A Chinese NASDAQ!

What is the link between EVE (a producer of lithium batteries) and Aier (a chain of eye hospitals)? Both have just made their debut on ChiNext, the newly-launched Shenzhen-based stock exchange for innovative firms.

For now, 28 companies are listed. Hundreds have been reported to be lining up for listing, still a paltry in comparison to the 3700 firms trading on the American board. But then, it has been around for almost 40 years.

The NASDAQ-styled stock exchange still hopes to fill an important gap in China: funding small and mid-sized enterprises (SMEs). While accounting for 60% of China’s economic output (and 80% of employment), SMEs only received 36% of total loans.

Price-to-Earning ratio (P/E) was at 96 after one week, compared with 35 on the Nasdaq and 33 on the Shanghai index. A good alternative for those bored with Macau’s casinos but probably not exactly what ChiNext would need to succeed in the long-run: patient and long-term investors, something that the neighboring Hong-Kong Growth Enterprise Market (GEM) has learnt the hard way.