Research On The Effect Of Overfunding In GEM Listed Companies

The establishment of GEM provides a new financing channel for the development of small and medium-sized high-tech industries in China,which plays a positive role in the progress of technology and the improvement of R&D capacity.However,in the development process of GEM,the phenomenon of high IPO price,high P/E ratio and high fundraising amount appeared.In 2013,the CSRC rectified the problem of excessive financing in the securities market.After this rectification,the growth rate of over-raising funds in GEM decreased significantly.However,there are still a large number of over-raised funds in the GEM market,and their use effect is poor,which seriously affects the business performance of enterprises,investors' income and the stable development of the securities market.Therefore,it is very necessary to study the effect of excessive fund raising in GEM listed companies.It is expected that the overfunding can be effectively used through research.At the same time,it can also improve the listed companies and investors to oversubscribed fund management attention.It is of great significance to optimize capital allocation in securities market.Firstly,through analysis,it is found that overfunded funds are ubiquitous in the securities market,but the problem of overfunded GEM is more prominent than that of the main board and SMEs.Further research finds that manufacturing and information technology industries are sought after by more investors,which leads to over-raising.The issue of over-raising has been improved in recent years,but there are still over-raising funds of 123.999 billion RMB in the GEM market.Because of the defects of the new stock issuance system,the promotion of many stakeholders and the irrational herd behavior of investors,the phenomenon of overraising of listed companies on the GEM is serious.However,more than half of the overraised funds in the GEM market are idle and can not be used reasonably,even if the funds put into use are not given to enterprises because of the change of the project.Bring ideal benefits.Secondly,Beijing Junzheng Integrated Circuit Co.,Ltd.is chosen as the case company in this paper.It starts with a brief description of the company.Then,it is found that the company's overfunded funds are formed under the influence of the system,the promotion of stakeholders and the pursuit of investors.Beijing Junzheng's overfunded funds are mainlyused to invest in the establishment of subsidiaries and merger and acquisition expansion,and the rest are deposited.In the bank account;however,the efficiency of the company's over-raised funds is only 28%,and the profitability of the project is poor,resulting in the decline of business performance and the loss of investors' interests;the main reasons for this result are the unclear use plan of Beijing Junzheng's over-raised funds,the constant change of the project and the problems of the company's investment decisions.Finally,the paper concludes that the efficiency of the use of excess funds of GEM listed companies is low,and most of the project investment decision-making process has defects,resulting in poor economic benefits of overfunded funds,which not only brings operational risks to listed companies,infringes on the interests of investors,but also causes waste of social resources.Based on the above analysis,in view of the problems existing in the use of overfunded funds of GEM listed companies,the following suggestions are put forward.At the institutional level,the overfunded funds can be managed exclusively,and at the same time,enhance the supervision function of supervision and recommendation agencies.At the level of the company,it is necessary to attach importance to the feasibility analysis of fundraising projects,and strengthen the internal governance mechanism of the company.At the same time,make substantive accountability for the violation of the regulations on the use of overfunded funds by employees in the company,so as to maintain the steady development of the enterprise.At the investor level,we can further promote investors' awareness of supervising the use of over-raised funds by improving the information disclosure system,establishing investor protection funds and cultivating rational market investors.In this way,the excess fund raised by GEM can be used reasonably,the order of capital market can be standardized,and the healthy development of GEM can be promoted.