A Study On Influencing Factors Of Growth Expectation And Premium Of China’s Listed Companies

It is a common phenomenon that growth enterprises’ stocks have high premium at securities market in all countries.The researches on enterprise growth and valuation always a hot topic in the academic field both at domestic and foreign country.China is at a critical period of economic growth transform from high-speed to medium-high-speed,it is need for economic restructuring and foster new economic growth point urgently,upgrading existing industries at the same time.Capital market should give full play to the function of financial resource allocation and guide the capital to the industry and business mobility which has growth potential.Because high-growth companies have higher earning expectations,so investors are often willing to pay it a higher premium.It is very important to study the relationship between the growth expectation and the valuation,and its dynamic process.As the basic component of the economic system,the listed company is the outstanding representative of the enterprise.Its growth and development are significance to the national economic.The paper used the methods of theoretical analysis and empirical analysis,qualitative and quantitative analysis,screen out 878 listed companies as the sample,used the methods of questionnaire research,descriptive statistics,factor analysis and multiple regression to study the relationship between growth expectation and valuation premium,and the impact of growth expectation on valuation premium.The main contents of this paper as follows: The first chapter puts forward the background and significance of the research,then points out the research method,content framework and innovation.The second chapter exponds and discusses including enterprise growth theory,behavior expectation theory and enterprise value theory.Then makes a summary and argument about the correlation of growth expectation and growth premium,and the interrelation of their influencing factors in previous studies.The third chapter combining with the theoretical analysis and questionnaire survey,selects 26 indicators which may be related to the enterprise growth such as scale,profit status and industry prospect,then use factor analysis to analyze the main influencing factors.Finally puts forward the Growth Expected Exponential Model.The fourth chapter,according to the relationship between the growth expectation and the valuation premium is studied in chapter 3,from the angle of the growth expectation may affect the growth premium and the growth expectation’s influencing factors may have an important impact on the growth premium.Firstly,an empirical model is established to test the hypothesis,then descriptive statistics,correlation analysis and multiple linear regression.Finally,the robustness test is used to test the reliability of the empirical results.Chapter 5 summarizes the research results and explains theoretically.Summarizing the shortcomings of the research and prospecting the future research at last.The conclusions and contributions of this paper are as follows:(1)The factors influencing the growth expectation of listed companies are profitability,firm size,income growth trend,industry growth rate,equity concentration ratio and industry profit rate.Earnings growth,industry growth,industry profitability and growth expectations are positive correlation,the company size and growth expectations are negatively correlated.(2)There is a positive correlation between the growth expectation and the valuation premium of the listed company.The investors will be affected by the expectation when conducting the transaction,and the trend of the stock price can be estimated by the investor’s expected survey.(3)Most of the listed companies are expected to influence the growth of the valuation premium also has a significant impact,but can not prove that the holdings of major shareholders can have a favorable stimulus to the stock price.(4)Good profitability,good development trend,bright industry prospects will be favorable to the company’s valuation premium,the valuation premium of listed companies and dividend distribution is almost no relationship,which is consistent with the results of the questionnaire survey,Few investors will pay attention to the number of dividends paid in China’s stock market is the main stock spreads profit.The main innovations in this paper are:(1)From the perspective of the relationship between the growth expectation and the growth premium,this paper compares and analyzes the similarities and differences between the factors affecting the growth expectation and growth premium of Chinese listed companies.(2)In the judgment of the growth of the enterprise,different from the common literature,the possible future growth and the existing financial growth rate is confused with the practice,the growth is divided into the existing growth and expected growth.(3)Different from direct selection of financial or economic indicators,this paper selecting the probabilistic factors through investigation and research is more scientific and the growth expectation index model constructed is more reasonable.