The Research On IPO Effect And The Influence Factors Of The First Releasedcompanies In Chinese GEM Market

Growth Enterprise Market(GEM) has been attracting lots of attention since it is a newly created sector in the Chinese stock market. Its registered company has the special characteristic like the “Two High, Six New” and others like the high market return rate, high initial over fund-raising and high offering price. Therefore the investors are not only getting the opportunities but also facing challenges when entering the Growth Enterprise Market. The GEM market company usually has great quantity of investment coming during its initial offering, however, many of these companies failed to take advantages of the abundant cash flow and build optimized development plan, instead there is a common phenomenon in this part, which is after the Initial Public Offerings, the most company cannot maintain the same level of operating performance and growing performance as the beginning of their IPO. Some companies even have decreased on stock performance. This phenomenon is also called IPO effect. Conduct research on this subject can not only help enrich the academic research on IPO effect in our country, but can also help investors to make more reasonable investment decisions and provide effective suggestions and regulations for Chinese GEM.It will use substantial evidence analysis and use the listed company in 2009 to analyze 6 years’(1 year before IPO, 1 IPO year, and 4 years after IPO) financial targets and other potential factors that can lead to IPO effect. This thesis uses Wilcoxon’s Sign Rank Test to analyzed company financial targets like profit earning ability, growthability, operating capacity, and debtpayingability to prove the existence of the IPO effect. Furthermore, the article also uses multiple linear aggressive analyzes to estimate the connection between IPO performance and the industry of enterprises, the enterprise registration area, Ownership concentration and financing.At last, according to the evidence-based conclusions, the thesis will bring forward advices and countermeasure such as: encourage venture investment; reform of ownership concentration; increase supervision of financial fund-raising; balance the ratio of eastern-western registered companies; adjust the distribution of different industries. These will help regulate the order of GEM and ensure its healthier development.