Research On Deviation Of The Listed Company Performance And Price About Bank And GEM Stock In China

The paper is based on the Chinese stock market from2010to2013, we use theclassical theory of PEG value investment model, DDM model and FCFF model toassess the performance of listed companies, the deviative price of secondary marketand analyze the reasons of the deviation. The samples include: bank stocks,pharmaceutical stocks and growth enterprises market (GEM) board. In last3years,the bank stocks could keep a stable25%increase in profits every year, but the pricewas deviated from the good financial condition. Relatively, the pharmaceutical stockswere far stronger than the bank stocks which the profit was similar. Likewise, GEMstocks in higher PE ratio also went out the independent trend, which wascontradictory to the traditional investment model. In addition, the applications of PEGmethod also puts forward a new hypothesis, and give the advices to the medium andsmall investors.Main conclusions of this paper:(1) Bank stocks share price deviation is caused bymany factors, one important reason is the profitability decline and the futureprofitability prediction from the institutions.(2) Deviation of GEM stock price iscaused by many aspects with its higher PE level, part of GEM stock could beexplained by PEG valuation method and FCFF model by its good profitability.