Youzan Technology (HKG:6051) proposed a 20-to-1 share consolidation and a change in board lot size, according to a Wednesday Hong Kong bourse filing.
Shares of the firm were down 18% in Thursday's late morning trade.
Under the plan, the company will change the board lot size from 4,000 existing shares to 5,000 consolidated shares.
Assuming no further share issuance or repurchases, the number of issued shares will be reduced to about 1.65 billion from about 33 billion following the consolidation.
The company said the move is intended to comply with Hong Kong listing requirements and bring the trading value per board lot to a reasonable level to attract a broader investor base, including institutional investors.
The share consolidation is subject to shareholder approval at an annual general meeting scheduled for June 30 and is expected to take effect on July 3.