REG - JPMorgan China G&I - Annual Financial Report
19/12/2025 11:30
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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
Source: Factset, Morningstar/J.P.Morgan.
Performance attribution analyses how the Company achieved its recorded
performance relative to its Benchmark.
A glossary of terms and APMs is provided in the full annual report.
Performance commentary
Sector allocation and gearing contributed positively to performance over the
year, but these positive influences were offset by the adverse impact of stock
selection, so the Company's performance was slightly behind the Benchmark.
Our significant overweight to Industrials was the most significant contributor
to relative returns at the sectoral level, thanks to the performance of
several holdings. Contemporary Amperex Technology ('CATL'), a global leader in
battery manufacturing, was a top contributor. The company is expanding its
international market penetration and saw strong volume growth in batteries for
electric vehicles ('EVs') and energy storage systems. Shijiazhuang Shangtai, a
leading battery anode producer, outperformed due to robust sales growth, cost
leadership, and strong strategic partnerships, while Sieyuan Electric, a
provider of power grid equipment with strong R&D capabilities, benefited
from global electricity demand growth and increased renewable energy usage.
Anhui Yingliu Electromechanical, a leading casting manufacturer specialising
in components for gas turbines, aircraft engines, and nuclear power, did well
due to market share gains and strong global demand for gas turbines, which was
driven by the AI data centre boom. XCMG Construction Machinery, a leading
construction equipment manufacturer, outperformed on the back of significant
growth in mining machinery and overseas sales.
Our more modest overweight to Consumer Discretionary also contributed
positively to relative returns at the sector level. Minth outperformed due to
strong growth in its battery housing business, driven by robust global EV
sales. Its share price was also supported by better-than-expected financial
results and the resumption of dividend payments. Fuyao Glass specialises in
the production of automotive glass. It did well thanks to its pricing power in
high-value-added products, strong market share expansion in the US and Europe,
and effective cost control measures. Alibaba, an internet retailer, benefited
from a favourable market response to its strategic focus on AI and cloud
services. Our decision not to own car maker BYD also contributed. The stock
underperformed due to the company's failure to meet sales targets, and a
cautious outlook for sales and unit profit.
The positive performance impact of these consumer discretionary holdings was
partially offset by weakness in a few other positions. Meituan, an internet
retailer, was one of the most significant detractors from relative returns
over the year due to intensified competition in food delivery, which resulted
in operational losses and uncertainty about the timing of a return to
profitability. However, the adverse performance effect of this position was
partially offset by not owning JD.com, which suffered from the same headwinds.
Pinduoduo, another internet retailer, underperformed due to disruptions caused
by US tariffs and a decline in short-term profitability arising from
expenditures on extensive merchant support initiatives.
Our sectoral overweight to Technology and an underweight to Communication
Services both detracted, despite significant performance contributions from
several companies that benefited from strong AI semiconductor and server
demand, and the rapid adoption of AI across the business landscape. In fact,
Montage, a semiconductor company specialising in high-performance chips and
connectivity solutions for servers and datacentres, was the Company's top
performer over the past year. Montage's share price gained thanks to the
company's rapid product expansion into AI and other high-growth markets. Our
positions in Foxconn Industrial Internet, Kingdee International Software
Group, WUS Printed Circuit Kunshan and our out-of-Benchmark position in
Taiwan Semiconductor Manufacturing Company ('TSMC') also benefited from the
same AI-fuelled demand. However, these positive influences were more than
offset by the underperformance of several other holdings, most notably Xiaomi,
which is a producer and retailer of smart phones, consumer electronics and
EVs. This relatively new holding faced supply constraints in its EV division
and negative sentiment generated by one-off events and social media attacks.
Silergy, a semiconductor manufacturer, was another significant detractor due
to weaker-than-expected demand, prolonged inventory backlogs, and delayed
product launches. An underweight position in Tencent, a leading technology
company with a strong presence in gaming, social media, and cloud services,
also detracted following the AI-generated re-rating momentum towards the end
of the financial year.
The other notable detractor at the sectoral level was our small overweight to
Consumer Staples, thanks mainly to the underperformance of two names - liquor
supplier Kweichow Moutai, which was hurt by policy changes that reduced
demand, and packaged food supplier Anjoy Foods, which suffered from margin
pressures and the general weakness in consumption. We exited Anjoy Foods
during the review period.
Contributors:
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
Transactions and sector allocation
We maintained our growth tilt over the review period, and our sector
weightings remained largely unchanged. The portfolio is still overweight in
sectors with long-term growth opportunities, notably information technology,
internet platforms, and globally competitive manufacturing businesses. Our
most significant underweights are in financials and communication services,
and we are zero-weighted in energy.
Over the year we added several companies that we expect to benefit from the
spread of AI technology. In addition to our acquisition of Xiaomi, mentioned
above, these included WUS Printed Circuit Kunshan and Zhen Ding Technology,
which are both leading global manufacturers of high-end printed circuit boards
('PCBs') used in AI tools, data centres, and communication equipment. We also
opened a position in MPI Corp, which makes advanced semiconductor probe cards
and testing equipment for AI, automotive, and other advanced technological
applications. New positions in consumer electronics producer Huaqin Technology
and Sangfor Technology, a cloud services and network security company, are
doing well thanks to the surge in AI-related capex. We also added several
names including NAURA, Bejing Huafeng, and Verisilicon, which should benefit
from China's efforts to increase its self-sufficiency in semiconductor
production. In addition, we believe Tencent's leadership in digital
entertainment and social networking is unparalleled in China. Its leading
position in cloud and fintech also gives the company the potential to
capitalise on the respective industry growth. Although the Company's
investment restrictions have prevented us from taking an overweight position,
we view Tencent as a core franchise stock within the China internet universe
and a key AI beneficiary, with strong cashflow generation and a high
commitment to shareholder returns.
In other sectors, we bought several industrial names including Sieyuan
Electric, Anhui Yingliu, Huaming Power, and NARI Technology which are all
power equipment and solution providers seeing increased demand thanks to the
heavy energy requirements of AI. These businesses are also benefiting from the
transition to renewable energy. We topped up existing positions in battery and
battery material manufacturers, including CATL and Shijiazhuang Shangtai, in
response to strong demand and attractive valuations. We also opened positions
in XCMG, a producer of construction machinery, and Jiangsu Hengli, which
specialises in hydraulic systems, as both companies have potential to increase
their share in global markets, while also having exposure to any recovery in
domestic demand. Within Healthcare, we bought several innovative
pharmaceutical companies, including GenFleet, Jiangsu Hengrul, and Dizal, as
well as leading Chinese medtech companies, Shanghai United Imaging and
Eyebright Medical Technology.
In addition to the sale of Anjoy Foods mentioned above, we exited Chacha Foods
in response to weak consumer demand and increased competition. We reduced our
position in Meituan, due to the unexpected persistence of fierce competition
in the food delivery business, and within financials, we took profits by
trimming our exposure to China Merchants Bank and China Pacific Insurance
Group.
Gearing
As market sentiment improved during the period under review, we used CFDs to
increase the Company's gearing levels. While the average gearing level during
the six months ended 31st March 2025 was 6.5%, broadly in line with 6.7%
during 2024, it ranged from 5.7% to 12.9% over the second half of the year,
ending at 11.9%. This level of gearing reflects our generally positive view of
the market, discussed below.
Outlook
The investment environment continues to hold risks, the greatest of which
remains trade and broader tensions between China and the US. However, as we
noted in our Half Year Report, the experience of the first Trump
administration (2017-2020) provided ample forewarning of things to come and
Chinese companies prepared themselves over the intervening years by
diversifying their end markets and supply chains away from reliance on the US.
Chinese companies were therefore already relatively well positioned to deal
with recent tariff rises, and exports have actually risen in recent months, as
noted above. The summit between Chinese President Xi and US President Trump,
which took place in late October 2025, helped ease tensions between the two
nations.
The worst of China's economic slowdown and market de-rating is probably behind
us. Given recent developments in relations between China and the US, the
investment environment feels at least a little more supportive than it did in
the first half of the year. We therefore feel cautiously optimistic about
Chinese equities and the portfolio for the upcoming year. Our positive view is
underpinned by several key factors:
• Geopolitical Balancing Act: Regardless of any recent or renewed
near-term tensions, the relationship between China and the US is likely to
reach a more stable equilibrium over the medium term. While competition,
particularly in technology, will persist, we believe direct confrontation is
unlikely, as it would be detrimental to both nations' interests. China's
position as a dominant producer of rare earth elements gives it a powerful
lever to counter high-tech restrictions imposed by the US, which could lead to
a more balanced and predictable trading environment.
• Economic Resilience and Transformation: China is likely to maintain
its economic resilience. The government's strategic pivot away from a reliance
on the property sector towards industrial upgrades and high-tech manufacturing
is creating a more sustainable growth model. This transformation is expected
to generate new investment opportunities in sectors that are key to the
country's long-term prosperity. Consumer spending should respond positively to
recent government efforts to stimulate demand, especially if confidence
returns to the property sector.
• Attractive Valuations and Idiosyncratic Opportunities: Valuations
across the Chinese market remain attractive, with price-to-book ratios still
below historical averages. The low-interest rate environment is particularly
favourable for growth and income stocks, although we remain focused on
identifying high-quality businesses that can thrive independently of broader
market movements. We are encouraged by the fact that we see numerous
idiosyncratic opportunities in specific sectors like technology, energy
transformation, and biotech, where companies possess strong fundamentals and
long-term growth potential.
• Team and Process Enhancement: We have taken proactive steps to improve
the Company's performance. The analyst team has been upgraded by the hiring of
senior sector research analysts and dedicated product analysts to deepen
research insights and expand research coverage. The investment process has
also been refined to include more robust industry framework analysis and
a 'Pre-determined Game plan' for systematic execution. In addition, AI tools
are being adopted to support and enhance the team's day-to-day operations.
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. 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.
JPMorgan Asset Management (UK) Limited
Rebecca Jiang
Howard Wang
Li Tan
Portfolio Management Team
19th December 2025
Principal and Emerging Risks
The Directors, through the Audit Committee, confirm that they have carried out
a robust assessment of the principal and emerging risks facing the Company,
including those that would threaten its business model, future performance,
solvency or liquidity.
The Board has overall responsibility for reviewing the effectiveness of the
Company's system of risk management and internal control. The Board is
supported by the Audit Committee in the management of risk. With the
assistance of the Manager, the Audit Committee maintains a risk matrix which
identifies the principal and emerging risks to which the Company is exposed,
and methods of mitigating against them as far as practicable. The risk matrix
sets out the risk, which is then rated by the likelihood of occurrence and
possible severity of impact, together with the mitigations in place. The risks
identified and the broad categories in which they fall, and the ways in which
they are managed or mitigated are summarised below. The Audit Committee
considers the Company's risk matrix at each meeting, and holds a third meeting
each year dedicated to a thorough review of the risk matrix.
The Audit Committee conducted a thorough review of the risk matrix during the
year to ensure that there is a clear focus on the principal and emerging risks
facing the Company. This has resulted in a reduced number of principal risks
reported in this annual report to the most significant principal risks.
Previously reported principal risks remain on the Company's risk matrix.
Previously considered emerging risks have either been removed from the risk
matrix as they are no longer considered potential risks to the Company or have
been escalated to a principal risk.
An upwards, stable or downwards arrow has been included to show if the risk
level has heightened, remained stable or reduced since it was reported in last
year's Annual Report and Financial Statements.
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 The Board meets advisers and gathers insights from both JPMorgan and ã
invested; restrictions on the ability to invest and the free movement of independent sources on a regular and ongoing basis and takes advice from the
capital can also potentially impact the ability of the Manager and other Manager and its professional advisers. The Audit Committee's assessment of geopolitical risk has increased from the
service providers to carry on business as usual. Specifically in China, we prior year. This reflects increased market volatility following the
have seen instances of the government interfering in certain sectors of the introduction of, and uncertainties relating to, US tariffs on Chinese goods;
financial markets as well as concerns relating to US-China trade tensions, the likelihood of increased tensions between the US and China ahead of the US
potential conflict involving Taiwan and wider questions about supply chains mid-term elections in 2026; and the ongoing conflict in Ukraine/Russia and
and human rights in China. These concerns have led to international investors continued tensions in the Middle East.
reducing their investments in China, and could risk damaging overseas
sentiment towards Chinese equities further.
Investment under-performance Inappropriate investment decisions may lead to sustained investment The Board aims to manage this risk by diversification of investments through áâ
underperformance against the Company's Benchmark index and peer companies, its investment restrictions and guidelines, which are monitored and reported
resulting in the Company's shares trading on a wider discount, as well as on by the Manager. The Manager provides the Directors with timely and accurate The Audit Committee's assessment of this risk has remained heightened, and
discontent amongst the Company's shareholders. In addition, a significant loss management information, including performance data and attribution analyses, unchanged from the prior year. This reflects the continued under-performance
of scale would leave the Company less attractive to investors given the revenue estimates and transaction reports. The Board monitors the of the portfolio. While the Company's absolute performance was very positive
increase in the cost base and reduction in liquidity in the secondary market implementation and results of the investment process with the portfolio during the period under review, the Board remains concerned about the
for its shares. management team, who attend all Board meetings, and reviews data which show Company's relative NAV performance over the medium term. The Directors believe
statistical measures of the Company's risk profile. 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 The Board seeks assurance that the Manager takes steps to reduce the áâ
could result in a deterioration in investment performance. 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 The Audit Committee's assessment of this risk remained stable and unchanged
key personnel. The Board engages privately with the portfolio management team from the prior year. There are no identified concerns with the stability of
on a regular basis and visits them annually in Shanghai and Hong Kong. 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 In order to manage the Company's discount, which can be volatile, the Company áâ
could result in a loss of value for shareholders. operates an active marketing plan as well as a share repurchase programme.
The Board regularly discusses discount policy and has set parameters for the The Audit Committee's assessment of this risk has remained heightened,
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 and unchanged from 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 prior year. Whilst the Company's discount to its NAV narrowed during the year,
triggered in 2028. 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 Details of how the Board monitors the services provided by the Manager, its áâ
systems or the depositary's or custodian's records may prevent accurate associates and depositary and the key elements designed to provide effective
reporting and monitoring of the Company's financial position. internal control are included within the Risk Management and Internal Control The Audit Committee's assessment of this risk remains heightened, and
section of the Directors' Report in the full annual report. The threat of unchanged from the previous year.
In addition to threatening the Company's operations, such an attack is likely cyber attack, in all its guises, is regarded as at least as important as more
to raise reputational issues which may damage the Company's share price and traditional physical threats to business continuity and security. The Company To date the Manager's cyber security arrangements have proven robust and the
reduce demand for its shares. This risk is heightened given advances in benefits directly or indirectly from all elements of JPMorgan's Cyber Security Company has not been impacted by any cyber attacks threatening its operations.
computing power that mean that artificial intelligence ('AI') has become a programme. The information technology controls around the physical security of
powerful tool which can potentially impact and disrupt a wide range of JPMorgan's data centres, security of its networks and security of its trading However, the Audit Committee is cognisant of the increasing number of cyber
applications. applications are tested independently. 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 The Manager's investment process integrates consideration of financially áâ
and their investors. Climate change may have a disruptive effect on individual material environmental, social and governance factors into decisions on which
investee companies and the operations of the Manager and other service stocks to buy, hold or sell (see full annual report). This includes the The Audit Committee's assessment of this risk remains stable, and unchanged
providers. approach investee companies take to recognising and mitigating climate change from the previous year.
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 This reflects the view that climate risk is to be viewed over the longer term
a signatory of the United Nations Principles for Responsible Investment. and its current specific impact on the Company is uncertain and difficult to
quantify.
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.
The AIC Code of Corporate Governance (the 'AIC Code') requires the Board to
put in place procedures to identify and manage emerging risks facing the
Company. At each meeting, the Board, through the Audit Committee, considers
whether any emerging risks, which it defines as potential trends, sudden
events or changing risks which are characterised by a high degree of
uncertainty in terms of occurrence probability and possible impacts on the
Company, have arisen. Horizon scanning and ongoing monitoring of the business
environment, industry trends, and regulatory changes helps the Audit Committee
to identify emerging risks. Once identified, as the impact of emerging risks
is understood, they may be entered on the Company's risk matrix and mitigating
activities considered as necessary.
Emerging Description Mitigation/Control Movement in risk
risk status in year to
30th September 2025
Impact of reshoring and tariffs Political and economic pressures from countries in the Developed Markets, led The Board works with the Manager using JPMorgan's resources to monitor áâ
by the US, have led to instances of 'reshoring' in recent years that have developments on a continuous basis. Working closely with the Board, the
potentially negative consequences for both the Chinese economy and its portfolio management team will keep shareholders regularly informed of its The Audit Committee's assessment of this risk remains stable, and unchanged
companies. In addition, the threat of a step change in tariffs applied to views using various communication methods such as webcasts, monthly fact from the previous year.
goods originating in China and the wider Asian region could see a robust sheets and the Company's website.
response from those countries impacted, with a dampening effect on global
economic activity.
Change Key
ã Heightened áâ Stable ä Reduced
TRANSACTIONS WITH THE MANAGER
Details of the management contract are set out in the Directors' Report in the
full annual report. The management fee payable to the Manager for the year was
£1,785,000 (2024: £1,715,000).
Safe custody fees amounting to £39,000 (2024: £33,000) were payable during
the year to JPMorgan Chase Bank N.A. of which £7,000 (2024: £8,000) was
outstanding at the year end.
The Manager may carry out some of its dealing transactions through group
subsidiaries. These transactions are carried out at arm's length. The
commission payable to JPMorgan Securities Limited for the year was £13,000
(2024: £3,000).
Handling charges (other capital charges) on dealing transactions amounting to
£52,000 (2024: £57,000) were payable to JPMorgan Chase Bank N.A. during the
year of which £5,000 (2024: £4,000) was outstanding at the year end.
Securities lending fees amounting to £104,000 (2024: £48,000) were
receivable from stock lending transactions during the year. JPMorgan Investor
Services Limited commissions in respect of such transactions amounted to
£12,000 (2024: £5,000).
The Company also invests in the JPMorgan USD Liquidity Fund, which is managed
by JPMorgan Asset Management (Europe) S.à r.l. At the year end this was
valued at £4,854,000 (2024: £347,000). Interest amounting to £195,000
(2024: £35,000) was receivable during the year.
At the year end, total cash of £690,000 (2024: £2,291,000) was held with
JPMorgan Chase Bank, N.A. in a non interest bearing current account.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and Financial
Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law the Directors have elected to prepare the
Financial Statements in accordance with applicable law and United Kingdom
Accounting Standards, comprising Financial Reporting Standard 102 'the
Financial Reporting Standard applicable in the UK and Republic of Ireland'
(FRS 102). Under company law the Directors must not approve the Financial
Statements unless they are satisfied that, taken as a whole, the Annual Report
and Financial Statements are fair, balanced and understandable, provide the
information necessary for shareholders to assess the Company's performance,
business model and strategy and that they give a true and fair view of the
state of affairs of the Company and of the total return or loss of the Company
for that period. In preparing these Financial Statements, the Directors are
required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable UK Accounting Standards comprising FRS 102,
have been followed, subject to any material departures disclosed and explained
in the Financial Statements;
• make judgments and accounting estimates that are reasonable and
prudent; and
• prepare the Financial Statements on a going concern basis unless it is
inappropriate to presume that the Company will continue in business
and the Directors confirm that they have done so.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Financial Statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Financial Statements are published on the Company's website;
www.jpmchinagrowthandincome.co.uk, which is maintained by the Company's
Manager. While the directors are responsible for the maintenance and integrity
of the corporate and financial information included on the Company's website,
the website is maintained by the Manager, and is therefore considered, so far
as it relates to the Company, the responsibility of the Manager. The work
carried out by the Auditor does not involve consideration of the maintenance
and integrity of this website and, accordingly, the Auditor accepts no
responsibility for any changes that have occurred to the accounts since they
were initially presented on the website. The accounts are prepared in
accordance with UK legislation, which may differ from legislation in other
jurisdictions.
Under applicable law and regulations the Directors are also responsible for
preparing a Strategic Report, a Directors' Report and a Directors'
Remuneration Report that comply with that law and those regulations.
Each of the Directors, whose names and functions are listed in the Directors'
Report confirm that, to the best of their knowledge:
• the Company's Financial Statements, which have been prepared in
accordance with applicable law and United Kingdom Accounting Standards,
comprising FRS102, give a true and fair view of the assets, liabilities,
financial position and profit of the Company; and
• the Strategic Report includes a fair review of the development and
performance of the business and the position of the Company, together with
a description of the principal risks and uncertainties that it faces.
The Board confirms that it is satisfied that the Annual Report and Financial
Statements, taken as a whole, are fair, balanced and understandable and
provide the information necessary for shareholders to assess the Company's
position, performance, business model and strategy.
For and on behalf of the Board
Alexandra Mackesy
Chairman
19th December 2025
STATEMENT OF COMPREHENSIVE INCOME
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 instruments(1) - 6,497 6,497 - - -
Foreign currency exchange (losses)/gains(2) - (940) (940) - 1,308 1,308
Income from investments 4,219 148 4,367 4,346 106 4,452
Income from derivative financial instruments(1) 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
( )
(1) These relate to CFDs. Please see the full annual report for
definition.
(2) £425,000 due to foreign currency exchange loss on the loan which
was denominated in US dollars and £515,000 due to net foreign currency
exchange losses on cash at bank and current asset investments (2024:
£1,491,000 due to foreign currency exchange gain on the loan which was
denominated in US dollars and £183,000 due to net foreign currency exchange
losses on cash at bank and current asset investments).
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.
The 'Total' column of this statement is the profit and loss account of the
Company and the 'Revenue' and 'Capital' columns represent supplementary
information prepared under guidance issued by the Association of Investment
Companies. Net return after taxation represents the profit for the year and
also total comprehensive Income.
STATEMENT OF CHANGES IN EQUITY
For the year ended 30th September
Called up Share Exercised Capital
share premium warrant redemption Other Capital Revenue
capital account reserve reserve reserve(1) reserves(2) reserve(2) 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 forfeiture(3) - - - - - 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
dividends(3) (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
( )
(1) Created during the year ended 30th September 1999, following a
cancellation of the share premium account, and is available for the repurchase
of ordinary shares.
(2) These reserves form the distributable reserves of the Company and
may be used to fund distributions to shareholders.
(3) During the year ended 30th September 2024, the Company undertook
an Asset Reunification Program to reunite inactive shareholders with their
shares and unclaimed dividends. Pursuant to the Company's Articles of
Association, the Company has exercised its right to reclaim the shares of
shareholders whom the Company, through its previous Registrar, has been unable
to locate for a period of 12 years or more. These forfeited shares were sold
in the open market by the Registrar and the proceeds, net of costs, were
returned to the Company. In addition, any unclaimed dividends older than 12
years from the date of payment of such dividends were also forfeited and
returned to the Company.
STATEMENT OF FINANCIAL POSITION
At At
30th September 30th September
2025 2024(1)
£'000 £'000
Fixed assets
Investments held at fair value through profit or loss(1) 262,796 224,328
Investments on loan at fair value through profit or loss(1) 13,606 11,069
Total investments held at fair value through profit or loss 276,402 235,397
Current assets
Derivative financial instrument assets(2) 2,441 -
Debtors 1,139 630
Current asset investments(3) 4,854 347
Cash at bank 690 2,291
9,124 3,268
Current liabilities
Derivative financial instrument liabilities(2) (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
( )
(1) For clarity, investments held at fair value through profit or loss
are separately disclosed to those investments on loan via securities lending
arrangements with no impact on the value of the investments.
(2) These relate to CFDs. Please see the full annual report for
definition.
(3) The current asset investments relates to the JPMorgan USD
Liquidity Fund.
STATEMENT OF CASH FLOWS
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 instruments(1) (6,497) -
Foreign currency exchange losses/(gains) 940 (1,308)
Dividend income (4,367) (4,452)
Income from derivative financial instruments(1) (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 instruments(1) 4,469 -
Income received from derivative financial instruments(1) 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 instruments(1) (491) -
Net cash outflow from financing activities (19,546) (31,744)
Increase in cash and cash equivalents(2) 3,486 2,281
Cash and cash equivalents at start of year(2) 2,638 87
Foreign currency exchange movements (580) 270
Cash and cash equivalents at end of year(2) 5,544 2,638
Cash and cash equivalents consist of(2):
Cash at bank 690 2,291
Investment in JPMorgan USD Liquidity Fund 4,854 347
Total 5,544 2,638
( )
(1) These relate to CFDs. Please see the full annual report for
definition.
(2) The term 'cash and cash equivalents' is used for the purposes of
the Statement of Cash Flows.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30th September 2025
1. Accounting policies
(a) Basis of accounting
The Financial Statements are prepared under the historical cost convention,
modified to include fixed asset investments at fair value, and in accordance
with the Companies Act 2006, United Kingdom Generally Accepted Accounting
Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard
applicable in the UK and Republic of Ireland' and with the Statement of
Recommended Practice 'Financial Statements of Investment Trust Companies and
Venture Capital Trusts' (the 'SORP') issued by the Association of Investment
Companies in July 2022.
All of the Company's operations are of a continuing nature.
The Financial Statements have been prepared on a going concern basis. In
forming this opinion, the Directors have considered the Company's investment
objective, risk management policies, capital management policies and
procedures, the nature of the portfolio and revenue as well as expenditure
projections, taking into account the heightened market volatility from, the
growing geopolitical risk to include tensions between China and the
United States, the ongoing conflict between Russia and Ukraine, and tensions
in the Middle East. The Company's shareholders voted for the continuation of
the Company at the 2023 AGM. The next continuation vote will be at the
2028 AGM. The disclosures on going concern in the Directors' Report in the
full annual report form part of these Financial Statements. The Directors
consider that the Company has adequate financial resources to enable it to
continue in operational existence for at least 12 months.
During the year ended 30th September 2025, the Company entered into Contracts
for Difference ('CFDs'). The new accounting policies have been included below.
Except for the addition of accounting policies in respect of contracts for
difference (CFDs); and the change in the policy to separately present the
'investments held at fair value through profit or loss' and the 'investments
on loan at fair value through profit or loss' in the Statement of Financial
Position, all other policies applied in these Financial Statements are
consistent with those applied in the preceding year.
2. Dividends
(a) Dividends paid and proposed
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
In respect of the year ending 30th September 2026, the first quarterly interim
dividend of 3.39p per ordinary share amounting to £2,816,000 (2025: 2.73p per
share amounting to £2,271,000) has been declared and paid. In accordance with
the accounting policy of the Company, this dividend will be reflected in the
Financial Statements for the year ending 30th September 2026.
(b) Dividend for the purposes of Section 1158 of the Corporation Tax Act
2010 ('Section 1158')
The requirements of Section 1158 are considered on the basis of the dividend
paid and declared in respect of the financial year, shown above. For the year
ended 30th September 2025, the dividends declared were paid during the year as
shown above.
The aggregate of the distributable reserves by way of dividend to shareholders
is £142,049,000 (2024: £87,666,000).
3. Return per ordinary share
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
4. Net asset value per ordinary share
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
5. Status of results announcement
2024 Financial Information
The figures and financial information for 2024 are extracted from the
Annual Report and Financial Statements for the year ended 30th September 2024
and do not constitute the statutory accounts for that year. The Annual
Report and Financial Statements has been delivered to the Registrar of
Companies and included the Report of the Independent Auditors which was
unqualified and did not contain a statement under either section 498(2) or
section 498(3) of the Companies Act 2006.
2025 Financial Information
The figures and financial information for 2025 are extracted from the Annual
Report and Financial Statements for the year ended 30th September 2025 and do
not constitute the statutory accounts for that year. The Annual Report and
Financial Statements includes the Report of the Independent Auditor which is
unqualified and does not contain a statement under either section 498(2) or
section 498(3) of the Companies Act 2006. The Annual Report and Financial
Statements will be delivered to the Registrar of Companies in due course.
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.
JPMORGAN FUNDS LIMITED
19th December 2025
For further information, please contact:
JPMorgan Funds Limited
Telephone: 0800 20 40 20 or +44 1268 44 44 70
E-mail: jpmam.investment.trusts@jpmorgan.com
(mailto:jpmam.investment.trusts@jpmorgan.com)
ENDS
A copy of the Annual Report and Financial Statements will be submitted to the
National Storage Mechanism and will shortly be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The Annual Report and Financial Statements will also shortly be available on
the Company's website at www.jpmchinagrowthandincome.co.uk
(http://www.jpmchinagrowthandincome.co.uk) where up to date information on the
Company, including daily NAV and share prices, factsheets and portfolio
information can also be found.
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. END FR UKAARVKUUAAA
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