REG - Baillie GiffordChina - Baillie Gifford China Growth Trust Interim Results
24/09/2025 07:00
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RNS Number : 5147A Baillie Gifford China Grwth TrstPLC 24 September 2025
RNS Announcement
Baillie Gifford China Growth Trust plc
Legal entity identifier: 213800KOK5G3XYI7ZX18
Regulated information classification: Interim financial report.
Results for the six months to 31 July 2025
The following is the unaudited Interim Financial Report for the six months to
31 July 2025 which was approved by the Board on 23 September 2025.
Summary of unaudited results*
31 January 2025
31 July 2025 (audited) % change
Total assets (before deduction of bank loans) £179.5m £159.2m
Bank loans £8.0m £6.1m
Shareholders' funds £171.5m £153.1m
Net asset value per ordinary share 294.53p 259.07p 13.7
Share price 265.50p 232.00p 14.4
Benchmark(†#) 8.4
Discount (9.9%) (10.4%)
Active share(‡) 65% 68%
Six months to Six months to
31 July 2025 31 July 2024
Revenue earnings per ordinary share 2.45p 2.40p
Six months to Six months to
31 July 2025 31 July 2024
Total returns (%)(#‡)
Net asset value per ordinary share 14.6 10.2
Share price 15.5 4.1
Benchmark(†) 10.3 12.0
Six months to 31 July 2025 Year to 31 January 2025
Period's high and low High Low High Low
Net asset value per ordinary share 304.07p 255.52p 285.19p 193.64p
Share price 285.00p 223.00p 253.00p 176.00p
(Discount)/premium‡ (6.1%) (14.8%) (6.3%) (15.7%)
Notes
* For a definition of terms see Glossary of terms and alternative
performance measures below.
† The benchmark is the MSCI China All Shares Index (in sterling terms).
# Source: Baillie Gifford/LSEG and relevant underlying index providers. See
disclaimer below.
‡ Alternative performance measure see Glossary of terms and alternative
performance measures below.
Past performance is not a guide to future performance.
Chair's statement
Introduction
The Board believe that the Company has a unique investment strategy with a
growth style, investment in unlisted companies, prudent gearing, a competitive
cost and a commitment to discount management. The six months to 31 July 2025
was a period where all of these components contributed to deliver a strong
performance for shareholders.
Key Performance Indicators ('KPIs')
It is pleasing to report positive progress on the Baillie Gifford China Growth
Trust (the 'Company') KPIs in the six months to 31 July 2025*.
The NAV per share total return ('NAV TR') was 14.6% and outperformed the
benchmark by 4.3%. The share price total return was 15.5% and outperformed the
benchmark by 5.2% and therefore the discount reduced marginally to 9.9% (10.4%
on 31 January 2025). The Ongoing Charges Ratio is calculated at the end of the
financial year and was 1.12% for the year ended 31 January 2025.
In November 2024, the Company announced a performance related Conditional
Tender Offer (the 'CTO') based on performance in the four-year period to 30
November 2028, detailed on page 10 of the Company's Annual Report and
Financial Statements for the year to 31 January 2025. In the eight-month
period 1 December to 31 July 2025 the NAV TR has outperformed the benchmark by
4.7%.
The very strong performance in the past year (NAV TR of 40.8% in year to 31
July 2025, outperforming the benchmark by 10.5%) is therefore steadily
recouping the underperformance since the mandate change. From the mandate
change to Baillie Gifford in September 2020 until 31 July 2025, the Company
NAV TR and share price total return has underperformed the benchmark by 9.9%
and 14.7%, respectively.
Total Return Performance(†)
Six months Since Since
to 31 July announcement Mandate
2025 of Conditional change (‡)
Tender Offer (#) 31 July
to 31 July 2025
2025
NAV TR (%) 14.6 18.9 -20.8
Share price TR (%) 15.5 22.9 -26.8
Benchmark TR(¶) (%) 10.3 14.2 -11.5
Whilst Baillie Gifford's investment time horizon is five to ten years, it is
very encouraging that the Manager has outperformed the benchmark since August
2024, when conditions for growth investing in China have been favourable and
despite the volatility created by geopolitics.
Investment Performance
The principal contributors to outperformance were Pop Mart, Zhongji Innolight,
Tencent and Zijin Mining. The Company has one unlisted investment, ByteDance,
which was revalued upwards in the period, and was also a significant
contributor to outperformance. The main detractors were Meituan and Zhejiang
Sanhua Intelligent Controls, as well as Xiaomi and China Construction Bank,
which are in the benchmark but not in the portfolio. Portfolio turnover
remained in line with the long run average at less than 20% and the main
changes to the portfolio were purchases of ANTA Sports Products and Yangtze
Power and a reduction in Meituan. Net gearing remained prudent at 4% at 31
July 2025 and made a small contribution to NAV performance (net gearing 3% at
31 January 2025).
More detail about Investment Performance can be found in the Interim
management report below.
Discount and Premium Management
Over the six months to 31 July 2025 the company bought back 0.87m shares at an
average discount of 10.6%, representing 1.5% of the Company's share capital
excluding shares held in Treasury at 31 January 2025. The buyback therefore
marginally enhanced NAV total return. In the long run the solution to the
discount of NAV relative to the share price is better investment performance.
In the short run, the buyback is a key tool to address the continuing
discount, together with the performance related CTO in 2028 and ongoing
marketing of the Company.
Marketing
The Board co-funds marketing with Baillie Gifford. In a new initiative the
Board wrote to shareholders on investment platforms to invite them to sign up
for updates from the Investment Manager, including webinars and newsletters.
If you are not already signed up but would like to do so, please scan the QR
code on the back cover of the interim report.
Share Premium Account
Shareholders supported a proposal at the 2025 Annual General Meeting in June
2025 to cancel the Company's substantial share premium account, which is
non-distributable. The cancellation of the share premium account was completed
in August 2025 and has been credited to distributable reserves. This will
provide the Board with flexibility to use such distributable reserves should
it wish to do so for shareholder distributions (such as share buybacks or
dividends) in the future.
Dividend
The Company pays only a single full-year dividend, which is declared with the
annual results. Therefore, no dividend for the half-year has been declared.
Outlook
Recently, conditions for growth investing in China have been supported by an
outline China-US trade deal, China government stimulus to stabilise the
economy and ongoing state support for the private sector. More notable for
Baillie Gifford's concentrated portfolio of growth stocks is mounting evidence
of Chinese companies' leadership in EVs, e-commerce and AI. Portfolio holdings
such as BYD, ByteDance (owner of TikTok), PDD (owner of Temu), CATL, Meituan
and Pop Mart have all achieved global recognition. Equally, the volatility in
the Company's share price in spring 2025, caused by US-China tensions, is a
reminder of lingering geopolitical uncertainties and persisting deflation
worries. The valuation of the portfolio is therefore an important margin of
safety. Whilst the benchmark's valuation has increased since August 2024 to
around the average of the long-term history, and the portfolio's average price
earnings ratio is higher than the benchmark, the Company's holdings are
forecasted to deliver nearly double the benchmark's earnings growth over the
next three years with significantly higher profitability. Furthermore, the
portfolio also trades at a substantial discount to global equities. The Board
continues to believe that a holding in the Company remains an attractive part
of an investor's allocation to global equities in the long term.
Nicholas Pink
Chair
23 September 2025
* The Company has four KPIs:
• Net Asset Value per share total return ('NAV TR')
relative to the benchmark
• Share price total return relative to the benchmark
• The discount of the share price to Net Asset Value
('the discount')
• The Ongoing Charges Ratio ('OCR')
† Source: LSEG/Baillie Gifford and relevant underlying index providers.
See disclaimer below. All figures are stated on a total return basis. Total
return and discount are alternative performance measures - see Glossary of
terms and alternative performance measures below.
# The Company announced the introduction of a performance related tender
offer (the 'Conditional Tender Offer') from 29 November 2024.
‡ Baillie Gifford & Co Limited were appointed as Managers and
Company Secretaries on 16 September 2020.
¶ The benchmark is the MSCI China All Shares Index (in sterling terms).
For a definition of terms see Glossary of terms and alternative performance
measures below.
Past performance is not a guide to future performance.
Interim management report
In the first half of our financial year 2025, Chinese equities continued their
robust performance with the MSCI China All Shares Index rising 10.3%. The
Company outperformed its benchmark in net asset value (NAV) and share price
terms, rising 14.6% and 15.5% respectively.
Returns for the period were driven by several factors, including a
continuation of macroeconomic measures to stimulate the economy, the robust
performance of both exports and the industrial base, clear political support
for the private sector, and breakthroughs in AI.
In terms of the Company's NAV, the operational performance of its holdings was
strong, with the portfolio delivering earnings growth close to 80% faster than
the MSCI China All Shares index*.
Whilst the benchmark has now reached a 3-year high, the portfolio is now
almost twice as profitable as it was three years ago, while its valuation
premium over the benchmark has fallen, and its forecast growth premium has
risen(†). In lay terms, the portfolio is more profitable, higher growth, and
significantly cheaper relative to 2022.
The Macroeconomic Backdrop
The Chinese government largely delivered on its 2024 promises to further
stimulate the economy. Premier Li Qiang's Annual Government Work Report
outlined a real gross domestic product (GDP) growth target of 5% for 2025 with
a fiscal stance that is the most expansionary in recent history. Real GDP
growth in the first two quarters of 2025 was above target. Positive
contributors included industrial production and exports. Continued weakness in
the property market and persistent deflation remained headwinds.
Even with higher U.S. tariffs and soft global demand, China's export engine
proved more resilient than expected, contributing around 1.2 percentage
points to GDP growth in Q2. China's march up the value chain continues with
exports increasingly driven by high-value sectors such as semiconductors,
advanced machinery, and autos. Geographical diversification also continues at
pace with trade to countries outside of the US growing strongly. BYD - a
portfolio holding - is a case in point. In Q1, BYD exported 214,000 vehicles,
marking 117% YoY growth, and topped sales charts in seven markets, including
Brazil, Thailand, Australia and the UK. Indeed, it plans to double overseas
sales to 800,000 vehicles in 2025 with targeted expansion into Latin America,
Southeast Asia and Europe.
China's export success is not only in hard goods, but increasingly in
pop-culture and creative intellectual property. Pop Mart, a holding in the
portfolio, has seen its overseas sales grow nearly 480% YoY in Q1, driven by
explosive demand for its Labubu collectible. Indeed, in the UK, outlets were
forced to pause in-store sales due to long queues and crowd issues after the
character went viral across TikTok. This follows on from earlier cultural
breakthroughs by Chinese companies in video games, where titles such as Black
Myth: Wukong and Genshin Impact have sold millions of copies globally. And
beyond toys and games, China's 'new-style tea' chains are also going global -
with Heytea opening a flagship store on London's Oxford Street - showing that
tastes, brands, and design are quickly becoming part of China's export story,
not just semiconductors and cars.
Consumption was a modest but positive driver of GDP growth in the first half,
with household spending up 5.3% YoY in Q2, supported by trade-in subsidies for
durable goods. The picture was uneven, however: goods demand held up while
services such as travel and tourism levelled off. Property, which accounts for
approximately 70% of household wealth in China, remained a drag. After a
tentative stabilisation through early 2025, property sales and prices resumed
their decline in Q2, with volumes falling below 2019 levels. Tier 1 cities,
which had led the late-2024 rebound on policy optimism, saw renewed price
weakness this year. The once-in-a-decade Central Urban Work Conference
confirmed the policy shift away from large-scale slum redevelopment toward
upgrading existing housing stock, signalling that while some real-estate
support will continue, it will be modest in scale.
This modest growth in overall consumption masks significant structural growth
trends that bottom-up investors focusing on company fundamentals can take
advantage of. China's pizza market is still under-penetrated - roughly 5,000
chain outlets nationwide versus 75-80,000 in the US - yet growing rapidly. DPC
Dash, a new holding for the portfolio, is driving growth by leaning into
localised flavours such as salted-egg-yolk, chicken, crayfish, and even durian
toppings to deliver growth of 27% in the first half. In sportswear, ANTA
Sports Products, another portfolio holding, saw 60-65% YoY growth in its
performance and outdoor labels - Descente and Kolon Sport - reflecting younger
consumers' embrace of hiking and winter sports gear.
Industrial production has been another key contributor to GDP growth in the
first half, with real output rising 6-7% YoY. Nominal growth, however, was
much weaker due to persistent deflation, with domestic pricing power
constrained by overcapacity and aggressive competition. This squeeze on
corporate profits feeds into weaker job creation, slower wage growth, and
subdued consumer confidence. Beijing's recently launched 'anti-involution'
campaign seeks to address these pressures by curbing price wars, limiting
excess capacity and encouraging the orderly exit of outdated production in
sectors such as new-energy vehicles, solar panels and batteries. If
successful, the policy could support healthier industry structures and more
sustainable profitability for market leaders with scale and cost advantages,
such as our holdings in CATL and BYD. That said, past capacity-rationalisation
efforts have often faltered due to local protectionism and conflicting policy
incentives, so we are monitoring the situation closely for signs of genuine
follow-through.
The Private Sector
Xi Jinping's hosting of a high-profile symposium with top entrepreneurs in
February marked the clearest indication yet of renewed political support for
private enterprise. In attendance were Alibaba, Tencent, Meituan, BYD, and
CATL - all portfolio holdings - in addition to Huawei and DeepSeek. Jack Ma's
presence at the meeting was particularly notable. Xi declared that the private
economy holds "broad prospects and great potential for development" and that
firms of all ownerships should have "equal access to factors of
production…compete…on an equal footing, and be protected by the law as
equals." He coupled this with a call for entrepreneurs to "maintain their
passion for entrepreneurship and serving the country," underscoring that
advancing national strategic priorities, such as technological self-reliance,
also remained important.
With the private sector accounting for over 50% of tax revenue, 60% of GDP,
70% of innovation and 80% of urban employment, restoring confidence here is
essential. The symposium offered a much‑needed lift and signalled that
Beijing views a healthy private sector as critical to long-term development.
From a portfolio perspective, this is equally important, with around 90% of
the Company's NAV in private companies versus just 10% in state-owned
enterprises (SOEs) - a stark contrast to the index's approximately 50%
weighting to SOEs.
AI: China's Sputnik moment?
Artificial intelligence (AI) is one of the most important structural themes
for both China's economy and the Company. At a national level, Beijing sees AI
as a strategic technology that will drive productivity, upgrade industry and
reduce its reliance on foreign tech. For us as bottom-up investors, it is
equally significant: AI is already reshaping the economics of our platform
holdings, creating new profit pools, and opening opportunities across adjacent
hardware and infrastructure. Against this backdrop, China has made remarkable
progress in AI this year.
The arrival of DeepSeek, China's answer to ChatGPT, stunned the global AI
landscape by delivering performance on a par with Western peers via
breakthroughs on lagging-edge domestic chips. Since then, the pace of
development has been breathtaking: nearly 3,800 generative AI tools have been
registered, with 250-300 more added each month. Among private players, Alibaba
and Tencent - both portfolio holdings - dominate in volume, while a wave of
innovative boutiques is also emerging. Government support has reinforced this
momentum, with subsidies and seed funds channelled into AI startups and
regulators mandating deployment across 40 'strategic high-value scenarios',
from power-grid optimisation to antibody testing.
This matters in two ways for equities: first, AI adoption can lift China's
macro trajectory by boosting productivity and innovation; second, it directly
drives revenues, margins, and valuations at the company level. We are already
seeing both effects in our holdings. In a watershed moment, ByteDance has
overtaken Meta in quarterly revenue, becoming the world's largest social media
platform by top line. It leverages the instant deployment of AI across TikTok
and Douyin to increase ad demand and ecommerce. Tencent's online advertising
has rebounded to 20% YoY growth, powered by AI-enhanced targeting and
optimisation. Alibaba Cloud has accelerated to about 18% YoY growth, with
triple-digit expansion in AI products. Importantly, Alibaba also reports that
AI adoption is spreading rapidly into traditional industries such as
manufacturing and livestock farming - evidence that AI's impact extends well
beyond consumer internet into the wider economy.
Geopolitical Risks: Is the elephant still in the room?
Geopolitics remains a risk for Chinese equities. Washington briefly pushed
effective tariffs on most Chinese imports toward c. 145% before a joint
statement in May paused part of the hikes for 90 days; the truce was extended
in mid-August to November. A 10% baseline and sectoral measures (e.g., a 100%
levy on Chinese EVs) remain, so rates are lower than the spring peak but far
from normal. Beijing's response has been to threaten the US with restricted
rare earths access - minerals that are critical to a range of industries.
The macro impact of tariffs on China has been limited: weaker U.S. trade has
been offset by stronger shipments elsewhere. Beyond re-routing, China's move
up the value chain and its cultivation of new markets built since the first
trade war in 2018 have helped; exports to Central Asia are up c.150% since
2018 and to Latin America c.92%.
The US has continued to use technology controls as leverage. In January,
Washington broadened rules under a new 'Responsible Diffusion' framework and
further restricted China's access to leading edge chips. In July, the US made
a U-turn by granting licences for Nvidia's China-specific H20 AI chip, which
had been restricted earlier in the year.
Meanwhile, with regard to ByteDance, the U.S. Supreme Court upheld the 2024
'sale-or-ban' law, confirming that TikTok must be divested from Chinese
control for U.S. operations to continue; however, since taking office
President Trump has repeatedly granted extensions, most recently signalling
another extension beyond the current September 17 deadline while negotiations
with prospective U.S. buyers continue (even as the White House itself launched
an official TikTok account).
Where does this leave us as growth investors in China?
Despite mixed macro headlines and continued geopolitical risk, we remain
cautiously optimistic about the future. The domestic policy environment is
markedly more supportive to growing Chinese businesses and breakthroughs
continue across a range of high-tech and advanced industries. Indeed, as
growth investors, there remain substantial structural opportunities within
China across an increasingly wide array of sectors from AI to autos, cosmetics
to creative IP. Post the market rally, Chinese equities now trade closer to
their long-run average of about 13x price earnings. However, this is still
about a 40% discount to global equities. From a bottom-up perspective,
valuations of high-quality, growing companies remain compelling and, as such,
we believe our starting point today remains attractive.
Portfolio Positioning and Activity
We believe our portfolio is a concentrated collection of China's most
innovative listed and unlisted growth franchises. From an investable universe
of roughly 6,000 stocks, we hold between 40 and 80 names, targeting the
highest-quality opportunities. At the portfolio level, we are overweight in
consumer discretionary, communication services, and industrials sectors. Here,
one finds China's leading private-sector growth engines across the platform
economy, domestic consumer brands, AI and high-end manufacturing, and the
energy transition. Together, these represent about 90% of the portfolio. By
contrast, we remain materially underweight in areas with fewer compelling
growth prospects - financials, real estate and utilities - with an exposure
close to 10% versus roughly 30% in the index.
Portfolio turnover during the period was 16.6%, which aligns with our stated
investment time horizon of 5-10 years. As a reminder, this time horizon is a
significant differentiator versus the Chinese market, where average holding
periods are measured in months rather than years. Over the past six months, we
have trimmed or exited holdings where competitive pressures, valuation or
execution risk increased, and redeployed capital into areas with more durable
growth and uncorrelated return drivers.
In food delivery and quick commerce, we materially trimmed Meituan following
the emergence of an aggressive subsidy war with JD and Alibaba. After our
reduction, the regulator summoned the companies, to tell them to "participate
in competition rationally." Each platform responded with public commitments to
curb aggressive promotions and a material subsidy reduction. While this is
positive for short-term profitability, we believe restraint may be short-lived
given food delivery's role as a gateway to instant retail. As such, we remain
happy with the reduction but will monitor developments closely for signs of a
sustained easing in competitive intensity.
We also reduced high-valuation consumer names such as Pop Mart, in addition to
companies such as PROYA, where recent senior management changes create
execution risk. These moves were complemented by the exit of Huayu in auto
parts and Yonyou in software, as both companies had failed to meet our
operational performance expectations.
We have selectively redeployed proceeds into a range of industries. New
positions in Yangtze Power (hydropower) and Tianqi Lithium (low-cost lithium
assets) strengthen the portfolio's diversification and add exposure to
high-quality, uncorrelated assets. Yangtze Power operates the world's largest
hydro dam and benefits from electricity market reform, while Tianqi Lithium
has stakes in some of the world's lowest-cost, highest quality lithium mines
and is likely to benefit from a cyclical recovery in pricing and a three-fold
increase in lithium demand by the end of the decade.
We also initiated a small position in Innovent Biologics. Like AI, healthcare
is another area where innovation in China is accelerating, with Innovent
emerging as a leader in biologics and winning validation through major global
licensing deals. That said, given the sector's regulatory and geopolitical
risks, we are keeping overall portfolio exposure modest at present.
While our overweight in consumer discretionary remains largely unchanged, we
have reshaped the holdings, reducing positions in companies where competitive
pressure is rising, and adding to those companies operating in more stable
market environments. New holdings within the sector include DPC Dash, the
master franchisee of Domino's Pizza in China, and DiDi Global, China's
dominant ride-hailing platform. DiDi has over 70% market share in ride-hailing
and is likely to benefit from its strong scale advantages, improving
profitability from higher take rates, and long-term upside from robotaxi
development.
Alongside these moves, we have continued to build exposure to innovation-led
growth in AI and advanced hardware. We added to Horizon Robotics, a leader in
AI chips for smart mobility, which grew revenues 54% in 2024 and now holds
over 40% of China's autonomous driving market.
Portfolio Performance
The portfolio's performance was positive in both absolute and relative terms.
The benchmark for the period returned 10.3%, NAV grew 14.6% and the Company's
share price appreciated 15.5%. Our stock selection in consumer discretionary
and information technology were major contributors to our relative
performance. Net borrowing (gearing) equal to about 4% of assets during the
period was also a positive driver in a rising market, whilst our overweight
position in communication services also contributed. The main performance
detractors at sector level were weak stock selection in industrials and our
underweight position in healthcare.
Stock level contributors to performance were varied. Pop Mart, a top
contributor in 2024, continued its exceptional operational and share price
performance in 2025 and was again our top contributor to performance during
the period. Growth is currently running at triple digits both domestically and
overseas due to the success of a number of its collectible toys.
ByteDance, the Company's unlisted holding, also contributed to performance.
The valuation was revised upwards by about 30% in response to double-digit
revenue and cash flow growth combined with an increase in valuations of
ByteDance's listed peer group. Uncertainty around the US business persists,
with the deadline for TikTok's required divestiture being pushed back several
times under President Trump. As stated in previous reports, we believe the
growth opportunity for ByteDance, and its current valuation are very
attractive even if one excludes the US business.
Zhongji Innolight was a standout contributor to performance, delivering
approximately 80% share price appreciation during the period. A global leader
in high-speed optical transceivers-a critical component for AI data centre
infrastructure-the company continues to impress with strong fundamentals. In
Q1 2025, it reported revenue growth of about 38% YoY, and net profit surged
56%. We are attracted to its robust technology roadmap, exposure to soaring
AI capital expenditure, and its strategic role as a key supplier to major
players such as Nvidia. However, the stock's sharp rally - prompted partly by
the relaxation of US export controls on Nvidia chips - appears to have
outpaced near-term delivery, prompting us to reduce the holding.
Tencent, another of the Company's largest holdings, also contributed to
relative performance. Q1 revenue rose 13% YoY, supported by continued strength
in gaming and the early payoff from AI investments enhancing advertising
targeting and game monetisation. This momentum carried into Q2, where revenue
grew 15%, outpacing analysts' forecasts - driven by robust domestic and
international gaming performance and strong take-up of AI-powered marketing
services.
Zijin Mining was also a top contributor. Its operational performance in the 1H
was strong, with net profit surging approximately 54% YoY. This exceptional
performance was driven by strong production growth - copper output rose about
10% and gold production jumped about 17% - along with robust metal prices. The
company also expanded through strategic acquisitions, including the Akyem Gold
Mine in Ghana and the Raygorodok Gold Mine in Kazakhstan, adding quality
reserves and supporting further production upside. We continue to like Zijin
for its exposure to the energy transition and non-correlated metals such as
gold.
Detractors to performance were varied. Meituan and Zhejiang Sanhua Intelligent
Controls Company were our top detractors. As noted above, Meituan's shares
weakened in response to concerns regarding rising competitive intensity in
food delivery and instant commerce. We are confident in Meituan's long-term
leadership, but are mindful of near-term margin pressure if competition stays
elevated, hence the reduction in our holding discussed above. Zhejiang
Sanhua's shares have been weak in 1H 2025 despite solid guidance for revenue
growth of 10-30% and net profit growth of 25-50%, driven by strength in NEV
thermal management systems and steady refrigeration demand. Sentiment has been
weighed down by pricing pressure in autos and a slower ramp-up in some
new-energy applications. Beyond autos, Sanhua offers longer-term optionality
in robotics and automation, including potential exposure to humanoid robots,
though this remains an early-stage theme.
Not owning Xiaomi and China Construction Bank (CCB) also detracted from our
performance. Xiaomi designs, manufactures, and sells smartphones, smart home
devices, and electric vehicles. The company delivered very strong operational
performance in Q1 with revenue surging 47% YoY and adjusted net profit rising
64% YoY. However, the stock's strength has come with lofty valuations: it now
trades at a trailing price-to-earnings (P/E) multiple of over 50x, meaning
shares are trading at more than 50 times the last 12 months' earnings - a
level that significantly exceeds peer multiples and makes future upside from
here much harder to justify. CCB has outperformed during the period due to
strong southbound inflows from mainland insurers seeking high-dividend yield
stocks.
Shenzhen Megmeet Electrical Company, a portfolio holding, has been a key
detractor this year having performed well in 2024. The company is a key
beneficiary of growth in AI datacentre capital expenditure globally and a
partner to Nvidia. Its long-term growth runway is material. However, the
shares have been volatile over shorter time periods due to changes in domestic
sentiment regarding AI related companies.
Outlook
We see a constructive backdrop for Chinese equities, underpinned by a
supportive policy stance in Beijing, improving private-sector sentiment,
wide-scale deployment of AI, and continued progress in a range of high growth
industries. We recognise that challenges remain, from persistent property
market weakness to patchy domestic demand and unpredictable geopolitics.
However, we believe the combination of targeted policy support, accelerating
innovation and attractive valuations create a compelling environment for
bottom-up growth investors. With the Company's portfolio delivering earnings
well above the index, and with valuations for Chinese equities still at a
significant discount to global markets, we believe we are well-positioned for
the future.
Baillie Gifford & Co
* 1 year listed earnings growth as of 27 July 2025.
† Earnings before interest and taxes (EBIT) margin 7.7% July 2022 versus
13.3% July 2025; valuation premium 54% July 2022 versus 23% July 2025; growth
premium 43% July 2022 versus 60% July 2025.
The principal risks and uncertainties facing the Company are set out below.
Related party transaction disclosures are set out in note 9 below.
For a definition of terms see Glossary of terms and alternative performance
measures below.
Past performance is not a guide to future performance.
Baillie Gifford - valuing private companies
We aim to hold our private company investments at 'fair value', i.e. the price
that would be paid in an open-market transaction. Valuations are adjusted both
during regular valuation cycles and on an ad hoc basis in response to 'trigger
events'. Our valuation process ensures that private companies are valued in
both a fair and timely manner.
The valuation process is overseen by a valuations committee at Baillie
Gifford, which takes advice from an independent third party (S&P Global).
The portfolio managers feed into the process, but the valuations committee
owns the process and the portfolio managers only receive final valuation
notifications once they have been applied.
We revalue the private holdings on a three-month rolling cycle, with one-third
of the holdings reassessed each month. For investment trusts, the prices are
also reviewed twice per year by the respective investment trust boards and are
subject to the scrutiny of external auditors in the annual audit process.
Beyond the regular cycle, the valuations team also monitors the portfolio for
certain 'trigger events'. These may include: changes in fundamentals; a
takeover approach; an intention to carry out an initial public offering; or
changes to the valuation of comparable public companies. The valuations team
also monitors relevant market indices on a weekly basis and updates valuations
in a manner consistent with our external valuer's (S&P Global) most recent
valuation report where appropriate. When market volatility is particularly
pronounced the team do these checks daily. Any ad hoc change to the fair
valuation of any holding is implemented swiftly and reflected in the next
published net asset value.
Distribution of total assets(†) (unaudited)
Sector at 31 July 2025
Sector % at % at
31 July
31 January
2025
2025
1 Consumer discretionary 27 29
2 Communication services 27 24
3 Industrials 13 15
4 Information technology 9 10
5 Financials 6 6
6 Consumer staples 5 7
7 Healthcare 4 3
8 Materials 4 3
9 Utilities 3 1
10 Real estate 1 1
11 Net liquid assets 1 1
† Total assets before deduction of loans.
List of investments
at 31 July 2025 (unaudited)
Name Business Value % of total
£'000 assets *
Tencent Social media and entertainment company 23,957 13.3
ByteDance (U) Social media and entertainment company 18,651 10.4
Alibaba Group Online retailer, payments and cloud business 10,882 6.1
Ping An Insurance Life and health insurance 5,793 3.2
Kweichow Moutai Luxury baijiu maker 5,709 3.2
Pop Mart Toy and collectibles maker 5,669 3.2
China Merchants Bank Consumer lending and wealth management 5,552 3.1
PDD Holdings Online retailer 5,368 3.0
CATL Electric vehicle battery maker 5,123 2.9
NetEase Gaming and entertainment business 4,027 2.2
Zijin Mining Group Renewable energy enabler 3,876 2.2
Meituan Online food delivery company 3,626 2.0
BYD Hybrid and EV automobiles 3,449 1.9
Midea Group White goods and robotics manufacturer 3,432 1.9
Weichai Power Construction machinery and heavy duty trucks 3,165 1.8
BeiGene Immunotherapy biotechnology company 2,890 1.6
Zhongji Innolight Optical transceiver and component maker for AI chips 2,679 1.5
Anker Innovations Consumer electronics 2,652 1.5
ANTA Sports Products Sportswear designer and manufacturer 2,487 1.4
Sunny Optical Technology Electronic components for smartphones and autos 2,397 1.3
Yangtze Power Power generation operator 2,381 1.3
ENN Energy Gas distributor and provider 2,284 1.3
Name Business Value % of total
£'000 assets *
Jiangsu Azure Small form batteries 2,253 1.3
Estun Automation Robotics and factory automation company 2,198 1.2
Zhejiang Sanhua Intelligent Controls Heating and cooling component manufacturer 2,073 1.2
Luckin Coffee(†) Coffee retailer 2,070 1.2
Shandong Sinocera Functional Material Advanced materials manufacturer 2,032 1.1
Haidilao International Hot pot restaurant brand 2,013 1.1
Fuyao Glass Industry Group Automotive glass manufacturer 2,008 1.1
Shenzhen Inovance Technology Factory automation company 1,992 1.1
Centre Testing International Testing and inspection company 1,812 1.0
Naura Technology GP Integrated micro-electronics company 1,788 1.0
DiDi Global(†) Passenger transportation platform operator 1,767 1.0
Shenzhou International Garment manufacturer 1,754 1.0
KE Holdings Online real estate 1,673 0.9
Kingdee International Software Software for SMEs and corporates 1,672 0.9
SG Micro Corp Semiconductor designer 1,671 0.9
Shenzhen Megmeet Electrical Power electronics manufacturer 1,630 0.9
Minth Automotive parts manufacturer 1,561 0.9
Horizon Robotics AI chips used in autonomous driving and advanced driving assistance systems 1,560 0.9
Advanced Micro-Fabrication Etch and deposition semiconductor equipment manufacturer 1,538 0.9
Li-Ning Domestic sportswear manufacturer 1,525 0.8
Kingsoft Software for SMEs and corporates 1,423 0.8
Medlive Technology Medical dictionary and marketing organisation 1,421 0.8
DPC Dash Franchise fast food restaurant operator 1,418 0.8
PROYA Cosmetics and personal care company 1,331 0.7
Tianqi Lithium Lithium product developer and manufacturer 1,226 0.7
Yifeng Pharmacy Chain Drug retailer 1,200 0.7
Sungrow Power Supply Component supplier to renewables industry 1,158 0.6
China Oilfield Services Oilfield service provider 1,149 0.6
Innovent Biologics Biopharmaceutical company 1,089 0.6
Silergy Semiconductors & semiconductor equipment 1,045 0.6
Shanxi Xinghuacun Fen Wine Factory Distiller and distributer of liquor products 953 0.5
Sinocare Diagnostics and diabetes company 908 0.5
Robam Appliances White goods manufacturer 869 0.5
Guangzhou Kingmed Diagnostics Diagnostics company 700 0.4
Dongguan Yiheda Automation Co Automation components 534 0.3
New Horizon Health(#) Early cancer detection - -
Total investments 179,063 99.8
Net liquid assets 418 0.2
Total assets 179,481 100.0
Borrowings (7,990) (4.5)
Shareholders' funds 171,491 95.5
* Total assets before deduction of loans.
(U) Denotes unlisted investment (private company).
† Includes investment in American Depositary Receipt (ADR).
# Suspended, see note 6 below.
Income statement (unaudited)
For the six months ended For the six months to For the year ended
31 July 2025
31 July 2024
31 January 2025 (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 20,582 20,582 - 11,117 11,117 - 40,068 40,068
Currency gains/(losses) - 412 412 - 81 81 - (1) (1)
Income 2,119 - 2,119 2,138 - 2,138 2,718 - 2,718
Investment management fee 3 (140) (421) (561) (115) (346) (461) (246) (737) (983)
Other administrative expenses (336) - (336) (298) - (298) (584) - (584)
Net return before finance costs and taxation 1,643 20,573 22,216 1,725 10,852 12,577 1,888 39,330 41,218
Finance cost of borrowings (56) (169) (225) (88) (265) (353) (149) (448) (597)
Net return before taxation 1,587 20,404 21,991 1,637 10,587 12,224 1,739 38,882 40,621
Tax (149) - (149) (168) - (168) (210) - (210)
Net return after taxation 1,438 20,404 21,842 1,469 10,587 12,056 1,529 38,882 40,411
Net return per ordinary share 4 2.45p 34.77p 37.22p 2.40p 17.28p 19.68p 2.53p 64.39p 66.92p
Note: 5 nil nil 2.20p
Dividends paid and payable per share
The total column of this statement represents the profit and loss account of
the Company. The supplementary revenue and capital columns are prepared under
guidance published by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing
operations.
A Statement of Comprehensive Income is not required as the Company does not
have any other comprehensive income and the net return after taxation is both
the profit and comprehensive income for the period.
The accompanying notes are an integral part of the Financial Statements.
Balance sheet (unaudited)
Notes At 31 July At 31 January
2025 2025
£'000 £'000
Fixed assets
Investments held at fair value through profit or loss 6 179,063 158,682
Current assets
Debtors 32 40
Cash and cash equivalents 1,149 975
1,181 1,015
Creditors
Amounts falling due within one year 7 (8,753) (6,598)
Net current liabilities (7,572) (5,583)
Net assets 171,491 153,099
Capital and reserves
Share capital 17,087 17,087
Share premium account 31,780 31,780
Capital redemption reserve 41,085 41,085
Capital reserve 74,398 56,154
Revenue reserve 7,141 6,993
Shareholders' funds 171,491 153,099
Net asset value per ordinary share* 294.53p 259.07p
Shares in issue 8 58,225,323 59,095,680
* See Glossary of terms and alternative performance measures below.
Statement of changes in equity (unaudited)
Six months to 31 July 2025
Notes Share Share Capital Capital Revenue Share-holders'
capital premium redemption reserve * reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 February 2025 17,087 31,780 41,085 56,154 6,993 153,099
Ordinary shares bought back into treasury - - - (2,160) - (2,160)
Net return after taxation - - - 20,404 1,438 21,842
Dividends paid during the year 5 - - - - (1,290) (1,290)
Shareholders' funds at 31 July 2025 17,087 31,780 41,085 74,398 7,141 171,491
Six months to 31 July 2024
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve * reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 February 2024 17,087 31,780 41,085 22,775 6,684 119,411
Ordinary shares bought back into treasury - - - (2,870) - (2,870)
Net return after taxation - - - 10,587 1,469 12,056
Dividends paid during the year 5 - - - - (1,220) (1,220)
Shareholders' funds at 31 July 2024 17,087 31,780 41,085 30,492 6,933 127,377
* The Capital reserve as at 31 July 2025 includes investment holding
losses of £7,160,000 (31 July 2024 - losses of £65,132,000).
Condensed statement of cash flows (unaudited)
Six months Six months
to 31 July 2025 to 31 July 2024
£'000 £'000
Cash flows from operating activities
Net return before taxation 21,991 12,224
Adjustments to reconcile company profit before tax to net cash flow from
operating activities
Net gains on investments (20,582) (11,117)
Currency gains (412) (81)
Finance costs of borrowings 225 353
Other capital movements
Changes in debtors 8 (280)
Changes in creditors 102 26
Taxation
Overseas withholding tax suffered (149) (170)
Overseas withholding tax reclaims received - 2
Cash from operations* 1,183 957
Interest paid (241) (299)
Net cash inflow from operating activities 942 658
Cash flows from investing activities
Acquisitions of investments (13,752) (13,514)
Disposals of investments 14,020 18,661
Net cash inflow from investing activities 268 5,147
Cash flows from financing activities
Shares bought back (2,054) (2,869)
Bank loans repaid (13,940) (5,906)
Bank loans drawn down 16,392 5,970
Equity dividends paid (note 5) (1,290) (1,220)
Net cash outflow from financing activities (892) (4,025)
Increase in cash and cash equivalents 318 1,780
Exchange movements (144) 8
Cash and cash equivalents at start of period 975 926
Cash and cash equivalents at end of period(†) 1,149 2,714
* Cash from operations includes dividends received in the period of
£2,114,000 (31 July 2024 - £1,833,000) and deposit interest received of
£5,000 (31 July 2024 - £9,000).
† Cash and cash equivalents represent cash at bank and short term money
market deposits repayable on demand.
Notes to the financial statements (unaudited)
1. Basis of accounting
The condensed Financial Statements for the six months to 31 July 2025 comprise
the statements set out above together with the related notes below. They have
been prepared in accordance with FRS 104 'Interim Financial Reporting' and the
AIC's Statement of Recommended Practice issued in November 2014 and updated in
July 2022 with consequential amendments. They have not been audited or
reviewed by the Auditor pursuant to the Auditing Practices Board Guidance on
'Review of Interim Financial Information'. The Financial Statements for the
six months to 31 July 2025 have been prepared on the basis of the same
accounting policies as set out in the Company's Annual Report and Financial
Statements at 31 January 2025.
Going concern
The Directors have considered the nature of the Company's assets, its
liabilities, projected income and expenditure together with its investment
objective and policy, dividend policy and principal risks and uncertainties,
as set out below. The Board has, in particular, considered the impact of
heightened market volatility due to macroeconomic and geopolitical concerns,
and reviewed the results of specific leverage and liquidity stress testing but
does not believe the Company's going concern status is affected. The Company's
assets, the majority of which are investments in quoted securities which are
readily realisable, exceed its liabilities significantly. All borrowings
require the prior approval of the Board. Gearing levels and compliance with
borrowing covenants are reviewed by the Board on a regular basis. The Company
has continued to comply with the investment trust status requirements of
section 1158 of the Corporation Tax Act 2010 and the Investment Trust
(Approved Company) (Tax) Regulations 2011. Accordingly, the Directors consider
it appropriate to adopt the going concern basis of accounting in preparing
these Financial Statements and confirm that they are not aware of any material
uncertainties which may affect the Company's ability to continue to do so over
a period of at least twelve months from the date of approval of these
Financial Statements.
2. Financial information
The financial information contained within this Interim Financial Report does
not constitute statutory accounts as defined in sections 434 to 436 of the
Companies Act 2006. The financial information for the year ended 31 January
2025 has been extracted from the statutory accounts
which have been filed with the Registrar of Companies.
The Auditor's Report on those accounts was not qualified, did not include a
reference to any matters to which the Auditor drew attention by way of
emphasis without qualifying the report, and did not contain a statement under
sections 498(2) or (3) of the Companies Act 2006.
3. Investment manager
Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford
& Co, was appointed by the Company as its Alternative Investment Fund
Manager and Company Secretaries on 16 September 2020. The investment
management function has been delegated to Baillie Gifford & Co. Dealing
activity and transaction reporting have been further sub-delegated to Baillie
Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited. The
management agreement is terminable on not less than three months notice or on
shorter notice in certain circumstances. The annual management fee is (i)
0.75% of the first £50 million of net asset value; plus (ii) 0.65% of net
asset value between £50 million and £250 million; plus (iii) 0.55% of net
asset value in excess of £250 million, calculated and payable quarterly.
4. Net return per ordinary share
Six months to Six months to Year to
31 July 2025 31 July 2024 31 January 2025
£'000 £'000 £'000
Revenue return after taxation 1,438 1,469 1,529
Capital return after taxation 20,404 10,587 38,882
Total net return 21,842 12,056 40,411
Weighted average number of ordinary shares in issue 58,687,259 61,279,594 60,389,282
Net return per ordinary share is based on the above totals of revenue and
capital and the weighted average number of ordinary shares in issue during
each period.
There are no dilutive or potentially dilutive shares in issue.
5. Dividends
Six months to Six months to
31 July 2025 31 July 2024
£'000 £'000
Amounts recognised as distributions in the period: 1,290 1,220
Previous year's final dividend of 2.20p (2024 - 2.00p) paid on 25 July 2025
6. Fixed assets - investments
Fair value hierarchy
The fair value hierarchy used to analyse the basis on which the fair values of
financial instruments held at fair value through the profit or loss account
are measured is described below. Fair value measurements are determined by the
lowest (that is the least reliable or least independently observable) level of
input that is significant to the fair value measurement for the individual
investment in its entirety as follows:
Level 1 - using unadjusted quoted prices for identical instruments in an
active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that
are directly or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is
unavailable).
Level 1 Level 2 Level 3 Total
As at 31 July 2025 £'000 £'000 £'000 £'000
Listed equities 160,412 - - 160,412
Unlisted equities - - 18,651 18,651
Suspended equities - - - -
Total financial asset investments 160,412 - 18,651 179,063
Level 1 Level 2 Level 3 Total
As at 31 January 2025 (audited) £'000 £'000 £'000 £'000
Listed equities 144,059 - - 144,059
Unlisted equities - - 14,429 14,429
Suspended equities - - 194 194
Total financial asset investments 144,059 - 14,623 158,682
Investments in securities are financial assets designated at fair value
through profit or loss on initial recognition. In accordance with FRS 102 the
tables above provide an analysis of these investments based on the fair value
hierarchy described above which reflects the reliability and significance of
the information used to measure their fair value. During the six months, no
investments were transferred from Level 1 to Level 2. New Horizon Health
(Level 3) was written down to a nil valuation during the period following an
application to appoint liquidators and the submission of a winding up petition
in July 2025 (31 January 2025 - £194,000).
7. Bank loans
The Company has a two year US$25 million revolving credit facility with The
Royal Bank of Scotland (International) Limited which expires on 11 April 2026.
At 31 July 2025 creditors falling due within one year include borrowings of
£8.0 million (HKD83 million) (31 January 2025 - £6.1 million
(US$7.5 million)) drawn down under the facility.
8. Share capital
The Company has authority to allot shares under section
551 of the Companies Act 2006 or sell shares held in treasury. Such
authorities will only be used to issue shares or sell shares from treasury at,
or at a premium to, net asset value and only when the Directors believe that
it would be in the best interests of the Company to do so. In the six months
to 31 July 2025 no ordinary shares were issued from treasury (in the year to
31 January 2025 no shares were issued from treasury).
The Company also has authority to buy back shares. In the six months to 31
July 2025, 870,357 ordinary shares were bought back and held in treasury (in
the year to 31 January 2025, 2,756,602 ordinary shares were bought and held in
treasury). At 31 July 2025, the Company had authority remaining to buy back a
further 8,430,352 ordinary shares.
9. Related party transactions
There have been no transactions with related parties during the first six
months of the current financial year that have materially affected the
financial position or the performance of the Company during that period and
there have been no changes in the related party transactions described in the
last Annual Report and Financial Statements that could have had such an effect
on the Company during that period.
None of the views expressed in this document should be construed as advice to
buy or sell a particular investment.
10. Contingent asset
HMRC have indicated they will repay overpaid taxes for the accounting periods
ending 2008 and 2009 of £1.1 million plus interest. As the repayment is
probable, but not virtually certain, the Company is disclosing £1.1 million
as a contingent asset.
11. Share Premium Account cancellation
On 19 August 2025, the High Court of Justice approved the cancellation of the
amount standing to the credit of the Company's share premium account and the
crediting of an equivalent amount to the Company's Distributable Capital
Reserve. The Court Order became effective when it was filed with the Registrar
of Companies on 22 August 2025.
Principal risks and uncertainties
The principal risks facing the Company are financial risk, investment strategy
risk, discount risk, regulatory risk, custody and depository risk, operational
risk, leverage risk, climate and governance risk, cyber security risk, single
country risk, emerging market risk, unlisted securities risk, and emerging
risks. An explanation of these risks and how they are managed is set out on
pages 35 to 41 of the Company's Annual Report and Financial Statements for the
year to 31 January 2025 which is available on the Company's website:
bailliegiffordchinagrowthtrust.com. The principal risks and uncertainties have
not changed since the date of the Annual Report.
The Board is mindful of the risk that geopolitical developments could
adversely impact companies held within the Company's investment portfolio,
including the potential impact of sanctions, and such matters are evaluated
both in conjunction with the manager and, where appropriate, with input from
external advisers.
Responsibility statement
We confirm that to the best of our knowledge:
a. the condensed set of Financial Statements has been
prepared in accordance with FRS 104 'Interim Financial Reporting';
b. the Interim Management Report includes a fair review of
the information required by Disclosure Guidance and Transparency Rule 4.2.7R
(indication of important events during the first six months, their impact on
the Financial Statements and a description of the principal risks and
uncertainties for the remaining six months of the year); and
c. the Interim Financial Report includes a fair review of
the information required by Disclosure Guidance and Transparency Rule 4.2.8R
(disclosure of related party transactions and changes therein).
On behalf of the Board
Nicholas Pink
Chair
23 September 2025
Glossary of terms and alternative performance measures ('APM')
An alternative performance measure ('APM') is a financial measure
of historical or future financial performance, financial position,
or cash flows, other than a financial measure defined or specified in the
applicable financial reporting framework.
The APMs noted below are commonly used measures within the investment trust
industry and serve to improve comparability between investment trusts.
Total assets
This is the Company's definition of adjusted total assets, being the total
value of all assets less current liabilities, before deduction of all
borrowings.
Net asset value
Net asset value is the value of total assets less liabilities
(including borrowings). The net asset value per share ('NAV') is calculated
by dividing this amount by the number of ordinary shares in issue (excluding
treasury shares).
Net liquid assets
Net liquid assets comprise current assets less current liabilities, excluding
borrowings.
Net asset value (borrowings at book value) (APM)
31 July 31 January
2025 2025
Shareholders' funds (borrowings at book value) £171,491,000 £153,099,000
Shares in issue 58,225,323 59,095,680
Net asset value per ordinary share (borrowings at book value) 294.53p 259.07p
Discount/premium (APM)
As stockmarkets and share prices vary, an investment trust's share price is
rarely the same as its NAV. When the share price is lower than the NAV it is
said to be trading at a discount. The size of the discount is calculated by
subtracting the NAV from the share price and is usually expressed as a
percentage of the NAV. If the share price is higher than the NAV it is said to
be trading at a premium.
31 July 31 January
2025 2025
Closing NAV per share 294.53p 259.07p
Closing share price 265.50p 232.00p
Discount (9.9%) (10.4%)
Total return (APM)
The total return is the return to shareholders after reinvesting the dividend
on the date that the share price goes ex-dividend.
31 July 31 July 31 January 31 January
2025 2025 2025 2025
NAV Share price NAV Share price
Closing NAV per share/share price (a) 294.53p 265.50p 259.07p 232.00p
Dividend adjustment factor* (b) 1.008036 1.009167 1.008783 1.009852
Adjusted closing NAV per share/share price (c = a x b) 296.90p 267.93p 261.35p 234.29p
Opening NAV per share/share price (d) 259.07p 232.00p 193.06p 181.00p
Total return (c ÷ d) -1 14.6% 15.5% 35.4% 29.4%
* The dividend adjustment factor is calculated on the assumption that the
dividends paid out by the Company are reinvested into the shares of the
Company at the cum income NAV/share price, as appropriate, at the
ex-dividend date.
Ongoing charges ratio (APM)
The total expenses (excluding borrowing costs) incurred by the Company as a
percentage of the average net asset value. The ongoing charges are calculated
on the basis prescribed by the Association of Investment Companies.
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other public company, an
investment trust can borrow money to invest in additional investments for its
portfolio. The effect of the borrowing on the shareholders' funds is called
'gearing'. If the Company's assets grow, the shareholders' funds grow
proportionately more because the debt remains the same. But if the value of
the Company's assets falls, the situation is reversed. Gearing can therefore
enhance performance in rising markets but can adversely impact performance in
falling markets.
Gross gearing is the Company's borrowings expressed as a percentage of
shareholders' funds.
Gearing is the Company's borrowings adjusted for cash and cash equivalents
expressed as a percentage of shareholders' funds.
Leverage (APM)
For the purposes of the UK Alternative Investment Fund Managers Regulations,
leverage is any method which increases the Company's exposure, including the
borrowing of cash and the use of derivatives. It is expressed as a ratio
between the Company's exposure and its net asset value and can be calculated
on a gross and a commitment method. Under the gross method, exposure
represents the sum of the Company's positions after the deduction of sterling
cash balances, without taking into account any hedging and netting
arrangements. Under the commitment method, exposure is calculated without the
deduction of sterling cash balances and after certain hedging and netting
positions are offset against each other.
Active share (APM)
Active share, a measure of how actively a portfolio is managed,
is the percentage of the portfolio that differs from its comparative index.
It is calculated by deducting from 100 the percentage of the portfolio that
overlaps with the comparative index. An active share of 100 indicates no
overlap with the index and an active share of zero indicates a portfolio that
tracks the index.
Unlisted (Private) Company
An unlisted (private) company means a company whose shares are not available
to the general public for trading and not listed on a stock exchange.
Variable Interest Entity ('VIE')
VIE structures are used by some Chinese companies to facilitate access to
foreign investors in sectors of the Chinese domestic economy which prohibit
foreign ownership. The purpose of the VIE structure is to give the economic
benefits and operational control of ownership without direct equity ownership
itself. The structures are bound together by contracts and foreign investors
are not directly invested in the underlying company.
Treasury shares
The Company has the authority to make market purchases of its ordinary shares
for retention as treasury shares for future reissue, resale, transfer or for
cancellation. Treasury shares do not receive distributions and the Company is
not entitled to exercise the voting rights attaching to them.
Third party data provider disclaimer
No third party data provider ('Provider') makes any warranty, express or
implied, as to the accuracy, completeness or timeliness of the data contained
herewith nor as to the results to be obtained by recipients of the data. No
Provider shall in any way be liable to any recipient of the data for any
inaccuracies, errors or omissions in the index data included in this document,
regardless of cause, or for any damages (whether direct or indirect) resulting
therefrom.
No Provider has any obligation to update, modify or amend the data or to
otherwise notify a recipient thereof in the event that any matter stated
herein changes or subsequently becomes inaccurate.
Without limiting the foregoing, no Provider shall have any liability
whatsoever to you, whether in contract (including under an indemnity), in tort
(including negligence), under a warranty, under statute or otherwise, in
respect of any loss or damage suffered by you as a result of or in connection
with any opinions, recommendations, forecasts, judgements, or any
other conclusions, or any course of action determined,
by you or any third party, whether or not based on the
content, information or materials contained herein.
MSCI index data
The MSCI information may only be used for your internal use, may not be
reproduced or redisseminated in any form and may not be used as a basis for or
a component of any financial instruments or products or indices. None of the
MSCI information is intended to constitute investment advice or a
recommendation to make (or refrain from making) any kind of investment
decision and may not be relied on as such. Historical data and analysis should
not be taken as an indication or guarantee of any future performance analysis,
forecast or prediction.
The MSCI information is provided on an 'as is' basis and the user of this
information assumes the entire risk of any use made of this information. MSCI,
each of its affiliates and each other person involved in or related to
compiling, computing or creating any MSCI information (collectively, the 'MSCI
Parties') expressly disclaims all warranties (including, without limitation,
any warranties of originality, accuracy, completeness, timeliness,
non-infringement, merchantability and fitness for a particular purpose) with
respect to this information. Without limiting any of the foregoing, in no
event shall any MSCI Party have any liability or any direct, indirect,
special, incidental, punitive, consequential (including, without limitation,
lost profits) or any other damages. (msci.com).
Baillie Gifford China Growth Trust aims to achieve long term capital growth
through investment principally in Chinese companies which are believed to have
above average prospects for growth. At 31 July 2025 the Company had total
assets of £179.5m.
You can find up-to-date performance information about Baillie Gifford China
Growth Trust at bailliegiffordchinagrowthtrust.com(‡).
Baillie Gifford China Growth Trust is managed by Baillie Gifford, the
Edinburgh based fund management group with around £215 billion under
management and advice in active equity and bond portfolios for clients in the
UK and throughout the world (as at 23 September 2025).
Investment Trusts are UK public limited companies and are not authorised or
regulated by the Financial Conduct Authority.
(‡ ) Neither the contents of the Managers'
website nor the contents of any website accessible from hyperlinks on the
Managers' website (or any other website) is incorporated into, or forms part
of, this announcement.
Past performance is not a guide to future performance. The value of an
investment and any income from it is not guaranteed and may go down as well as
up and investors may not get back the amount invested. This is because the
share price is determined by the changing conditions in the relevant stock
markets in which the Company invests and by the supply and demand for the
Company's shares.
For further information please contact:
Naomi Cherry, Baillie Gifford & Co
Tel: 0131 275 2000
Jonathan Atkins, Director, Four Communications
Tel: 0203 920 0555 or 07872 495396
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