JPMorgan China G&I - Annual Financial Report
19/12/2025 11:24
RNS Number : 3145M
JPMorgan China Growth & Income PLC
19 December 2025
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN CHINA GROWTH & INCOME PLC (the 'Company')
FINAL RESULTS FOR THE YEAR ENDED 30th SEPTEMBER 2025
Legal Entity Identifier: 549300S8M91P5FYONY25
Highlights:
· NAV total return of +29.3% compared with +30.3% for the MSCI China Index in Sterling terms (the 'Benchmark'). Share price total return of +35.2% outperforming the index by +4.9%.
· For three years cumulative, NAV total return of +12.9% compared with +41.4% for the Benchmark. Share price total return of +17.2%.
· For ten years cumulative, NAV total return of +145.4% compared with +120.3% for the Benchmark. Share price total return of +172.6%.
· Four quarterly dividends of 2.73p per share paid during the year, totalling 10.92p per share. For the year ending 30th September 2026, the quarterly dividend, subject to any unforeseen circumstances, has been increased by 24.2% to 3.39p per share (annual total 13.56p).
· The Company repurchased 134,622 shares into Treasury during the year and its share price discount to NAV narrowed to 9.7% at year end (2024: 13.1%).
· Sector allocation, including a significant overweight to Industrials and a more modest overweight to Consumer Discretionary, contributed positively to performance over the year, as did gearing. However, these were offset by the adverse impact of stock selection, with detractors including Meituan and Xiaomi.
Alexandra Mackesy, Chairman, commented:
"The Board is encouraged by the Investment Manager's steps to improve our Company's performance, particularly in terms of stock selection…The Investment Manager has concentrated our portfolio in areas that are well positioned to capitalise on emergent opportunities, including a recovery in consumer spending in China and high-quality technology. The Board shares the Investment Manager's optimism about the long-term prospects for the Chinese stock markets."
The Portfolio Management Team commented:
"The recovery in performance is much welcomed after three challenging years for the Company. In addition, the Company's long-term track record of outright gains and outperformance remains intact... In response to developments over the past year, we have concentrated portfolio holdings in two areas: domestically focused businesses with exposure to structural growth tailwinds such as technology advancement and energy transformation; and exporters with global competitiveness, that have strong pricing power and well-diversified supply chains and are thus well-positioned to weather the challenges presented by higher tariffs.
The worst of China's economic slowdown and market de-rating is probably behind us… We are confident that China's more stable economic prospects, combined with attractive valuations, and our continued focus on fundamental stock selection, leave the portfolio well-positioned to capitalise on emerging opportunities. Furthermore, we believe that the market environment is lending itself once again to our growth orientated style. After a period of disappointing performance, the portfolio management team is committed to grasping these opportunities to deliver superior long-term returns for shareholders."
CHAIRMAN'S STATEMENT
Introduction
After a challenging few years, it is pleasing to report that the Company's total return on net assets (with net dividends reinvested) climbed +29.3% in the year ended 30th September 2025. During the same period, the Company's share price total return increased +35.2%, with the discount to net asset value ('NAV') narrowing to 9.7% from 13.1% at the end of the previous year.
When discussing the outlook in the Half Year Report, I commented that 'the future outlook for Chinese equities and for our portfolio appears to be improving'. This proved to be the case. The Company's total return on net assets rose 24.2% in the second half of the financial year, and the share price total return climbed 23.6%. While relations between the US and China remained hard to decipher during the second half of the financial year, China's economy, including its export trade, demonstrated remarkable resilience and adaptability. The Chinese government's focus on a strategic, long-term economic transformation, together with co-ordinated policy initiatives, fostered a much-needed sense of economic stability and strengthened domestic investors' confidence. At the same time, the announcement of DeepSeek's AI technology breakthrough created a surge of interest in cutting-edge technologies. As a result, the Chinese stock markets rallied enthusiastically, driven by thematic investment and helped by a new government policy encouraging local insurance companies to increase their exposure to listed equities. Hong Kong's stock market led the charge. A spate of successful initial public offers ('IPOs') in Hong Kong also boosted sentiment. Between January and September 2025, companies raised some HK$88 billion (£18 billion), with Hong Kong responsible for four of the top ten global IPOs. This exuberance spilled over to the Shanghai and Shenzhen markets in the last three months of the financial year, with the Shanghai Index reaching a ten year high.
It is disappointing that the Company's total return on net assets underperformed the MSCI China Index (the 'Benchmark') in the period under review, albeit marginally. The Board is particularly concerned that the Company's total return on net assets significantly underperformed the Benchmark over three and five years, by 28.5% and 23.6%, respectively. As has been the case for the last three years, value-focused stocks drove much of the Benchmark's rise, particularly companies controlled by state-owned enterprises. The Company's disciplined Investment Manager focuses on the long-term prospects of quality growth companies, including A share companies (listed on the Shanghai and Shenzhen exchanges), which lagged the initial market rally. Stock selection also proved a drag on the Company's performance.
That said, the Company's objective is to achieve 'long-term capital growth'. The Company's long-term track record of absolute gains and outperformance remains intact. Over the ten years to 30th September 2025, the Company's return in NAV terms was +145.4% and +172.6% in share price terms, compared with the Benchmark return of +120.3%.
The Investment Manager's Report sets out details of recent performance and portfolio activity and discusses the outlook for 2026.
The Board's engagement with the Manager
In addition to its regular board meetings and its annual visit to Hong Kong and China, the Board had candid discussions with the Manager throughout the period. Concerned about the Company's relative underperformance over the medium term, the Board examined the Investment Manager's investment processes in detail and interrogated the actions being implemented by JPMorgan to improve stock selection and enhance future investment performance. Investment processes have been refined, including more robust industry framework analysis, and AI tools are being adopted to support and enhance daily operations. The Board noted the Investment Manager's enhanced research teams in Hong Kong, Taipei and Shanghai, the further integration of JP Morgan's domestic-focused analysts in Shanghai within the Greater China investment team, and the appointment of new portfolio analysts to support the Company's portfolio management team. One of the key objectives of the Board's recent visit to Hong Kong and China was to review these enhancements and to meet these new recruits. Our portfolio management team has leveraged these expanded and enhanced research capabilities to adapt the Company's portfolio to reflect the new realities that face them and the attractive opportunities offered by China's rapidly evolving corporate sector. The Board will continue to monitor closely the impact of these improvements.
Review of services provided by the Manager
In addition to its rigorous review of investment processes, the Board, through its Management Engagement Committee, carried out its regular annual review of the investment management, secretarial, administration and marketing services provided to the Company by the Manager and Investment Manager. These services have been formally assessed through the annual manager evaluation process. Taking all factors into account, the Board concluded that the ongoing appointment of the Manager is in the continuing interests of shareholders.
Ongoing charges for the year ended 30th September 2025 fell to 1.05% from 1.18% for the previous year, mainly reflecting the impact of the reduction of the management fee on 1st April 2024.
Dividend
In the absence of unforeseen developments, the Company's dividend policy aims to pay regular, quarterly dividends, equivalent in total to 4% of the Company's NAV on the last business day of the preceding financial year, in order to provide clarity to shareholders over the income stream they can expect during the following 12 months. This is paid by way of four equal interim dividends on the first business day in December, March, June and September.
For the year ended 30th September 2025, four quarterly dividends of 2.73 pence per ordinary share ('pps') (2024: 2.76pps) were paid to shareholders, totalling 10.92pps (2024: 11.04pps) in line with the above policy. This represented a 1.09% reduction year-on-year but was consistent with the decline in the Company's NAV over the 12 months to 30th September 2024. These dividends were paid from a combination of revenue returns and capital reserves.
As announced on 2nd October 2025, for the year ending 30th September 2026, subject to the absence of unforeseen circumstances, a quarterly dividend of 3.39pps will be paid, totalling 13.56pps. This equates to an annual dividend of 4% of the Company's unaudited NAV as at 30th September 2025 and represents an increase of 24.2% year-on-year, reflecting both the growth in the Company's NAV and improved financial returns. The first quarterly dividend was paid on 1st December 2025 to shareholders on the register at the close of business on 17th October 2025. The ex-dividend date was 16th October 2025.
Loan Facility and Gearing
The Board considers the use of gearing to be beneficial to performance, and therefore advantageous to shareholders. The Company is permitted to use gearing up to a maximum level of 20% of shareholders' funds. While the Board has established the overarching strategic policy and guidelines for gearing, it has given the Investment Manager discretion to manage gearing tactically within a range set by the Board, from 10% net cash to 20% geared, subject to daily market movements.
The Company repaid in full its £30.0 million two-year revolving loan facility with Industrial and Commercial Bank of China Limited, London Branch ('ICBC') upon its maturity on 15th July 2025. Instead, the Board has made the decision to use low-cost and capital efficient Contracts for Differences ('CFDs'). This strategic decision reflects the Company's commitment to efficient capital management and to maximising shareholder value.
At the year-end, the Company was 11.9% geared. Gearing ranged from 12.9% and 3.1% throughout the year and, at the time of writing, was 12.9%. The Board closely monitors the use and cost effectiveness of using CFDs for gearing. The use of gearing contributed positively to performance in the year under review.
Discount Management and Share Repurchases
At last year's Annual General Meeting, shareholders granted the Directors authority to allot new shares and to repurchase the Company's own ordinary shares for cancellation or to be held in Treasury. During the financial year, the Company repurchased 134,622 of its own ordinary shares into Treasury, at a total cost of £314,000 and an average weighted discount of 11.1%. These repurchases added 0.045 pps to the Company's NAV. The Company did not issue any ordinary shares.
As in previous years, the Board's objective is to use share repurchase and share issuance authorities to help reduce the volatility in the level of the Company's discount by managing imbalances between supply and demand. We continue to focus on minimising our discount volatility in recognition of the importance in supporting existing shareholders. The Board monitors closely the discount of the Company and its peers, receiving daily reports from the Company's broker When considering share buybacks, the Board considers carefully the Company's size and what is in the best interests of all shareholders. This is particularly the case when, in periods of extended volatility, the Investment Manager finds attractive opportunities to enhance long-term shareholder returns by investing in undervalued quality growth companies.
Share repurchases are only undertaken at a discount to NAV, ensuring value accretion for continuing shareholders. Shares held in Treasury may be re-issued at a premium to NAV, providing flexibility in capital management. We are therefore seeking approval from shareholders to renew the share issuance and repurchase authorities at the forthcoming Annual General Meeting.
The Board
As mentioned in the Company's last Annual Report, it was agreed to increase the Board size to five members as the Board believes this to be the optimal number of Directors for this Company. We were delighted that Nick Bannerman joined the Board on 24th January 2025, and he is proving a valuable addition. For more details regarding his directorships and experience, please see the full annual report.
In July 2025, the Board, through its Nomination Committee, carried out a comprehensive evaluation of the Board, its Committees, the individual Directors and the Chairman. Topics evaluated included board composition, diversity, board information and processes, shareholder engagement, as well as training and accountability. The evaluation confirmed the efficacy of the Board.
In line with the AIC Corporate Governance Code, all Directors will retire at the forthcoming Annual General Meeting and, being eligible, will offer themselves for reappointment by shareholders, with the exception of Nick, who will offer himself for election, with this being his first Annual General Meeting since his appointment to the Board.
Board Diversity
The Board recognises the value and importance of diversity in the boardroom. I am pleased to report that the Board meets the Financial Conduct Authority ('FCA') UK listing rules' diversity targets on gender diversity criteria, female representation in a senior role and ethnic representation on the Board.
Environment, Social and Governance ('ESG') considerations
The Company has not sought any Sustainability label under the UK Sustainability Directive Regime. However, as detailed in the Investment Process in the full annual report, the Board is satisfied that financially material ESG considerations are integrated into the investment process.
The Board shares the Investment Manager's view of the importance of considering financially material ESG factors when making investments for the long term, and in particular, the necessity of continued engagement with investee companies over the duration of the investment. More details can be found in the full annual report.
Annual General Meeting
The Company's thirty-first Annual General Meeting ('AGM') will be held at 60 Victoria Embankment, London EC4Y 0JP on Tuesday, 3rd February 2026 at 11.30 a.m. The Board cannot stress strongly enough the importance of all shareholders exercising their right to vote, regardless of their size of holding, and hopes to welcome as many shareholders as possible to the AGM. As with previous years, you will have the opportunity to hear from members of the portfolio management team. Their presentation will be followed by a question-and-answer session. Shareholders wishing to follow the AGM proceedings but choosing not to attend will be able to view them live and ask questions through conferencing software. Details on how to register, together with access details, can be found on the Company's website: www.jpmchinagrowthandincome.co.uk, or by contacting the Company Secretary at jpmam.investment.trusts@jpmorgan.com.
In accordance with normal practice, all voting on the resolutions will be conducted on a poll. Due to technological reasons, shareholders viewing the meeting via conferencing software will not be able to vote on the poll. We therefore encourage all shareholders, and particularly those who cannot attend physically, to submit their proxy votes in advance of the meeting, so that they are registered and recorded at the AGM. Proxy votes can be lodged in advance of the AGM either by post or electronically: detailed instructions are included in the Notes to the Notice of Annual General Meeting in the full Annual Report. In addition, shareholders are encouraged to send any questions ahead of the AGM to the Board via the Company Secretary at the email address below. We will endeavour to answer relevant questions at the meeting or via the website depending on arrangements in place at the time.
If there are any changes to the above AGM arrangements, the Company will update shareholders through its website and, if appropriate, through an announcement on the London Stock Exchange.
My fellow Board members, representatives of JPMorgan and I look forward to the opportunity to meet and speak with shareholders over lunch, after the formalities of the meeting have been concluded.
Cancellation of the Share Premium Account and Capital Redemption Reserve
The Company has a substantial share premium account and capital redemption reserve. However, these two reserve accounts are non-distributable. Cancelling the amounts standing to the credit of such reserves will provide the Company with additional flexibility as the Company will be able to use the resulting distributable reserve in future, if required, to fund the payment of dividends, share repurchases or other returns of capital in accordance with the Companies Act 2006. The Board is therefore seeking shareholder authority for the cancellation of the Company's share premium account and capital redemption reserve at the forthcoming Annual General Meeting, following which it will make an application to the High Court to obtain its approval for the cancellation and the credit arising in the Company's books of account will be able to be applied in crediting a distributable reserve.
Change of Investment Policy and Restrictions
At the forthcoming Annual General Meeting, the Board is proposing changes to the Company's investment policy to amend the current investment restrictions. A strike through comparison of the investment restrictions, as amended, is set out in full in the full annual report. The Company is seeking approval to amend its investment restrictions, including the maximum permitted exposure to a single company. This was previously limited to 10% of total assets at the time of investment, albeit this could grow up to 12.5% as a result of market moves. This restriction has led to the Company being underweight companies such as Tencent and Alibaba, despite our Investment Manager favouring both, particularly the former as the Investment Manager's Report notes below. This also led to a significant headwind to performance relative to our Benchmark in the latest financial year. As a result, your Board is recommending that the maximum permitted exposure to an individual company be limited to the lower of: (i) a 5% position over the Benchmark; or (ii) 20% of net assets. To be clear, this could result in a significant proportion of the Company being exposed to a small handful of companies. However, we believe that it is right to back our Investment Manager and its investment process. The overall investment strategy of the Company will remain unchanged. The Financial Conduct Authority has approved the proposed changes.
Amendment to the Company's Articles of Association
The Directors are proposing that the Company adopt new Articles of Association which contain provisions dealing with the potential situation whereby fewer directors than the required minimum number are re-elected at an Annual General Meeting. Resolution 18 seeks shareholder approval for this amendment to be made to the Company's existing articles of association with the adoption of the new articles. No other amendments are being proposed at this time.
Stay Informed
The Company delivers email updates with regular news and views, as well as the latest performance, and holds regular webinars. If you have not already signed up to receive these communications and to attend the webinars and you wish to do so, you can opt in via https://tinyurl.com/JCGI-Sign-Up or by scanning the QR code in the full annual report
Outlook
After a strong performance during the first 11 months of 2025, the key question now is whether the Chinese stock market rally is sustainable. During its recent China trip, the Board visited a number of portfolio companies and met with industry experts and business people in Hong Kong, Beijing and Shanghai, as well as the Investment Manager's enhanced Greater China Team. While concerns about the property market, domestic consumption and unemployment remain, there is a general sense that a bottom has been reached. Interest rates have fallen, and there are some signs of improving consumer sentiment, particularly in terms of high-end consumption and travel. Chinese companies have demonstrated remarkable resilience and adaptability in the face of unexpected challenges. The use of AI-related technology is transforming business models, and companies are embracing the use of share buybacks and clear dividend policies. At the same time, the Chinese government's strategic pivot towards industrial upgrades, bolstered by its 'anti-involution' policy designed to eliminate excess capacity, and high-tech manufacturing has been widely welcomed. At the Communist Party's Fourth Plenum, held in October, the government confirmed its commitment to self-sufficiency in its fifteenth Five Year Plan. Due to be implemented in early 2026, this plan emphasises advanced manufacturing to fuel high-quality development together with greater co-ordination of regional development.
Assuming that China's economic prospects have stabilised, and given the attractive valuations of quality growth companies, prospects for Chinese equities and our portfolio appear to be improving. Our Investment Manager is 'cautiously optimistic' about next year's prospects. That said, tensions are likely to remain high between the US and China. As a dominant producer of rare earth elements, China has demonstrated that it has a powerful lever to counter high-tech restrictions imposed by the US. This could lead to a more balanced and predictable trading environment. As long as these geopolitical tensions remain, however, market sentiment is likely to remain cautious, ahead of the US mid-term elections, with overseas investors remaining on the sidelines. Stock-specific and thematic ideas are likely to remain the drivers of market rallies in 2026.
The Board is encouraged by the Investment Manager's steps to improve our Company's performance, particularly in terms of stock selection. With these improvements in place and supported by an enlarged team of experienced analysts, the Investment Manager has concentrated our portfolio in areas that are well positioned to capitalise on emergent opportunities, including a recovery in consumer spending in China and high quality technology. The Board shares the Investment Manager's optimism about the long-term prospects for the Chinese stock markets, and will work closely with them to ensure that the Company maintains its well established track record of absolute gains and long-term outperformance.
On behalf of the Board, I would like to thank you for your ongoing support.
Alexandra Mackesy
Chairman 19th December 2025
INVESTMENT MANAGER'S REPORT
During the financial year ended 30th September 2025, the Company's net assets returned +29.3% (in sterling terms), while the share price return was +35.2%. This compares with a return of +30.3% by its Benchmark, the MSCI China Index (the 'Benchmark'). The recovery in performance is much welcomed after three challenging years for the Company. In addition, the Company's long-term track record of outright gains and outperformance remains intact. Over the ten years to 30th September 2025, the Company produced an average annualised return of +9.4% in NAV terms, and +10.5% on a share price basis, ahead of the annualised Benchmark return of +8.2%.
Setting the scene
The financial year just ended was a dynamic period marked by a complex interplay of structural changes within the Chinese economy, significant policy interventions, and fluctuations in the global market environment. The Chinese economy demonstrated remarkable resilience and adaptability in the face of ongoing challenges, notably a prolonged trade war with the US and a continued downturn in the domestic property sector. China's GDP growth for the first nine months of 2025 was 5.2% year-on-year, with the third quarter expanding by 4.8% annually. The economy was supported by exports, which grew 6.1% in the first three quarters of the calendar year. In response to aggressive increases in US tariffs, Chinese producers expanded sales to new markets, such as the European Union and Southeast Asia, which more than offset a significant drop in exports to the US.
Rather than relying on large-scale stimulus packages, the Chinese government's policy approach focused on a strategic longer-term economic transformation, steering the economy away from its traditional reliance on the property sector, towards a new, more sustainable model driven by technological innovation and industrial upgrades. This shift was a central theme throughout the year. The government's coordinated policy initiatives, which began in late 2024, were crucial in fostering a much-needed sense of economic stability and policy direction that boosted market sentiment. The initiatives included a series of pro-growth and pro-business regulations aimed at improving investor and consumer confidence. Measures targeted at stabilising the property market focused on reductions in down payment requirements and mortgage rates. To prevent systemic risk, the authorities also applied pressure on banks to coordinate efforts to support major developers. There were also measures to stimulate domestic demand and spending, including trade-in subsidies for a variety of consumer products, although these initiatives have not yet had a significant impact on consumption.
Another significant positive driver of market performance over the year was the emergence of new growth opportunities. The year was defined by a surge of interest and investment in cutting-edge technologies. The rapid advancements in artificial intelligence ('AI') and the 'Deepseek breakthrough' were particularly impactful, creating a wave of optimism and signalling new avenues for value creation beyond traditional sectors. This technological momentum was complemented by advancements in other areas, including autonomous technology, humanoid robots, and biotech.
Changes to the government's regulatory framework were also well received by investors. Crackdowns on capital market misconduct and the promotion of a more pro-business, pro-private enterprise regulatory environment by the China Securities Regulatory Commission ('CSRC') and other government bodies sent a strong signal of their commitment to fostering a more stable and investor-friendly environment. The government also explicitly expressed its willingness to support capital markets, by encouraging state-owned investment funds to buy domestic stock ETFs.
Together, these economic and technological developments and policy initiatives helped to significantly improve investor confidence from the very low levels seen during and immediately after the pandemic. The collective effect was a market that, while still facing headwinds, was increasingly perceived as a place of opportunity rather than risk.
Performance attribution
Year ended 30th September 2025
| % | % | |
| Contributions to total returns | ||
| Benchmark total return | 30.3 | |
| Sector allocation | 2.0 | |
| Stock selection | (5.5) | |
| Gearing/net cash | 3.8 | |
| Currency effect | 0.5 | |
| Investment Manager contribution | 0.8 | |
| Dividend/residual | (0.6) | |
| Portfolio total return | 30.5 | |
| Management fee and other expenses | (1.2) | |
| Net asset value total return | 29.3 | |
| Ordinary share price total return | 35.2 |
| Top five contributors | Sector | % contribution |
| Montage Technology | Information Technology | 1.31 |
| GenFleet Therapeutics | Healthcare | 1.04 |
| Minth | Consumer Discretionary | 0.82 |
| Guming Holdings | Consumer Discretionary | 0.80 |
| JD.com (not held) | Consumer Discretionary | 0.78 |
| Detractors: | ||
| Top five detractors | Sector | % detraction |
| Xiaomi | Information Technology | -2.01 |
| Meituan | Consumer Discretionary | -1.08 |
| Qingdao Haier Bio | Healthcare | -0.83 |
| Silergy | Information Technology | -0.77 |
| Tencent | Communication Services | -0.64 |
| Principal risk | Description | Mitigation/Control | Movement in risk status in year to 30th September 2025 |
| Investment management and performance | |||
| Geopolitical | Geopolitical risk can cause volatility in the markets in which the Company is invested; restrictions on the ability to invest and the free movement of capital can also potentially impact the ability of the Manager and other service providers to carry on business as usual. Specifically in China, we have seen instances of the government interfering in certain sectors of the financial markets as well as concerns relating to US-China trade tensions, potential conflict involving Taiwan and wider questions about supply chains and human rights in China. These concerns have led to international investors reducing their investments in China, and could risk damaging overseas sentiment towards Chinese equities further. | The Board meets advisers and gathers insights from both JPMorgan and independent sources on a regular and ongoing basis and takes advice from the Manager and its professional advisers. | ã The Audit Committee's assessment of geopolitical risk has increased from the prior year. This reflects increased market volatility following the introduction of, and uncertainties relating to, US tariffs on Chinese goods; the likelihood of increased tensions between the US and China ahead of the US mid-term elections in 2026; and the ongoing conflict in Ukraine/Russia and continued tensions in the Middle East. |
| Investment under-performance | Inappropriate investment decisions may lead to sustained investment underperformance against the Company's Benchmark index and peer companies, resulting in the Company's shares trading on a wider discount, as well as discontent amongst the Company's shareholders. In addition, a significant loss of scale would leave the Company less attractive to investors given the increase in the cost base and reduction in liquidity in the secondary market for its shares. | The Board aims to manage this risk by diversification of investments through its investment restrictions and guidelines, which are monitored and reported on by the Manager. The Manager provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates and transaction reports. The Board monitors the implementation and results of the investment process with the portfolio management team, who attend all Board meetings, and reviews data which show statistical measures of the Company's risk profile. | áâ The Audit Committee's assessment of this risk has remained heightened, and unchanged from the prior year. This reflects the continued under-performance of the portfolio. While the Company's absolute performance was very positive during the period under review, the Board remains concerned about the Company's relative NAV performance over the medium term. The Directors believe that the Chinese market is poised for a period of stronger performance and that the market environment is lending itself once again to the growth orientated style of the Company's portfolio management team. |
| Loss of portfolio management team or Investment Manager | A sudden departure of one or more members of the portfolio management team could result in a deterioration in investment performance. | The Board seeks assurance that the Manager takes steps to reduce the likelihood of such an event by ensuring appropriate succession planning and the adoption of a team-based approach, as well as special efforts to retain key personnel. The Board engages privately with the portfolio management team on a regular basis and visits them annually in Shanghai and Hong Kong. | áâ The Audit Committee's assessment of this risk remained stable and unchanged from the prior year. There are no identified concerns with the stability of the portfolio management team. Furthermore, the Management Engagement Committee seek annual assurances from the Investment Manager on its succession plans. |
| Share price discount | A disproportionate widening of the discount relative to the Company's peers could result in a loss of value for shareholders. | In order to manage the Company's discount, which can be volatile, the Company operates an active marketing plan as well as a share repurchase programme. The Board regularly discusses discount policy and has set parameters for the Manager and the Company's broker to follow. The Board receives regular reports and is actively involved in the discount management process. In addition, the Company's conditional tender offer of up to 15% of the issued share capital should limit the extent of the discount in the event that the tender offer is triggered in 2028. | áâ The Audit Committee's assessment of this risk has remained heightened, and unchanged from the prior year. Whilst the Company's discount to its NAV narrowed during the year, it remains sensitive to market volatility. The Board required minimal use of the share buyback authorities. |
| Operational risks | |||
| Cyber crime | Disruption to, or failure of, the Manager's accounting, dealing or payments systems or the depositary's or custodian's records may prevent accurate reporting and monitoring of the Company's financial position. In addition to threatening the Company's operations, such an attack is likely to raise reputational issues which may damage the Company's share price and reduce demand for its shares. This risk is heightened given advances in computing power that mean that artificial intelligence ('AI') has become a powerful tool which can potentially impact and disrupt a wide range of applications. | Details of how the Board monitors the services provided by the Manager, its associates and depositary and the key elements designed to provide effective internal control are included within the Risk Management and Internal Control section of the Directors' Report in the full annual report. The threat of cyber attack, in all its guises, is regarded as at least as important as more traditional physical threats to business continuity and security. The Company benefits directly or indirectly from all elements of JPMorgan's Cyber Security programme. The information technology controls around the physical security of JPMorgan's data centres, security of its networks and security of its trading applications are tested independently. | áâ The Audit Committee's assessment of this risk remains heightened, and unchanged from the previous year. To date the Manager's cyber security arrangements have proven robust and the Company has not been impacted by any cyber attacks threatening its operations. However, the Audit Committee is cognisant of the increasing number of cyber attacks, in both scale and cost, occurring not only in the UK but worldwide. Furthermore, cyber threats are evolving through new technologies, such as AI. |
| Economic and geopolitical | |||
| Climate change | Climate change is one of the most critical issues confronting asset managers and their investors. Climate change may have a disruptive effect on individual investee companies and the operations of the Manager and other service providers. | The Manager's investment process integrates consideration of financially material environmental, social and governance factors into decisions on which stocks to buy, hold or sell (see full annual report). This includes the approach investee companies take to recognising and mitigating climate change risks. The Manager aims to influence the management of climate related risks through engagement and voting and is a participant of Climate Action 100+ and a signatory of the United Nations Principles for Responsible Investment. As extreme weather events become more common, in particular with the typhoons, flooding and droughts experienced in China, the resiliency, business continuity planning and the location strategies of our services providers will come under greater scrutiny. | áâ The Audit Committee's assessment of this risk remains stable, and unchanged from the previous year. This reflects the view that climate risk is to be viewed over the longer term and its current specific impact on the Company is uncertain and difficult to quantify. |
| Emerging risk | Description | Mitigation/Control | Movement in risk status in year to 30th September 2025 |
| Impact of reshoring and tariffs | Political and economic pressures from countries in the Developed Markets, led by the US, have led to instances of 'reshoring' in recent years that have potentially negative consequences for both the Chinese economy and its companies. In addition, the threat of a step change in tariffs applied to goods originating in China and the wider Asian region could see a robust response from those countries impacted, with a dampening effect on global economic activity. | The Board works with the Manager using JPMorgan's resources to monitor developments on a continuous basis. Working closely with the Board, the portfolio management team will keep shareholders regularly informed of its views using various communication methods such as webcasts, monthly fact sheets and the Company's website. | áâ The Audit Committee's assessment of this risk remains stable, and unchanged from the previous year. |
| Year ended | Year ended | |||||
| 30th September 2025 | 30th September 2024 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Gains on investments held at fair value | ||||||
| through profit or loss | - | 56,563 | 56,563 | - | 4,194 | 4,194 |
| Gains on derivative financial instruments1 | - | 6,497 | 6,497 | - | - | - |
| Foreign currency exchange (losses)/gains2 | - | (940) | (940) | - | 1,308 | 1,308 |
| Income from investments | 4,219 | 148 | 4,367 | 4,346 | 106 | 4,452 |
| Income from derivative financial instruments1 | 240 | - | 240 | - | - | - |
| Other income | 337 | - | 337 | 96 | - | 96 |
| Gross return | 4,796 | 62,268 | 67,064 | 4,442 | 5,608 | 10,050 |
| Management fee | (446) | (1,339) | (1,785) | (429) | (1,286) | (1,715) |
| Other administrative expenses | (604) | - | (604) | (647) | - | (647) |
| Net return before finance costs and taxation | 3,746 | 60,929 | 64,675 | 3,366 | 4,322 | 7,688 |
| Finance costs | (233) | (699) | (932) | (276) | (829) | (1,105) |
| Net return before taxation | 3,513 | 60,230 | 63,743 | 3,090 | 3,493 | 6,583 |
| Taxation | (278) | - | (278) | (267) | - | (267) |
| Net return after taxation | 3,235 | 60,230 | 63,465 | 2,823 | 3,493 | 6,316 |
| Return per ordinary share (Note 3) | 3.89p | 72.43p | 76.32p | 3.39p | 4.20p | 7.59p |
| Called up | Share | Exercised | Capital | |||||
| share | premium | warrant | redemption | Other | Capital | Revenue | ||
| capital | account | reserve | reserve | reserve1 | reserves2 | reserve2 | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| At 30th September 2023 | 20,803 | 80,951 | 3 | 581 | 37,392 | 90,042 | - | 229,772 |
| Proceeds from share forfeiture3 | - | - | - | - | - | 333 | - | 333 |
| Net return after taxation | - | - | - | - | - | 3,493 | 2,823 | 6,316 |
| Dividends paid in the | ||||||||
| year (note 2) | - | - | - | - | - | (6,202) | (2,984) | (9,186) |
| Refund of unclaimed | ||||||||
| dividends3 (note 2) | - | - | - | - | - | - | 161 | 161 |
| At 30th September 2024 | 20,803 | 80,951 | 3 | 581 | 37,392 | 87,666 | - | 227,396 |
| Repurchase of ordinary shares | ||||||||
| into Treasury | - | - | - | - | (314) | - | - | (314) |
| Net return after taxation | - | - | - | - | - | 60,230 | 3,235 | 63,465 |
| Dividends paid in the | ||||||||
| year (note 2) | - | - | - | - | - | (5,847) | (3,235) | (9,082) |
| At 30th September 2025 | 20,803 | 80,951 | 3 | 581 | 37,078 | 142,049 | - | 281,465 |
| At | At | |
| 30th September | 30th September | |
| 2025 | 20241 | |
| £'000 | £'000 | |
| Fixed assets | ||
| Investments held at fair value through profit or loss1 | 262,796 | 224,328 |
| Investments on loan at fair value through profit or loss1 | 13,606 | 11,069 |
| Total investments held at fair value through profit or loss | 276,402 | 235,397 |
| Current assets | ||
| Derivative financial instrument assets2 | 2,441 | - |
| Debtors | 1,139 | 630 |
| Current asset investments3 | 4,854 | 347 |
| Cash at bank | 690 | 2,291 |
| 9,124 | 3,268 | |
| Current liabilities | ||
| Derivative financial instrument liabilities2 | (413) | - |
| Creditors: amounts falling due within one year | (3,648) | (11,269) |
| Net current assets/(liabilities) | 5,063 | (8,001) |
| Net assets | 281,465 | 227,396 |
| Capital and reserves | ||
| Called up share capital | 20,803 | 20,803 |
| Share premium account | 80,951 | 80,951 |
| Exercised warrant reserve | 3 | 3 |
| Capital redemption reserve | 581 | 581 |
| Other reserve | 37,078 | 37,392 |
| Capital reserves | 142,049 | 87,666 |
| Revenue reserve | - | - |
| Total shareholders' funds | 281,465 | 227,396 |
| Net asset value per ordinary share (Note 4) | 338.8p | 273.3p |
| Year ended | Year ended | |
| 30th September | 30th September | |
| 2025 | 2024 | |
| £'000 | £'000 | |
| Cash flows from operating activities | ||
| Net return before finance costs and taxation | 64,675 | 7,688 |
| Adjustment for: | ||
| Gains on investments held at fair value through profit or loss | (56,563) | (4,194) |
| Gains on derivative financial instruments1 | (6,497) | - |
| Foreign currency exchange losses/(gains) | 940 | (1,308) |
| Dividend income | (4,367) | (4,452) |
| Income from derivative financial instruments1 | (240) | - |
| Interest and stock lending income | (337) | (48) |
| Realised gains/(losses) on foreign currency exchange transactions | 425 | (298) |
| Realised foreign currency exchange losses on the JPMorgan USD Liquidity Fund | (360) | (155) |
| Decrease in other debtors | 6 | 16 |
| Decrease in accrued expenses | (48) | (20) |
| Net cash outflow from operations before dividends and interest | (2,366) | (2,771) |
| Dividends received | 3,994 | 4,157 |
| Interest and stock lending income received | 337 | 48 |
| Net cash inflow from operating activities | 1,965 | 1,434 |
| Purchases of investments | (116,730) | (51,159) |
| Sales of investments | 133,131 | 83,750 |
| Net settlement of derivative financial instruments1 | 4,469 | - |
| Income received from derivative financial instruments1 | 197 | - |
| Net cash inflow from investing activities | 21,067 | 32,591 |
| Dividends paid | (9,082) | (9,186) |
| Refund of unclaimed dividends | - | 161 |
| Repayment of bank loans | (9,124) | (21,618) |
| Repurchase of ordinary shares into Treasury | (314) | - |
| Proceeds from share forfeiture | - | 333 |
| Interest paid on bank loans and overdrafts | (535) | (1,434) |
| Interest paid on derivative financial instruments1 | (491) | - |
| Net cash outflow from financing activities | (19,546) | (31,744) |
| Increase in cash and cash equivalents2 | 3,486 | 2,281 |
| Cash and cash equivalents at start of year2 | 2,638 | 87 |
| Foreign currency exchange movements | (580) | 270 |
| Cash and cash equivalents at end of year2 | 5,544 | 2,638 |
| Cash and cash equivalents consist of2: | ||
| Cash at bank | 690 | 2,291 |
| Investment in JPMorgan USD Liquidity Fund | 4,854 | 347 |
| Total | 5,544 | 2,638 |
| 2025 | 2024 | |||
| Pence per | Pence per | |||
| ordinary | ordinary | |||
| share | £'000 | share | £'000 | |
| Dividends paid | ||||
| First quarterly interim dividend | 2.73 | 2,271 | 2.76 | 2,296 |
| Second quarterly interim dividend | 2.73 | 2,271 | 2.76 | 2,297 |
| Third quarterly interim dividend | 2.73 | 2,271 | 2.76 | 2,297 |
| Fourth quarterly interim dividend | 2.73 | 2,269 | 2.76 | 2,296 |
| Total dividends paid in the year | 10.92 | 9,082 | 11.04 | 9,186 |
| Refund of unclaimed dividends over 12 years old | - | - | n/a | (161) |
| Net dividends | 10.92 | 9,082 | 11.04 | 9,025 |
| 2025 | 2024 | |
| £'000 | £'000 | |
| Revenue return | 3,235 | 2,823 |
| Capital return | 60,230 | 3,493 |
| Total return | 63,465 | 6,316 |
| Weighted average number of ordinary shares in issue during the year | 83,153,379 | 83,202,465 |
| Revenue return per ordinary share | 3.89p | 3.39p |
| Capital return per ordinary share | 72.43p | 4.20p |
| Total return per ordinary share | 76.32p | 7.59p |
| 2025 | 2024 | |
| Net assets (£'000) | 281,465 | 227,396 |
| Number of ordinary shares in issue, excluding shares held in Treasury | 83,067,843 | 83,202,465 |
| Net asset value per ordinary share | 338.8p | 273.3p |