Part of the private placement: little room for GEM’S further downside.

For the GEM index which has been decreased for nearly four years, individual private placement said that the overall adjustment range of GEM is relatively large, and there is little room for further downward moving.

YuAibin, general manager of Jufeng Capital, told reporters that the GEM may not be complete in the short term, but now the scope of the GEM adjustment is relatively large, the adjustment cycle has reached the late stage.

But Yu stressed that although the big risk may have disappeared, but the overall valuation is still on high level, the risk of individual stock differentiation still exists. "It turned out that the valuation of the entrepreneurial sector is more expensive than the traditional sector. But GEM valuation should not be compared with the past high valuation, but with the company's performance, long-term growth space to compare. Most GEM firms do not have the strength of high valuation and should not be overvalued as they used to be. Like the GEM in Hong Kong and the Nasdaq, there will gradually be no financial attention, and even cheaper than the traditional sector.

He said that in the future, whether it is GEM or main board, the differentiation will be more serious, only the core variety gain market focus. non-core, marginal companies may not have liquidity. For GEM, some fundamentals long-term value companies, companies with long-term growth space can start to pay attention. But at the same time, there are many companies business model, profit prospects are not clear, these companies are still a big risk in the future.

Specifically, he believes that the better targets of GEM are mainly concentrated in information, electronics, medicine and other sectors.

Wu Danfeng, chairman of Longteng Assets, believes that the declining GEM index is mainly due to two reasons: on the one hand, the high valuation should be returned, on the other hand, the past growth expectations of GEM should be discounted.

He said that the GEM market is relatively large, the past valuation system problems, including the extension of M&A expectations, but in the current economic environment, the development of small and medium-sized enterprises is relatively small. However, for the future trend of GEM, he believes that the downside space is not large. "The future depends on the policies of the whole country, including support for small and medium-sized enterprises. If China's economy wants to be vigorous, it must rely on small and medium-sized enterprises. From this point of view, there is little room for further downward movement of the GEM stock index. Secondly, it is related to the whole macro-economy. Including the recent good news, the CSRC has introduced a "small quick" merger and reorganization review mechanism for small transactions that do not constitute major asset restructuring, which is directly examined by the listed company merger and reorganization audit committee, simplifying administrative licensing and reducing the audit time. This is also conducive to the growth of growth oriented enterprises. He further explains that investing is not a completely quantifiable thing, including the need to focus on market risk preferences. If risk appetite rises and incremental capital is available, GEM as a whole have less room to fall at this position.

Specifically, he admitted that the current allocation of small and medium-sized shares is not particularly large, or need to find a low valuation. Relatively optimistic about the technology consumer industry, or to find a reasonable valuation, growth firm, cannot look at the concept of hype.

But there are also pessimistic institutions, saying that GEM liquidity is not good, loss of trend opportunities. A growth oriented private placement has seen less of GEM companies. He said that small stock liquidity is not good, and now the position is very low.

A research director told reporters that the growth enterprise market has lost its growth myth. "Now, the gem 3.3PB, if its ROE return to CSI300 level, only about 15%. The corresponding PB for finance share is only 1 time, and ROE is also about 15%. Someone may say growth. So how did growth come from? First, the accumulation of their own funds, which requires a higher rate of return on capital. The two is mergers and acquisitions. But we can't do it now. If the whole economy goes down, those growth myths will be lost, or at least not universal. So GEM has almost no chance. "

Xiangcai Securities believes that the growth of GEM is still low, indicating that the market is still in a weak position. "To sum up, the power of the trend is hard to reverse quickly, just as it takes time in winter, so for the current market, we still adhere to the view that the market is still weak."

Copyright by fangquant.com