China's Shenzhen-listed small and medium-sized enterprises (SME) posted average net profits of 85.6 million yuan ($12 million) in 2007, up 40 percent over a year earlier.

Average revenue from the main business was 1.12 billion yuan, up 30 percent from 2006, the Shanghai Securities News reported on Saturday.

In 2004, Shenzhen Stock Exchange launched the SME board as part of its main board for companies to offer less than 100 million shares in their initial public offerings. By the end of February, 219 companies were listed, with total market capitalization of 1.1 trillion yuan.

Of the total 219 firms on the SME board, 183 reported profits rises and 16 revenue more than doubled. Only two firms - Zhejiang-based Kan Specialities Material Co and Guangdong-based Well Medicine Science and Technology Co suffered losses.

Lack of finance has been a problem for China's 42 million SMEs, more than 95 percent of which are privately owned.

The China Securities Regulatory Commission (CSRC) will open a growth enterprise board, similar to the Nasdaq, in the first half of 2008, said Shang Fulin, CSRC chairman, in January.

The board, which will have relatively lower thresholds than the main board, is intended to help small start-ups, especially high-growth, high-tech firms, to access funds.