abrdn China Investment Company Limited

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

Daily prices as of 02 Dec 2021

Share Price 684.00p

Estimated NAV cum income 802.64p

Estimated NAV ex income 803.23p

Dividend Yield 3.4%

Premium / (Discount) to NAV cum income -15.5%

Premium / (Discount) to NAV ex income -15.6%

Latest news

On 26 October 2021 shareholders approved the proposals to change the investment policy of the Company from investing in emerging markets on a fund-of-funds basis to investing directly in the equities of Chinese companies, a combination with Aberdeen New Thai Investment Trust, and a tender offer for up to 15% of the Company’s shares. The scheme is expected to complete on 9 November 2021.

Why China?

China’s equity markets have grown into the second largest financial market in the world, after the US. This is a US$17 trillion market that is both deep and liquid. There are more than 5,000 Chinese companies listed onshore in mainland China and offshore, mostly in Hong Kong and the US, presenting vast opportunity.

Chinese markets are also becoming large and growing components of major global indices. For instance, Chinese equities now make up 33% of the MSCI Emerging Markets Index. If China A Shares (the shares of mainland China-based companies that trade on the two Chinese stock exchanges) were included fully (from the current 20%), this would push the overall weighting of Chinese equities to 53%.

A big driver of growth has been the Stock Connect programme, which was launched in 2014. This opened direct trading links connecting Shanghai and Shenzhen with Hong Kong, making A Shares more accessible to institutional investors outside the mainland. These days, any investor with a brokerage account in Hong Kong can invest in over 2,000 companies listed in Shenzhen and Shanghai. Two-way investor flows between mainland China and Hong Kong have flourished as a result.

Another draw is the low correlation of Chinese equities and other asset classes. In other words, A Shares provide a great opportunity to diversify portfolio risk and potentially enhance returns.

Investing in both the onshore and offshore markets offers an extensive range of opportunities across these markets. With the onshore market, investors gain greater exposure to unique sectors such as baijiu (a popular liquor), as well as the faster growing new economy ones like electric vehicles and batteries, specialist technology and niche industrial areas. As for the offshore market, investors gain more access to internet and e-commerce companies, along with investment opportunities in telecoms.

More broadly, China’s financial reforms continue to improve the accessibility and liquidity of the domestic market. With more international investors’ participation in the A-share market, it could shine a light on global best practice and help to raise governance standards of local companies over time.

Why now?

abrdn sees tremendous opportunity in China, and the portfolio is well positioned to capitalise on key areas of structural growth.

  • Aspiration: As incomes increase and living standards improve in China, rising affluence is leading to fast growth in premium, or higher value, goods and services in areas including cosmetics, travel and food and beverage. The consumer story is attractive because boosting domestic spending forms a central component of China’s reform agenda.
  • Digital: Growing integration amid the widespread adoption of technology means a bright future for plays on e-commerce, cybersecurity and data centres supporting cloud services.
  • Green: Policy makers globally are committing to a greener and lower carbon world and China is expected to have a transformational role to play. Investments in renewable energy, batteries, electric vehicles, related infrastructure, and environmental management all have a bright future. Grid parity will be game-changing.
  • Health: Rising disposable incomes are driving demand for healthcare products and services. The opportunity set is diverse. The proposed holdings include a leading hospital, contract research providers and an internet healthcare platform.
  • Wealth: Growing prosperity means structural growth for consumer finance, such as wealth management and insurance protection, as well as increasing investor participation on stock exchanges.

Read the full article here >

Key people

Nicholas Yeo

Nicholas Yeo

Director and Head of Equities, China

Nicholas Yeo is the Head of China/Hong Kong Equities team at abrdn. Nicholas joined abrdn in 2000 via the acquisition of Murray Johnstone. He was seconded to the London Global Emerging Market team for two years where he covered EMEA and Latin American companies, before returning to the Asian Equities team in Singapore in March 2004. In March 2007, he transferred to Hong Kong to lead Chinese equity research.

Nicholas holds a BA (Hons) in Accounting and Finance from The University of Manchester and an MSc in Financial Mathematics from Warwick Business School. Nicholas is a CFA charterholder.

Elizabeth Kwik

Elizabeth Kwik

Investment Manager

Elizabeth Kwik is an Investment Manager on the China/Hong Kong Equities Team at abrdn where she is responsible for researching the Consumer Discretionary, Automobiles & Components and Banking sectors. Elizabeth sits on the China A share and All China equity fund portfolio construction groups (pods). Elizabeth joined abrdn in 2013.

Elizabeth holds a Bachelor of Science in Economics from the London School of Economics. She is a CFA charterholder.

  • Nicholas Yeo

    Nicholas Yeo

    Director and Head of Equities, China

    Nicholas Yeo is the Head of China/Hong Kong Equities team at abrdn. Nicholas joined abrdn in 2000 via the acquisition of Murray Johnstone. He was seconded to the London Global Emerging Market team for two years where he covered EMEA and Latin American companies, before returning to the Asian Equities team in Singapore in March 2004. In March 2007, he transferred to Hong Kong to lead Chinese equity research.

    Nicholas holds a BA (Hons) in Accounting and Finance from The University of Manchester and an MSc in Financial Mathematics from Warwick Business School. Nicholas is a CFA charterholder.

  • Elizabeth Kwik

    Elizabeth Kwik

    Investment Manager

    Elizabeth Kwik is an Investment Manager on the China/Hong Kong Equities Team at abrdn where she is responsible for researching the Consumer Discretionary, Automobiles & Components and Banking sectors. Elizabeth sits on the China A share and All China equity fund portfolio construction groups (pods). Elizabeth joined abrdn in 2013.

    Elizabeth holds a Bachelor of Science in Economics from the London School of Economics. She is a CFA charterholder.

Mark Hadsley Chaplin

Mark Hadsley-Chaplin

Chairman

United Kingdom resident – founded RWC Partners Ltd (formerly known as MPC Investors), a London based fund management firm specialising in hedge funds, long only funds and UCITS strategies, in 2000. He was CEO until 2006 and Chairman until 2010. Prior to this he was Vice Chairman of UBS Securities (East Asia) Ltd, based in Singapore and responsible for the management and development of the bank’s Asian equity business worldwide.
William Collins

William Collins

Senior Independent Director

Guernsey resident – has over 45 years’ experience in banking and investment. From September 2007 he was employed by Bank J Safra Sarasin (formerly Bank Sarasin) in Guernsey as Director – Private Clients, retiring at the end of 2014. Prior to that he worked for Barings in Guernsey for over 18 years. In 1995 he was appointed a director and from 2003 until August 2007 was Managing Director of Baring Asset Management (CI) Ltd.
Eleonore de Rochechouart

Eleonore de Rochechouart

Non-Executive Director

United Kingdom Resident - is a partner of Res Familiaris LLP, a London based wealth and corporate management advisory boutique. Prior to joining Res Familiaris in 2010, Eleonore spent 20 years in the financial services industry as an economist, researcher and asset allocator in both the traditional and alternative investment arena. She started her career in 1992 at Dubin & Swieca Capital Management's branch in France, before joining Standard & Poor's Rating Agency in 1998. She was then appointed CIO of a French family office in 2003 before moving to London in 2010.

none

Anne Gilding

Non-Executive Director

Anne Gilding was appointed a Director on 9 November 2021 upon the completion of the combination with Aberdeen New Thai Investment Trust PLC, where she had been a director since October 2019. She is a non-executive director of Momentum Multi-Asset Value Trust plc, a senior adviser to Peregrine Communications, and she has also served a term as a trustee of an educational charity. She has over twenty five years' experience of developing and leading global communications, branding and marketing solutions for a broad range of companies including Impax Asset Management Group plc (where she gained valuable experience of ESG criteria), BMO (formerly F&C), GAM, Vernalis Group plc and UBS.
Helen Green

Helen Green

Non-Executive Director

Guernsey resident - is a chartered accountant and has been employed by Saffrey Champness , a top 20 firm of chartered accountants since 1984. She qualified as a chartered accountant in 1988, and became a partner in the London office in 1998. Since 2000 she has been based in the Guernsey office where she is a Client Liaison Director, responsible for trust and company administration.

She is a director of CQS Natural Resources Growth and Income PLC, Landore Resources Limited, UK Mortgages Limited and JP Morgan Global Core Real Assets Limited. She is Chairman of the Audit Committee.

Sarah Macaulay

Sarah MacAulay

Non-Executive Director

Sarah MacAulay was appointed a Director on 9 November 2021 upon the completion of the combination with Aberdeen New Thai Investment Trust PLC, where she had been a director since January 2017. She is chairman of Schroder Asia Total Return Investment Company plc and JPMorgan Multi-Asset Growth and Income plc. She is also senior independent director on the board of Fidelity Japan Trust. Previously she was a director of Baring Asset Management (Asia) Limited in Hong Kong and Asian Investment Manager at Kleinwort Benson and Eagle Star in London. She has twenty years of Asian investment management experience in London and Hong Kong, managing and marketing investment portfolios across numerous jurisdictions. She is also a trustee of Glendower School Trust, an educational charitable trust.
  • Mark Hadsley Chaplin

    Mark Hadsley-Chaplin

    Chairman

    United Kingdom resident – founded RWC Partners Ltd (formerly known as MPC Investors), a London based fund management firm specialising in hedge funds, long only funds and UCITS strategies, in 2000. He was CEO until 2006 and Chairman until 2010. Prior to this he was Vice Chairman of UBS Securities (East Asia) Ltd, based in Singapore and responsible for the management and development of the bank’s Asian equity business worldwide.
  • William Collins

    William Collins

    Senior Independent Director

    Guernsey resident – has over 45 years’ experience in banking and investment. From September 2007 he was employed by Bank J Safra Sarasin (formerly Bank Sarasin) in Guernsey as Director – Private Clients, retiring at the end of 2014. Prior to that he worked for Barings in Guernsey for over 18 years. In 1995 he was appointed a director and from 2003 until August 2007 was Managing Director of Baring Asset Management (CI) Ltd.
  • Eleonore de Rochechouart

    Eleonore de Rochechouart

    Non-Executive Director

    United Kingdom Resident - is a partner of Res Familiaris LLP, a London based wealth and corporate management advisory boutique. Prior to joining Res Familiaris in 2010, Eleonore spent 20 years in the financial services industry as an economist, researcher and asset allocator in both the traditional and alternative investment arena. She started her career in 1992 at Dubin & Swieca Capital Management's branch in France, before joining Standard & Poor's Rating Agency in 1998. She was then appointed CIO of a French family office in 2003 before moving to London in 2010.

  • none

    Anne Gilding

    Non-Executive Director

    Anne Gilding was appointed a Director on 9 November 2021 upon the completion of the combination with Aberdeen New Thai Investment Trust PLC, where she had been a director since October 2019. She is a non-executive director of Momentum Multi-Asset Value Trust plc, a senior adviser to Peregrine Communications, and she has also served a term as a trustee of an educational charity. She has over twenty five years' experience of developing and leading global communications, branding and marketing solutions for a broad range of companies including Impax Asset Management Group plc (where she gained valuable experience of ESG criteria), BMO (formerly F&C), GAM, Vernalis Group plc and UBS.
  • Helen Green

    Helen Green

    Non-Executive Director

    Guernsey resident - is a chartered accountant and has been employed by Saffrey Champness , a top 20 firm of chartered accountants since 1984. She qualified as a chartered accountant in 1988, and became a partner in the London office in 1998. Since 2000 she has been based in the Guernsey office where she is a Client Liaison Director, responsible for trust and company administration.

    She is a director of CQS Natural Resources Growth and Income PLC, Landore Resources Limited, UK Mortgages Limited and JP Morgan Global Core Real Assets Limited. She is Chairman of the Audit Committee.

  • Sarah Macaulay

    Sarah MacAulay

    Non-Executive Director

    Sarah MacAulay was appointed a Director on 9 November 2021 upon the completion of the combination with Aberdeen New Thai Investment Trust PLC, where she had been a director since January 2017. She is chairman of Schroder Asia Total Return Investment Company plc and JPMorgan Multi-Asset Growth and Income plc. She is also senior independent director on the board of Fidelity Japan Trust. Previously she was a director of Baring Asset Management (Asia) Limited in Hong Kong and Asian Investment Manager at Kleinwort Benson and Eagle Star in London. She has twenty years of Asian investment management experience in London and Hong Kong, managing and marketing investment portfolios across numerous jurisdictions. She is also a trustee of Glendower School Trust, an educational charitable trust.

 

Financial calendar

Year End 31 October
Accounts Published January
Annual General Meeting February
Dividend Paid N/A

Trust details

abrdn China Investment Company Limited

Registered Office:
11 New Street
St Peter Port
Guernsey
GY1 2PF

Registered in Guernsey as an Investment Company Number 50900

Launch Date: November 2009
Risk Warning
Risk warning
The value of investments and the income from them can go down as well as up and you may get back less than the amount invested. Please refer to the relevant Key Information Document (KID) prior to making an investment decision. Please be aware of scams that can affect investors.