Growth Of Gem Is Over &Nbsp; Low Performance Growth.

　　 Gem Is the bubble going to collapse, or is it going towards the "Nike inflection point" that management wants?

In May, the growth enterprise market rose slightly, ending the trend of three consecutive weeks of decline, but the haze still lingers.

In June 1, 2010, the gem index opened at 986.02 points, and climbed to 1239.60 at the end of December. It rose only 25% in the half year, and the average price earnings ratio reached seventy or eighty times.

But with the 2010 annual report and Quarterly Report The announcement of gem's "high growth" illusion broke down in April, down 9.48%, and once fell below the 900 mark, reaching a minimum of 897.20 points. So far this year, the index has fallen by 18%. The number of stocks falling by more than 30% is as high as 55, with a breakage rate of 37%. At present, the average of gem is average. P / E ratio It has slipped to more than 40 times, almost to the waist.

The gem has been criticized for its "high growth" aura. But the growth rate in 2010 was lower than the market expectations, lower than the small and medium sized boards and main board. Instead, the growth enterprise market has become the worst and fastest change segment in the market.

The way to eliminate bubbles is to accelerate the expansion of the growth enterprise market in order to lower the average price earnings ratio. But after a series of examination and approval, the gem which lacks basic delisting system brings disaster or opportunity.

Recently, the regulatory authorities have further stipulated that the criteria for evaluating the continuous growth of earnings in the conditions of gem issuance are clear, and that the track of performance growth must be like the shape of the "Nike" trademark. For example, companies who plan to enter the growth enterprise market can have repeated performance in 2008, lower than those in 2007, but the subsequent growth rate, if they exceed 2007 in 2009, can be regarded as "sustained growth".

"Nike type" also represents the expectation of the regulatory authorities on the Growth Enterprise Market: first plunging down and then long-term slow down. How naive! " A market person is not ironic.

Lowest performance growth

"The market expectations are too high, and the growth of gem is 31%, which we feel is not enough." The chief executive of the Shenzhen Stock Exchange GEM board management said helplessly.

Because the 2010 annual report statistics show that over the same period, small and medium-sized board companies reported a 32.53% increase in performance, while the average growth rate of the motherboard companies was 42.1% higher.

This makes it embarrassing to flaunt that they are high growth firms's GEM companies. In the quarterly report just released, the performance of GEM listed companies has declined year by year. Statistics show that as of May 3rd, the 209 listed companies listed on a quarterly gem, net profit fell to 48, accounting for up to 23%.

The comprehensive analysis Institute of Shenzhen Stock Exchange thinks that the sustainability of growth enterprise growth is mainly due to the fact that most of these companies are in the stage of rapid growth of enterprise life cycle. However, with the further expansion of the scale and further maturity of operation, the life cycle of enterprises is beginning to change. In addition, most of the gem and small and medium-sized board companies have developed in the ten years of China's economic gold, and a large part of their performance has benefited from the growth of the macro economy. However, due to the possible slowdown in the future macro-economic development, it is worth noting whether enterprises can continue to maintain their high growth performance against the economic cycle.

A fund manager in Shanghai bluntly said that the overall performance of the gem was related to the excessive pre market packaging and the growth of pre market performance.

Yang Delong, chief strategist of the southern fund, told the financial new century reporter that the growth rate of GEM companies was down because the company overdrew the profits in the coming years ahead of schedule. In addition, the rapid development of small companies in the industry may be a misunderstanding. Yang Delong said, in fact, in many industries, the growth rate of small companies is not higher than that of large ones. "Many industries are winners, and the top three companies dominate the industry, making their development more robust and fast. On the contrary, small companies may face competitive disadvantage.

A head of the investment banking department of a Shenzhen securities company said that the performance change of gem is related to the macro economy and the industry. However, it is restricted by the current auditing concept that the enterprises are directly related to the gem and are particularly reflected in the growth enterprise market.

According to the gem rules, the financial conditions that the listed companies should meet include: continuous profit in the past two years, net profit of not less than 10 million yuan, and continuous growth; or profit in the latest year, and net profit of not less than 5 million yuan. The operating income of the latest year is not less than 50 million yuan. The growth rate of operating income in recent two years is not less than 30%. Net profit is calculated on the basis of the deduction of non recurring gains and losses.

"Gem should actually be a new and developing industry that has just passed the death period, and the growth period is small. It is possible to maintain an annual growth of 50%." This investment bank executive said, "however, in the process of actually doing," the small and medium boards are judged according to the standard of the main board, and the trial board is based on the small and medium-sized board. "

A PE group who has invested in several GEM companies also said: "the growth enterprise market can be listed as a net profit of 10 million yuan, but in fact there is no 40 million yuan, and the SFC will not look at it."

The investment bank executives said that investors could not enjoy the most rapid growth period due to the long period of preparation and preparation. Enterprises rely entirely on their own funds to maintain this process. In essence, if there is external capital push at this stage, the growth of enterprises may be even higher.

Over raised funds remain idle

Poor performance is not the only factor that deters investors. Nearly 70% of the funds raised are still idle, and no profit has been generated, resulting in a decline in the net assets yield of some gem and small and medium-sized board companies.

In May 3rd, the Shenzhen Stock Exchange issued a report showing that the IPO financing amount of the 209 listed companies on GEM was 161 billion 800 million yuan, and the over raised fund was 100 billion 200 million yuan, but as of the end of April, 31 billion 560 million yuan had been arranged, accounting for 31.5% of the total raised funds. The proportion of direct project investment and equity investment related to the main industry was close to 60%, and the ratio of bank loans and supplementary circulation funds exceeded 30%.

In other words, the average IPO financing per gem for GEM companies amounts to 769 million yuan, of which 479 million yuan is over raised, and less than 20% of the total investment projects related to the main industry are less than a year and a half down.

Idle funds raised rapidly, resulting in a sharp decline in profitability of the gem. 2010 annual report shows that A shares all listed companies net assets yield is 14.44%. According to the Shenzhen Stock Exchange, the SME board was 11.72%, while the gem was only 8.73%.

Concerned about the abuse of funds by enterprises, the supervision authorities are very strict in the audit of over raised funds. A senior sponsor of Caixin "new century" reporter said, "now the investment projects are more stringent, and even raise funds even if they lie in their survival period."

The Shenzhen Stock Exchange stipulates that the GEM listed companies should be stored in the special fund raising fund within 6 months after the excess funds are collected, and their use should be used for the main business of the company. They can not be used to carry out high-risk investments such as securities investment, entrust financial management, Derivative Investment, venture capital, and provide financial assistance to others. Listed companies should properly arrange the utilization plan of over raised funds according to the company's development plan and actual production and operation needs, and submit them to the board for deliberation and timely disclosure.

At the same time, before the actual use of the excess fund raised, the listed company should also perform the corresponding procedures of the board of directors or shareholders' meeting and disclose it in a timely manner. For the amount of over raised funds used for permanently replenish the working capital and return the bank loans, it is stipulated that every 12 months the cumulative amount shall not exceed 20% of the total raised funds.

In March this year, the Shenzhen Stock Exchange publicly condemned the draft standard on GEM, saying it would be publicly condemned by the Shenzhen stock exchange if it would raise funds for high-risk investments such as speculation and venture capital, involving more than 5 million yuan.

The administration's painstaking efforts are evident. But this has also been the market rebound. A sponsor said that the money raised from the collection project to the listed company's special number management is problematic. Money enters the enterprise, is owned by the company, not owned by shareholders, shareholders enjoy the shares of the company. Money is owned by the company, which is used by shareholders' meetings and board decisions. It is not solely responsible for shareholders but is responsible for the company's shareholders as a whole.

"In addition, it takes one year for the recruitment and investment projects to be filed, and the audit period takes one year. The whole construction period is two years, during which the market environment has changed. The audit also requires clear figures. For enterprises, two to three years' projects can not be planned so carefully. "

The sponsor revealed that at present, the regulatory authorities also prohibit enterprises from raising funds for takeovers in the actual audit. "When the trial is held, they do not encourage the fund-raising funds to be used for takeovers." If the oversubscription is taken over, the audit will be more complicated. It is more complex for the enterprise to buy its own funds and raise funds for projects. "

The original intention of the SFC may be to worry about the lack of main businesses and profits from buying and selling assets through the examination and approval of the listed companies. But when the bath water was dropped, the baby was also dropped. "This fact makes it impossible for enterprises to raise funds in the capital market for mergers and acquisitions in A shares." An industry M & a expert said.

Dilatancy and defuse foam

The rapid expansion of the growth enterprise market has changed the supply-demand relationship of the market.

At present, there are 212 enterprises listed on the growth enterprise market, and gem and small and medium sized boards basically keep the average speed of about 6 new shares each week, which makes the premium level of small cap fall significantly.

"When there are only 100 or 200 companies, there must be a bubble, but when it comes to 600 or 1000, there will be no bubble. Next, the growth rate of gem will not slow down. " A person from the China Securities Regulatory Commission clarified the idea of regulators using the incremental solution of bubbles.

In May 10th, three new GEM stocks, 300217.SZ, 300218.SZ and 300219.SZ, were first released online, and their first earnings to 35 times below.

Data from the Shenzhen Stock Exchange show that as of May 3rd, the average price earnings ratio of 209 GEM listed companies was 47.62 times, which was nearly 80 times higher than that of the previous year. Market participants expect that with the expansion of small and medium sized board and growth enterprise market, the first price earnings ratio will return to below 30 times, and the decline in the first price earnings ratio will further transmit to the two market and accelerate the return of the valuation of small cap stocks.

An analysis report of Huatai Securities pointed out that this year and last January to May gem data showed that with the continuous decline of GEM stocks, the funds for the purchase of GEM stocks were also plummeting. Up to 37.25% of the breakage rate allowed the OTC purchase funds to be deterred. In the first batch of gem IPO issued in May, the 300215.SZ with the highest price earnings ratio reached 18.7%.

A fund manager said that the high success rate of new shares indicated that the participants were very few. Now some GEM stocks are poor in liquidity, and there are only a few tens of thousands of transactions per day.

"Gem price regression, or even about 50% of the price return, indicating that the turning point has emerged. However, at present, market participation in gem is not high, volume is small, market is pessimistic, and opportunities for certainty are not found. Now it is a concussion market and capital participation is not high. Breakage will become normal in the future. The fund manager asserted.

Some fund managers simply accused the regulatory authorities of being responsible for the quality of the new listed companies on the gem. Yang Delong told Caixin "new century" that the current issuance speed is too fast, supervision and approval should be stricter, so as to ensure the quality of listed companies. Another fund manager pointed out, "a lot of rotten enterprises, what paper making poker companies are also on the market, where is the regulation going?"

The absence of the system forever

The deterrent of the delisting is a part of the basic regulation mechanism of the market. But just like the motherboard, the delisting system of gem is slow to come out.

Sources close to the Shenzhen Stock Exchange revealed that the reasons were not in the Shenzhen Stock Exchange, including Chairman Chen Dongzheng and so on. On many occasions, he repeatedly suggested that he was willing to actively implement the delisting system on the growth enterprise market. He hoped that the gem would not be restructured and backloaded. The exchange had reported two copies. The latest draft was fixed on the delisting, which would be buffered to the third board, but the decision was made in the SFC.

Ouyang Zehua, deputy director of the SFC's listing department, said in March this year that the SFC had set up a delisting working group and is studying and perfecting the delisting system. He said that the basic principles and main framework of the delisting system have been basically settled. "This is a holistic approach, including the motherboard and the gem."

However, a person close to the securities and Futures Commission said that the delisting system is still in a stalemate within the SFC.

Although policy makers hope to make an overall reform in the motherboard, small and medium sized boards and gem, one step at a time, and solve the historical problems at once, but the resistance encountered is much more than that in the gem.

According to the above sources, in the view of the exchange, although there are some poor performances in the gem enterprises, there is no listing company to withdraw from the market.

Therefore, the introduction of the delisting system is not urgent at present.

An investment bank executive said that it was too short to evaluate the gem on the basis of the performance of the year and year. "The most likely way is that enterprises should disclose information as much as possible, and at the same time, the external environment, including the market, media and regulatory authorities, needs to tolerate the failure of the growth enterprise market."

"However, the absence of the delisting system and the possibility of shell buying may actually provide an insurance for the listed companies, and it will be fine for the company to do worse. This is a distorted system. A market source said.