Is there still hope for full delivery stocks? Investors must know the turning points and risks

Why Are Some Stocks Classified as Full Delivery Stocks?

The full delivery stock system in Taiwan’s stock market is a risk management mechanism. When a listed company’s per-share net asset value falls below the face value of 5 NT dollars due to operational difficulties, financial crises, or major violations, it will be designated as a full delivery stock by the regulatory authority. This means that when buying or selling such stocks, investors must pay the full purchase amount upfront to the broker, and cannot use credit trading tools such as margin or short selling.

Is There Really No Cure for Full Delivery Stocks?

The answer is no. The key question of Can full delivery stocks be saved? depends on whether the company can turn around its operations. Once the company’s financial situation improves, there is a chance to be removed from the full delivery stock status.

Specifically, the conditions for returning to regular stock trading are divided into two categories:

For listed companies: Continuous two quarters with per-share net asset value above 5 NT dollars, and shareholder equity remaining above 300 million NT dollars for two consecutive quarters.

For OTC companies: Achieving a quarter where the per-share net asset value exceeds 5 NT dollars, with shareholder equity showing positive growth.

Once these conditions are met, the stock exchange will conduct a formal review on the first business day after receiving the quarterly report. After the review announcement takes effect, it only takes 2 days to resume normal trading.

How Complex Is the Trading Process for Full Delivery Stocks?

The buying and selling process for full delivery stocks differs significantly from that of regular stocks. Investors need to understand these differences in advance to avoid trading disruptions.

Actual purchase process: Investors must first transfer the full amount (including fees) into a designated settlement account of the broker, then inform the broker of the stock code and quantity they wish to buy. Since direct order placement is not possible, it is more accurate to say that they are “placing an order with the broker to purchase on their behalf.” If the full amount is not used on the same day, the broker will typically automatically refund the remaining balance to the investor’s account at 3:30 PM.

Cumbersome selling procedure: Investors need to call their broker to apply for the “reserved stocks” (i.e., pre-accepted stocks) for that trading day. The broker will record this via a voice confirmation (some brokers now use app-based applications). Only after completing this reservation can investors independently place a sell order. If the order does not execute by the close, they must re-reserve the stocks the next day, which increases transaction time and costs.

How to Check the List of Full Delivery Stocks?

Investors can log in to the Taiwan Stock Exchange official website, navigate to “Trading Information” → “Change of Trading,” and view the complete list of full delivery stocks along with the reasons for their designation.

What Should You Consider When Choosing a Broker for Trading Full Delivery Stocks?

Major Taiwanese brokers such as Fubon Securities, Yuanta Securities, CTBC Securities, and KGI Securities all offer services for trading full delivery stocks. When selecting a broker, consider the following factors: the professionalism and responsiveness of the sales staff, the convenience of the settlement account, competitive fee rates, and whether they provide APIs or apps for reservation applications. Since the process for trading full delivery stocks is quite complex, having a patient and professional broker can significantly improve trading efficiency.

Core Risks of Investing in Full Delivery Stocks

Operational risk is the most critical. Being classified as a full delivery stock indicates that the company is facing significant difficulties, which may stem from poor management, worsening finances, or legal disputes. The likelihood of the company rescuing itself is relatively low, so investors need to be fully aware of this.

Volatility is much higher than that of regular stocks. When a stock’s net asset value hovers around 5 NT dollars, even minor negative news can trigger decisions on whether to maintain the full delivery status, leading to sharp short-term fluctuations. Some stocks may even hit the limit-down repeatedly after losing credit trading eligibility.

Severe lack of liquidity. Full delivery stocks trade only once every 30 minutes (compared to continuous trading for regular stocks), resulting in a serious imbalance between buyers and sellers, high trading costs, and difficulty in executing trades. Some stocks with extremely poor liquidity may have no transactions for several days.

No dividends or distributions. Holding full delivery stocks does not entitle investors to dividends or stock distributions. The only potential profit is waiting for the company to turn around and re-enter regular stock trading, which requires strong psychological resilience and patience.

Investing in full delivery stocks essentially involves betting on the company’s revival. The risks and rewards are highly asymmetric, making it suitable only for investors with very high risk tolerance and in-depth research capabilities.