On April 22, 1998, Shanghai and Shenzhen Stock Exchanges announced that according to the stock listing rules, implemented in 1998, they would give special treatment to the stocks of listed companies with abnormal financial conditions. Because the initials of "Special Treatment" are "ST", these listed shares are called ST shares.

The above abnormal financial mainly refer to one of the following conditions:

• The net profit of listed companies were negative in two consecutive fiscal years;
• The per share net assets of listed companies in one recent fiscal year is lower than the face value of the share.
• There is no auditing report from an authorized account firm, or the accounting firm provided an auditing report that materially disagree with the financial statement of the company.
• Any abnormal financial behavior identified and claimed by CSRC or a Stock Exchange

In the special treatment period, the stock of the listed company should observe the following rules: (1) the limit of the increase and decrease of ST share quotation is 5 %; (2) adding "ST" before the original share name; (3) a listed company's interim report shall be audited.

The ST shares will be marked with * to become *ST shares, when a company failed to comply with certain rules posed by the exchange during the period of "Special Treatment". A ST company would receive a delisting warning from the stock exchange if one of the following situation happens:

• The ST company can not make itself profitable within a reasonable time period, after two years of consecutive loss.
• There is material mistake or fraud in the ST companies' financial statement.
• The company does not follow the law to timely file and disclose its financial statements.