Analysis On Financial Risk Control Of Chinese Companies Listed On GEM

Financial risk is the deviation of corporate finance revenues and expected return influenced by various uncertain factors in corporate finance activities, thus suffering from the opportunities and possibilities of loss. SMEs as the corporate type of active and good prospects in the Market Economy, is the main driver of economic growth, an important force for technological innovation and the main channel of employment which Accounted for a large share in China's enterprises.But, SMEs is easy to bankruptcy because of its smaller scale and the fierce market competition,its disadvantaged position than the large enterprises destined to face more financial risk. China's Shenzhen Stock Exchange has set up GEM on October 23,2009. GEM has opened up a new financing channel for SMEs. SMEs is still in its early growth stage,its operating conditions are unstable, Cause it will face greater financial risks after listing on GEM. Therefore,it is very necessary to understand and evaluate the financial risks that GEM listed companies faced rational and comprehensive, discuss the measures to prevent its financial risks scientific and effective, and strengthen its financial risk control,so that GEM listed companies will develop steadily.Through using the basic theoretical knowledge of financial risk, combined with GEM Listed company's financial characteristics, identify and analyze the major financial risks that GEM Listed companies faced. Through learning financial risk control experience and lessons from Western and HongKong GEM listed companies, This paper tries to present several constructive comments about financial risk control of China's GEM listed companies. This article mainly uses the research methods of standard analysis and comparative analysis. Standard analysis tries to be objective, accurate and easy to understand. Comparative analysis tries to be synchronization, comparable and persuasive.This article includes four parts.The first part is the overview of the theory of financial risk control about China's GEM listed companies.It defines the basic concepts of GEM,GEM listed companies,corporate financial risk and financial risk of GEM listed companies,and proposes the mainly financial risk that GEM listed companies faced based on analysis of the characteristics of GEM listed companies. The second part is the problems and causes about financial risk control of China's GEM listed companies.lt mainly analyzes the problems about financial risk control of China's GEM listed companies,and analyzes the reasons for the problems through the external macro environment and the GEM listed companies. The third part is the experience of financial risk control of Western and HongKong GEM listed companies.It makes a few inspiration of financial risk control for China's GEM listed companies through learning the successful experience of NASDAQ and HongKong GEM and the failed lessons of Germany New Market. The fourth part is the thinking of strengthening the financial risk control of China's GEM listed companies.It offers some constructive advice from the pespective of GEM listed companies and GEM macro-management system. The healthy development of GEM mainly depends on the quality resources of listed companies. Therefore,it is basal to control financial risks from listed companies. I think that the following aspects should come from a financial risk control. First, establish a full risk awareness;Second, make scientific investment decisions, reduce investment risk;Third, strengthen efforts to control inventory and accounts receivable,reduce the recovery of funds risk;Fourth,control income distribution risk. GEM system construction should be fully learned from abroad, especially the experience of NASDAQ. These recommendations include: First,develop more stringent listing standards; Second, improve the regulatory system, improve the level of supervision; Third, establish a sound system of delisting.The establishment of China's Shenzhen Stock Exchange GEM is less than a year, the theory of GEM has not yet formed a organic system.So the biggest limitation of this writing is lack of information,by the way, my ability level and time is limited,so that some of this paper are not sufficient consider and regularities. The analysis of financial risk of listed companies is inaccuracies.As the development of China's GEM,I will be constantly revised in future research.