Dunxin Financial Holdings significantly alters ADS ratio

In Hong Kong on December 3, 2024, Dunxin Financial Holdings Limited (Dunxin) announced a major change to the ratio of its American depositary shares (ADSs). The company is shifting from a ratio where one ADS represents 480 Class A ordinary shares to a new ratio of one ADS for 60,000 Class A ordinary shares. This change will take effect on December 4, 2024, marking a significant adjustment in the trading terms of its ADSs in the over-the-counter market. Existing ADS holders will find that this change effectively functions as a one-for-125 reverse split. It’s important to note that there will be no alterations to the Company's Class A ordinary shares, meaning the underlying stock remains unchanged despite the new ADS structure. Those holding ADS on the effective date will need to surrender their current ADSs to the depositary bank for cancellation and exchange. Further information related to the process will be provided by the depositary bank in a notice directed to ADS holders. The company has emphasized that while the ADS price is likely to increase proportionally due to the change in the ADS ratio, they cannot guarantee that the actual trading price post-change will align with that expectation. Dunxin has also highlighted that their ADSs will continue to trade under the same symbol on the OTC market. Since halting the provision of loans to customers in 2020, the company is focusing on enhancing its business framework and ensuring stability, making this ratio change a strategic move to potentially bolster confidence among investors. This shift places Dunxin in a unique position, aiming to navigate future developments within the Hong Kong market.