Potential institutional investors, such as banks, insurance companies and large state-owned enterprises, are currently subject to a variety of restrictions on investments outside their core businesses. It will take some time for supervisors to loosen related restrictions, Shaw said.

Sustainable exit channel

The ChiNext has already proven its wealth-generating power and will become a major exit channel for equity funds in the future.

"It's difficult for startup hi-tech companies in China to secure mortgage loans because they don't have enough tangible assets. Our bank allows such companies to secure loans through accounts receivable and is looking for a partner in China to provide this service." —Daniel R. Quon, Managing Director of Asia for SVB Global (COURTESY OF ZERO2IPO)

During the forum, an opinion poll on the higher-than-expected performance of the ChiNext revealed that half of investors, fund managers and entrepreneurs believed an average 30 to 50 price-to-earning ratio

(P/E ratio) is appropriate for the growth board. Still, its more than 100 P/E ratio has made it the first choice for enterprises seeking a public listing in the coming years.

In the past 11 months, 58 Chinese enterprises with investments from equity funds have been successfully listed on domestic and overseas stock markets, and 20 have been listed on the ChiNext.

"The extraordinarily high P/E ratio is a result of the demand-supply imbalance, because only 28 stocks were offered while all the country's stock investors fixed their eyes on the growth board," Shaw said. "The China Securities Regulatory Commission was aware of the problem and that's why they are speeding up the approval procedures for more candidates to allow the indicator to reflect the real market value of listed companies."

Zheng Weihe, chairman of a Shenzhen-based VC company, attributed this fever to the inexperience of investors. He pointed out the fact that speculative investors dominated the market. About 90 percent of stock investors in China have less than 50,000 yuan ($7,321) in their brokerage accounts, Zheng said.

While considering the ChiNext as another exit channel in the future, many VC managers said the current market frenzy is unsustainable.

"Venture capital fund managers have to accompany companies they invest in for quite some time, because the cycle of an investment will usually last seven to 10 years," said Wu Xiaohui, Director of Intel Capital China. "It's a job for people with great patience and that's why we value the sustainability of the growth enterprise market more than the amount of returns it will yield us."

The wealth delusion in the ChiNext has already attracted some companies with overseas listing plans. They hope to have higher evaluations through making the company qualified for listing on the ChiNext to raise more money. But Wu contends a responsible fund manager should help such companies make rational decisions, reminding them of their major markets, the different procedures they have to go through to be listed in domestic and overseas stock markets, as well as the business models that different capital markets favor.

"Less transparent approval procedures in the domestic market generate more uncertainties," said Wu.

While the NASDAQ favors hi-tech and Internet companies, and the Hong Kong stock market favors commercial and retail businesses, the three domestic stock exchanges (Shanghai, Shenzhen and ChiNext) do not yet have a specific business niche, said Managing Director of Legend Capital Li Jiaqing.

In addition, the market positioning of the ChiNext still has some overlapping with the board for SMEs on the Shenzhen stock market, said Li.