The Study On Security Analysts’Earnings Forecast Accuracy Tn China

The securities market in China has developed for more than20years, and now it has been basically in the "weak-form efficient market". In the meantime, the brokerage industry has been beginning to develop rapidly. Security analysts research and forecast earnings of the listing corporation, giving many small investors an effective reference or investment advice. At present, earnings forecast are one of the most concerned information.All the signs indicate that because of their own professional degree, information asymmetry, bounded rationality or other factors, securities analysts cannot forecast earnings information accurately. In China, the researches about earning forecasting are quite few, and also do not have a deep mind enough. Through study and comparison of most literature, we found many scholars have studied forecast accuracy in a whole market or a single industry, but few have focused on the industry differences between earnings forecast, and even no scholars have explained the accuracy of earnings forecast by industrial characteristics.In the view of the background above, we studied on security analysts’earnings forecast accuracy in China from the respective of industry. At first, we investigated the relevant literature, and gave a summarization of the previous research results. Then, we collected the data of earnings information forecast in the year2007-2013of China’s listing corporation from the CSMAR database. According to the rules of CSRC we divided the data into16sectors, and then discussed the industry’s differences of earnings forecast. After that, we collected yhe financial statements of our listing corporation in fiscal year from the database, sorted the numerous financial indicators, and did a systematical analysis on the relationship between industry’s characteristics and earnings forecast accuracy using SPSS18.0, in order to explore the reasons of earnings forecast accuracy, providing reasonable and effective suggestions for investors.The paper mainly includes the following several results:(1)On the whole, the result of China’s security analysts’earnings forecast to listing corporation is mostly reliable in accuracy;(2)The accuracy of earnings forecasts has significant differences generally between the industries, and the differences has been increasing year by year;(3)The influence of industry’s characteristics to the earnings forecast accuracy is significant: When more attention is paid on the industry, the scale larger, the competition more fierce, the earnings unstable, the growth worse, the risk higher, the accuracy forecast by analysts is worse. Besides, when the industry is a cyclical one, earnings forecast accuracy is better;The main innovation of this paper lies in:(1) Using up-dated data we found that the earnings forecast accuracy in China exists in different industries;(2) We discussed the impact of industry’s characteristics on earnings forecast accuracy.