The Gem Index Fell To The Bottom Of The &Nbsp; The Level Of P / E Dropped Sharply.

On Tuesday, capital Faced with bad news, the Shanghai and Shenzhen stock index continued to bottom out. Market The sharp callback has also made the recent weak performance. Gem One disaster after another. Yesterday (April 27th), the gem index fell unilaterally all day, closing a sharp fall of 1.73%, and hit a new low in the year. In January 4th this year, it is still at a high of 1155.11 points. The gem means a drop of 17.04% in nearly four months.

The gem index has not performed well, and the stocks have fallen. Some of the outstanding stocks in the quarterly reports have not been spared. Yesterday, the entire plate rose only 32 stocks, down to 168 stocks, the new shares of Tian Ze information, Heng Shun electric listed on the first day of double break. The first quarter earnings growth of yiweicheng lithium and sunflower rose by 4.40% and 3.40% respectively, becoming the few rising stocks in the gem, while the Kang Zhi pharmaceutical industry was almost down to the main business crisis, and more than 7% fell into the sky, instruments, quantum high tech, Sheng Yun shares, Yin Zhijie and Zhong Neng electric.

As a matter of fact, there has been an obvious fall effect between the gem index and the stock market. A quarterly "performance landmine" not only caused the related stock prices to drop sharply, but also pulled the plate index down. Statistics show that in April 25th, a Quarterly Bulletin released Corti power 1~3 performance fell 76.89%, the the Great Wall group and tengbang international declined by 26.81% and 24.67% respectively, which affected the three three consecutive two days, respectively, reaching 10.74%, 8.99%, 11.20%, and the share price also hit a new low since the listing.

With the gem 2010 annual report and the first quarterly report in 2011, the gem's high price earnings ratio issuance and far below expected growth in performance, highlighting the risk of investment in the sector, and gradually get a rational understanding of the market. Statistics show that less than half of the 168 GEM companies that have reported their 2010 performance increased by more than 30% over the same period, and the growth rate seems to be less attractive than its fifty or sixty times earnings. It is also based on this that the risk release of plates becomes inevitable. According to the latest data of Shenzhen Stock Exchange, the average price earnings ratio of gem in April 26th was 49.28 times, the first time it dropped to 50 times, which has dropped by 38.41% compared with 80.01 times the highest in January 4th.

Analysts pointed out that overvaluation has been the main reason why gem has been widely questioned by investors in the two tier market. The 60 times price earnings ratio is a "water level line" for investors in gem valuation over the past 18 months. If it is below this level, some capital based on value considerations will consider buying, thereby supporting the stock price. However, from the historical trend, the strength of this support seems to be getting weaker and weaker. Statistics show that the overall rebound of the first four gem is about 50%, 25%, 30% and 15% respectively. The recent slump in the growth enterprise market index seems to indicate that the road to valuing returns has yet to come to an end.

However, there is no doubt that some GEM companies have higher growth, but it takes longer to show them. The reason is that companies that are really in expansion stage are often subject to fast growth costs, which are usually derived from investment and expenses needed for business expansion. However, the new business needs a long process from development to maturity, and its recognition of revenue and profit is not an overnight success. From this perspective, some investors are biased about the understanding of growth firms, and the fact that the growth rate is not as good as expected is also a dialectical view.