Study On The Financial Sustainable Growth Of The Listed Companies On GEM

Coming into the era of “knowledge economy” with the development of society, Chinese government has managed to provide a more convenient financing channel, which is also called as the growth enterprises market(GEM) to all of the high-tech enterprises to enhance its core competence and the capability of independent innovation. Oriented to serve those newly-established growing firms, such a GEM mainly supports those enterprises characterized with the capability of independent innovation for their financing and becoming listed companies. The listed companies on GEM are always featured with high technological content and great development potential,But compared with the Main Board listed company, GEM listed companies are in the initial stage of development, the operating time are short, and the ability to resist macroeconomic risks and industry risks is relatively weak, thus causing the enterprise difficult to maintain the stability of operation, therefore the investment risk will increase, which will reduce to some extent the investor’s enthusiasm in the investment. Hence how the listed companies on GEM have been developed and if they possess the sustainable development capacity have become the focus of attention to numerous operators, investors and the creditors of the enterprises.In view of this, this paper takes the 152 listed companies on Chinese GEM as the samples to make an empirical research. Firstly, this paper makes an evaluation on the financial sustainable growth of the listed companies on GEM through the Wilcoxon signed ranks test. Secondly, this paper makes a demonstration on the key factors that influence the financial sustainable growth of the listed companies on GEM by extracting most of the information contained in the financial indexes set up by the sample company through the factor analysis method. The empirical analysis reveals that generally Chinese listed companies on GEM fail to achieve sustainable growth. For most of the enterprises, the actual growth rate is always greater than the sustainable growth rate to bring about an excessive growth. Under such a circumstance, if no proper measures are taken to prevent it beforehand, the company might suffer from the shortage of the endogenous financial resources. Finally based on the empirical results, this paper will take NanFeng Ventilator Co., Ltd. as an example, according to the current situation of the development of the company and the problems existing in the implementation of financial sustainable growth and put forward the corresponding suggestions, in order to help business achieve better development. At the same time, it can also be used as other GEM companies in the business strategy and financial policy choice of reference, and make corresponding improvement for the shortcomings of their own, in order to improve the comprehensive strength of the enterprise in the market competition, making sure that the listed companies will be developed in a good way and laying a foundation for their sustainable growth.