year drops of 62.7%, 96.29%, and 59.22%, respectively.

In terms of store count, as of the end of the first half of 2024, GOME Retail operated only 565 stores, marking a cumulative decline of over 86% compared to its peak in 2021. Its debt-to-asset ratio soared to 148%, indicating insolvency.

In February 2021, Wong Kwong Yu was released from prison on commutation of sentence and resumed control of GOME Retail. The capital market responded enthusiastically, pushing GOME Retail's share price skyward. Wong Kwong Yu, brimming with confidence, publicly vowed, "We will strive to restore the company's original market position within the next 18 months."

While making bold statements, Wong Kwong Yu also engaged in significant share sales. Starting in December 2021, he continuously reduced his holdings in GOME Retail. From December 22, 2021, to February 8, 2024, Wong Kwong Yu reduced his holdings 44 times, cashing out over 2.3 billion Hong Kong dollars (approximately 2.2 billion yuan), and reducing his shareholding percentage from 60.98% to 10.96%.

The average price of the most recent share reduction was as low as 0.04 Hong Kong dollars per share.

Consequently, GOME Retail's share price collapsed. As of January 6, 2025, GOME Retail's share price stood at merely 0.02 Hong Kong dollars, marking a cumulative decline of 99% from its 2021 peak, with a total market capitalization of only 958 million Hong Kong dollars.

Wong Kwong Yu's Bold Gamble

Faced with the complete collapse of its retail business, Wong Kwong Yu abruptly decided to venture into the automotive sector, aiming to establish a "new force in car sales."

On December 28, GOME announced its entry into the automotive dealership industry and its collaboration with navigation platforms, e-commerce vertical platforms, MCN agencies, and other enterprises to create a "new force in car sales."

Recently, the GOME Auto Strategy and Ecological Partnership Conference was held in Beijing, with Wong Kwong Yu personally in attendance.

Wong Kwong Yu stated that GOME would revolutionize car sales. After years of market research and innovative development, GOME Holding Group has seized opportunities in the automotive industry and is fully committed to participating in its transformation. It has launched "GOME Auto," a comprehensive operation platform for the automotive circulation sector in the era of smart cars. GOME Auto aims to become a new force in car sales.

Judging from publicly available information, GOME Auto's model does not offer substantial innovation. It still adheres to Wong Kwong Yu's familiar store model, simply replacing electrical appliances with cars. It brings together various automaker brands and derives businesses such as used car export offline services and automotive battery recycling, essentially serving as an enhanced version of traditional 4S stores.

This raises doubts about whether Wong Kwong Yu's plan can salvage GOME Retail in the fiercely competitive automotive sector.

According to GOME's plan, it intends to create an automotive self-media live streaming sales center, establish an online intelligent traffic operation system, construct a used car auction platform, and propose a "trilogy" strategy encompassing the construction of new integrated automotive showrooms, the expansion of the used car business, and the exploration of after-sales and financial services, among other diverse ventures. GOME aims to carve out a new niche in this sector, but the market will ultimately determine its success.

Summarizing Wong Kwong Yu's past business strategies, they primarily encompass four tactics: firstly, relying on an established chain network for small profits and quick turnover; secondly, employing an aggressive sales team to expand territories; thirdly, utilizing capital markets for financing and expansion; and fourthly, exerting strong control over distribution channels.

Currently, domestic automotive brands are fiercely competitive, with intense price wars, significantly compressing profit margins. Wong Kwong Yu's first tactic clearly has limited maneuverability.

Whether Wong Kwong Yu's bold gamble can save GOME Retail from collapse remains to be seen, a question that only time can answer.