Research On The Using Effects Of GEM Over-raised Funds

China's GEM has been listed on Shenzhen Stock Exchange for nearly nine years in October 2009.The establishment of GEM provides a good financing channel for SMEs in China,which is conducive to the improvement of core competitiveness of SMEs and the healthy long-term development of SMEs in China.It is also conducive to the rational allocation of capital market resources and the orderly development of capital market.However every coin has two sides.According to the statistics of Shenzhen Securities Data Service Platform,as of March 25,2019,the number of companies listed on the GEM has reached 743,of which over-raising accounted for 53.7% and over-raised funds reached127.448 billion yuan.The original intention of the establishment of the GEM is to solve the dilemma of financing difficulties for SMEs in China and to provide assistance for the development of SMEs.However,the inefficient use of over-funded funds by GEM listed companies violates the original intention of GEM and is not conducive to the long-term development of enterprises.At the same time,it will make the resources of capital market unreasonable allocation,destroy the order of the securities market,and also damage the interests of investors.Therefore,it is necessary to analyze the causes of over-raised funds,the use of super-raised funds,and the efficiency of the use of super-raised funds.With the help of research,GEM listed companies will use the over-raised funds effectively,so that the resources of the capital market can be effectively utilized,and the interests of investors of all parties can be safeguarded.This paper summarized the previous studies after lots reading on the research of over-raised funds by scholars at home and abroad.Reading a large number of literature and combining with the various rules and regulations of the GEM and the characteristics listed companies,to analyze and summarize the reasons why the GEM in China over-raised.At the same time,through a large number of statistical analysis and description of data,this paper summarizes the current situation of over-funded GEM in China.At the same time,it introduces the role of IPO pricing theory,information asymmetry theory and principal-agent theory in over-raised funds,which lays theoretical foundation for the following.After a general understanding of the overall over-raised status of the GEM,this paper selects “Health Co.Ltd.” as a research case to track the implementation of the specific investment project,and then analyze whether the investment project meets Health Co.Ltd's expected goal.Thispaper evaluates the efficiency of Health Co.Ltd's over-raised funds from two aspects of economic benefit and financial effect.Finally,the study finds that Health Co.Ltd's use of over-raised funds is strictly in line with the core business of the enterprise and serves the long-term strategic development planning of the enterprise on the basis of abiding by laws and regulations.Generally speaking,the use of the over-raised funds strengthened the profitability of Health Co.Ltd and weakened its' financial risk.It laid a solid foundation for the long-term development of Health Co.Ltd.At the same time,based on the use of Health Co.Ltd's over-raised funds,this paper suggests that other companies strengthen the management efficiency of over-raised funds,formulate investment plans based on the company's development strategy,pay attention to the development of the company's main business and enhance the core competitiveness of the company.at the same time,the relevant departments of China should also strengthen the regulation and management of over-raised funds.