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An Empirical Analysis of Chinese Financial Analysts' Opinions and Forecast Performance in Their Qualitative Research Reports
Yiming Hu,
Shanghai Jiao Tong University
Thomas W. Lin, University of Southern California
ABSTRACT. This exploratory study investigates Chinese analysts’ original opinions and forecast performance in their qualitative research reports. We find that analysts possess certain analytical capacity, but there is a lack of strong evidence that their opinions are original. Specifically, we find that Chinese analysts use different analysis methods and focus on different types of information to draw “very positive” or “negative” conclusions, and they tend to use more evidential accounting information and sophisticated financial analysis methods when making “negative” conclusions. We also find that analysts’ conclusions rely on auditors’ opinions and on firms’ current accounting performance. But we do not find any significant differences exist in the type of information and the financial analysis method used when they analyze companies with different industries or between failure and non-failure companies.
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