Study Of The Growth Potential Of The Listed Companies On GEM (Growth Enterprise Market)

Under the age background of economic recovery and rapid development,setting up a multitiered capital market system is the necessary strategic choicefor future development of China’s economy. After2years of development,China’s listed companies on growth enterprises market (GEM) is in a time ofunimpeded growth. The operation practice shows that studying on growth of thelisted companies is the foundation and core of exploring development of GEM.The growth situation of firms on GEM, of which determination and see-saw ofstock prices, the operation ability and the overall market performance are closelyrelated to growth of firms, determines themselves fate in market. The listedcompanies on GEM, most of which are at the early stage of life cycle andfluctuate a lot on performance, have a greatly volatile developing prospect.Therefore, analysis on growth concerns that if small and medium-sized and newenterprises in China could own strong competitiveness and increment ofenterprise value.The study of the growth of the listed companies on GEM analyses theirgrowth situation and continued growth potential mainly.First and foremost, thepresent paper makes a comment about research results of growth of the listedcompanies on GEM at home and abroad, and makes a simple description on therelated theories of enterprises growth. Next, it summarizes the characteristics ofGEM and on which companies listed, and analyzes the factors which influencethe growth of firms on GEM at macroscopic and microscopic view. In the thirdplace, it applies SPSS statistical software to establish the evaluation index andgrowth model by taking54listed companies on GEM in China as samples,makes a empirical analysis on their growth status; takes the method of factorsanalysis to study the growth and options theory to assess the value and futuregrowth potential of these companies.In our empirical research, according to the overall score of growth, by the Standardized data processing, it divides these enterprises into two parts, highgrowth and general growth, analysis the growth of companies of informationtechnology industry and Mechanical equipment can reflect the general level ofcompanies listed on GEM. From the ranking of Comprehensive factor and Eachfactor, draws a conclusion that the debt paying ability, profitability and annualsalary of senior management affect the overall score of growth of companieslisted on GEM significantly. On the whole, the scores of growth factor, scientificresearch innovation factor, capital operation ability factor and company scalefactor are all lower than zero. It shows that the growth of the listed companies onGEM is not high generally; Through the analysis of the growth potential, wethink that the growth of the listed companies on GEM is manifested intheirselves increased value includes the real option more, and the growth abilityof the listed companies on GEM largely depends on the potential investmentincome in the future. Thereby it describes the growth status and developmentprospect of the listed companies on GEM objectively.Last but not least, in this paper, we put forward some countermeasures andsuggestions for increasing the growth of Chinese companies listed on GEM inthe current period, in order to lay the foundation for promoting these firms todevelop healthily, help investors judge enterprises’ investment value anddevelopment potential to make investment decisions, and assist regulators tostrengthen supervision and management and make corresponding policies forreference.