Growth enterprise market, also known as the second board market, refers to the securities trading market outside the main board, which provides financing channels and growth space for small and medium-sized enterprises and emerging companies that are temporarily unable to go public. It is an effective supplement to the main board market and occupies an important position in the capital market. The risks of GEM are:
1. The products of GEM companies basically have the characteristics of high-tech products, but these products and technologies are updated faster and rely heavily on technicians. Once influenced by backward products and technologies, brain drain, technical improvement failure or elimination, the impact on the performance of listed companies is enormous.
2. Generally speaking, GEM listed companies are small in scale and short in operation time, which are greatly affected by market risks and industry risks, thus affecting the fluctuation range of stock prices.
3. For many new industries and new business models of GEM companies, the traditional valuation analysis method is not applicable, and the valuation of new industries and new models is not very accurate, so there are certain valuation risks.
4. Due to the small circulation of GEM stocks, the banker's manipulation cost is low, and it is easy to be over-hyped, and the stocks fluctuate greatly and the risks are relatively high.
5. Many GEM are private enterprises, even including some family enterprises, and there are some problems in their management.