What is a gem?

Growth enterprise market, also known as innovation and entrepreneurship plate or innovative enterprise plate, refers to the securities trading plate established to support and develop technology-based and growth-oriented enterprises with investment value. GEM is generally set up next to the main board exchange market, which is relatively independent and complementary to the main board.

The establishment of GEM is to solve some defects of traditional market in investment and financing of innovative enterprises. From the perspective of brokers, the valuation of main board stocks is high, and the threshold for ordinary investors is high. At the same time, some details of the control system are still primitive, which leads to inadequate supervision and difficult control of risks. Therefore, in order to activate the market and encourage more SMEs to raise funds, China established Shenzhen Growth Enterprise Market in 2009.

Compared with the main board, the investment risk of GEM is greater, and the fluctuation is limited to 20%. At the same time, GEM companies have the characteristics of rapid development, high growth and high technology content. Moreover, because it was established late, the supervision is also strict.

The establishment of GEM has injected new vitality into the development of China stock market, and also provided a platform for financing and development for start-ups. However, we also need to realize that the high-value fluctuation of GEM stock trading brings great risks, and investors should make investment plans according to their own risk tolerance.