Abrdn China Investment : Latest Factsheet

abrdn China Investment Company Limited

Seeking long-term capital growth by investing predominantly in Chinese equities

Performance Data and Analytics to 31 July 2022

Investment objective

To produce long-term capital growth by investing predominantly in Chinese equities.

Benchmark

MSCI China All Shares Index in GBP (from 26 October 2021).

Note on change of investment strategy

Prior to 26 October 2021, the Company's investment policy was to invest in emerging market funds of funds. Please note that performance data for time periods prior to 26 October 2021 relate to an investment objective and strategy that no longer applies.

Cumulative performance (%)

	as at	1	3	6	1	3	5
	31/07/22	month	months	months	year	years	years
Share Price	594.0p	(5.7)	10.8	(12.1)	(18.9)	5.2	17.0
NAV	661.5p	(9.1)	3.7	(9.6)	(17.8)	(0.8)	10.5
Reference IndexA		(8.2)	4.3	(5.4)	(13.0)	(0.8)	9.8

Discrete performance (%)

	31/07/22	31/07/21	31/07/20	31/07/19	31/07/18
Share Price	(18.9)	41.5	(8.3)	10.0	1.1
NAV	(17.8)	26.6	(4.6)	8.8	2.4
Reference IndexA	(13.0)	14.2	(0.3)	5.2	5.3

Total return; NAV to NAV, gross income reinvested, GBP. Share price total return is on a mid-to-mid basis.

Dividend calculations are to reinvest as at the ex-dividend date. NAV returns based on NAVs with debt valued at fair value. Source: Aberdeen Asset Managers Limited, Lipper and Morningstar.

Past performance is not a guide to future results.

1. Reference Index is the MSCI China All Shares Index since 26 October 2021 and MSCI Emerging Markets Index prior to that date.
2. © 2022 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. For more detailed information about Morningstar's Analyst Rating, including its methodology, please go to: http://corporate.morningstar.com/us/documents/ MethodologyDocuments/AnalystRatingforFundsMethodology.pdf The Morningstar Analyst Rating for Funds is a forward-looking analysis of a fund. Morningstar has identified five key areas crucial to predicting the future success of a fund: People, Parent, Process, Performance, and Price. The pillars are used in determining the Morningstar Analyst Rating for a fund. Morningstar Analyst Ratings are assigned on a five-tier scale running from Gold to Negative. The top three ratings, Gold, Silver, and Bronze, all indicate that our analysts think highly of a fund; the difference between them corresponds to differences in the level of analyst conviction in a fund's ability to outperform its benchmark and peers through time, within the context of the level of risk taken over the long term. Neutral represents funds in which our analysts don't have a strong positive or negative conviction over the long term and Negative represents funds that possess at least one flaw that our analysts believe is likely to significantly hamper future performance over the long term. Long term is defined as a full market cycle or at least five years. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detailed information about the Morningstar Analyst Rating for Funds, please visit http://global.morningstar.com/managerdisclosures.

Morningstar Sustainability RatingTM

Morningstar RatingTM

1. Morningstar RatingTM for Funds

Morningstar rates funds from one to five stars based on how well they've performed (after adjusting for risk and accounting for all sales charges) in comparison to similar funds.

Twenty largest holdings (%)

Tencent Holdings	7.4
Kweichow Moutai	5.8
China Merchants Bank	4.7
Meituan	3.9
Bank of Ningbo	3.7
Alibaba Group Holding	3.5
JD.com	3.5
China Tourism Group Duty Free	3.3
Contemporary Amperex Technology	3.1
AIA Group	2.5
Ping An Bank	2.5
Sungrow Power Supply Co	2.3
Wanhua Chemical	2.0
Li Ning	1.9
LONGI Green Energy Technology	1.9
Midea Group	1.9
Estun	1.9
Nari Technology	1.8
Proya Cosmetics	1.8
Sinoma Science&Technology	1.7
Total	61.0

Total number of investments	55

All sources (unless indicated): abrdn: 31 July 2022.

invtrusts.co.uk

abrdn China Investment Company Limited

(formerly Aberdeen Emerging Markets Investment Company)

1 Year Premium/Discount Chart (%)

0

-5

-10

-15

-20
Jul-21	Sep-21	Nov-21	Jan-22	Mar-22	May-22	Jul-22

Fund managers' report

Market and portfolio review

Broad Chinese stock markets fell sharply in July after June's significant gains. The dynamics of China's Covid-19 situation continue to influence market sentiment heavily. Reports of virus flare ups in the east and news that more cities were subject to restrictions on local movement weighed on share prices. Shares fell despite comments from the People's Bank of China reaffirming its commitment to an accommodative policy stance and amid further stimulus from the central bank. The real estate sector was particularly weak.

However, it was a largely improved picture on the economic data front, as releases reflected the recent reopening of major cities after lockdowns. The Caixin China General Manufacturing Purchasing Managers' Index beat forecasts in climbing from 48.1 in May to 51.7 in June, marking the first expansion in the index since February. There was better news in the services sector, too. The Caixin Services PMI leapt from 41.4 in May to 54.5 in June, returning to expansionary mode for the first time in four months. Industrial production grew 3.9% year on year in June, up from May's rate of +0.7%. There were also signs of improvement in the retail sector. Retail sales grew 3.1%

in June, easily surpassing analyst expectations of a flat performance and comparing to 6.7% fall in May. Chinese exports grew 17.9% year on year in June, the best rate of growth in five months.

The effects of earlier lockdowns were evident in the China's second-quarter GDP figure. The Chinese economy grew by just 0.4% over the quarter versus a year earlier, representing its most sluggish growth rate since the first wave of Covid-19 in Q1 2020. Inflation hit a 23-month high of 2.5% in June, in part due to higher food prices.

In sterling terms, the net asset value total return was -9.1%, which compares to the reference index total return of -8.2%.

Fund managers' report continues overleaf

1. Expressed as a percentage of average daily net assets for the year ended 31 October 2021. The Ongoing Charges Figure (OCF) is the overall cost shown as a percentage of the value of the assets of the Company. It is made up of the Annual Management Fee and other charges. It does not include any costs associated with buying shares in the Company or the cost of buying and selling stocks within the Company. The OCF can help you compare the annual operating expenses of different Companies.

Sector allocation (%)

Consumer Discretionary	22.1
Financials	15.1
Consumer Staples	14.0
Industrials	11.8
Health Care	9.0
Information Technology	8.7
Communication Services	8.6
Materials	6.3
Real Estate	4.1
Unit Trusts	0.4
Total	100.0

Fund risk statistics

	5 Years
Return (Fund) p.a. as at 31/07/2022	3.08
Return (Benchmark) p.a. as at	9.83
31/07/2022
Annualised Tracking Error	4.64
Alpha	0.10
Beta	1.07
Correlation	0.96

Source: Aberdeen Asset Management, BPSS & Refinitiv

Datastream, Basis: Total Return, Net of Fees, GBP. Please note that risk analytics figures are calculated on net asset value(NAV) returns. In addition, the risk analytics figures lag the performance figures.

Key information

Calendar

Year end	October
Accounts published	January
Annual General Meeting	April
Dividend paid	Annual
Launch date	21 Jun 1998
	(redomiciled on
	6 Nov 2009)
Fund manager	Nicholas Yeo and
	Elizabeth Kwik
Annual management fee	0.8% of first
	£150m of Market
	Cap, 0.75% on
	next £150m of
	Market Cap and
	0.65% on the
	Market Cap over
	£300m
Ongoing chargesC	0.98%
Net assets	£304.5m
Premium/(Discount)	(10.2)%

abrdn China Investment Company Limited

02

abrdn China Investment Company Limited

(formerly Aberdeen Emerging Markets Investment Company)

Fund managers' report - continued

In terms of individual stocks, Sungrow Power Supply added value. Surging energy prices and solid industry data (e.g. installed solar capacity) supported positive sentiment towards renewable energy companies. Proya Cosmetics was boosted by healthy second-quarter operating data. Meanwhile, Nari Technology was helped by the recovery in grid capex growth post-Covid and the further release of renewables and infrastructure policies.

Turning to the laggards, China Merchants Bank was hurt by market worries about financial system risk after the report of mortgage payment suspensions by homeowners. We believe the bank's risk exposure to mortgage is manageable. Maxscend Microelectronics lost ground after its second-quarter preliminary results missed forecasts due to weak Android demand. Shanghai M&G Stationery experienced relatively slow growth in July, which led to concerns over a slower recovery pace in the third quarter.

During the month we initiated a position in Netease on the back of a positive outlook for its business fundamentals and the stock's reasonable valuation.

Outlook

The market has been volatile during recent months amid news flow surrounding Covid-19 policies, mortgage boycotts and geopolitics. Nevertheless, we believe the recovery is underway, but it is likely to be a bumpy one. This is due to a lack of clarity on China's dynamic 'zero-Covid' strategy and markets demanding to see more results from economic stimulus measures.

We assume any decisions around the evolution of the 'zero-Covid' strategy are more likely to happen after the 20th National Congress of the Chinese Communist Party in October and November. We also believe the government has the levers to stabilise the real estate situation, which is an important pillar of economic recovery.

Meanwhile, Chinese companies will start to report first-half results in August, when investor focus should gradually switch back to company fundamentals. We remain optimistic over the relative earnings resilience of our holdings in the upcoming result season. As such, we remain constructive on the economic outlook and our portfolio's performance for the second half of 2022.

The risks outlined overleaf relating to gearing, exchange rate movements and emerging markets are particularly relevant to this investment company but should be read in conjunction with all warnings and comments given. Important information overleaf

1. The Company's main objective is now long-term capital growth, rather than income and it is not expected that the Company will generate sufficient surplus net revenues to declare a dividend.
2. Net gearing is defined as a percentage, with net debt (total debt less cash/cash equivalents) divided by shareholders' funds.

Key information continued

YieldD	n/a
Net GearingE	Nil

AIFMD Leverage Limits

Gross Notional	2X
Commitment	2X

Capital structure

Ordinary shares	46,028,089
Treasury shares	16,144,858

Trading details

Reuters/Epic/	ACIC
Bloomberg code
ISIN code	GG00B45L2K95
Sedol code	B45L2K9
Stockbrokers	Shore Capital
	Numis

i

Factsheet

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Contact

Private investors 0808 500 4000

Institutional investors [e-mail]

[phone]

[phone]

abrdn China Investment Company Limited

03

Important information

Risk factors you should consider prior to investing:

• The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested.
• Past performance is not a guide to future results.
• Investment in the Company may not be appropriate for investors who plan to withdraw their money within 5 years.
• The Company may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that any movement in the value of the company's assets will result in a magnified movement in the NAV.
• Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. This may mean your money is at greater risk.
• The Company invests in emerging markets which tend to be more volatile than mature markets and the value of your investment could move sharply up or down.
• As with all stock exchange investments the value of the Company's shares purchased will immediately fall by the difference between the buying and selling prices, the bid-offer spread. If trading volumes fall, the bid-offer spread can widen.
• There is no guarantee that the market price of the Company's shares will fully reflect their underlying Net Asset Value.
• Yields are estimated figures and may fluctuate, there are no guarantees that future dividends will match or exceed historic dividends and certain investors may be subject to further tax on dividends.
• The Company may accumulate investment positions which represent more than normal trading volumes which may make it difficult to realise investments and may lead to volatility in the market price of the Company's shares.
• Movements in exchange rates will impact on both the level of income received and the capital value of your investment.
• The Company invests into other funds which themselves invest in assets such as bonds, company shares, cash and currencies. The objectives and risk profiles of these underlying funds may not be fully in line with those of this Company.

Other important information:

The Company is a Closed-ended investment scheme registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended and the Registered Collective Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission.

An investment trust should be considered only as part of a balanced portfolio. The information contained in this document should not be considered as an offer, solicitation or investment recommendation to deal in the shares of any securities or financial instruments. It is not intended for distribution or use by any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication or use would be prohibited. Nothing herein constitutes investment, legal, tax or other advice and is not to be relied upon in making an investment or other decision. No recommendation is made, positive or otherwise, regarding individual securities mentioned. This is not an invitation to subscribe for shares and is by way of information only. Subscriptions will only be received and shares issued on the basis of the current Key Information Document (KID). These can be obtained free of charge from Aberdeen Asset Managers Limited, PO Box 11020, Chelmsford, Essex, CM99 2DB or available on www.invtrusts.co.uk. Any data contained herein which is attributed to a third party ("Third Party Data") is the property of (a) third party supplier(s) (the "Owner") and is licensed for use by abrdn*. Third Party Data may not be copied or distributed. Third Party Data is provided "as is" and is not warranted to be accurate, complete or timely. To the extent permitted by applicable law, none of the Owner, abrdn* or any other third party (including any third party involved in providing and/or compiling Third Party Data) shall have any liability for Third Party Data or for any use made of Third Party Data. Neither the Owner nor any other third party sponsors, endorses or promotes the fund or product to which Third Party Data relates. * abrdn means the relevant member of abrdn group, being abrdn PLC together with its subsidiaries, subsidiary undertakings and associated companies (whether direct or indirect) from time to time.

Issued by abrdn Fund Managers Limited, registered in England and Wales (740118) at Bow Bells House, 1 Bread Street, London, EC4M 9HH. Aberdeen Asset Managers Limited, registered in Scotland (No. 108419), 10 Queen's Terrace, Aberdeen AB10 1XL. Both companies are authorised and regulated by the Financial Conduct Authority in the UK.

The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis, should not be taken as an indication or guarantee of any future performance analysis forecast or prediction. The MSCI information is provided on an "as is" basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the "MSCI" Parties) expressly disclaims all warranties (including without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.msci.com).

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