The Enterprise Value Of The Chinese Companies Listed On Gem Assessment Study

After ten years preparing, GEM finally opened its door to the outside world. Only in more than a year, the GEM already has 132 listed companies with a total market value of about 5600 billion yuan. At the same time, as one of the stock market Service industries, the asset evaluation industry plays an important role in valuing the GEM listed companies, protecting the investors'legitimate rights and interests, and reducing the market risks. However, from the actual operation of GEM in the past one year, there is a gap between the valuation of the asset evaluation industry of China and the recognized value of the market investors. The existing valuation methods can not accurately assess the value of the GEM companies. The reason lies in that most of GEM listed companies in China are in their early stage of development, with high-tech background, and the business assets consist of a larger proportion of intangible assets, which is a potential investment income. Therefore, the basic valuation methods can not accurately assess the value of assets.Based on the analysis of the characteristics of the GEM listed companies in China, the value of GEM listed companies in China is considered to be divided into two parts:the value of the actual assets and the value of the potential investment income. The reason why the asset evaluation industry can't accurately assess the value of the GEM listed companies is that the current valuation methods can not accurately assess such kind of potential and uncertain value. The real option pricing method in the financial area can determine the value of this uncertainty. Therefore, in this paper, the value of the actual assets of the GEM listed companies is assessed by using the traditional discounted cash flow model and the value of the potential uncertainty is assessed by the real options pricing method. The combination of the two methods is the overall value of the GEM listed companies and it is quite practically reasonable to use the method of the case description of the pioneer the new material.Finally, in order to give an accurate assessment of the GEM listed companies' value, we should consider the value of their basic assets as well as the value based on potential uncertainty. It is more reasonable to use the combination of these two parts as an assessment of whole value of GEM listed companies.