In a quick look around the world at market price/earnings multiples after the launch of the ChiNext wild-wild west exchange in China, the league tables have really changed. The impossible has happened, with the outrageously expensive Shanghai Composite newly looking (relatively) cheap. Gosh.
I’m particularly fond of how 20 of the 28 ChiNext companies fell by the exchange maximum 10% today, that coming after 23 rose the maximum 10% on the previous trading day.
While some are pointing to the new ChiNext listings as an example of China celebrating growth entrepreneurs, I’m not convinced. The early listed companies are a grab bag of utilities, movie companies, pulp & paper, and machinery makers. And don’t even get me started about the low listing hurdle. As Andy Xie has said, “This is a V.I.P. table built on top of a casino”.
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