Why Is The Gem Index Soaring?

Since the rebound in October, gem is the best performing sector.

From October 8th to 23, a total of 12 trading days, Shanghai Composite Index rose 11.8%, Shenzhen index increased 16.2%, small and medium board index rose 15.4%, the worst performing Shanghai index 50 rose only 9.23%, while the gem index rose to 21.9%.

Of the 430 GEM stocks, only 14 fell (mainly in the long term suspension before the stock market crash, and then resumed), or 30 more than 50%. In terms of volume, the gem accounted for 15.36% of the total value of 6.95% of the total market value of Shanghai and Shenzhen two, and the turnover rate of GEM has reached 60.89% on these 12 trading days.

The venture board will go on and down, and it is not strange to invest in the people's Congress.

But the investment sector must be bright, slow, and today is overjoyed. Maybe tomorrow there will be no tears.

First of all, from the perspective of performance, gem is the fastest growing sector (although the absolute number of earnings and earnings per share is low, and the P / E ratio is as high as 80-90 times).

According to the three quarterly report, 61.88% of the 480 GEM companies reported good news (including pre growth, turnaround and loss reduction), while small and medium-sized boards and boards accounted for 53.52% and 41.86% respectively.

The 162 listed companies that have disclosed three quarterly reports, 97 of their performance growth, accounted for 59.88%, and 4 of them accounted for more than 60%.

The 162 GEM companies grew by 22.14% in the first three quarters, 24.99% in net profits, and more than 400 companies that have disclosed three quarterly reports so far, excluding the surging brokerage stocks (which are not sustainable). The growth of revenue and net profit is only 3.37% and 12.24% respectively.

There are two reasons for the growth of the growth rate of the gem, one is the emerging industries which are mostly supported by the state, and the other is high growth.

Two is a considerable part of the gem in the recent IPO new shares and times.

In addition, the vast majority of private enterprises are hard to borrow and have high interest rates, resulting in lower debt ratio and less financial expenses.

At present, the average debt ratio of 162 GEM companies that have disclosed three quarterly reports is 33.36%, while the average debt ratio is 66.33%, which is 1 times higher than that of the gem, according to the newly released 1-9 month state-owned enterprises operating data.

Second, mergers and acquisitions of GEM companies are frequent, and quite a part of their profits come from the extensive growth after asset injection.

According to the data of the audit committee of the Commission on mergers and acquisitions (as of October 16th), a total of 156 enterprises acquired mergers and acquisitions through issuing shares and buying assets, of which 45 were GEM companies, accounting for 10% of the sector, while 41 and 70 of the small and medium-sized boards and main board companies accounted for 5.3% and 4.5% of their respective sectors respectively.

A number of GEM companies have greatly improved their performance through mergers and acquisitions, such as Dongfang fortune, Lehman photoelectric, Shanghai Jia Hao, Lok Jin health and so on.

The reason why GEM companies are highly motivated by mergers and acquisitions is that they want to shorten the M & a process with the SFC, and that GEM companies are mostly private-owned and small businesses.

Incidentally, paying more attention to the news and trends of the mergers and acquisitions Commission is a big trick for investing in the gem.

Third,

The company's performance is fluctuating, whether it is index or stocks.

Since its opening in 2009, the gem has been only 6 years old, just enough to go to primary school age, sometimes alive and jumping, sometimes crying rogue.

Take the last three quarterly reports, 22 of the 162 households grew by more than 100%, just like the first three seasons.

Surging from 21 million 460 thousand to 489 million 310 thousand yuan, a 21.8 fold increase, naturally overjoyed.

On the contrary, some companies have greatly reduced their profits, with twenty or thirty more than 50% reduction.

But in the view of investors, as long as there is good asset injection, a boom in the industry will soon lead to the "old hen turning duck", so some share losses still rise, and become a monster stock, such as potential Hengxin (deficit 17 million 360 thousand yuan).