Study on the Influence of PE Shareholding on the Profit of GEM Listed Enterprises

This paper takes 91 companies listed on the GEM from 2014 to 30 April 2015 as the research object. The financial data of the firms as of 31 December 2022 are obtained from the Rexis database to analyze whether PEs play the role of certification and monitoring and whether there are adverse selection and grandstanding hypotheses in China's GEM market. Through empirical analysis, it is concluded that there is no significant difference in earnings between listed companies with and without PE background, that is, there is no adverse selection, certification effect and monitoring effect in the GEM market. Then, this paper extracts PE reputation and PE holding time as PE characteristics, studies the impact of these two on corporate profitability, and concludes that ROE is higher for firms supported by PE with good reputations. PE with long investment periods and high participation in corporate governance have higher ROE of invested enterprises.