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ChiNext performs poorly in H1

09-21-2010 09:36 BJT Special Report:GEM=Cradle of Wealth? |

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Chinese companies listed on the country's NASDAQ style board, have been plagued by problems this year. Reports from the first half, showed they performed much worse than their peers in other markets. Profits are down, and executives are jumping ship.

Companies listed on the ChiNext, China's Nasdaq-style board, have reported their first half performance. On average, net profits rose around 25 percent, far less than those on the the small and medium enterprises board, and the main board.

Zhong Wei, Director of Financial Research Center, Beijing Normal University said "Profits of companies listed on the main board and SME board have increased more than 40 percent in the first half. But the ChiNext companies' profit growth was far less than expected."

The ChiNext started on October 30th, 2009. In the beginning, the market was flooded with capital, because investors expected strong growth. But 8 month later, the half year report was quite disappointing.

Making matters worse, many senior executives are resigning.

Huang Xiangbin, Chief Strategic Analyst of Cinda Securities said "Some executives can make a fortune by selling their stocks in the secondary market. That makes them rethink their career plan, even life plan."

The market is being plagued by poor performance, stock prices falling below their issuing price, and the executives resigning. Analysts say entrepreneurs have lost their passion, along with less-than-impressive investments.

Zhong Wei said "Many entrepreneurs take their money to clone their original companies. Cases like this show the ChiNext may be overvalued, and shareholders are not loyal enough to the original companies."

Analysts also point out that the mechanism for de-listing is yet to be properly established, so companies have little drive to develop.

Editor:Xiong Qu |Source: CNTV.CN

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