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GEM-listed firms report slower growth
Source: Xinhua |
August 27, 2010, Friday
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Online Edition
Online Edition
Comparable net profits of 105 companies listed on China's Nasdaq-style Growth Enterprise Market (GEM) rose 25.56 percent from a year earlier in the first half of the year, lagging far behind those on the country's main boards.
H1 net profits of 1,044 companies on the main boards in Shanghai and Shenzhen surged by 47.8 percent. The GEM expansion was also far behind the 43-percent H1 growth of the country's small and medium enterprises (SME) board, said today's China Securities Journal.
Among the 105 GEM companies, H1 profits of 83 grew while the remaining 22 posted declines. Zhanjiang Guolian Aquatic Products Co., Ltd. was the only one reporting losses in the first half, according to the newspaper.
The total operating revenue of the 105 companies, among which 88 rose and 17 fell, stood at 18.23 billion yuan (about US$2.68 billion), up 27.08 percent from a year earlier.
On October 30 last year, shares soared in a wild first day of trading on the long-awaited Nasdaq-style board, with all 28 listed small and medium-sized firms rocketing on fevered interest from investors. Trading in all shares on the ChiNext in Shenzhen was suspended at least once as market circuit-breakers in place to curb rampant speculation were tripped.
Unlike companies on the main board, GEM listings are small-sized start-ups, with considerable growth potential but high uncertainty. The rules for the delisting of GEM-listed companies are much harsher than the main board. Once they are forced to delist, investors will suffer huge losses.
Analysts have warned that the nascent GEM faces overvaluation challenges.
H1 net profits of 1,044 companies on the main boards in Shanghai and Shenzhen surged by 47.8 percent. The GEM expansion was also far behind the 43-percent H1 growth of the country's small and medium enterprises (SME) board, said today's China Securities Journal.
Among the 105 GEM companies, H1 profits of 83 grew while the remaining 22 posted declines. Zhanjiang Guolian Aquatic Products Co., Ltd. was the only one reporting losses in the first half, according to the newspaper.
The total operating revenue of the 105 companies, among which 88 rose and 17 fell, stood at 18.23 billion yuan (about US$2.68 billion), up 27.08 percent from a year earlier.
On October 30 last year, shares soared in a wild first day of trading on the long-awaited Nasdaq-style board, with all 28 listed small and medium-sized firms rocketing on fevered interest from investors. Trading in all shares on the ChiNext in Shenzhen was suspended at least once as market circuit-breakers in place to curb rampant speculation were tripped.
Unlike companies on the main board, GEM listings are small-sized start-ups, with considerable growth potential but high uncertainty. The rules for the delisting of GEM-listed companies are much harsher than the main board. Once they are forced to delist, investors will suffer huge losses.
Analysts have warned that the nascent GEM faces overvaluation challenges.
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