The Investment Value Of Listed Company On GEM

Since late October2009when the GEM been set up in China, until now there have been more than300companies on GEM. For these companies have good growth ability, many investors have a high enthusiasm in GEM, which is the main reason why listed companies on GEM have a significantly higher average p/e ratio than that of Shanghai and Shenzhen stock markets. The average p/e ratio of GEM listed companies is about60, in2011the price of many new shares fell below their IPO price, many investors lose everything. The fear of the great risk prevented many investors invest in GEM. But there are indeed lots of really good companies on GEM, which are well-managed. So how to correctly guide the investment, optimize capital market resource allocation efficiency, realize the benefit of both investors and listed companies to make GEM to achieve the purpose of its establishment at the beginning, which is support the developing of the small and medium-sized enterprises, is the a very important issue which has direct bearing on the stability and development of securities market and social economic. The first chapter of this article analyses the background of the research, explains why the article do this research, and why the article do this research based on enterprise value.Along with the rapid development of securities market in China and constantly improving of the relevant laws and regulations, the investors gradually accept value investment idea in China The second chapter summarizes the theory of value investment and value evaluation methods, it introduces the advantages, disadvantages and working conditions of these methods, points out that some evaluation methods are not adaptive for the companies on GEM in China. Besides it summarizes the research status of investment evaluation of the companies on GEM in China, and advances the evaluation method in this article.By reference to others’research and combining with the characteristics of the GEM in China, the third chapter selected175GEM listed companies as samples, use the data of2011for the research. It chooses14financial indicators to establish a comprehensive evaluation system to assess the investment value for enterprises, including gross profit ratio, ROA,ROE etc..In Chapter4it uses the factor analysis method, and extracts four common factors from the14indexes:profitability and growth ability, anti-risk ability, operation ability and corporate governance situation. The results give factor scores of the14original indicators on these4common factors, and then it calculates the total points of all the samples, which indicates the investment value. The higher the total points, the higher investment value.The company Qingdao Eastsoft Communication Technology Co.,Ltd ranks in the top in chapter4, So in chapter5it analyses its investment value through industry analysis and company analysis. And the result of the analysis is:l) this company is the best in its industry, and its industry has high technical barriers, which conform to the trend of industrial upgrading;2) the company’s main business are supported by the country’s industry policies, and in the next few years there are predictable source of a large number of government programs;3) the company has a strong competitive power especially its sustainable ability of independent research;4)the company’s business model brings it much advantage on pricing, and the cumulative advantage is difficult to imitate or surpass in the short run.At last it’s the conclusion of this article in chapter6.Based on the above research, the main conclusions are:1) Factor analysis method can be used to do investment value analysis of listed companies, it can’t directly find a absolute good investment chance, but it can distinguish between good and bad investment group to a certain extent;2) the financial index evaluation system In this paper can reflect the operating performance and assess investment value of listed companies objectively.4aspects should be considered when you study of investment value of the listed companies on GEM:profitability and growth ability, anti-risk ability, operation ability and corporate governance situation.3)Through comprehensive analysis in this paper these stocks have higher investment value:300183,300146,300182,300174and300171.