Research On Value Assessment Of Companies Listed On GEM

Currently GEM is facing an important turning point under the background of reform of registration system.By Administrative Measures on Initial Public Offering and Listing on the GEM as implemented since 2014,China Securities Regulatory Commission formally reduces the mandatory requirements for listed companies in terms of financial indicators,which symbolizes a new round of investment boom in GEM.Compared to the companies listed in main stock market,GEM listed companies are characterized by high-growth,high-yield and high-risk.Conventional value assessment method has a certain limitations on such GEM listed companies;therefore it is greatly significant for both executives and investors to seek for a reasonable value assessment that reflects present value and development prospects of GEM listed companies.In the present research,the author introduces the conventional value assessment method,analyzes the limitations of conventional value assessment method to companies listed on GEM according to GEM listed company's characteristics.Basing the above analysis,the paper introduces the basic theories and methods of revised economic value added(REVA),and demonstrates the application feasibility of the method in value assessment of companies listed on GEM.Then it attempts to build a REVA model special for GEM listed companies by adjusting the relevant parameters,and takes China Net Center,a GEM listed company,as a study case where the author gains its value growth driving factors by through simple financial analysis,and further calculates REVA values from 2010 to 2014,by adjusting and applying such REVA model.In addition,in consideration of macroeconomic environment,the company's development prospects and other relevant factors,the paper predicts the sum of REVA present values in next five years and assesses its enterprise value by the end of 2014.The conclusion on the value of companies listed on GEM is made according to comparison between the predicted value and market value over the same period,and the reasons for the differences are analyzed.Finally,the author proposes shortcomings in the present study process,and outlooks prospects in the research field.