Gem Has Been Hit Hard: "Bubble" Has Become A Consensus

After the recent continuous decline, the average price earnings ratio of the gem has dropped to 57.36 times.

Last Friday, the average price earnings ratio of gem was 60.65 times.

Although the average price is 45.54 times and 30.77 times higher than that of the small and medium-sized boards and Shenzhen board, the gem valuation is still at a high level.

However, the gem has been squeezed out of water by 80 times the price earnings ratio at the beginning of this year.

The process of "extruding foam"

With the return of valuation, the share price of GEM stocks is also declining.

Financial information statistics show that since March, there are [21.90 -3.23% shares of Tongyu Heavy Industries (300185.SZ), Dahua agricultural [20.40 -1.40% shares (300186.SZ), Jiashi technology [24.48 -0.73% stock bar (300193.SZ) and Fu'an pharmaceutical [38.11 -1.30% stock bar] ([38.11) 4 stock market level two stock market share price has fallen through the issue price.

In addition, Liyuan information [25.63 -0.97% shares] (300184.SZ), Neusoft carrier [43.10 -4.20% shares] (300183.SZ), Quartet [30.77 -2.50% shares bar (300179.SZ) and Lang yuan shares [20.68 -0.53% stock bar] ([20.68) and other GEM companies in March, the stock price hit a new low.

CIC believes that the recent mainstream funds to blue chip, resource stocks and other signs of aggregation are more obvious, and gem and other small cap stock market trend is weak, split stocks increased.

It is suggested that the gem and small and medium board varieties with high valuation should be reduced.

CIC's proposal to reduce gem is similar to that of star fund manager Wang Yawei.

In the 2010 annual report of the Huaxia Fund, Wang Yawei believes that under the pressure of continuous expansion and lifting of the ban, the valuation level is hard to maintain at the present high level, and the future will go through the process of foam.

Ping An Securities [0.00 0.00%] also said in a recent report that at present, the scale of small and medium capitalization stocks, including gem, is expanding gradually, and the contradiction between supply and demand of funds will gradually increase. Therefore, it should be the main trend to narrow the valuation gap with the large cap stocks.

When the valuations of small and medium capitalization stocks are already high, their valuation level will continue to be suppressed by various policies, such as policy regulation, supply and demand relations and so on.

New three board impact

In addition, the expectation of the diversion of funds from the second board caused by the expansion of the new three boards is also an important factor in suppressing the performance of the growth enterprise market after the Spring Festival.

However, compared with the expansion and reduction, Guotai Junan believes that the impact of the expansion of the new three boards will be much smaller.

In a recent report by Guotai Junan, the agency believes that the actual impact of the new three boards on the growth enterprise market is more psychological rather than capital side.

Specifically, such worries in the short term are unnecessary. Just like the launch of the gem in 2009, the market is concerned about the diversion of funds from small and medium-sized boards and main board.

From the perspective of market capital supply and new three board investment with high risk, there will be little impact on the capital side of gem in the short term.

In 2010, the total turnover of the new three board market was less than 3 billion 700 million yuan, which is almost the same as the daily turnover of the whole gem. Even after the expansion, due to the phasing and long-term expansion of the expansion, it is still difficult for small and medium-sized investors to participate in the market, and the diversion effect will not be obvious.

A self employed trader in Shenzhen believes that the growth of market speculation last year has led to a high valuation of small and medium capitalization stocks, including GEM stocks, while blue chips, which were originally very low valuation, were left out in the cold market.

Now the market has gradually realized that small and medium capitalization stocks, including gem, are actually not as good as expected in the growth.

The self-employed people expect that the future capital will still choose to flow into the blue chips with lower valuation, and the growth enterprise market will further decline.