TIDMACIC
RNS Number : 1160E
abrdn China Investment Company Ltd.
28 June 2023
abrdn China Investment Company Limited
Legal Entity Identifier (LEI): 213800RIA1NX8DP4P938
Half Yearly Report 30 April 2023
Performance Highlights
NAV per Ordinary share NAV per ordinary share total return(A)
As at 30 April 2023 Six months ended 30 April 2023
580.9p +14.0%
As at 31 October 2022 512.0p Year ended 31 October 2022 -37.0%
Ordinary share price Ordinary share price total return(A)
As at 30 April 2023 Six months ended 30 April 2023
497.0p +11.5%
As at 31 October 2022 448.0p Year ended 31 October 2022 -35.5%
Discount(A) MSCI China All Share Index
total return (in sterling
terms)
As at 30 April 2023 Six months ended 30 April 2023
14.4% +16.7%
As at 31 October 2022 12.5% Year ended 31 October 2022 +31.5%
Net assets Net gearing/(cash)(A)
As at 30 April 2023 As at 30 April 2023
GBP253.1m 2.6%
As at 31 October 2022 GBP231.8m As at 31 October 2022 -3.6%
Revenue return per Ordinary share Ongoing charges ratio ('OCR')(AB)
Six months ended 30 April 2023 Forecast for year ending 31 October
2023
-2.52p 1.09%
Six months ended 30 April
2022 -0.47p Year ended 31 October 2022 0.60%
(A) Considered to be an Alternative Performance Measure.
(B) The OCR for the year ended 31 October 2022 benefited from a six
months' waiver of the management fee charged by abrdn plc and a twelve
months' waiver of marketing fees.
Financial Calendar and Highlights
Financial year end 31 October 2023
========================================== ================
Expected announcement of results for year February 2024
ended 31 October 2023
========================================== ================
Annual General Meeting (London) April 2024
========================================== ================
Performance (total return)
Six months Year ended 31 October
ended 2021 -
30 April 31 October 30 April
2023 2022 2023
% % %
----------------------------------------- ----------- ----------- -----------
Net asset value(A) 14.0 -37.0 -28.2
========================================= =========== =========== ===========
Share price(A) 11.5 -35.5 -28.1
========================================= =========== =========== ===========
MSCI China All Share Index (in sterling
terms) 16.7 -31.5 -20.1
========================================= =========== =========== ===========
(A) Considered to be an Alternative Performance Measure.
Chairman's Statement
Overview
I am pleased to share with you the half-yearly report for abrdn
China Investment Company Limited ("the Company"), covering the six
months to 30 April 2023 ("the Period"). During the Period, the
Company's net asset value ("NAV") total return was 14.0% in
sterling terms, while the share price total return was 11.5%. The
MSCI China All Shares Index, the Company's Reference Index returned
16.7% over the Period. The share price discount to NAV was 14.5% at
30 April 2023.
Compared with the investment backdrop at our financial year end
in October 2022, the Period covered by this half-yearly report was
much more positive for investors in Chinese equities. Whilst not
always evident from reporting in the Western media, domestic
sentiment now appears far more positive and China's swift rollback
of its zero-Covid measures during November and December, and a full
reopening of borders by early January, drove a strong stock market
rally with onshore and offshore Chinese companies seeing sharp
gains across the board. The Shanghai Stock Exchange A Shares Index
rose 11% in the six weeks following the lifting of Covid
restrictions in early November. The rally was particularly strong
as it followed a severe test of investors' nerves in the wake of a
host of domestic concerns, including Covid-related disruptions and
growing pressure on the domestic real estate sector, compounded by
the worsening global economic environment.
Despite the positive early indicators, the economic recovery has
not been as smooth as many expected. The predicted rebound in
consumption has failed to match the market's high expectations. As
a result, consumer companies, including many of those held by the
Company, have come under selling pressure since February. The
Company's Investment Manager believes that the bulk of this
recovery, aided by a restoration of consumer confidence, will
happen in the second half of this year and into 2024 as employment
and income prospects meaningfully improve for households. I am
encouraged by the fact that the Chinese Government publicly
declared its intention to support growth at the National People's
Congress in March 2023. This implies that the policy landscape is
likely to remain accommodative in the months ahead .
Lawmakers have moved swiftly to ease pressure on a heavily
indebted real estate sector, which is both a major driver of
economic growth and a key source of personal wealth in China. Last
year, the central government unveiled a swathe of measures,
including easing home-buying requirements for individuals as well
as a raft of policy tools, such as loan financing, bond issuance
and equity financing assistance, to help developers avoid the worst
effects of the liquidity crunch.
However, external pressures on China persist. There is still the
looming spectre of global recession as central banks raise interest
rates to fight rising inflation. China, where inflation is
comparatively low compared to the West, is one of the few nations
that is still able to employ looser monetary policy including
lowering interest rates. Meanwhile, tensions simmer between China
and Taiwan, and continue to flare between the US and China, as was
illustrated by the US shooting down an alleged Chinese spy balloon
that had strayed into its airspace.
Against this backdrop, the Company's performance was supported
by a rebound in some sectors that had dragged down performance over
the last financial year. The financial sector had been one of the
main detractors to performance for the 12 months to 31 October
2022. However, it was one of the strongest performing sectors
during the Period, after the Company's holdings, particularly in
the retail banks, rallied. The performance of investments in
healthcare and materials were also positive during the Period. On a
more negative note, given the Company's consumer focus, consumer
discretionary stocks detracted, reflecting how the pace of recovery
in consumption has, so far, not lived up to investors'
expectations.
In terms of positioning, the Company's Investment Manager
continues to focus on five core themes: Aspiration, Digitalisation,
Going Green, Health and Wealth. These are aligned to the Chinese
government's policy objectives and tap into the vast consumer
market and rising affluence of a growing middle class in China. The
Company's Investment Manager has reviewed exposure to internet
companies, increasing some positions and lowering the portfolio
weight to others, for stock-specific reasons. More detail on the
performance of the portfolio and changes to the holdings can be
found in the Investment Manager's Review.
China's reopening has had another direct positive impact for the
Company. With the lifting of Covid restrictions heralding the
return of travel, one of the Company's portfolio managers,
Elizabeth Kwik, was able to update shareholders in person at the
Company's Annual General Meeting in London in April. This provided
our shareholders with a useful insight into the long-term outlook
for China and the differences between how the region is reported in
the Western media and the investment opportunities the Investment
Manager sees locally. The Board is also due to travel to China
later this year in order to meet with the abrdn investment team on
the ground, as well as visit some of the companies in the
Investment Portfolio. By then, it will have been two years since
the mandate change, but it will be the first opportunity the Board
has had to travel to the region together and meet with the broader
team in Hong Kong and Shanghai.
Discount and Share Buy Backs
The discount at which the Company's shares trade relative to the
NAV operated in a narrow band between around -12% to -15% for most
of the Period. At the end of April 2023 the share price was trading
at a discount of 14.4% and since then the discount has remained
unchanged.
The Board has continued to buy back shares in order to try to
mute the volatility of the discount. During the Period, 1,721,633
shares were bought back at a total cost of GBP9.2m and a weighted
average discount of 13.9%. This represented 3.8% of the issued
share capital and added 3.2p, or 0.51%, to the Net Asset Value per
Share. The shares are held in treasury.
The Company's share price has typically traded at a wider
discount than that of its peers, albeit with less variation in
level than other trusts in the sector. Although, there are times
when all the peers' discounts have widened to match that of the
Company .
Revenue Account & Dividend Outlook
In the previous financial year, the Company paid a dividend of
2.2 pence per Ordinary share. The dividend was paid in order that
the Company complied with the rules governing investment trusts,
which includes the requirement that most of the net income is
distributed to shareholders.
The surplus revenue last year arose largely as a result of the
Company benefiting from a waiver of the management fee following
the merger with Aberdeen New Thai Investment Trust PLC in November
2021. In the current year, the Company will pay a full year of
management fees and, as a result, the charge in the current year is
more representative of the ongoing expense than last year.
Loan Facility and Gearing
In April 2022, the Company entered into a two year GBP15m,
unsecured, multi-currency, revolving loan facility with Industrial
and Commercial Bank of China, London Branch. The facility was
undrawn at the start of the Period, but GBP12.8m (CNH 106m) was
drawn down in two tranches in December 2022 and January 2023. At
the end of the Period, the cost of the funding was 4.11%. Since the
end of the Period, the remaining GBP2.2m (CNH 19.8m) of the
facility has been drawn. At the end of Period, the net gearing was
2.6%.
Change of Portfolio Administrator, Depositary, Registered
Office, Custodian and Company Secretary
In April 2023, the Company completed the process of moving most
of its support functions to various entities within BNP Paribas
S.A. Group ("BNP"). The depositary and administration of the
portfolio moved to BNP Paribas S.A., Guernsey Branch. The
registered office of the Company moved to BNP Paribas House, St
Julian's Avenue, St Peter Port, Guernsey, GY1 1WA. The custodian
was also moved to BNP Paribas S.A. At the same time abrdn Holdings
Limited was appointed Company Secretary.
The Board decided to make these changes as BNP is the preferred
service partner of the Company's Investment Manager, abrdn plc, and
currently BNP provides these services to the majority of the
investment companies that abrdn manages. The Company will be able
to access a more competitive rate card for the provision of these
vital services and at the same time, bringing the Company into
abrdn's administration model should result in improved reporting to
the Board.
I would like to thank the teams at Northern Trust (Guernsey)
Limited and Vistra Fund Services (Guernsey) Limited for the
professional services and support they have provided to the Company
over the years, including through the merger with Aberdeen New Thai
in 2021 and, more recently, in the transfer of responsibilities to
BNP.
Outlook
It has been a challenging time for the Company since our mandate
change in November 2021.
However, the Chinese economy appears to be moving in the right
direction. After a lengthy period of social and travel
restrictions, we believe there is pent-up consumer demand in China.
The reopening that is already underway should lead to a multi-stage
recovery, with a gradual revival of domestic consumption. In turn,
this should boost sectors ranging from tourism to healthcare, and
property to banks.
China's economic recovery appears to be underway, albeit at a
slower and more gradual pace than elsewhere in Asia. This recovery
is aided by supportive financial conditions. China's inflation is
lower than surrounding countries, meaning authorities have been
more able to introduce accommodative monetary and fiscal policies
to support economic growth. Projections from the International
Monetary Fund ("IMF") earlier this year forecast that China's
economy will grow 5.2% in 2023 (compared with 3% in 2022). China's
economy is also expected to contribute one third of overall global
growth. Although the IMF also points out that "comprehensive
macroeconomic policies and structural reforms" are still
required.
At the heart of China's economic growth is its rising middle
class, supporting the high-quality companies favoured by the
Company's Investment Manager and providing opportunities to invest
in companies that are set to deliver long-term capital growth.
These companies are benefiting from rising affluence leading to
growth in consumption, growing digital integration and more
widespread technology adoption, the move to a greener, lower-carbon
world, greater demand for healthcare products, and structural
growth in consumer finance.
The Board and I remain convinced of China's long-term potential.
We are confident of the Company's Investment Manager's approach and
believe the portfolio is well positioned for the future.
Helen Green
Chairman
27 June 2023
Investment Manager's Review
Market Environment
The gloom surrounding Chinese equities and the economy has
lifted and growth is returning, albeit tentatively, after three
years of the economic malaise caused by the Covid-19 pandemic.
Optimism was in short supply as the Company's financial year got
underway. The central government's strict zero-Covid policy weighed
heavily on share prices for much of 2022 and disrupted swathes of
the economy. Yet throughout stock market history, patient investors
who have been prepared to sit tight during periods of volatility
have often been rewarded. The turning point for China came at the
start of November 2022, the very beginning of the reporting Period.
Share prices surged after the government unexpectedly announced
that it was abandoning its seemingly steadfast commitment to its
controversial zero-Covid policy. Increased liquidity support for
the struggling property sector from the government and state-owned
banks also improved investor sentiment. Share prices rallied
further in December as the prospect of an economic reopening became
a reality. All social distancing measures were lifted and Covid-19
cases surged as a result, but China responded by encouraging herd
immunity. China's Center for Disease Control and Prevention stated
in January 2023 that the current wave of infections was "coming to
an end".
Investor spirits, buoyed by hopes of a rebound in economic
growth, drove the market higher and, with a strong rebound in share
prices from November onwards, February's profit-taking was perhaps
inevitable. However, share prices resumed their upward trajectory
in March. Investors chased short-term "hot themes", including those
relating to ChatGPT, wider artificial intelligence ("AI")
opportunities and state-owned enterprise reforms, rotating out of
previous winners in the process. April saw the AI hype dissipate
somewhat as investors refocused on fundamentals.
Turning to broader economic themes, one of the most eye-catching
statistics of the Period was the reported GDP for the first quarter
of 2023. It showed 4.5% year-on-year growth, up from 2.9% in Q4
2022, and easily surpassed market estimates of 4% annual growth.
However, other data, such as an unexpected decline in the Caixin
Manufacturing Purchasing Managers' Index, generally considered a
reliable indicator of the strength of the Chinese economy, declined
from 51.6 in February to 50 in March, suggesting the recovery
remains patchy.
The concerns over the speed and strength of the economic
recovery after the easing of the zero-Covid policy has been
reflected in company earnings. First-quarter results from A-share
companies largely pointed to recovery, although the rebound is not
yet proving to be as robust and broad-based as expected. Based on
our conversations with company management teams, we believe that
growth and recovery will be more pronounced as we move into the
second half of 2023.
Portfolio Performance
During the Period the Company's net asset value ("NAV") total
return was 14.0%, which compares with the MSCI China All Shares
Index, the Company's Reference Index's, return of 16.7%. The
Ordinary share price total return was 11.5%, as the discount to NAV
at which the Company's Ordinary shares trade widened to 14.4% from
12.5% at the start of the financial year.
The portfolio initially performed strongly after the re-opening
of the Chinese economy. The market recognised our high-quality
holdings and the opportunity for them to benefit from the return to
normal economic activity after three years of stifled growth.
However, profit-taking affected the portfolio in February. Our
limited exposure to artificial AI-related stocks also negatively
impacted performance as investors chased this "hot" trend in March.
We do not believe this trend is sustainable as we expect that
investors will find earnings delivery does not match their
expectations, forcing them to refocus on fundamentals. We have
already seen this to a degree, as AI-related stocks suffered a dip
in April.
Stock-selection accounted for the Company's modest
underperformance versus the Reference Index. Our consumer
discretionary holdings were the main source of underperformance,
although our information technology holdings also had a negative
impact on overall portfolio returns. Our financials and healthcare
holdings partially offset the rest of the portfolio's negative
performance.
China Merchants Bank (CMB) and Tencent were the top two
performers. CMB rallied on the economic reopening while Tencent
benefited from a recovery in sentiment as regulation towards the
internet sector eased. Elsewhere, Kweichow Moutai benefited from
strong initial interest in consumer stocks after the re-opening.
The company's special dividend and proposed capacity expansion also
boosted sentiment. Other holdings also benefited from the improved
investor confidence in consumption, including sportswear firm
Li-Ning and electrical appliance manufacturer Midea Group . Other
beneficiaries of China's re-opening included pan-Asian life insurer
AIA and the Hong Kong Stock Exchange.
Turning to the laggards, LONGi Green Energy , Yunnan Energy New
Material and Sungrow Power Supply were all affected by the weakness
in renewable energy-related stocks. Starpower Semiconductor
suffered from softening semiconductor prices. Not owning Ping An
Insurance also hurt relative performance, given its strong
first-quarter results. Holding JD.com was unhelpful based on market
concerns over rising competition in e-commerce. This may weigh on
the stock over the near term, but we remain positive on the
company's long-term competitiveness.
Portfolio Activity
We believe our bottom-up stock-picking approach, grounded in
fundamental research and local expertise, provides an advantage in
finding the best quality companies in which to invest. We engage
collaboratively with companies, prior to investment as well as part
of our ongoing due diligence, with the aim of sharing expectations
and encouraging best practices. Please see the Case Studies of
Engagement Activity below for examples of the work we have been
doing in this area. We continue to construct and manage the
Company's portfolio based on the themes of Aspiration, Digital,
Green, Health and Wealth. Whilst this approach will not prevent us
from investing in stocks where we see fundamental value, we would
expect most of our holdings to align to these key themes.
During the Period the Company received regulatory approval for a
Qualified Foreign Investor ("QFI") licence status, which provides
access to the broader Chinese equity market. As a result of this,
we purchased two new stocks: Centre Testing International and OPT
Machine Vision . Centre Testing International is a leading
third-party testing company that enjoys stable and diversified
growth. OPT Machine Vision is a leading machine vision company with
good growth prospects, driven by the upgrade of automation
manufacturing in China.
We also initiated a position in PDD , owner of popular shopping
app Pinduoduo. It is gaining market share within China's ecommerce
sector. We added to our existing position in Alibaba Group in
January, based on its attractive valuation, easing regulatory
pressures and an improving outlook thanks to the earlier than
expected reopening of the economy.
We exited positions in Anhui Conch Cement and GDS due to
weakening conviction and in view of better opportunities
elsewhere.
Revenue Account
The loss for the Period was GBP1.1m compared to a loss of
GBP0.221m for the same period last year. While investment income
was up almost 34% to GBP0.604m, the prior year numbers benefited
from a waiver of the management fee for the first six months
following the completion of the combination with Aberdeen New Thai
Investment Trust in November 2021. As a result, the current year
management fee charge is more representative of the ongoing expense
than the prior year.
In 2022 90% of the income in the year was generated in the
second half of the Company's financial year and we expect that the
split is likely to be similar in the current year.
Outlook
The past three years have undeniably been challenging for China
and those who are invested in the country. Stringent social curbs
and onerous travel restrictions placed a great burden on the
population. Now is the time for optimism, however, even if there
has not been a 'V' shaped economic rebound as some had
expected.
We see the Chinese consumer at the heart of the recovery. After
a very long period of widespread lockdowns, there is considerable
pent-up consumer demand. Furthermore, elevated household savings
should provide a powerful tailwind for consumer spending. As jobs
and income prospects improve, we expect consumers to spend their
savings across different sectors, including tourism, travel,
healthcare and property.
The policy environment is another reason for optimism. Many
Western economies are still wrestling with stubbornly high
inflation, resorting to repeated interest-rate rises in a bid to
manage the problem, with varying degrees of success. In contrast,
the inflation picture in China remains benign. This has given the
authorities the freedom to introduce accommodative monetary and
fiscal policies to support economic growth. In late April the
central government acknowledged the need to sustain the economic
recovery at a meeting of the Politburo. Policy guidance is
therefore likely to remain supportive. With growth in many
developed Western economies set to slow as higher interest rates
bite, China represents a real counter-cyclical opportunity.
Finally, but crucially, valuations in China remain highly
attractive. We believe that quality companies - the type our
investment process favours - are still discounted by the market,
but their prospects have improved significantly and we believe that
the market will recognise this valuation discrepancy over time.
Across our five themes of Aspiration, Digital, Green, Healthcare
and Wealth, companies are still trading below historical
valuations. These companies have weathered the pandemic storm and
continue to exhibit solid fundamentals. We believe this is a great
opportunity to invest in quality companies at compelling
valuations.
Nicholas Yeo and Elizabeth Kwik
abrdn Hong Kong Limited
27 June 2023
Ten Largest Investments
As at 30 April 2023
Tencent Holdings Ltd Kweichow Moutai Co Ltd
(9.6% of portfolio value) (6.3% of portfolio value)
An innovative leader in China's The largest maker of Chinese alcohol
internet sector with a strong spirit Baijiu, positioned in the
presence in fintech and cloud ultra-premium space where there
segments, backed by are few competitors. The company
an entrenched social media and is well placed to capture rising
payment ecosystem. domestic consumption trends in
China.
Alibaba Group Holding Ltd China Merchants Bank Co Ltd
(5.2% of portfolio value) (3.9% of portfolio value)
The Chinese internet group is A best-in-class retail bank in
a global e-commerce company with China, offering diversified financial
leading platforms including Taobao services with a solid track record
and T-mall in the mainland. The and sound risk management practices.
company also has interests in
logistics and media as
well as cloud computing platforms
and payments.
Contemporary Amperex Technology Bank of Ningbo Co Ltd
Co Ltd (3.3% of portfolio value)
(3.3% of portfolio value)
The largest lithium battery maker A city bank focused on lending
in the world with leading technology to small and medium enterprises
and supply chain advantage, set in the affluent Ningbo-Zhejiang
to benefit from the rise of electric region. The bank has shown superior
vehicles and energy storage. returns and asset quality over
the years.
Meituan AIA Group Ltd
(3.0% of portfolio value) (2.9% of portfolio value)
A diversified online services A leading pan-Asian life insurance
platform with over 400 million company, it is poised to take
users, offering services including advantage of Asia's growing affluence,
food delivery, travel bookings backed by an effective agency
and wedding planning. It is optimally sales force and a strong balance
placed to capture rising consumption sheet.
in mainland China.
JD.com Inc China Tourism Group Duty Free
(2.3% of portfolio value) Corp Ltd
(2.3% of portfolio value)
An online retailer with an edge China's largest duty-free operator
in its strong logistics network. that is well placed to benefit
The company has shown improving from supportive government policy
corporate governance and management and
quality over the years. rising demand for duty-free cosmetics
on the mainland.
Investment Portfolio
As at 30 April 2023
================================ =============================== ========= =====
Value Value
Company Industry (sub-sector) (GBP'000) (%)
================================ =============================== ========= =====
Tencent Holdings Ltd Interactive Media & Services 25,037 9.6
================================ =============================== ========= =====
Kweichow Moutai Co Ltd (A) Beverages 16,517 6.3
================================ =============================== ========= =====
Alibaba Group Holding Ltd Broadline Retail 13,449 5.2
================================ =============================== ========= =====
China Merchants Bank Co Ltd
(H) Banks 10,050 3.9
================================ =============================== ========= =====
Contemporary Amperex Technology
Co Ltd (A) Electrical Equipment 8,586 3.3
================================ =============================== ========= =====
Bank of Ningbo Co Ltd (A) Banks 8,505 3.3
================================ =============================== ========= =====
Meituan Dianping - Class B Hotels, Restaurants & Leisure 7,761 3.0
================================ =============================== ========= =====
AIA Group Ltd Insurance 7,520 2.9
================================ =============================== ========= =====
JD.com Inc - Class A Broadline Retail 6,158 2.3
================================ =============================== ========= =====
China Tourism Group Duty Free
Corp Ltd (AH) Specialty Retail 5,981 2.3
-------------------------------- ------------------------------- --------- -----
Top ten investments 109,564 42.1
----------------------------------------------------------------- --------- -----
Hong Kong Exchanges & Clearing
Ltd Capital Markets 5,356 2.1
================================ =============================== ========= =====
Ping An Bank Co Ltd (A) Banks 5,109 2.0
================================ =============================== ========= =====
Textiles, Apparel & Luxury
Li Ning Co Ltd Goods 4,796 1.8
================================ =============================== ========= =====
NetEase Inc Entertainment 4,790 1.8
================================ =============================== ========= =====
Wanhua Chemical Group Co Ltd
(A) Chemicals 4,755 1.8
================================ =============================== ========= =====
Sungrow Power Supply Co Ltd
(A) Electrical Equipment 4,697 1.8
================================ =============================== ========= =====
Shenzhen Mindray Bio-Medical Health Care Equipment &
Electronics Co Ltd (A) Supplies 4,655 1.8
================================ =============================== ========= =====
Proya Cosmetics Co Ltd (A) Personal Care Products 4,629 1.8
================================ =============================== ========= =====
Aier Eye Hospital Group Co Health Care Providers &
Ltd Services 4,622 1.8
================================ =============================== ========= =====
PDD Holdings Inc Broadline Retail 4,555 1.8
-------------------------------- ------------------------------- --------- -----
Top twenty investments 157,528 60.6
----------------------------------------------------------------- --------- -----
LONGi Green Energy Technology Semiconductors & Semiconductor
Co Ltd (A) Equipment 4,317 1.7
================================ =============================== ========= =====
Centre Testing International
Group Co Ltd Consulting Services 4,249 1.6
================================ =============================== ========= =====
Sinoma Science & Technology
Co Ltd (A) Chemicals 4,097 1.6
================================ =============================== ========= =====
Health Care Providers &
Wuxi Biologics Cayman Inc Services 3,903 1.5
================================ =============================== ========= =====
Glodon Co Ltd (A) Software 3,869 1.5
================================ =============================== ========= =====
Fuyao Glass Industry Group
Co Ltd (H) Automobile Components 3,828 1.5
================================ =============================== ========= =====
Real Estate Management
China Resources Land Limited & Development 3,785 1.5
================================ =============================== ========= =====
Foshan Haitian Flavouring
& Food Co Ltd (A) Food Products 3,776 1.4
================================ =============================== ========= =====
Real Estate Management
China Vanke Co Ltd & Development 3,763 1.4
================================ =============================== ========= =====
Inner Mongolia Yili Industrial
Group Co Ltd (A) Food Products 3,602 1.4
-------------------------------- ------------------------------- --------- -----
Top thirty investments 196,717 75.7
----------------------------------------------------------------- --------- -----
By-health Co Ltd (A) Personal Care Products 3,488 1.3
================================ =============================== ========= =====
Midea Group Co Ltd (A) Household Durables 3,452 1.3
================================ =============================== ========= =====
Shanghai M&G Stationery Inc
(A) Commercial Services & Supplies 3,349 1.3
================================ =============================== ========= =====
Hefei Meiya Optoelectronic
Technology Inc (A) Machinery 3,343 1.3
================================ =============================== ========= =====
Chacha Food Co Ltd (A) Food Products 3,315 1.3
================================ =============================== ========= =====
Nari Technology Co Ltd (A) Electrical Equipment 3,299 1.3
================================ =============================== ========= =====
Hundsun Technologies Inc (A) Software 3,210 1.2
================================ =============================== ========= =====
Zhejiang Weixing New Building
Materials Co Ltd (A) Building Products 3,157 1.2
================================ =============================== ========= =====
Venustech Group Inc (A) Software 2,945 1.1
================================ =============================== ========= =====
Amoy Diagnostics Co Ltd (A) Biotechnology 2,865 1.1
-------------------------------- ------------------------------- --------- -----
Top forty investments 229,140 88.1
----------------------------------------------------------------- --------- -----
Semiconductors & Semiconductor
Silergy Corp Equipment 2,733 1.1
================================ =============================== ========= =====
Shenzhou International Group Textiles, Apparel & Luxury
Holdings Ltd Goods 2,672 1.0
================================ =============================== ========= =====
Jiangsu Hengrui Medicine Co
Ltd (A) Pharmaceuticals 2,576 1.0
================================ =============================== ========= =====
Yunnan Energy New Material
Co Ltd (A) Chemicals 2,576 1.0
================================ =============================== ========= =====
Estun Automation Co Ltd (A) Machinery 2,508 1.0
================================ =============================== ========= =====
Maxscend Microelectronics Electronic Eqpt Instruments
Co Ltd (A) & Components 2,501 1.0
================================ =============================== ========= =====
StarPower Semiconductor Ltd Semiconductors & Semiconductor
(A) Equipment 2,393 0.9
================================ =============================== ========= =====
China Meidong Auto Holdings
Ltd Specialty Retail 2,188 0.8
================================ =============================== ========= =====
Luxshare Precision Industry Electronic Eqpt Instruments
Co Ltd & Components 1,991 0.8
================================ =============================== ========= =====
Hangzhou Tigermed Consulting
Co Ltd (H) Life Sciences Tools & Services 1,899 0.7
-------------------------------- ------------------------------- --------- -----
Top fifty investments 253,177 97.4
----------------------------------------------------------------- --------- -----
OPT Machine Vision Tech Co Electronic Eqpt Instruments
Ltd & Components 1,863 0.7
================================ =============================== ========= =====
Yantai China Pet Foods Co
Ltd (A) Food Products 1,772 0.7
================================ =============================== ========= =====
Zai Lab Ltd Biotechnology 1,549 0.6
================================ =============================== ========= =====
Komodo Fund Unit Trusts 1,049 0.4
================================ =============================== ========= =====
Wuliangye Yibin Co Ltd (A) Beverages 559 0.2
-------------------------------- ------------------------------- --------- -----
Total investments 259,969 100.0
----------------------------------------------------------------- --------- -----
Sector Breakdown as at 30 April 2023
Percentage
------------------------ -----------
Consumer Discretionary 21.1
Consumer Staples 14.5
Financials 14.4
Industrials 12.8
Communication Services 11.5
Information Technology 9.9
Healthcare 8.5
Materials 4.4
Real Estate 2.9
Case Studies of Engagement Activity
Chacha Food
(1.3% of portfolio value)
Chacha Food Company Limited ("Chacha") has been a leading player
in China's sizeable packaged roasted seeds and nuts market since it
was founded in 1996. Its main products include sunflower,
watermelon and pumpkin seeds, beans, pistachios, walnuts, almonds,
and other nut products. The seeds segment has a market share in
excess of 50%, and accounts for 70% of
Chacha's sales.
Following management and strategy changes, including the return
of a former chairman, we believe that Chacha is well-positioned for
further growth. Its superior product quality, nimble organisational
structure, strong branding, and deep-rooted distribution channels
should support its growth trajectory in a fast-changing snack
market.
Recently, we engaged with Chacha to understand its
risk-management policies better, and to encourage it to produce a
standalone Environmental, Social and Governance ("ESG") report.
During our engagements, we were impressed with Chacha's daily
operations and its efforts to improve its ESG disclosure and
business integration.
Chacha has recently released its first ESG report. Within the
report, Chacha described its improving processes, including the use
of recyclable packaging, water-saving efforts in the manufacturing
process, improvements in supply-chain management and resulting
client satisfaction scores.
We believe that this additional insight into Chacha will result
in MSCI upgrading its ESG rating. We continue to work with Chacha
to help improve these non-financial disclosures over time.
Shanghai M&G Stationery
(1.3% of portfolio value)
Shanghai M&G Stationery Inc ("SM&GS") is a leading
stationery brand in China with a market share of around 7%.
SM&GS manufactures and sells student and office stationery in
three business lines:
-- Stationery business - which accounts for close to half of
overall sales.
-- Office-supply business - an emerging business-to-business arm
that trades under the Colipu brand and generates over 40% of
sales.
-- Zakka business - an emerging retail business with over 500
stores, operating under the M&G Life and M&G Shops
brands.
In 2021, we were the first investor to engage with SM&GS on
its ESG practices. We held multiple discussions with the SM&GS
team on its management of chemical safety, anti-corruption and
bribery practices and carbon emissions, as well as external ESG
scores and disclosures.
Following our engagements, SM&GS released its first ESG
report in 2022. Based on our suggestions, it has built up its
sustainability strategy and implemented it across its business
units. The company has improved in key areas including chemical
safety, by replacing and reducing its reliance upon substances
which are not sustainable. In supply chain management, it has
established ESG targets and introduced plans for its suppliers. It
has created a business conduct and anti-corruption system and
introduced enhanced disclosures.
SM&GS has established a highly competitive business, with
potential for further growth. The outlook for office stationery
supply is positive, and SM&GS is well-positioned to build upon
the rapid growth already experienced in its direct supply business.
We expect the company to benefit from its investments in recent
years. It is well placed to capitalise on the structural domestic
consumer trend towards premium products as disposable incomes
continue to rise. This is underpinned by its R&D expenditure
and premium product development, shared retail capabilities and
timely consumer insights.
Interim Management Report and Directors' Responsibility
Statement
The Chairman's Statement and the Investment Manager's Review
provide details on the performance of the Company. Those reports
also include an indication of the important events that have
occurred during the first six months of the financial year ending
31 October 2023 and the impact of those events on the condensed
unaudited financial statements included in this Half-Yearly
Financial Report.
Details of investments held and the sector breakdown at the
Period end is shown above.
Principal Risks, Emerging Risks and Uncertainties
The Board has an ongoing process for identifying, evaluating and
managing the principal and emerging risks and uncertainties facing
the Company. The Board has carried out a robust review of these
risks. Most of the principal risks and uncertainties are market
related and are no different from those of other investment trusts
that primarily invest in Chinese equities. These are contained
within the Annual Report for the year ended 31 October 2022 and
comprise the following risk categories:
-- Risks relating to the Company;
-- Risks relating to the investment policy;
-- Risks relating to the Manager/Investment Manager;
-- Risks relating to regulation, taxation and the Company's
operating environment;
-- Internal Risks;
-- Emerging Risks; and
-- Failure to manage premium and/or discount.
The Board continues to monitor closely the political and
economic uncertainties which could affect markets, particularly the
heightened interest rate risk and the knock-on impact of the
collapse of the likes of Silicon Valley Bank, Credit Suisse and
First Republic Bank. The Board also considers the impact of
geopolitical risk on the Company and its portfolio, including the
ongoing tensions between China and Taiwan, China and the West, and
potential sanctions, as well as the ongoing war in Ukraine.
The Board is also very conscious of the risks emanating from
increasing Environmental, Social and Governance ("ESG") challenges
together with climate change and continues to monitor, through its
Investment Manager, the potential risk that investee companies may
fail to keep pace with the rates of ESG and Climate Change
adaptation and mitigation that are required.
Going Concern
In accordance with the FRC's Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting, the
Directors have undertaken a rigorous review of the Company's
ability to continue as a going concern.
The Company's assets consist substantially of equity shares in
companies listed on recognised stock exchanges and in most
circumstances are realisable within a short timescale. The Company
has adequate resources to continue in operational existence for the
foreseeable future and the ability to meet all its liabilities and
ongoing expenses from its assets.
The Directors are mindful of the principal and emerging risks
and uncertainties disclosed above, and review on a regular basis
forecasts detailing revenue and liabilities and the Company's
operational expenses. Having reviewed these matters, the Directors
believe that the Company has adequate financial resources to
continue its operational existence for the foreseeable future and
for at least 12 months from the date of this Half Yearly Report.
Accordingly, they continue to adopt the going concern basis in
preparing the Half Yearly Report.
Related Party Transactions
There have been no material changes in the related party
transactions described in the 2022 Annual Report. A summary of
changes to the Company's Service Providers during the Period is set
out in the Chairman's Statement. Please also see the Related Party
Disclosures in note 10 to the financial statements.
Responsibility Statement of the Directors in respect of the
Half-Yearly Financial Report
The Disclosure Guidance and Transparency Rules require the
Directors to confirm their responsibilities in relation to the
preparation and publication of the Interim Management Report and
Financial Statements.
The Directors confirm that to the best of their knowledge:
-- The condensed set of financial statements contained within
the Half Yearly financial report has been prepared in accordance
with IAS 34 Interim Financial Reporting and gives a true and fair
view of the assets, liabilities, financial position and return of
the Company for the period ended 30 April 2023.
-- The Interim Management Report, together with the Chairman's
Statement and Investment Manager's Review, includes a fair review
of the information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements, and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first
six months of the financial year and that have materially affected
the financial position or performance of the Company during that
period, and any changes in the related party transactions described
in the last Annual Report that could do so.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website, but not for the content of any information
included on the website that has been prepared or issued by third
parties, and for the preparation and dissemination of financial
statements. Legislation in Guernsey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The Half-Yearly Financial Report was approved by the Board and
the above Directors' Responsibility Statement was signed on its
behalf by the Chair.
For abrdn China Investment Company Limited
Helen Green
Chairman
27 June 2023
Condensed Unaudited Statement of Comprehensive Income
Six months ended Six months ended Year ended
30 April 2023 30 April 2022 31 October 2022
(unaudited) (unaudited) (audited)
======================= ==== ========================= ============================= =============================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================= ==== ======= ======= ======= ======= ========= ========= ======= ========= =========
Gains/(losses)
on investments - 33,044 33,044 - (82,328) (82,328) - (142,451) (142,451)
======================= ==== ======= ======= ======= ======= ========= ========= ======= ========= =========
Gains/(losses)
on currency movements - 283 283 - (508) (508) - (354) (354)
----------------------- ---- ------- ------- ------- ------- --------- --------- ------- --------- ---------
Net investment
gains/(losses) - 33,327 33,327 - (82,836) (82,836) - (142,805) (142,805)
======================= ==== ======= ======= ======= ======= ========= ========= ======= ========= =========
Investment income 604 - 604 452 - 452 4,108 - 4,108
======================= ==== ======= ======= ======= ======= ========= ========= ======= ========= =========
Investment management
fees 10 (947) - (947) (75) - (75) (1,020) - (1,020)
======================= ==== ======= ======= ======= ======= ========= ========= ======= ========= =========
Other expenses (616) - (616) (455) - (455) (913) - (913)
----------------------- ---- ------- ------- ------- ------- --------- --------- ------- --------- ---------
Operating (loss)/profit
before finance
costs and tax (959) 33,327 32,368 (78) (82,836) (82,914) 2,175 (142,805) (140,630)
======================= ==== ======= ======= ======= ======= ========= ========= ======= ========= =========
Finance costs 5 (182) - (182) (107) - (107) (109) - (109)
----------------------- ---- ------- ------- ------- ------- --------- --------- ------- --------- ---------
Operating (loss)/profit
before taxation (1,141) 33,327 32,186 (185) (82,836) (83,021) 2,066 (142,805) (140,739)
======================= ==== ======= ======= ======= ======= ========= ========= ======= ========= =========
Taxation 27 (56) (29) (36) - (36) (215) - (215)
----------------------- ---- ------- ------- ------- ------- --------- --------- ------- --------- ---------
Total (loss)/profit
and comprehensive
income for the
period (1,114) 33,271 32,157 (221) (82,836) (83,057) 1,851 (142,805) (140,954)
----------------------- ---- ------- ------- ------- ------- --------- --------- ------- --------- ---------
(Losses)/earnings
per Ordinary share
(pence) 6 (2.52)p 75.28p 72.76p (0.47)p (177.94)p (178.41)p 4.00p (308.70)p (304.70)p
----------------------- ---- ------- ------- ------- ------- --------- --------- ------- --------- ---------
The total column of this statement represents the Company' s Statement
of Comprehensive Income, prepared under IAS 34 Interim Financial Reporting.
The revenue and capital columns, including the revenue and capital
(losses)/earnings per Ordinary share data, are supplementary information
prepared under guidance published by the Association of Investment
Companies.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the
period.
The notes are an integral part of the condensed financial statements.
Condensed Unaudited Statement of Financial Position
As at As at As at
30 April 2023 30 April 2022 31 October
2022
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
================================== ==== ============= ============= ==========
Non-current assets
================================== ==== ============= ============= ==========
Investments at fair value through
profit or loss 259,969 283,012 224,064
================================== ==== ============= ============= ==========
Current assets
================================== ==== ============= ============= ==========
Cash and bank 5,722 13,433 8,534
================================== ==== ============= ============= ==========
Sales for future settlement - 1,555 -
================================== ==== ============= ============= ==========
Other receivables 174 6 56
---------------------------------- ---- ------------- ------------- ----------
5,896 14,994 8,590
---------------------------------- ---- ------------- ------------- ----------
Total assets 265,865 298,006 232,654
================================== ==== ============= ============= ==========
Current liabilities
================================== ==== ============= ============= ==========
Purchases for future settlement - (1,244) (222)
================================== ==== ============= ============= ==========
Other payables (551) (261) (564)
================================== ==== ============= ============= ==========
Finance costs payable (68) (43) (25)
================================== ==== ============= ============= ==========
Bank loan (12,181) - -
---------------------------------- ---- ------------- ------------- ----------
Total liabilities (12,800) (1,548) (811)
---------------------------------- ---- ------------- ------------- ----------
Net assets 253,065 296,458 231,843
---------------------------------- ---- ------------- ------------- ----------
Equity
================================== ==== ============= ============= ==========
Share capital 7 138,216 154,462 147,744
================================== ==== ============= ============= ==========
Capital reserve 119,603 147,708 87,739
================================== ==== ============= ============= ==========
Revenue reserve (4,754) (5,712) (3,640)
---------------------------------- ---- ------------- ------------- ----------
Equity shareholders' funds 253,065 296,458 231,843
---------------------------------- ---- ------------- ------------- ----------
Net assets per Ordinary share
(pence) 8 580.93 637.68 511.98
---------------------------------- ---- ------------- ------------- ----------
The notes are an integral part of the condensed financial statements.
Condensed Unaudited Statement of Changes in Equity
Six months ended 30 April 2023 (unaudited)
Share Capital Revenue
capital reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000
=============== ======================== ============= ======== ========= ======= ==========
Balance at 1 November 2022 147,744 87,739 (3,640) 231,843
========================================= ============= ======== ========= ======= ==========
Profit/(loss) for the period - 33,271 (1,114) 32,157
========================================= ============= ======== ========= ======= ==========
Buyback of shares 7 (9,528) - - (9,528)
========================================= ============= ======== ========= ======= ==========
Dividends paid 9 - (1,407) - (1,407)
----------------------------------------- ------------- -------- --------- ------- ----------
Balance at 30 April 2023 138,216 119,603 (4,754) 253,065
----------------------------------------- ------------- -------- --------- ------- ----------
Six months ended 30 April 2022 (unaudited)
Share Capital Revenue
capital reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000
============== ========================= ============= ======== ========= ======= ==========
Balance at 1 November 2021 148,735 230,544 (5,491) 373,788
========================================= ============= ======== ========= ======= ==========
Loss for the period - (82,836) (221) (83,057)
========================================= ============= ======== ========= ======= ==========
Scheme of reconstruction:
========================================= ============= ======== ========= ======= ==========
Ordinary shares issued 62,037 - - 62,037
==================================== ============= ======== ========= ======= ==========
Ordinary shares repurchased (55,291) - - (55,291)
==================================== ============= ======== ========= ======= ==========
Tender offer and share issue
costs 7 (177) - - (177)
==================================== ============= ======== ========= ======= ==========
Buyback of shares 7 (842) - - (842)
----------------------------------------- ------------- -------- --------- ------- ----------
Balance at 30 April 2022 154,462 147,708 (5,712) 296,458
----------------------------------------- ------------- -------- --------- ------- ----------
Year ended 31 October 2022 (audited)
Share Capital Revenue
capital reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000
============== ========================= ============= ======== ========= ======= ==========
Balance at 1 November 2021 148,735 230,544 (5,491) 373,788
========================================= ============= ======== ========= ======= ==========
(Loss)/profit for the year - (142,805) 1,851 (140,954)
========================================= ============= ======== ========= ======= ==========
Scheme of reconstruction:
========================================= ============= ======== ========= ======= ==========
Ordinary shares issued 62,037 - - 62,037
==================================== ============= ======== ========= ======= ==========
Ordinary shares repurchased (55,291) - - (55,291)
==================================== ============= ======== ========= ======= ==========
Tender offer and share issue
costs 7 (177) - - (177)
==================================== ============= ======== ========= ======= ==========
Buyback of shares 7 (7,560) - - (7,560)
----------------------------------------- ------------- -------- --------- ------- ----------
Balance at 31 October 2022 147,744 87,739 (3,640) 231,843
----------------------------------------- ------------- -------- --------- ------- ----------
The capital reserve at 30 April 2023 is split between realised gains
of GBP193,654,000 and unrealised losses of GBP74,051,000 (30 April
2022 - realised gains of GBP218,088,000 and unrealised losses of GBP70,380,000;
31 October 2022 - realised gains of GBP207,445,000 and unrealised losses
of GBP119,706,000).
The revenue reserve and realised element of the capital reserve represents
the amount of the Company's retained reserves.
The notes are an integral part of the condensed financial statements.
Condensed Unaudited Statement of Cash Flows
Six months Six months Year ended
ended ended
30 April 2023 30 April 2022 31 October
2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
================================================ ===== ============= ============= ============
Operating activities
================================================ ===== ============= ============= ============
Cash inflow from investment income 488 540 4,187
================================================ ===== ============= ============= ============
Cash outflow from management expenses (1,580) (868) (2,009)
================================================ ===== ============= ============= ============
Cash outflow from withholding tax (29) (36) (215)
------------------------------------------------ ----- ------------- ------------- ------------
Net cash (used in)/from operating activities (1,121) (364) 1,963
------------------------------------------------ ----- ------------- ------------- ------------
Cash flows from investing activities
================================================ ===== ============= ============= ============
Cash outflow from purchase of investments (55,608) (378,180) (446,496)
================================================ ===== ============= ============= ============
Cash inflow from disposal of investments 52,525 244,052 311,504
------------------------------------------------ ----- ------------- ------------- ------------
Net cash outflows from investing activities (3,083) (134,128) (134,992)
------------------------------------------------ ----- ------------- ------------- ------------
Cash flows from financing activities
================================================ ===== ============= ============= ============
Dividends paid (1,407) - -
================================================ ===== ============= ============= ============
Proceeds from bank borrowings 12,181 - -
================================================ ===== ============= ============= ============
Borrowing commitment fee and interest
charges (137) (98) (118)
================================================ ===== ============= ============= ============
Scheme of reconstruction(A) :
================================================ ===== ============= ============= ============
Ordinary shares issued - 3,257 3,257
================================================== ============= ============= ============
Ordinary shares repurchased - (55,291) (55,291)
================================================== ============= ============= ============
Tender offer and share issue costs - (388) (388)
================================================== ============= ============= ============
Buyback of shares (9,528) (842) (7,338)
------------------------------------------------ ----- ------------- ------------- ------------
Net cash inflow/(outflow) from financing
activities 1,109 (53,362) (59,878)
------------------------------------------------ ----- ------------- ------------- ------------
Decrease in cash and cash equivalents (3,095) (187,854) (192,907)
------------------------------------------------ ----- ------------- ------------- ------------
Analysis of changes in cash and cash
equivalents during the period
======================================================= ============= ============= ============
Opening balance 8,534 201,795 201,795
================================================ ===== ============= ============= ============
Decrease in cash and cash equivalents
as above (3,095) (187,854) (192,907)
================================================ ===== ============= ============= ============
Effect of foreign exchange 283 (508) (354)
------------------------------------------------ ----- ------------- ------------- ------------
Cash and cash equivalents at end of
period 5,722 13,433 8,534
------------------------------------------------ ----- ------------- ------------- ------------
(A) Actual proceeds received as a result of the Scheme of reconstruction
on 9 November 2021 amounted to GBP3,257,000 with the remainder being
received in the form of a UK Treasury Bill amounting to GBP57,980,000.
The UK Treasury Bill was immediately sold on 10 November 2021 and subsequently
deployed into Chinese equities.
The notes are an integral part of the condensed financial statements.
Selected Explanatory Notes to the Condensed Unaudited Financial
Statements
For the six-month period ended 30 April 2023
1. Reporting entity
abrdn China Investment Company Limited (the "Company") is a closed-ended
investment company, registered in Guernsey on 16 September 2009.
The Company's registered office is BNP Paribas House St Julian's
Avenue St Peter Port Guernsey GY1 1WA. The Company's Ordinary
shares have a premium listing on the London Stock Exchange and
commenced trading on 10 November 2009. The condensed interim financial
statements of the Company are presented for the six months ended
30 April 2023.
The Company invests in companies listed, incorporated or domiciled
in the People's Republic of China ("China"), or companies that
derive a significant proportion of their revenues or profits from
China operations or have a significant proportion of their assets
there. In furtherance of the investment policy, the portfolio
will normally consist principally of quoted equity securities
and depositary receipts although unlisted companies, fixed interest
holdings or other non-equity investments may be held. Investments
in unquoted companies will be made where the Manager has a reasonable
expectation that the company will seek a listing in the near future.
The portfolio is actively managed and may be invested in companies
of any size and in any sector.
Manager. Management of the Company's investment activities were
delegated to abrdn Hong Kong Limited by abrdn Fund Managers Limited
("aFML") during the Period.
Non-mainstream pooled investments ("NMPIs"). The Company currently
conducts its affairs so that the Ordinary shares issued by the Company
can be recommended by Independent Financial Advisers to ordinary
retail investors in accordance with the Financial Conduct Authority's
rules in relation to NMPIs and intends to continue to do so for
the foreseeable future.
2. Basis of preparation
Statement of compliance . The condensed interim financial statements
have been prepared in accordance with IAS 34 Interim Financial
Reporting and the Disclosure Guidance and Transparency Rules ("DTRs")
of the UK's Financial Conduct Authority. They do not include all
of the information required for full annual financial statements
and should be read in conjunction with the financial statements
of the Company as at and for the year ended 31 October 2022. The
financial statements of the Company as at and for the year ended
31 October 2022 were prepared in accordance with International
Financial Reporting Standards ("IFRS") as issued by the International
Accounting Standards Board ("IASB"). The accounting policies used
by the Company are the same as those applied by the Company in
its financial statements as at and for the year ended 31 October
2022.
Where presentational guidance set out in the Statement of Recommended
Practice (SORP") for Investment Companies issued by the Association
of Investment Companies ("AIC") in July 2022 is consistent with
the requirements of IFRS, the Directors have prepared the financial
statements on a basis compliant with the recommendations of the
SORP.
The "Total" column of the Condensed Unaudited Statement of Comprehensive
Income is the profit and loss account of the Company. The "Revenue"
and "Capital" columns provide supplementary information.
This report will be sent to shareholders and copies will be made
available to the public at the Company's registered office. It
will also be made available on the Company's website: www.abrdnchina.co.uk
.
Going concern. The Directors have adopted the going concern basis
in preparing the financial statements. The Board formally considered
the Company's going concern status at the time of the publication
of these financial statements and a summary of the assessment is
provided below.
Since the adoption of new investment policy, as approved by Shareholders
at the EGM held on 26 October 2021, the Board considered it appropriate
to reset the interval between Continuation Resolutions so that
the next Continuation Resolution will be put to Shareholders at
the annual general meeting of the Company to be held in 2027.
The Directors believe that the Company has adequate resources to
continue in operational existence for at least twelve months from
the date of approval of this document. In reaching this conclusion,
the Directors have considered the liquidity of the Company's portfolio
of investments as well as its cash position, income and expense
flows.
As at 30 April 2023, the Company held GBP5.7 million in cash and
GBP260.0 million in investments. It is estimated that approximately
99% of the investments held at the period end could be realised
in one month. The total operating expenses for the period ended
30 April 2023 were GBP1.6 million, which on an annualised basis
represented approximately 1.09% of average net assets during the
period. The Company also incurred 0.15% of finance costs. At the
date of approval of this Report, based on the aggregate of investments
and cash held, the Company has substantial operating expenses cover.
The Company's net assets at 26 June 2023 were GBP228.0 million.
The Company has a GBP15 million revolving credit facility with
Industrial and Commercial Bank of China, London Branch ("ICBC")
terminating in April 2024. As at 30 April 2023 GBP12,181,000 of
the ICBC was drawn down at an interest rate of 4.108%. The liquidity
of the Company's portfolio, as mentioned above, sufficiently supports
the Company's ability to repay its borrowings at short notice.
In light of the impact of the heightened interest rate risk and
geopolitical risk, the Directors have fully considered and assessed
the Company's portfolio of investments. A prolonged and deep market
decline could lead to falling values of the investments or interruptions
to cashflow. However, the Company currently has more than sufficient
liquidity available to meet any future obligations.
The Directors are satisfied that it is appropriate to adopt the
going concern basis in preparing the financial statements and,
after due consideration, that the Company is able to continue in
operation for a period of at least twelve months from the date
of approval of these condensed financial statements.
Equity and reserves
Share capital . Share capital represents the 1p nominal value of
the issued share capital plus any share premium arising from the
net proceeds of issuing shares less the aggregate cost of shares
repurchased (to be held in treasury or for cancellation).
Capital reserve . Profits achieved by selling investments and changes
in fair value arising upon the revaluation of investments that
remain in the portfolio are all charged to profit or loss in the
capital column of the Condensed Statement of Comprehensive Income
and allocated to the capital reserve. The capital reserve attributable
to realised profits is also used to fund dividend distributions.
Revenue reserve . The balance of all items allocated to the revenue
column of the Condensed Statement of Comprehensive Income in each
period is transferred to the Company's revenue reserve. The revenue
reserve is also used to fund dividend distributions.
Use of estimates, assumptions and judgements. The preparation of
the condensed interim financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the to make
judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Use of estimates and assumptions. Estimates and underlying assumptions
are reviewed on an on-going basis. Revisions to accounting estimates
are recognised in the period in which the estimates are revised
and in any future periods affected.
Classification and valuation of investments. Investments are designated
as fair value through profit or loss on initial recognition and
are subsequently measured at fair value. The valuation of such
investments requires estimates and assumptions made by the management
of the Company depending on the nature of the investments as described
below and fair value may not represent actual realisable value
for those investments.
Use of judgements. In respect of note 11, the determination of
what constitutes 'observable' requires significant judgement by
the Company. The Company considers observable data to be that market
data that is readily available, regularly distributed or updated,
reliable and verifiable, not proprietary and provided by independent
sources that are actively involved in the relevant market.
Adoption of new and revised standards. At the date of approval
of these condensed financial statements, there were no new or revised
standards or interpretations relevant to the Company which came
into effect.
3. Investments
As the Company's business is investing in financial assets with
a view to profiting from their total return in the form of increases
in fair value, financial assets are designated as fair value through
profit or loss on initial recognition. These investments are recognised
on the trade date of their acquisition at which the Company becomes
a party to the contractual provisions of the instrument. At this
time, the best evidence of the fair value of the financial assets
is the transaction price. Transaction costs that are directly attributable
to the acquisition or issue of the financial assets are charged
to profit or loss in the Statement of Comprehensive Income as a
capital item. Subsequent to initial recognition, investments designated
as fair value through profit or loss are measured at fair value
with changes in their fair value recognised in profit or loss in
the Statement of Comprehensive Income and determined by reference
to:
(i) investments quoted or dealt on recognised stock exchanges in
an active market are valued by reference to their market bid
prices;
(ii) investments other than those in (i) above which are dealt on
a trading facility in an active market are valued by reference
to broker bid price quotations, if available, for those investments;
(iii) investments in underlying funds, which are not quoted or dealt
on a recognised stock exchange or other trading facility or in
an active market, are valued at the net asset values provided
by such entities or their administrators. These values may be
unaudited or may themselves be estimates and may not be produced
in a timely manner. If such information is not provided, or is
insufficiently timely, the Investment Manager uses appropriate
valuation techniques to estimate the value of investments. In
determining fair value of such investments, the Investment Manager
takes into consideration relevant issues, which may include the
impact of suspension, redemptions, liquidation proceedings and
other significant factors. Any such valuations are assessed and
approved by the Directors. The estimates may differ from actual
realisable values;
(iv) investments which are in liquidation are valued at the estimate
of their remaining realisable value; and
(v) any other investments are valued at Directors' best estimate
of fair value.
Transfers between levels of the fair value hierarchy are recognised
as at the end of the reporting period during which the change has
occurred.
Investments are derecognised on the trade date of their disposal,
which is the point where the Company transfers substantially all
the risks and rewards of the ownership of the financial asset.
Gains or losses are recognised within profit or loss in the 'Capital'
column of the Condensed Statement of Comprehensive Income. The
Company uses the weighted average cost method to determine realised
gains and losses on disposal of investments.
4. Operating segments
IFRS 8, 'Operating segments' requires a 'management approach',
under which segment information is presented on the same basis
as that used for internal reporting purposes. The Board, as a whole,
has been determined as constituting the chief operating decision
maker of the Company. The Board has considered the requirements
of the standard and is of the view that the Company is engaged
in a single segment of business, which is investing predominantly
in Chinese equities. The key measure of performance used by the
Board is the Net Asset Value of the Company (which is calculated
under IFRS). Therefore, no reconciliation is required between the
measure of profit or loss used by the Board and that contained
in the financial statements.
The Board of Directors is responsible for ensuring that the Company's
objective and investment strategy is followed. The day-to-day implementation
of the investment strategy has been delegated to the Investment
Manager, but the Board retains responsibility for the overall direction
of the Company. The Board reviews the investment decisions of the
Investment Manager at regular Board meetings to ensure compliance
with the investment strategy and to assess the achievement of the
Company's objective. The Investment Manager has been given full
authority to make investment decisions on behalf of the Company
in accordance with the investment strategy and analyses markets
within a framework of quality, value, growth and change. The investment
policy employed by the Investment Manager ensures that diversification
within investments is taken into account when deciding on the size
of each investment so the Company's exposure to any one company
should never be excessive. The Company's positions are monitored
as a whole by the Board in monthly portfolio valuations and at
Board meetings. Any significant change to the Company's investment
strategy requires shareholder approval.
The Company has a diversified portfolio of investments and no single
investment accounted for more than 10% of the Company's net assets
at the Company's period end. The Investment Manager aims to identify
investments which it considers are likely to deliver consistent
capital growth over the longer term.
5. Bank loan and finance costs
In April 2022, the Company entered into a GBP15 million unsecured
multicurrency revolving loan facility with Industrial and Commercial
Bank of China, London Branch ("the Lender") for a two-year period.
The facility will be utilised for general working capital purposes
and for the acquisition of investments in accordance with the Company's
investment policy. Under the terms of the facility, the Company
also has the option to increase the level of the commitment from
GBP15 million to GBP30 million at any time, subject to the Lender's
credit approval.
During the Period, a total of CNH 106m was drawn down from the
facility in two tranches in December 2022 and January 2023, which
was equivalent to GBP12.2m as at 30 April 2023. At the Period end,
the applicable interest rate on the amounts drawn down was 4.11%.
Net gearing at the Period end was 2.6%.
Subsequent to the Period end, a further CNH 19.8m (equivalent to
the remaining GBP2.2m available from the facility) has been drawn
down.
Six months Six months
ended ended Year ended
30 April 2023 30 April 2022 31 October
2022
GBP'000 GBP'000 GBP'000
========================== ============= ============= ============= ============
Interest payable 152 66 70
========================== ================= ============= ============= ============
Facility arrangement fees and
other charges 30 41 39
========================================= ------------- ------------- ------------
Total finance costs 182 107 109
-------------------------- ----------------- ------------- ------------- ------------
At 30 April 2023, interest payable of GBP65,000 (30 April 2022
- GBP43,000; 31 October 2022 - GBPnil) was accrued in the Condensed
Unaudited Statement of Financial Position.
Restrictions imposed by the Lender in connection with the credit
facility include the following financial covenants:
a) Total borrowings do not exceed 20% of the total assets at any
time:
b) Its net asset value shall at all times be a minimum of GBP200
million; and
c) The aggregate value of the unlisted investments does not exceed
10% of the aggregate value of the investments at any time.
The Company does not have any externally imposed capital requirements
other than disclosed above.
6. Earnings/(losses) per Ordinary
share
==================================== ============= ============= ==========
Six months Six months Year ended
ended ended
30 April 2023 30 April 2022 31 October
2022
pence pence pence
==================================== ============= ============= ==========
Revenue return (2.52) (0.47) 4.00
======================================== ============= ============= ==========
Capital return 75.28 (177.94) (308.70)
---------------------------------------- ------------- ------------- ----------
Total return 72.76 (178.41) (304.70)
---------------------------------------- ------------- ------------- ----------
The figures above are based on
the following:
Six months Six months Year ended
ended ended
30 April 2023 30 April 2022 31 October
2022
GBP'000 GBP'000 GBP'000
==================================== ============= ============= ==========
Revenue return (1,114) (221) 1,851
======================================== ============= ============= ==========
Capital return 33,271 (82,836) (142,805)
---------------------------------------- ------------- ------------- ----------
Total return 32,157 (83,057) (140,954)
---------------------------------------- ------------- ------------- ----------
Weighted average number of Ordinary
shares in issue(A) 44,194,416 46,552,649 46,260,167
---------------------------------------- ------------- ------------- ----------
(A) Excluding shares held in
treasury.
7. Share capital
=============================== ========== ======== ========== =========== ==========
Ordinary Ordinary
shares Allotted, shares
of 1p with
nominal issued voting Treasury
value and
Six month ended 30 April Authorised GBP'000 fully rights(A) shares
2023 paid
=============================== ========== ======== ========== =========== ==========
Opening number of shares Unlimited 622 62,172,947 45,283,575 16,889,372
=================================== ========== ======== ========== =========== ==========
Purchase of own shares - - - (1,721,633) 1,721,633
----------------------------------- ---------- -------- ---------- ----------- ----------
Closing number of shares Unlimited 622 62,172,947 43,561,942 18,611,005
----------------------------------- ---------- -------- ---------- ----------- ----------
Ordinary Ordinary
shares Allotted, shares
of 1p with
nominal issued voting Treasury
value and
Six month ended 30 April Authorised GBP'000 fully rights(A) shares
2022 paid
=============================== ========== ======== ========== =========== ==========
Opening number of shares Unlimited 546 54,618,507 45,965,159 8,653,348
=================================== ========== ======== ========== =========== ==========
Scheme of reconstruction:
=============================== ========== ======== ========== =========== ==========
Ordinary shares issued - 76 7,554,440 7,554,440 -
=================================== ========== ======== ========== =========== ==========
Ordinary shares repurchased - - - (6,894,773) 6,894,773
=================================== ========== ======== ========== =========== ==========
Purchase of own shares - - - (134,749) 134,749
----------------------------------- ---------- -------- ---------- ----------- ----------
Closing number of shares Unlimited 622 62,172,947 46,490,077 15,682,870
----------------------------------- ---------- -------- ---------- ----------- ----------
Ordinary Ordinary
shares Allotted, shares
of 1p with
nominal issued voting Treasury
value and
Year ended 31 October 2022(B) Authorised GBP'000 fully rights(A) shares
paid
=============================== ========== ======== ========== =========== ==========
Opening number of shares Unlimited 546 54,618,507 45,965,159 8,653,348
=================================== ========== ======== ========== =========== ==========
Scheme of reconstruction:
=============================== ========== ======== ========== =========== ==========
Ordinary shares issued - 76 7,554,440 7,554,440 -
=================================== ========== ======== ========== =========== ==========
Ordinary shares repurchased - - - (6,894,773) 6,894,773
=================================== ========== ======== ========== =========== ==========
Purchase of own shares - - - (1,341,251) 1,341,251
----------------------------------- ---------- -------- ---------- ----------- ----------
Closing number of shares Unlimited 622 62,172,947 45,283,575 16,889,372
----------------------------------- ---------- -------- ---------- ----------- ----------
(A) Excluding treasury shares.
(B) Audited.
Scheme of Reconstruction . On 9 November 2021, the Company completed
and announced a Scheme of Reconstruction (the "Scheme"). As a result
of the Scheme, the change in Ordinary share capital of the Company
was as follows:
Share issue - The Company acquired approximately GBP62 million
of net assets from Aberdeen New Thai Investment Trust PLC in consideration
for the issue of 7,554,440 new Ordinary shares in the Company.
Tender Offer - A total of 6,894,773 Ordinary shares were repurchased
by the Company on 10 November 2021 under the Tender Offer and held
in treasury at an aggregate cost to the Company of GBP55 million.
The costs incurred in implementing the Scheme amounted to GBP1,058,000.
Share capital account . The aggregate balance (including share
premium) standing to the credit of the share capital account at
30 April 2023 was GBP138,216,000 (30 April 2022 - GBP154,462,000;
31 October 2022 - GBP147,444,000)
Purchase of own shares. There were 1,721,633 Ordinary shares purchased
during the six months ended 30 April 2023 (six months ended 30
April 2022 - 134,749; year ended 31 October 2022 - 1,341,251) at
an aggregate cost to the Company of GBP9,528,000 (six months ended
30 April 2022 - GBP842,000; year ended 31 October 2022 - GBP7,560,000).
8. Net asset value per Ordinary share
Net asset value per Ordinary share is based on net assets of GBP253,065,000
(30 April 2022 - GBP296,458,000; 31 October 2022 - GBP231,843,000)
divided by 43,561,942 (30 April 2022 - 46,490,077; 31 October 2022
- 45,283,575) Ordinary shares in issue (excluding treasury shares)
at the period end.
The table below is a reconciliation between the NAV per Ordinary
share announced on the London Stock Exchange and the NAV per Ordinary
share disclosed in these condensed financial statements
As at 30 April As at 30 April As at 31 October
2023 2022 2022
========================== ==================== ==================== ====================
NAV per NAV per NAV per
Ordinary Ordinary Ordinary
Net assets share Net assets share Net assets share
GBP'000 p GBP'000 p GBP'000 p
========================== ========== ======== ========== ======== ========== ========
Published NAV 253,163 581.16 296,611 638.01 231,843 511.98
============================== ========== ======== ========== ======== ========== ========
Revaluation adjustments -
delayed prices (98) (0.23) (153) (0.33) - -
------------------------------ ---------- -------- ---------- -------- ---------- --------
NAV as disclosed in these
financial statements 253,065 580.93 296,458 637.68 231,843 511.98
------------------------------ ---------- -------- ---------- -------- ---------- --------
9. Dividends paid
On 17 March 2023, the Company paid to Shareholders the Interim
dividend of 3.2p per Ordinary share in respect of the Financial
Year ended 31 October 2022, amounting to GBP1,407,000.
No dividend was paid for the Period (six months ended 30 April
2022 - nil; year ended 31 October 2022 - 3.20p paid on
17 March 2023).
10. Related party disclosures
Manager. Management fees payable are shown in profit or loss in
the Condensed Unaudited Statement of Comprehensive Income.
Total management fees of GBP947,000 (30 April 2022 - GBP75,000;
31 October 2022 - GBP1,020,000) were paid and payable to the Manager
for the period, with a balance of GBP295,000 (30 April 2022 - GBP75,000;
31 October 2022 - GBP291,000) being payable to the Manager at the
period end.
Following completion of the Scheme of Reconstruction, on 9 November
2021, the Company entered into a new management agreement (the
'Management Agreement') with abrdn Fund Managers Limited ('aFML'),
pursuant to which the management fee payable by the Company to
aFML will be calculated by reference to the market capitalisation
of the Company, rather than its net assets (as was the case previously).
The new management fee is structured on a tiered basis, with the
first GBP150 million of market capitalisation being charged at
0.80%, the next GBP150 million being charged at 0.75%. and amounts
thereafter being charged at 0.65%.
Furthermore, aFML agreed to make a contribution to the costs of
implementing the Scheme of Reconstruction by means of a waiver
of the management fee for the first six months following the completion
of the Scheme.
The Management Agreement is terminable by either party on not less
than six months' written notice at any time.
Investments held by the Company which are managed by the abrdn
Group . As at 30 April 2023, the Company held the following investments
managed by the abrdn Group:
As at As at As at
30 April 30 April 31 October
2023 2022 2022
GBP'000 GBP'000 GBP'000
======================== ====================== ========== ========== ============
Aberdeen Standard SICAV I - China
A Share Equity Fund - 8,907 -
------------------------------------------ --------- ---------- ---------- ------------
11. Fair value hierarchy
IFRS 13 requires the Company to classify its investments in a fair
value hierarchy that reflects the significance of the inputs used
in making the measurements. IFRS 13 establishes a fair value hierarchy
that prioritises the inputs to valuation techniques used to measure
fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). The three levels of fair value hierarchy
under IFRS 13 are as follows:
Level quoted prices (unadjusted) in active markets for identical
1 assets or liabilities;
Level inputs other than quoted prices included within Level 1 that
2 are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from
prices);
Level inputs for the asset or liability that are not based on observable
3 market data (that is, unobservable inputs).
The classification of the Company's investments held at fair value
as at 30 April 2023 is detailed in the table below:
30 April 30 April 31 October
2023 2022 2022
GBP'000 GBP'000 GBP'000
================================ ============== =========== =========== ===========
Instruments held at fair value
through profit and loss
================================================ =========== =========== ===========
Level 1 258,920 281,974 222,745
================================ =================== =========== =========== ===========
Level 2 - - -
================================ ============== =========== =========== ===========
Level 3 1,049 1,038 1,319
-------------------------------- ------------------- ----------- ----------- -----------
Total 259,969 283,012 224,064
-------------------------------- ------------------- ----------- ----------- -----------
The Company recognises transfers between levels of fair value hierarchy
as at the date of the period end in which the change occurred.
There were no investments transferred between levels during the
period (30 April 2022 and 31 October 2022 - GBPnil).
Level 1 classification basis. Investments, whose values are based
on quoted market prices in active markets, and therefore classified
within Level 1, include listed equities in active markets. The
Company does not adjust the quoted price for these instrument.
Level 2 classification basis. Investments that trade in markets
that are not considered to be active but are valued based on quoted
market prices, dealer quotations or alternative pricing sources
supported by observable inputs are classified within Level 2. These
include monthly priced investment funds. The underlying net asset
values of the openended funds included under Level 2 are prepared
using industry accepted standards and the funds have a history
of accepting and redeeming funds on a regular basis at net asset
value. The net asset values of regularly traded open ended funds
are considered to be reasonable estimates of the fair values of
those investments and such investments are therefore classified
within Level 2 if they do not meet the criteria for inclusion in
Level 1.
Level 3 classification basis. Investments classified within Level
3 have significant unobservable inputs, as they trade infrequently.
The level 3 figure consists of an investment in Komodo Fund. Komodo
Fund is valued at the unadjusted net asset values provided by the
administrator of that fund.
The movement on the level 3 classified investments is shown below:
Six months Six months Year to
to 30 April to 30 April 31 October
2023 2022 2022
GBP'000 GBP'000 GBP'000
================================ ============== =========== =========== ===========
Opening balance 1,319 1,358 1,358
================================ =================== =========== =========== ===========
Valuation adjustments(A) (270) (320) (39)
-------------------------------- ------------------- ----------- ----------- -----------
Closing balance 1,049 1,038 1,319
-------------------------------- ------------------- ----------- ----------- -----------
(A) Total gains and losses for the period included in profit or
loss relating to assets held at the end of the period.
12. Financial instruments - risk profile
The principal risks relating to financial instruments held by the
Company remain the same as at the Company's last financial year
end.
13. Post Balance Sheet events
Since the Period end, a further 484,714Ordinary shares have been
bought back and held in treasury at a cost of GBP2,326,000.
14. Half-Yearly Report
The financial information for the Period and for the six months
ended 30 April 2022 has not been audited.
KPMG Channel Islands Limited has reviewed the financial information
for the Period pursuant to the Auditing Practices Board guidance
on Review of Interim Financial Information.
15. This Half Yearly Financial Report was approved by the Board on
27 June 2023.
Alternative Performance Measures ("APMs")
Alternative performance measures are numerical measures of the Company's
current, historical or future performance, financial position or cash
flows, other than financial measures defined or specified in the applicable
financial framework. The Company's applicable financial framework includes
International Financial Reporting Standards and the Statement of Recommended
Practice issued by Association of Investment Companies. The Directors
assess the Company's performance against a range of criteria which
are viewed as particularly relevant for closed-end investment companies.
Discount to net asset value per Ordinary share
The discount is the amount by which the share price is lower than the
net asset value per share with debt at fair value, expressed as a percentage
of the net asset value.
30 April 2023 31 October
2022
============================================ =========== ============== ===========
NAV per Ordinary share a 580.93p 511.98p
============================================ =========== ============== ===========
Share price b 497.00p 448.00p
============================================ =========== ============== ===========
Discount (a-b)/a 14.4% 12.5%
-------------------------------------------- ----------- -------------- -----------
Net gearing/(cash)
Net gearing/(cash) measures the total borrowings less cash and cash
equivalents divided by shareholders' funds, expressed as a percentage.
Under AIC reporting guidance cash and cash equivalents includes amounts
due to and from brokers at the Period end.
30 April 2023 31 October
2022
============================================ =========== ============== ===========
Borrowings (GBP'000) a 12,181 -
============================================ =========== ============== ===========
Cash (GBP'000) 5,722 8,534
========================================================= ============== ===========
Amounts due to brokers (GBP'000) - (222)
========================================================= ============== ===========
Amounts due from brokers (GBP'000) - -
-------------------------------------------- ----------- -------------- -----------
Cash and cash equivalents b 5,722 8,312
-------------------------------------------- ----------- -------------- -----------
Shareholders' funds (GBP'000) c 253,065 231,843
-------------------------------------------- ----------- -------------- -----------
Net gearing/(cash) (a-b)/c 2.6% (3.6%)
-------------------------------------------- ----------- -------------- -----------
Ongoing charges
The ongoing charges ratio has been calculated in accordance with guidance
issued by the AIC as the total of annualised investment management
fees and administrative expenses and expressed as a percentage of
the average daily net asset values with debt at fair value published
throughout the year. The ratio for 30 April 2023 is based on forecast
ongoing charges for the year ending 31 October 2023.
30 April 2023 31 October
2022
============================================ =========== ============== ===========
Investment management fees(A) (GBP'000) 1,791 1,020
========================================================= ============== ===========
Administrative expenses(AB) (GBP'000) 1,138 913
========================================================= ============== ===========
Less: non-recurring charges (GBP'000) (15) -
--------------------------------------------------------- -------------- -----------
Ongoing charges (GBP'000) 2,914 1,933
--------------------------------------------------------- -------------- -----------
Average net assets (GBP'000) 268,179 319,519
--------------------------------------------------------- -------------- -----------
Ongoing charges ratio 1.09% 0.60%
--------------------------------------------------------- -------------- -----------
(A) The Ongoing charges ratio for the year to 31 October 2022 benefited
from a six-month waiver of the management fee charged by abrdn plc
and a 12 month waiver of marketing fees.
(B) The Company's ongoing charges figure does not reflect any costs
of the underlying funds as the underlying information is not readily
available.
The ongoing charges ratio provided in the Company's Key Information
Document is calculated in line with the PRIIPs regulations which amongst
other things, includes the cost of borrowings and transaction costs.
Total return
NAV and share price total returns show how the NAV and share price
has performed over a period of time in percentage terms, taking into
account both capital returns and dividends paid to shareholders. Share
price and NAV total returns are monitored against open-ended and closed-ended
competitors, and the Benchmark, respectively.
Six months ended 30 April 2023 NAV Share price
============================================ =========== ============== ===========
Opening at 1 November 2022 a 511.98p 448.00p
============================================ =========== ============== ===========
Closing at 30 April 2023 b 580.93p 497.00p
============================================ =========== ============== ===========
Price movements c=(b/a)-1 13.5% 10.9%
============================================ =========== ============== ===========
Dividend reinvestment(A) d 0.5% 0.6%
-------------------------------------------- ----------- -------------- -----------
Total return c+d 14.0% 11.5%
-------------------------------------------- ----------- -------------- -----------
Year ended 31 October 2022 NAV Share price
============================================ =========== ============== ===========
Opening at 1 November 2021 a 813.20p 695.00p
============================================ =========== ============== ===========
Closing at 31 October 2022 b 511.98p 448.00p
============================================ =========== ============== ===========
Price movements c=(b/a)-1 (37.0%) (35.5%)
============================================ =========== ============== ===========
Dividend reinvestment(A) d 0.0% 0.0%
-------------------------------------------- ----------- -------------- -----------
Total return c+d (37.0%) (35.5%)
-------------------------------------------- ----------- -------------- -----------
(A) NAV total return involves investing the net dividend in the NAV
of the Company with debt at fair value on the date on which that dividend
goes ex-dividend. Share price total return involves reinvesting the
net dividend in the share price of the Company on the date on which
that dividend goes ex-dividend.
By order of the Board
abrdn Holdings Limited
Company Secretary
27 June 2023
Please note that past performance is not necessarily a guide to
the future and the value of investments and the income from them
may fall as well as rise. Investors may not get back the amount
they originally invested
For further information please contact:
Evan Bruce-Gardyne
Client Director, Investment Trusts, abrdn
Tel: 07720 073216
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END
IR KDLFLXQLXBBB
(END) Dow Jones Newswires
June 28, 2023 02:00 ET (06:00 GMT)
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