GEM insiders: Stock valuation too high

Insiders are reminding investors to take note of risks on the GEM Board, saying stock valuation at the new stock market is still too high at the moment. They also suggest investors temporarily turn away from the ChiNext, as P/E ratios are way too high at the GEM Board.

Qin Xiaobin, Strategy Director of China Galaxy Securities said "Based on closing prices on their debuts, all 28 shares at the GEM Board had an average P/E ratio of around 80. And the figure is expected to stand at a high level of 60 next year, given these firms' current performances. I think the investment opportunity will really come after a period of share price digesting."

Zhang Gang, Analyst of Southwest Securities said "According to the main board listing firms' third quarter reports, their average P/E ratio now is 20. While that of firms at the GEM Board are way too high. It's obvious that they don't have investment value at the moment. Investors should stay away from investment at the GEM Board and go to the main board."