Experts expressed confidence in ChiNext's performance in the third quarter even though the board has been falling.
China's stock markets have been falling since October 1, the country's National Day. Companies listed on the ChiNext board, a platform tailor-made for innovative and fast-growing enterprises, have seen a sluggish fiscal performance in the third quarter.
Average fiscal predictions from the companies themselves have grown only 2.7 percent between July and September, down from an estimated average growth of 10 percent recorded in their mid-year reports. Poor showings from Leshi Internet Information & Technology and Guangdong Wens Foodstuff Group have dragged the averages down.
The predicted growth rate of the ChiNext market would still be at its slowest pace since 2010.
“Investors might find growth slightly towards the lower-end simply because they have been very used to super-high growth that Chinese companies have enjoyed over the last years, compared to the main board companies. If you look at annual net income growth, many ChiNext companies recorded double-digit annual growth for many years. In that comparison, obviously the Q3 numbers are slightly disappointing,” said Theodore Shou, chief investment officer in Skybound Capital.
Among the recent sell-off market, some companies on the ChiNext are still witnessing significant revenue growth.
Entertainment company Songcheng Performance Development recorded a year-on-year net profit increase of 25 percent in the third quarter, while Lepu Medical saw net profit growth of over 50 percent during the same period.
“The overall index decline stems from sectors like infrastructure and real estate investment. But other emerging industries including Internet and entertainment performed great. Whether or not a company has core technology and innovation capabilities is the main issue,” said Shao Yu, chief analyst in Orient Securities.
ChiNext board has made significant achievements since its debut in October 2009. As of the end of October, 734 companies listed on the board have raised 382 billion Chinese yuan (55.3 billion US dollars) in the capital. 101 companies have issued corporate debts or convertible bonds of over 50 billion yuan (7.2 billion US dollars).