REG-Fidelity Asian Values Plc: Half-Yearly Results for the six months ended 31 January 2025
25/03/2025 07:15
Fidelity Asian Values PLC
Half-Yearly Results for the six months ended 31 January 2025
Financial Highlights
* During the six months ended 31 January 2025, Fidelity Asian Values PLC
(“the Company”) reported a Net Asset Value (NAV) total return of +3.2%
while the Comparative Index, the MSCI All Countries Asia ex Japan Small Cap
Index (net) total return (in sterling terms) fell -2.1%.
* Over the same period, the ordinary share price total return of the Company
was +4.1%.
* Overweight positioning in China and underweight positioning in India
contributed positively to performance.
* The Portfolio Managers continue to believe innovation and technological
excellence in China offer opportunities to investors.
Contacts
For further information please contact:
George Bayer
Company Secretary
0207 961 4240
PORTFOLIO MANAGERS’ HALF-YEARLY REVIEW
PERFORMANCE REVIEW
Over the six-month period ended 31 January 2025, the net asset value
(“NAV”) total return of the Company was +3.2%, outperforming the
Comparative Index, the MSCI All Countries Asia ex Japan Small Cap Index (net)
total return (in sterling terms), which fell by -2.1%. Over the same period,
the Company’s share price total return was +4.1%. The Company’s discount
to its NAV was 9.5% as at 31 January 2025, having ranged between 8.2% and
14.5% in the reporting period. However, it was trading in a narrower range
than its peer group.
TABLE 1: COMPANY’S NAV, SHARE PRICE AND COMPARATIVE INDEX RETURNS (AS AT 31
JANUARY 2025)
NAV Share Price Comparative
total return total return Index total
(%) (%) return (%)
Tenure (since 1 April 2015) +126.3 +134.2 +134.7
10 Years +140.5 +149.2 +144.1
5 Years +64.9 +51.1 +67.4
3 Years +20.5 +17.1 +14.0
1 Year +9.1 +4.9 +7.4
6 Months +3.2 +4.1 -2.1
3 Months -2.1 +1.6 -3.9
========= ========= =========
Source: Fidelity International, 31 January 2025.
The Company has outperformed its Comparative Index in the six-month period
under review. This was achieved through the consistent application of our
investment process, despite the challenging context of the past eighteen
months. We have retained our contrarian positions in undervalued Chinese
businesses and stayed away from expensive Indian small-caps. Our consistency
has driven the recovery in the Company’s relative performance compared to
the Comparative Index in the six-month period under review. Our overweight
position in China and underweight position in India contributed positively to
the Company’s relative performance against the Comparative Index. Small caps
in China and Hong Kong rose by 15.1%, while small caps in India fell by 10.4%.
The success of DeepSeek’s low-cost but top-end AI model drove a sharp rally
in shares of Chinese small cap technology companies perceived as potential
beneficiaries. We had minimal exposure to such companies as our investment
process filters them out due to their unpredictable long-term earnings
trajectory and expensive valuations. As a result, stock selection in China
detracted from performance. Outside of our benchmark countries, stock
selection in the US and Australia (reported under “Others” in Table 2)
also added value during the review period. While Genpact, which is a US-listed
business process outsourcing company with the majority of its operations in
India, drove returns from the US, gains in gold miners (De Gray Mining and
Gold Road Resources), which tracked gold prices, enhanced returns from
Australia.
TABLE 2: COUNTRY ATTRIBUTION OVER SIX MONTHS TO 31 JANUARY 2025
Average weight (%) Contribution to relative
returns (%)
Company Index Relative Cumulative Stock Market Total
(%) (%) (%) returns (%) selection selection
China & Hong Kong 39.0 13.8 +25.1 +15.1 -1.9 +4.9 +3.0
India 14.2 34.0 -19.8 -10.4 -0.6 +1.8 +1.2
Indonesia 17.1 2.2 14.9 -1.4 +0.1 +0.1 +0.2
Malaysia 0.6 3.2 -2.6 -0.8 0.0 0.0 0.0
Philippines 1.5 0.8 0.7 -5.4 -0.1 0.0 -0.1
Taiwan 2.0 24.4 -22.4 +1.2 +0.7 -0.7 -0.0
Singapore 2.6 5.5 -2.9 +4.3 0.0 -0.1 -0.1
Thailand 1.5 3.4 -1.9 +0.9 -0.1 -0.1 -0.2
Korea (South) 12.7 12.6 0.1 -6.2 -0.7 +0.2 -0.5
Others 11.8 0.0 11.8 – +2.1 0.0 +2.1
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total Primary Assets 103.0 100.0 +3.0 -2.1 -0.5 +6.1 +5.6
Cash & others -3.0 0.0 -3.0 – – – -0.3
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 100.0 100.0 0.0 – – – +5.3
========= ========= ========= ========= ========= ========= =========
Source: Fidelity International, 31 January 2025. Company = Fidelity Asian
Values PLC. Index = MSCI All countries Asia ex Japan Small Cap Index (net)
total return (in sterling terms).
TABLE 3: TOP 5 KEY CONTRIBUTORS OVER SIX MONTHS (AS AT 31 JANUARY 2025)
Order Security Average Gain/Loss Contribution
Active Weight (%) to Relative
(%) Returns (%)
Top 5
1 Genpact +2.6 +44.9 +1.0
2 Full Truck Alliance +1.1 +53.5 +0.6
3 Japfa Comfeed Indonesia +2.0 +29.9 +0.6
4 Taiwan Semiconductor Manufacturing +2.1 +26.9 +0.6
5 China Mengniu Dairy +0.9 +7.1 +0.5
---------------
Total +3.3
=========
Source: Fidelity International, 31 January 2025.
TOP 5 KEY DETRACTORS OVER SIX MONTHS (AS AT 31 JANUARY 2025)
Order Security Average Gain/Loss Contribution
Active Weight (%) to Relative
(%) Returns (%)
Top 5
1 Axis Bank +3.0 -15.7 -0.5
2 IndusInd Bank +1.0 -27.1 -0.4
3 Valaris +0.7 -36.5 -0.4
4 Samsung Electronics +0.8 -38.3 -0.4
5 LIC Housing Finance +1.3 -21.3 -0.4
---------------
Total -2.1
=========
Source: Fidelity International, 31 January 2025.
Genpact was the largest contributor to relative performance. Its high-quality
management team is driving it to grow at a faster rate than the industry. The
company’s investments in AI solutions are also attracting clients. We
trimmed our exposure when the stock price rose but continue to retain a
position as the company has high-teens return on invested capital (which
measures how well a company generates profits from its investment) and is
attractively valued at 13 times its 12-month forward earnings. Forward
earnings are a measure of the price of the shares against the likely future
profits. Full Truck Alliance which is China’s dominant freight transport
platform that matches trucker and shippers for commissions was another
contributor. Its highly cash generative, low capex business model adds value
to its clients by reducing logistics costs and enhancing efficiencies and the
stock trades at 15 times 12-month forward earnings. Indonesia’s second
largest poultry feed and farming company Japfa Comfeed Indonesia also added
value and again we have taken some profits but continue to retain a position
in the company given its operating margins and valuations are at historical
low levels at 6 times 12-month forward earnings.
Our holdings in Axis Bank and IndusInd Bank, which are India’s third and
fifth largest private sector lenders, detracted in line with the correction in
Indian equities. There were some concerns around asset quality for Axis Bank
while IndusInd Bank experienced near term weakness in growth in its micro
finance segment. Elsewhere, the share price in US listed oil services company
Valaris was subdued in an environment of oil price weakness despite continued
geopolitical issues and tensions in the Middle East. The company has
operations globally including in the Asia Pacific Rim. We maintain our
conviction in all of these names from a medium to long-term perspective.
INVESTMENT STRATEGY
Our investment strategy continues to focus on investing in good businesses,
run by good management teams that are available at a suitable margin of safety
which means that we are not overpaying for the investment.
Our bottom-up approach to investing is completely benchmark agnostic which has
succeeded in generating sustainable performance for the Company in the long
run, despite style headwinds. We believe these headwinds should become
tailwinds. In our opinion, value stocks should generate superior earnings
growth over time compared to growth stocks and provide better cash returns, in
terms of dividends.
Outlook
We have always maintained that macro-economic trends and market movements are
difficult to forecast. We know that equities can move sharply, driven by
sentiment. We witnessed this in China in September 2024 when investors reacted
strongly to Chinese policy announcements driving a steep rally, which then
fizzled out in the following few months as a result of policy disappointments.
This rally could repeat itself as there is a huge amount of money sitting on
the sidelines in China. The sentiment could turn very quickly if there are
signs of a shift in earnings momentum which could lead to stock market
strength in China.
Our focus remains on owning businesses which are better quality than the
market at cheaper valuations. As you can see from the chart in the Half-Yearly
Report, the Return on Equity which measures the prospective return against the
value of shares of our portfolio is at a premium to the market, while the
Price to Earnings ratio which measures the price of the shares of the
portfolio against its earnings, is at a significant discount.
Overall, we are very comfortable with the portfolio as it stands today. We are
overweight in China compared with the Index given that we see many
opportunities to own well-financed and well-run businesses with a significant
margin of safety, meaning that they are available at an attractive valuation.
We are convinced that China remains home to innovation and technological
excellence with its substantial pool of well-educated workforce. It also
maintains its position as a highly competitive manufacturing hub for the
world, offering technology and cost leadership. Indonesia is another country
where we continue to find investment opportunities at the right price,
particularly in well-run financials and we have selected long-term winners in
the consumer staples space. Meanwhile, we continue to stay away from sectors
and countries that most investors find fashionable, such as AI-driven
technology hardware; Taiwan and Korea; as well as expensive small caps in
India. This strategy has served us well in the past and we believe it will
continue to reward us well in the coming three to five years.
NITIN BAJAJ AJINKYA DHAVALE
Portfolio Manager Co-Portfolio Manager
24 March 2025 24 March 2025
TWENTY LARGEST HOLDINGS AS AT 31 JANUARY 2025
The Asset Exposures shown below measure exposure to market price movements as
a result of owning shares, corporate bonds, equity linked notes and derivative
instruments. The Fair Value is the realisable value of the portfolio as
reported in the Balance Sheet. Where the Company holds shares, corporate bonds
and equity linked notes, the Asset Exposure and Fair Value will be the same.
For derivative instruments, Asset Exposure is the market value of the
underlying asset to which the Company is exposed, while the Fair Value
reflects the mark-to-market on the contract since it was opened and is based
on how much the share price of the underlying asset has moved.
Fair
Value
£’000
Asset Exposure
£’000 % 1
Long Exposures – shares unless otherwise stated
Bank Negara Indonesia (Persero)
Banks 12,123 3.1 12,123
Axis Bank
Banks 11,709 3.0 11,709
Indofood CBP Sukses Makmur
Food Products 10,206 2.6 10,206
Taiwan Semiconductor Manufacturing Company
Semiconductors & Semiconductor Equipment 9,502 2.5 9,502
BOC Aviation (long CFDs)
Trading Companies & Distributors 9,105 2.4 (26)
KT
Diversified Telecommunication Services 8,932 2.3 8,932
Genpact
Professional Services 8,604 2.2 8,604
Federal Bank
Banks 8,333 2.2 8,333
Japfa Comfeed Indonesia
Food Products 7,201 1.9 7,201
De Grey Mining
Metals & Mining 6,526 1.7 6,526
Crystal International Group (shares and long CFDs)
Textiles, Apparel & Luxury Goods 6,287 1.6 4,129
Full Truck Alliance
Ground Transportation 6,229 1.6 6,229
IndusInd Bank
Banks 6,123 1.6 6,123
Sinotrans
Air Freight & Logistics 5,980 1.6 5,980
LIC Housing Finance
Financial Services 5,532 1.4 5,532
Arwana Citramulia
Building Products 5,480 1.4 5,480
Ciputra Development
Real Estate Management & Development 5,339 1.4 5,339
Chow Sang Sang Holdings International (shares and long CFD)
Textiles, Apparel & Luxury Goods 5,099 1.3 4,986
Asia Commercial Bank (shares and equity linked notes)
Banks 5,061 1.3 5,061
Qingdao Port International
Transportation Infrastructure 4,922 1.3 4,922
--------------- --------------- ---------------
Top twenty long exposures 148,293 38.4 136,891
Other long exposures 282,317 73.1 235,608
--------------- --------------- ---------------
Total long exposures (159 holdings) 430,610 111.5 372,499
========= ========= =========
Short exposures
Short CFDs (8 holdings) 12,068 3.1 (190)
Short futures (4 holdings) 5,010 1.3 (106)
--------------- --------------- ---------------
Total short exposures 17,078 4.4 (296)
--------------- --------------- ---------------
Gross Asset Exposure 2 447,688 115.9
========= =========
Portfolio Fair Value 3 372,203
=========
Net current assets (excluding derivative assets and liabilities) 13,760
---------------
Total Shareholders’ Funds/Net Assets 385,963
=========
1 Asset Exposure (as defined in the Glossary of Terms in the Half-Yearly
Report) is expressed as a percentage of Total Shareholders’ Funds.
2 Gross Asset Exposure comprises market exposure to investments of
£371,447,000 plus market exposure to derivative instruments of £76,241,000.
3 Portfolio Fair Value comprises investments of £371,447,000 plus derivative
assets of £1,473,000 less derivative liabilities of £717,000.
INTERIM MANAGEMENT REPORT AND DIRECTORS’ RESPONSIBILITY STATEMENT
BOARD CHANGES
Following completion of the Board’s succession planning, Michael Warren
retired from the Board at the conclusion of the AGM in November 2024, at which
point the Board reverted to five non-executive Directors.
DISCOUNT MANAGEMENT AND SHARE REPURCHASES
With geopolitical tensions remaining high, market conditions have continued to
be unsettled, leading to a degree of volatility in the Company’s share price
discount to NAV, which ranged during the period between 8.2% at its narrowest
and 14.5% at its widest, finishing the end of the reporting period at 9.5%. In
the six-month reporting period, the Company repurchased 1,503,615 ordinary
shares (2.0% of the issued share capital) for holding in Treasury, at a cost
of £7,550,000. Since then and up to the latest practicable date of this
report, 1,121,748 shares have been repurchased as part of the Company’s
active and ongoing discount management strategy. The primary purpose of share
buybacks is to limit discount volatility, and at the AGM on 21 November 2024
the Board received shareholder approval to renew the annual authority to
repurchase up to 14.99% or to allot up to 10% of the ordinary shares in issue.
The timing of repurchases of ordinary shares are made at the discretion of the
Broker, within guidelines set by the Board and considering market conditions
at the time. Shares will only be repurchased in the market at prices below the
prevailing NAV per ordinary share, thereby resulting in an accretive
enhancement to the NAV per ordinary share. Shares repurchased are currently
held in Treasury and would only be reissued at NAV per ordinary share or at a
premium to NAV per ordinary share. The Board will consider cancelling shares
when the percentage of shares held in Treasury exceeds 10% of the total issued
share capital.
ALLOCATION OF INVESTMENT MANAGEMENT FEES AND FINANCE COSTS
The Board has elected under the Statement of Recommended Practice: Financial
Statements of Investment Trust Companies and Venture Capital Trusts
(“SORP”) issued by the Association of Investment Trust Companies, to
charge 75% of the base investment management fees and finance costs to capital
and 25% to revenue with effect from 1 August 2024. The Board believes that
this allocation better reflects the Company’s focus on capital growth to
generate returns. Previously, these costs were charged in their entirety to
revenue. The change does not affect the total return although relative rates
of taxation of income and capital gains may be a consideration for some
investors.
The variable investment management fee continues to be allocated wholly to
capital.
PRINCIPAL AND EMERGING RISKS
The Board, with the assistance of the Manager (FIL Investments Services (UK)
Limited), has developed a risk matrix which, as part of the risk management
and internal controls process, identifies the key existing and emerging risks
and uncertainties faced by the Company.
The Board considers that the principal risks and uncertainties faced by the
Company continue to fall into the following risk categories: economic,
political and market; investment performance (including the use of derivatives
and gearing); changes in legislation, taxation or regulation; cybercrime and
information security; business continuity and crisis management; competition
and marketplace threats impacting business growth; level of discount to net
asset value; operational; key person; and environmental, social and governance
(ESG). Information on each of these risks is given in the Strategic Report
section of the Annual Report on pages 24 to 28 for the year ended 31 July 2024
which can be found on the Company’s pages of the Manager’s website at
www.fidelity.co.uk/asianvalues.
There continues to be increased geopolitical risks facing the company,
including political and trade tensions globally, trade sanctions and a
challenging regulatory environment hindering foreign investment. Global
economic uncertainty is raised by the ongoing war in Ukraine, the potential
for further Middle East conflict despite the ceasefire, ongoing tensions
between South Korea and North Korea, South China Sea dispute and implications
of China-Taiwan relations. The Board and the Manager remain vigilant in
monitoring such risks.
In recent months, there have been increased concerns around investment cost
disclosure and its impact in the industry. There is a risk that the FCA’s
proposed Consumer Composite Investment (CCI) regime may make investment
companies more complex for consumers and other investors to understand and
increase the regulatory burden imposed on the sector if it proceeds with some
of the proposals as drafted.
There are increased threats facing the sector within the current market
environment of increased mergers and acquisitions activity. The investment
company sector has suffered from significant discounts for an extended period
and this has allowed for some activist managers to take a more aggressive
approach. The Board is aware of these risks and continues to actively monitor
the Company’s discount and is taking action within the guidelines set.
Climate change continues to be a key principal risk confronting asset managers
and their investors. Globally, climate change effects are already being
experienced in the form of a changing pattern of weather events. Climate
change can potentially impact the operations of investee companies, their
supply chains and their customers. Additional risks may also arise from
increased regulations, costs and net-zero programmes which can all impact
investment returns. The Board notes that the Manager has integrated ESG
considerations into the Company’s investment process. The Board will
continue to monitor how this may impact the Company as a risk on investment
valuations and potentially affect shareholder returns.
The Board and the Manager are also monitoring the emerging risks and rewards
posed by the rapid advancement of artificial intelligence (AI) and technology
and how this may threaten the Company’s activities and its potential impact
on the portfolio and investee companies. AI can provide asset managers
powerful tools, such as enhancing data analysis risk management, trading
strategies, operational efficiency and client servicing, all of which can lead
to better investment outcomes and more efficient operations. However, with
these advances in computer power that will impact society, there are risks
from its increasing use and manipulation with the potential to harm, including
a heightened threat to cybersecurity.
Other emerging risks may continue to evolve from future geopolitical and
economic events.
Investors should be prepared for market fluctuations and remember that holding
shares in the Company should be considered to be a long-term investment. Risks
are mitigated by the investment trust structure of the Company which means
that the Portfolio Managers are not required to trade to meet investor
redemptions. Therefore, investments in the Company’s portfolio can be held
over a longer-time horizon.
The Manager has appropriate business continuity and operational resilience
plans in place to ensure the continued provision of services. This includes
investment team key activities, including those of portfolio managers,
analysts and trading/support functions. The Manager reviews its operational
resilience strategies on an ongoing basis and continues to take all reasonable
steps in meeting its regulatory obligations, assess its ability to continue
operating and the steps it needs to take to serve and support its clients,
including the Board.
The Company’s other third-party service providers also have similar measures
in place to ensure that business disruption is kept to a minimum.
TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES
The Manager has delegated the Company’s portfolio management of assets and
company secretariat services to FIL Investments International. Transactions
with the Manager and related party transactions with the Directors are
disclosed in Note 13 to the Financial Statements below.
GOING CONCERN STATEMENT
The Directors have considered the Company’s investment objective, risk
management policies, liquidity risk, credit risk, capital management policies
and procedures, the nature of its portfolio and its expenditure and cash flow
projections. The Directors, having considered the liquidity of the Company’s
portfolio of investments (being mainly securities which are readily
realisable) and the projected income and expenditure, are satisfied that the
Company is financially sound and has adequate resources to meet all of its
liabilities and ongoing expenses and can continue in operational existence for
a period of at least twelve months from the date of this Half-Yearly Report.
This conclusion also takes into account the Board’s assessment of the
ongoing risks as outlined above.
Accordingly, the Financial Statements of the Company have been prepared on a
going concern basis.
Continuation votes are held every five years and the next continuation vote
will be put to shareholders at the AGM in 2026.
BY ORDER OF THE BOARD
FIL INVESTMENTS INTERNATIONAL
24 March 2025
DIRECTORS’ RESPONSIBILITY STATEMENT
The Disclosure and Transparency Rules (“DTR”) of the UK Listing Authority
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 to the best of their knowledge that:
a) the condensed set of Financial Statements contained within the Half-Yearly
Report has been prepared in accordance with the Financial Reporting
Council’s Standard FRS 104: Interim Financial Reporting; and
b) the Portfolio Managers’ Half-Yearly Review and the Interim Management
Report above include a fair review of the information required by DTR 4.2.7R
and 4.2.8R.
The Half-Yearly Report has not been audited or reviewed by the Company’s
Independent Auditor.
The Half-Yearly Report was approved by the Board on 24 March 2025 and the
above responsibility statement was signed on its behalf by Clare Brady,
Chairman.
Financial Statements
Income Statement for the six months ended 31 January 2025
Six months ended 31 January 2025 Six months ended 31 January 2024 Year ended 31 July 2024
unaudited unaudited audited
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Gains/(losses) on investments – 4,641 4,641 – (4,905) (4,905) – 10,399 10,399
Gains/(losses) on derivative instruments – 2,952 2,952 – (6,058) (6,058) – (5,073) (5,073)
Income 4 7,237 – 7,237 6,960 – 6,960 17,605 – 17,605
Investment management fees 5 (345) (1,360) (1,705) (1,362) (389) (1,751) (2,749) (744) (3,493)
Other expenses (487) (6) (493) (522) – (522) (992) – (992)
Foreign exchange gains – 308 308 – 327 327 – 107 107
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/(loss) on ordinary activities before finance costs and taxation 6,405 6,535 12,940 5,076 (11,025) (5,949) 13,864 4,689 18,553
Finance costs 6 (280) (838) (1,118) (1,220) – (1,220) (2,473) – (2,473)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/(loss) on ordinary activities before taxation 6,125 5,697 11,822 3,856 (11,025) (7,169) 11,391 4,689 16,080
Taxation on return/(loss) on ordinary activities 7 (591) 415 (176) (409) (1,945) (2,354) (1,203) (3,215) (4,418)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/(loss) on ordinary activities after taxation for the period 5,534 6,112 11,646 3,447 (12,970) (9,523) 10,188 1,474 11,662
========= ========= ========= ========= ========= ========= ========= ========= =========
Return/(loss) per ordinary share 8 7.88p 8.71p 16.59p 4.80p (18.07p) (13.27p) 14.24p 2.06p 16.30p
========= ========= ========= ========= ========= ========= ========= ========= =========
The Company does not have any other comprehensive income. Accordingly, the net
return/(loss) on ordinary activities after taxation for the period is also the
total comprehensive income for the period and no separate Statement of
Comprehensive Income has been presented.
The total column of this statement represents the Income Statement of the
Company. The revenue and capital columns are supplementary and presented for
information purposes as recommended by the Statement of Recommended Practice
issued by the AIC.
No operations were acquired or discontinued in the period and all items in the
above statement derive from continuing operations.
Statement of Changes in Equity for the six months ended 31 January 2025
Notes Share Share Capital Other non- Capital Revenue Total
capital premium redemption distributable reserve reserve shareholders’
£’000 account reserve reserve £’000 £’000 funds
£’000 £’000 £’000 £’000
Six months ended 31 January 2025 (unaudited)
Total shareholders’ funds at 31 July 2024 18,895 50,501 3,197 7,367 297,210 14,844 392,014
Net return on ordinary activities after taxation for the period – – – – 6,112 5,534 11,646
Repurchase of ordinary shares 11 – – – – (7,550) – (7,550)
Dividend paid to shareholders 9 – – – – – (10,147) (10,147)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total shareholders’ funds at 31 January 2025 18,895 50,501 3,197 7,367 295,772 10,231 385,963
========= ========= ========= ========= ========= ========= =========
Six months ended 31 January 2024 (unaudited)
Total shareholders’ funds at 31 July 2023 18,895 50,501 3,197 7,367 299,562 15,055 394,577
Net (loss)/return on ordinary activities after taxation for the period – – – – (12,970) 3,447 (9,523)
Repurchase of ordinary shares 11 – – – – (677) – (677)
Dividend paid to shareholders 9 – – – – – (10,399) (10,399)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total shareholders’ funds at 31 January 2024 18,895 50,501 3,197 7,367 285,915 8,103 373,978
========= ========= ========= ========= ========= ========= =========
Year ended 31 July 2024 (audited)
Total shareholders’ funds at 31 July 2023 18,895 50,501 3,197 7,367 299,562 15,055 394,577
Net return on ordinary activities after taxation for the year – – – – 1,474 10,188 11,662
Repurchase of ordinary shares 11 – – – – (3,826) – (3,826)
Dividend paid to shareholders 9 – – – – – (10,399) (10,399)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total shareholders’ funds at 31 July 2024 18,895 50,501 3,197 7,367 297,210 14,844 392,014
========= ========= ========= ========= ========= ========= =========
Balance Sheet as at 31 January 2025
Company number 3183919
Notes 31.01.25 31.07.24 31.01.24
unaudited audited unaudited
£’000 £’000 £’000
Fixed assets
Investments 10 371,447 378,577 368,002
--------------- --------------- ---------------
Current assets
Derivative instruments 10 1,473 1,297 1,872
Debtors 1,394 4,379 3,054
Amounts held at futures clearing houses and brokers 3,419 4,413 2,882
Cash at bank 10,546 9,070 5,877
--------------- --------------- ---------------
16,832 19,159 13,685
========= ========= =========
Current liabilities
Derivative instruments 10 (717) (2,045) (1,919)
Other creditors (1,599) (3,242) (5,790)
Bank overdrafts – (435) –
--------------- --------------- ---------------
(2,316) (5,722) (7,709)
========= ========= =========
Net current assets 14,516 13,437 5,976
========= ========= =========
Net assets 385,963 392,014 373,978
========= ========= =========
Capital and reserves
Share capital 11 18,895 18,895 18,895
Share premium account 50,501 50,501 50,501
Capital redemption reserve 3,197 3,197 3,197
Other non-distributable reserve 7,367 7,367 7,367
Capital reserve 295,772 297,210 285,915
Revenue reserve 10,231 14,844 8,103
--------------- --------------- ---------------
Total shareholders’ funds 385,963 392,014 373,978
========= ========= =========
Net asset value per ordinary share 12 554.89p 551.66p 521.65p
========= ========= =========
Notes to the Financial Statements
1 Principal Activity
Fidelity Asian Values PLC is an Investment Company incorporated in England and
Wales that is listed on the London Stock Exchange. The Company’s
registration number is 3183919, and its registered office is Beech Gate,
Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP. The Company has
been approved by HM Revenue & Customs as an Investment Trust under Section
1158 of the Corporation Tax Act 2010 and intends to conduct its affairs so as
to continue to be approved.
2 Publication of Non-statutory Accounts
The Financial Statements in this Half-Yearly Report have not been audited by
the Company’s Independent Auditor and do not constitute statutory accounts
as defined in section 434 of the Companies Act 2006 (the “Act”). The
financial information for the year ended 31 July 2024 is extracted from the
latest published Financial Statements of the Company. Those Financial
Statements were delivered to the Registrar of Companies and included the
Independent Auditor’s Report which was unqualified and did not contain a
statement under either section 498(2) or 498(3) of the Act.
3 Accounting Policies
(i) Basis of Preparation
The Company prepares its Financial Statements on a going concern basis and in
accordance with UK Generally Accepted Accounting Practice (“UK GAAP”) and
FRS 102: The Financial Reporting Standard applicable in the UK and Republic of
Ireland, issued by the Financial Reporting Council. The Financial Statements
are also prepared in accordance with the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies and Venture Capital Trusts
(“SORP”) issued by the Association of Investment Companies (“AIC”) in
July 2022. FRS 104: Interim Financial Reporting has also been applied in
preparing this condensed set of Financial Statements. The accounting policies
followed are consistent with those disclosed in the Company’s Annual Report
and Financial Statements for the year ended 31 July 2024.
(ii) Base Investment Management Fees and Finance Costs
With effect from 1 August 2024, the Board elected under the Statement of
Recommended Practice: Financial Statements of Investment Trust Companies and
Venture Capital Trusts (“SORP”) issued by the Association of Investment
Trust Companies, to charge 75% of base management fees and finance costs to
capital and 25% to revenue, reflecting the Company’s focus on capital growth
to generate returns.
The treatment of the variable management fee and other expenses remains
unchanged.
(iii) Going Concern
The Directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence for a period of at least twelve
months from the date of approval of these Financial Statements. Accordingly,
the Directors consider it appropriate to adopt the going concern basis of
accounting in preparing these Financial Statements. This conclusion also takes
into account the Directors’ assessment of the risks faced by the Company as
detailed in the Interim Management Report above.
4 Income
Six months Six months Year
ended ended ended
31.01.25 31.01.24 31.07.24
unaudited unaudited audited
£’000 £’000 £’000
Investment income
Overseas dividends 5,531 5,501 14,009
Overseas scrip dividends 40 50 172
Interest on securities 302 227 584
--------------- --------------- ---------------
5,873 5,778 14,765
========= ========= =========
Derivative income
Dividends received on long CFDs 889 580 1,797
Interest received on CFDs 216 236 462
--------------- --------------- ---------------
1,105 816 2,259
========= ========= =========
Other interest
Interest received on collateral and deposits 259 366 581
--------------- --------------- ---------------
Total income 7,237 6,960 17,605
========= ========= =========
No special dividends have been recognised in capital during the period (six
months ended 31 January 2024: £nil and year ended 31 July 2024: £1,827,000).
5 Investment Management Fees
Revenue 1 Capital 1 Total
£’000 £’000 £’000
Six months ended 31 January 2025 (unaudited)
Investment management fees – base 345 1,036 1,381
Investment management fees – variable 2 – 324 324
--------------- --------------- ---------------
345 1,360 1,705
========= ========= =========
Six months ended 31 January 2024 (unaudited)
Investment management fees – base 1,362 – 1,362
Investment management fees – variable 2 – 389 389
--------------- --------------- ---------------
1,362 389 1,751
========= ========= =========
Year ended 31 July 2024 (audited)
Investment management fees – base 2,749 – 2,749
Investment management fees – variable 2 – 744 744
--------------- --------------- ---------------
2,749 744 3,493
========= ========= =========
1 As disclosed in the accounting policies above, from 1 August 2024, base
management fees were charged 25% to revenue and 75% to capital. Prior to this
date, base investment management fees were charged 100% to revenue.
2 For the calculation of the variable management fee, the Company’s NAV
return was compared to the Benchmark Index return on a rolling three year
basis.
FIL Investment Services (UK) Limited is the Company’s Alternative Investment
Fund Manager and has delegated portfolio management to FIL Investments
International (“FII”). Both companies are Fidelity group companies.
FII charges base investment management fees at an annual rate of 0.70% of net
assets. In addition, there is a +/- 0.20% variation fee based on the
Company’s NAV per ordinary share performance relative to the Company’s
Benchmark Index which is charged/credited to capital. Fees are payable monthly
in arrears and are calculated on a daily basis.
6 Finance Costs
Revenue 1 Capital 1 Total
£’000 £’000 £’000
Six months ended 31 January 2025 (unaudited)
Interest paid on bank deposits – 1 1
Interest paid on CFDs 261 782 1,043
Dividends paid on short CFDs 19 55 74
--------------- --------------- ---------------
280 838 1,118
========= ========= =========
Six months ended 31 January 2024 (unaudited)
Interest paid on bank deposits 1 – 1
Interest paid on CFDs 1,140 – 1,140
Dividends paid on short CFDs 79 – 79
--------------- --------------- ---------------
1,220 – 1,220
========= ========= =========
Year ended 31 July 2024 (audited)
Interest paid on bank deposits 1 – 1
Interest paid on CFDs 2,147 – 2,147
Dividends paid on short CFDs 325 – 325
--------------- --------------- ---------------
2,473 – 2,473
========= ========= =========
1 As disclosed in the accounting policies above, from 1 August 2024, finance
costs were charged 25% to revenue and 75% to capital. Prior to this date,
finance costs were charged 100% to revenue.
7 Taxation on Return/(Loss) on Ordinary Activities
Six months Six months Year
ended ended ended
31.01.25 31.01.24 31.07.24
unaudited unaudited audited
£’000 £’000 £’000
Revenue – taxation on overseas dividends 591 409 1,203
Capital – Indian capital gains tax (415) 1,945 3,215
--------------- --------------- ---------------
Total taxation charge for the period 176 2,354 4,418
========= ========= =========
8 Return/(Loss) per Ordinary Share
Six months Six months Year
ended ended ended
31.01.25 31.01.24 31.07.24
unaudited unaudited audited
Revenue return per ordinary share 7.88p 4.80p 14.24p
Capital return/(loss) per ordinary share 8.71p (18.07p) 2.06p
--------------- --------------- ---------------
Total return/(loss) per ordinary share 16.59p (13.27p) 16.30p
========= ========= =========
The return/(loss) per ordinary share is based on the net return/(loss) on
ordinary activities after taxation for the period divided by the weighted
average number of ordinary shares in issue during the period, as shown below:
£’000 £’000 £’000
Net revenue return on ordinary activities after taxation 5,534 3,447 10,188
Net capital return/(loss) on ordinary activities after taxation 6,112 (12,970) 1,474
--------------- --------------- ---------------
Net total return/(loss) on ordinary activities after taxation 11,646 (9,523) 11,662
========= ========= =========
Number Number Number
Weighted average number of ordinary shares held outside of Treasury during the period 70,197,994 71,752,985 71,551,097
========= ========= =========
9 Dividends Paid to Shareholders
Six months Six months Year
ended ended ended
31.01.25 31.01.24 31.07.24
unaudited unaudited audited
£’000 £’000 £’000
Dividend of 14.50 pence per ordinary share paid for the year ended 31 July 2024 10,147 – –
Dividend of 14.50 pence per ordinary share paid for the year ended 31 July 2023 – 10,399 10,399
--------------- --------------- ---------------
10,147 10,399 10,399
========= ========= =========
No dividend has been declared in respect of the six months ended 31 January
2025 (six months ended 31 January 2024: £nil).
10 Fair Value Hierarchy
The Company is required to disclose the fair value hierarchy that classifies
its financial instruments measured at fair value at one of three levels,
according to the relative reliability of the inputs used to estimate the fair
values.
Classification Input
Level 1 Valued using quoted prices in active markets for identical assets
Level 2 Valued by reference to inputs other than quoted prices included in level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly
Level 3 Valued by reference to valuation techniques using inputs that are not based on observable market data
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset. The valuation techniques used by the Company are as disclosed
in the Company’s Annual Report for the year ended 31 July 2024 (Accounting
Policies Notes 2 (k) and 2 (l) on pages 57 and 58). The table below sets out
the Company’s fair value hierarchy:
31 January 2025 (unaudited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Investments 355,263 11,581 4,603 371,447
Derivative instrument assets 12 1,461 – 1,473
--------------- --------------- --------------- ---------------
355,275 13,042 4,603 372,920
========= ========= ========= =========
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities (118) (599) – (717)
========= ========= ========= =========
31 July 2024 (audited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Investments 358,503 19,028 1,046 378,577
Derivative instrument assets 131 1,166 – 1,297
--------------- --------------- --------------- ---------------
358,634 20,194 1,046 379,874
========= ========= ========= =========
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities (14) (2,031) – (2,045)
========= ========= ========= =========
31 January 2024 (unaudited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Investments 345,128 22,139 735 368,002
Derivative instrument assets 260 1,612 – 1,872
--------------- --------------- --------------- ---------------
345,388 23,751 735 369,874
========= ========= ========= =========
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities (691) (1,228) – (1,919)
========= ========= ========= =========
The increase in level 3 investments relates to shares purchased in ByteDance,
an unlisted security, during the six months ended 31 January 2025.
11 Share Capital
31 January 2025 31 July 2024 31 January 2024
unaudited audited unaudited
Number of Nominal Number of Nominal Number of Nominal
shares value shares value shares value
£’000 £’000 £’000
Issued, allotted and fully paid
Ordinary shares of 25 pence each held outside of Treasury
Beginning of the period 71,060,556 17,766 71,829,336 17,958 71,829,336 17,958
Ordinary shares repurchased into Treasury (1,503,615) (376) (768,780) (192) (137,825) (34)
--------------- --------------- --------------- --------------- --------------- ---------------
End of the period 69,556,941 17,390 71,060,556 17,766 71,691,511 17,924
========= ========= ========= ========= ========= =========
Ordinary shares of 25 pence each held in Treasury 1
Beginning of the period 4,520,333 1,129 3,751,553 937 3,751,553 937
Ordinary shares repurchased into Treasury 1,503,615 376 768,780 192 137,825 34
--------------- --------------- --------------- --------------- --------------- ---------------
End of the period 6,023,948 1,505 4,520,333 1,129 3,889,378 971
========= ========= ========= ========= ========= =========
Total share capital 18,895 18,895 18,895
========= ========= =========
1 Ordinary shares held in Treasury carry no rights to vote, to receive a
dividend or to participate in a winding up of the Company.
The cost of ordinary shares repurchased into Treasury during the period was
£7,550,000 (year ended 31 July 2024: £3,826,000 and six months ended 31
January 2024: £677,000).
12 Net Asset Value per Ordinary Share
The calculation of the net asset value per ordinary share is based on the
total shareholders’ funds divided by the number of ordinary shares held
outside of Treasury.
31.01.25 31.07.24 31.01.24
unaudited audited unaudited
Total shareholders’ funds £385,963,000 £392,014,000 £373,978,000
Ordinary shares held outside of Treasury at the period end 69,556,941 71,060,556 71,691,511
Net asset value per ordinary share 554.89p 551.66p 521.65p
=========== =========== ===========
It is the Company’s policy that shares held in Treasury will only be
reissued at net asset value per ordinary share or at a premium to net asset
value per ordinary share and, therefore, shares held in Treasury have no
dilutive effect.
13 Transactions with the Manager and Related Parties
FIL Investment Services (UK) Limited is the Company’s Alternative Investment
Fund Manager and has delegated portfolio management and the role of Company
Secretary to FIL Investments International (“FII”). Both companies are
Fidelity group companies.
Details of the fee arrangements are given in Note 5. During the period,
management fees of £1,705,000 (six months ended 31 January 2024: £1,751,000
and year ended 31 July 2024: £3,493,000) and secretarial and administration
fees of £38,000 (six months ended 31 January 2024: £38,000 and year ended 31
July 2024: £75,000) were payable to FII. At the Balance Sheet date, net
management fees of £289,000 (31 January 2024: £291,000 and 31 July 2024:
£277,000) and secretarial and administration fees of £6,000 (31 January
2024: £25,000 and 31 July 2024: £6,200) were accrued and included in other
creditors. FII also provides the Company with marketing services. The total
amount payable for these services during the period was £93,000 (six months
ended 31 January 2024: £94,000 and year ended 31 July 2024: £172,000). At
the Balance Sheet date, marketing services of £106,000 (31 January 2024:
£58,000 and 31 July 2024: £77,000) were accrued and included in other
creditors.
As at 31 January 2025, the Board consisted of five non-executive Directors (as
shown in the Directory in the Half-Yearly Report), all of whom are considered
to be independent by the Board. None of the Directors have a service contract
with the Company. The Chairman receives an annual fee of £46,000, the
Chairman of the Audit Committee an annual fee of £38,000, the Senior
Independent Director an annual fee of £33,500 and each other Director an
annual fee of £31,500. The following members of the Board held shares in the
Company: Hussein Barma 2,500 ordinary shares, Clare Brady 13,073 ordinary
shares, Lucy Costa Duarte 3,800 ordinary shares, Sally Macdonald 2,734
ordinary shares and Matthew Sutherland 27,859 ordinary shares.
The financial information contained in this Half-Yearly Results Announcement
does not constitute statutory accounts as defined in section 435 of the
Companies Act 2006. The financial information for the six months ended 31
January 2025 and 31 January 2024 has not been audited or reviewed by the
Company’s Independent Auditor.
The information for the year ended 31 July 2024 has been extracted from the
latest published audited financial statements, which have been filed with the
Registrar of Companies, unless otherwise stated. The report of the Auditor on
those financial statements contained no qualification or statement under
sections 498(2) or (3) of the Companies Act 2006.
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
A copy of the Half-Yearly Report will shortly be submitted to the National
Storage Mechanism and will be available for inspection at
www.morningstar.co.uk/uk/NSM
The Half-Yearly Report will also be available on the Company's website at
www.fidelity.co.uk/asianvalues where up to date information on the Company,
including daily NAV and share prices, factsheets and other information can
also be found.
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