Chijet Motor faces potential Nasdaq delisting

JILIN CITY, China - Chijet Motor Company, Inc. (NASDAQ: CJET), a manufacturer of traditional and new energy vehicles, disclosed on Monday that it has been notified by Nasdaq of non-compliance with market value requirements. The notifications, received on August 15, 2024, indicated that the company's market value of listed securities and publicly held shares fell below the minimum thresholds set by Nasdaq's listing rules.

Specifically, Chijet's market value of listed securities did not maintain the required $50 million over the past 30 business days, while the market value of publicly held shares did not meet the $15 million mark for 32 consecutive business days. Nasdaq's rules grant the company a 180-day period, ending on February 11, 2025, to regain compliance with both requirements.

To comply, Chijet's market value of listed securities must close at or above $50 million for at least ten consecutive business days during the grace period. Similarly, the market value of publicly held shares must reach or exceed $15 million for ten consecutive business days within the same timeframe. If Chijet achieves these benchmarks, Nasdaq will confirm compliance and close the matter.

Failure to regain compliance by the deadline may lead to delisting, although Chijet would have the option to appeal the decision or seek a transfer to The Nasdaq Capital Market if eligible. The Nasdaq notices do not currently affect Chijet’s listing on the Nasdaq Global Market or the trading of its securities, provided the company meets other continued listing requirements.

Chijet is evaluating potential actions to regain compliance and maintain its listing status. However, the company cautions that there is no assurance of success in these efforts. Chijet specializes in the development, manufacture, sales, and service of vehicles, and is known for its high-performance products offered at reasonable prices. It is also constructing a dedicated factory for new energy vehicle production in Yantai, China.

This news is based on a press release statement from Chijet Motor Company, Inc.

In other recent news, Chijet Motor Company, Inc. has enacted a 1-for-30 reverse stock split to meet Nasdaq's minimum bid price rule. This move has reduced the total number of Chijet's issued and outstanding ordinary shares from 160,707,171 to approximately 5,356,905. The company hopes this corporate action will make its shares more attractive to investors by increasing the market price per share.

Chijet Motor Company also announced an expansion into Uzbekistan through a three-year distribution agreement with TANK AUTO, an Uzbek distributor. TANK AUTO will now serve as the official agent for automotive sales and after-sales services for Chijet's subsidiary, FAW Jilin Automobile Co., Ltd. in Uzbekistan. This move is a part of Chijet's ongoing efforts to broaden its global reach.

The Uzbek delegation, led by Sayyed Karimov, the economic governor of Tashkent Region, visited FAW's production facilities and expressed confidence in FAW's product lineup, predicting a sales target of 12,000 units within the three-year agreement period. FAW's head, Mr. Wang Yunfei, reciprocated the positive sentiments and expressed readiness for long-term cooperation. These are the latest developments in Chijet's business strategy.

InvestingPro Insights

As Chijet Motor Company (NASDAQ: CJET) faces challenges with Nasdaq's market value requirements, a closer look at the company's financial health through InvestingPro data reveals several critical metrics. Chijet's market capitalization stands at a modest $18.74 million, reflecting the market's current valuation of the company. This figure is well below the Nasdaq's minimum requirement, underscoring the urgency for Chijet to address its market value situation.

InvestingPro data also shows a negative price-to-earnings (P/E) ratio of -0.38, with an adjusted P/E ratio for the last twelve months as of Q4 2023 at -0.28. This indicates that the company has been unprofitable over the last year, which aligns with the InvestingPro Tip that Chijet is not profitable over the last twelve months. Moreover, the gross profit margin for the same period was deeply negative at -345.49%, reflecting significant challenges in generating profit from its revenues.

Despite these financial hurdles, Chijet's stock price experienced a significant return over the last week, increasing by 15.13%. This short-term gain, however, contrasts with the overall performance over the last year, where the total return plummeted by -93.79%, as noted in the InvestingPro data. This volatility is echoed in an InvestingPro Tip that highlights the stock's general tendency to trade with high price volatility.

For investors seeking more detailed analysis and additional insights, InvestingPro offers 16 more tips on Chijet's financial performance and stock behavior, available at: https://www.investing.com/pro/CJET. These tips provide a deeper understanding of the company's financial position, which could be critical for investors considering Chijet's ability to regain compliance with Nasdaq's requirements and its future prospects.

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