Valuation Of GEM Listed Companies Based On Growth And Innovation Capability

Since Growth Enterprise Market was formally established in2009, in our country,security market has formed a kind of Multi-level market structure and market systemin which Main-Board Market、Small Cap Market and Growth Enterprise Market arethe mainstay. However, the query about Growth Enterprise Market never stops，inthe final analysis，the query is nothing more than the more in name that in reality aboutGrowth Enterprise Market and the entrepreneurship or the wealth-creation. In short,the query causes the worry about Growth Enterprise Market.Consequently, we mainly study the capacity of independent innovation、growthand enterprise value aim at the companies the GEM lists. Firstly, we study the theoryof corporate value and the corresponding value-evaluated model systematically; makefurther comparation about the process of international GEM’s development and thesystem construction. Then we build the empirical model aim atthe companies the GEM lists, discuss the capacity of independent innovation、growthand enterprise value, and make correlation analysis to the capacity of independentinnovation, stock price fluctuation and business performance, make correlationresearch to the growth with the business performance, for enterprise value andbusiness performance、stock price fluctuation，we take the same approach.In the paper, we select various empirical methods such as Factor Analysis Model,Cluster analysis, Catastrophe progression method, Entropy Method, DCF method,Ohlson residual income model, Panel data model and so on.This paper is mainly divided into three parts, first part is to review the theory ofcorporate value and corresponding value-evaluated methods. In the second part, wecompare the development vein and trend of overseas GEM, we also analysis it’ssystem construction. Finally, we made empirical study to the capacity of independentinnovation、growth and enterprise value about the companies the GEM lists, in addition, we analyze the relevance about the above factors with business performance、stock price fluctuation and other factors individually in the third part.Full text is divided five chapters.Chapter one is about enterprise value and value evaluation, this chapter is belongto importing type review content. First define and analyze enterprise and enterprisevalue, also made further analysis to the evolution methods of enterprise valuefrom the point of view of Finance. Then give the different methods of the judgment toenterprise value, concluding cost method、 market comparison approach、income approach and option share price method. In the end, in the view of econometricmodeling, explore the further method about enterprise value evaluation.Chapter two is about overseas GEM development and the comparation amonglisted enterprises. This chapter firstly summarizes the development history of GEM inEurope and the US、Hong Kong region、Japanese、Singapore and other countries andregions. After that, study the existing problems and reasons about overseas GEM.Finally compare the NASDAQ market in the US with China GEM, explorethe development trends and perspectives in the future of China GEM.Chapter three is about the innovation ability evaluation of our country’s listedcompanies on GEM. Above all, give the theory of enterprise technology innovation,and analyze the driving factors on innovation ability and evaluation index system.Then carry on factor analysis to our country’s GEM’s innovation ability, summarizeinnovation factors. In the end, the paper study the relevance regard to innovationfactors and business performance、technology innovation factors and stock price. Inaddition, assess and research the standard degree of GEM.This chapter concludes the technology innovation index as three factors:trademark factor、 research and development factor and patent factor. The study’sconclusion concludes the independent innovation will improve business performance,especially enterprises ‘patent right and trademark, but firm’s R&D don’t havesignificant influence on business performance; the R&D of enterprises listed on GEMis insufficient,so the enterprise should increase the R&D, at the same time enhance theproportion of per development capita and the development costsin operating revenue, in the end, the enterprise will owe more patent technology andthe business performance also is increased at the same time; Enterprise listed on GEM will has influence on stock price fluctuation, especially the patent right, has positiveimpact on stock price fluctuation; enterprise’s trademark and development costs don’thave significant impact, this point is closely related to investor’s knowledge andinvestment philosophy.Standardized information disclosure about the development costs is one of thebest ways to filter listed companies on GEM.Chapter four is the growth evaluation about listed companies on GEM. First, startwith the companies’ growth, then give the growth and it’s influencing factors, buildingthe corresponding evaluation index system about enterprise growth, make use ofCatastrophe progression method、Clustering method and Entropy method to estimatethe company’s growth. Finally, build the correlation model about growth and businessperformance in order to study if the growth has significant effect on the businessperformance.This chapter’s conclusion is the growth index evaluation of listed companies onGEM is reasonable, but the conclusion of a correlation study carried on make use ofgrowth index and business performance indicate that listed companies on GEM arefacing financing constraints; enterprise’s growth can promote the increase of businessperformance, however, there is a difference among the companies whose growth arenot same on influence machine; companies ‘scale effect is not significant. Therefore,taken together, listed companies on GEM should pay close attention to the growth,meanwhile, should look out moderate scale. If the growth is lower, this moment scalecan have more significant positive influence.Chapter five is the empirical study about enterprises ‘value evaluation. Thechapter’s content mainly is on the value evaluation about our country’s listedcompanies on GEM. First build the specific framework about value evaluation, thenconstruct the companies’ value evaluation index system, based on various methods tofilter,take advantage of DCF method、Ohlson residual income model to evaluate ourcountry’s listed companies on GEM respectively,in the end make use of the result ofvalue evaluation to study the relevance between enterprise value and businessperformance、enterprise value and stock price volatility.After making use of DCF method and Ohlson method to evaluate the value ofenterprise,the relevance test on enterprise value and performance、value and stock price volatility taking advantage of panel data model indicates that the result ofenterprise value evaluation is reasonable, meanwhile, the relationship between valueand performance is positive; listed companies on GEM faces financing constraints,because of the shortage of financing channels、the higher of financing costs, so theasset-liability ratio is higher, under the circumstances, this capital structure can’t giveplay to tax saving effect, instead, the business performance will be reduced; therelation between enterprise value and stock price volatility is positive. Listedcompanies on GEM should increase value by increasing business performance, at thesame time is able to increase business performance further through increasingenterprise value, this is a virtuous circle of development. Besides, the companiesshould get rid of financing bottleneck and constraints, only by this, the capital structurecan give full play to tax saving effect, then promote the optimal capital structure andenterprise standardization.In conclusion, we consider that the independent innovation capacity of ourcountry’s listed companies on GEM is inadequate, especially the problem about R&Dand poor development effect, the company’s growth is worse and the risk is higher,meanwhile, although the company is listed on GEM, the enterprise still face financingconstraints.Therefore if we want to deal with the plenty of problems on GEM, firstly, weshould strict the listing standards, especially begin with the capacity of innovation、growth and potential，strict the innovation standards, only by this we can ensure theboom of GEM. Secondly, the companies listed on GEM should disclose strictly R&D.Finally, we also increase the quantity of listed company in order to raise thecompetition, improving the possibility of successfully listed.