The Average Price Earnings Ratio Of The Gem Is &Nbsp, And How Long Can The Venture Capital Industry Be Excited?

According to the statistics of Shenzhen Stock Exchange, as of June 18th, the average price earnings ratio of gem was 64.05 times, which has been cut 127.65 times from the end of last year.

At the same time, the issue price earnings ratio of GEM stocks has been reduced, and the number of GEM stocks has increased to 19.

In the background of gradual return to rationality in the two tier market, venture capital camp's radical investment ideas or readjustment.

The high P / E ratio is a double-edged sword for venture capital institutions. On the one hand, the venture capital which has been dormant has obtained a super high return, and at the same time, it also pushed up the cost of venture capital investment projects.

Under the help of gem's high price earnings ratio, venture capital institutions' bid for pre-IPO projects has risen rapidly, even triggering a "PE fever of the whole nation".

However, in the background of gradually returning to the rational level in the two tier market, venture capital camp's radical investment ideas or readjustment.

High price earnings ratio boosted venture capital profits

There is no doubt that listing is the most ideal exit way for VC/PE in a variety of common exit ways.

Since last year, with the motherboard IPO audit restart, especially the "ten years grinding sword" of the gem floodgates, the venture capital invested in it has gained a lot of floating profit.

Statistics show that among the listed GEM companies, there are 80% venture capitalists behind them. The average investment period of these institutions is more than 2 years, and the book yield is more than 10 times.

Since this year, with the growth of gem and small and medium-sized board projects, the return curve of venture capital institutions is still accelerating.

Data from the Qing Ke group show that in January this year, 15 VC/PE institutions in the 9 VC/PE supporting enterprises listed on the mainland averaged 13.21 times their profits.

In February, of the 9 VC/PE support companies listed in the mainland, 19 VC/PE institutions made an average profit of 9.95 times.

In March, of the 13 VC/PE support companies listed in the mainland, 19 VC/PE institutions made an average profit of 10.68 times.

In April and May this year, the returns on venture capital continued to soar.

In April, of the 10 VC/PE support companies listed in the mainland, 23 VC/PE institutions made an average profit of 27.02 times.

In May, of the 9 VC/PE support companies listed in China, 17 VC/PE made an average profit of 30.74 times.

Negative impact of high price earnings ratio

A sharp contrast is the fact that in 2009, as the global economic situation was uncertain, most venture capital institutions slowed down their investment pace, and the total investment volume in China's venture capital market fell sharply for the first time since 2002.

The banquet of the gem has opened up vigorously, which has injected a stimulant to the domestic venture capital industry, and has also increased the bargaining chip for the listed companies.

"According to the investment stage, the PE that is generally reasonable in the previous stage is 3 to 5 times, and the competition for relatively late projects is generally 6 to 8 times more appropriate," a private venture capitalist in Zhejiang told reporters. "At present, the bid of less than 10 times PE is difficult for enterprises to be moved, and the competition for quality projects is more intense."

It can be corroborated that in early June of this year, Qianjiang Motorcycle subsidiary invested 77 million 810 thousand yuan to subscribe for new shares of Jinling Chemical Company to be listed.

Based on EPS in 2009, the increase price is about 21 times earnings.

This means that if Jinling Chemical is listed this year, its price earnings ratio should be 21 times higher than that of Qianjiang motor.

"Almost every week, a new equity investment institution was born," the venture capital industry said, because of the country's suppression of investment and speculative housing demand, some of the real estate funds also turned to venture capital industry.

Under the pursuit of various funds, such as industrial capital and private capital, the "popular PE fever" has swept through.

In Wenzhou with abundant capital, equity investment is more openly encouraged by the government.

In May this year, the Wenzhou municipal government, China Venture Capital Research Institute and Zhejiang Industry and Trade Vocational College jointly organized the Wenzhou Venture Capital Research Institute, aiming to guide a large number of Wenzhou folk capital to enter the venture capital field orderly and professionally.

How long can the national PE fever last?

Just as the PE of the whole nation was surging, there was a significant change in the GEM market that was once popular.

According to the statistics of Shenzhen Stock Exchange, as of June 18th, the average price earnings ratio of gem was 64.05 times, and the highest value of last year's 127.65 times has been cut short.

At the same time, the issue price earnings ratio of GEM stocks has cooled, and the number of GEM stocks has increased to 19.

In addition, the long standing criticism of GEM companies "assault shares" phenomenon encountered strict supervision.

Also noteworthy is that in November this year, the gem will usher in the first batch of the lifting of the original shareholders' climax, there will be a total of 1 billion 200 million shares listed circulation, corresponding to the market value of about 40 billion yuan.

Due to the low cost of shareholding and the poor performance of some companies, some shareholders who choose to take good care of themselves may trigger a price adjustment, which will further reduce the price earnings ratio of the gem.

On the one hand, the growth enterprise market, which is regarded as a reference frame by venture capital, is rapidly cooling down. On the other hand, a large number of idle funds are pouring in continuously. What changes will it bring to the domestic venture capital industry?

At the moment, the venture capital industry has not stopped.

Statistics from the Qing Research Center show that in the first quarter of 2010, 41 new RMB funds were raised, accounting for 85.4% of the total, which exceeded 1/3 of the 2009 level and the total amount raised was 2 billion 868 million dollars.

However, the industry has been issuing a warning voice.

Yan Yan, chief partner of Sai Fu Asia Investment Fund, is concerned about the surge of capital.

He believes that China's VC/PE accounts for only GDP of the total 0.1%-0.2%, and the proportion is very small. "Many people only see money making, but do not see risks."

Yan Yan made a bold prediction that the next two or three years may be a "mixed battle" situation.

At the twelfth China Venture Capital Forum held in Shenzhen in June 4th, many people in the industry say that PE investment is "short, light and long, quick and profitable" in the current hot private equity investment boom.

Gu Shengzu, vice chairman of the NPC Standing Committee and the Central Committee of the National People's Congress, said at the forum that China's private equity market is becoming increasingly popular because a large amount of funds go into angel investment, venture capital and private equity funds under the condition that the property market and stock market are not very good.

Gong Fangxiong, managing director of JP Morgan, also believes that equity investment should go to the early stage and go to the incubator fund, Angel Fund and venture capital fund, because these investment markets are relatively rational.

He reminded investors that with the expansion of stock market plates, the overvaluation of the existing gem and small and medium board market is probably not sustainable. It is very dangerous to invest in late projects with reference to the current high valuation.

Liu Zhou, chairman of the venture capital board, which has been well established in the growth enterprise market and small and medium-sized board, said: "venture capital should be the money that makes the enterprise grow, rather than the difference between the one or two markets."

Regarding the market's concern about the gem myth and the high valuation of the gem, Liu Zhou said that the price earnings ratio of the GEM market is indeed high, and the reasonable overall price earnings ratio should be 30-50 times.