NYSE to delist Kuke Music ADSs due to price compliance failure

NEW YORK - The New York Stock Exchange (NYSE) announced Tuesday it has begun proceedings to delist the American Depositary Shares (ADSs) of Kuke Music Holding Limited, which trade under the ticker symbol KUKE. Trading in the company’s ADSs has been suspended immediately. The announcement comes as the stock has experienced a dramatic 90% decline over the past year, with its market capitalization falling to $130.4 million.

NYSE Regulation made the delisting decision after Kuke Music failed to maintain an average closing price of at least $1.00 over a consecutive 30 trading-day period, as required under Section 802.01C of the NYSE’s Listed Company Manual. The exchange also noted that the company had implemented a change to its American Depositary Receipts ratio, equivalent to a reverse stock split, during the prior one-year period. According to InvestingPro data, the company’s financial health score is rated as "WEAK," with current ratio at 0.34 indicating significant liquidity challenges.

Kuke Music has the right to appeal this determination through a review by a Committee of the NYSE Board of Directors. If the delisting proceeds, the NYSE will apply to the Securities and Exchange Commission to formally delist the company’s ADSs after all applicable procedures are completed, including any potential appeal by the company.

Kuke Music Holding Limited, which offers classical music licensing, subscription, and education services in China, has faced ongoing challenges maintaining compliance with NYSE listing requirements. The exchange’s decision is based on the company’s failure to meet the minimum price threshold required for continued listing. Recent financial data shows the company is not profitable, with negative EBITDA of $5.86 million and revenue declining by 35.5% in the last twelve months. InvestingPro subscribers have access to 15 additional key insights about KUKE’s financial position and market performance.

According to the press release statement, the delisting process will continue following standard NYSE procedures, which include the possibility of an appeal by the company before final action is taken.

In other recent news, Kuke Music Holding Limited has acquired a controlling stake in Naxos Music Group, one of the largest independent classical music companies globally. The acquisition, valued at approximately $106.35 million, was completed through the issuance of Kuke’s Class A ordinary shares. This strategic move was executed in two transactions, involving Naxos One Holding Limited and Desun Holding Limited, and gives Kuke a 70.43% interest in Naxos Music Group.

Additionally, Kuke has formed a strategic partnership with People’s Music Publishing House, China’s national music publishing institution. This collaboration aims to enhance global music cooperation, support young Chinese musicians, and develop a digital music ecosystem. In another development, Kuke Music has partnered with Chinese automaker Great Wall Motor to integrate a customized in-car music application in GWM’s new intelligent electric vehicles.

The partnership will initially deploy the "KUKE Music" smart application in GWM’s WEY brand vehicles, utilizing Kuke’s classical music library and AI algorithms. These recent developments indicate Kuke’s expanding influence in both the music and automotive industries.

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