LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN CHINA GROWTH & INCOME PLC
HALF YEAR REPORT & FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31ST MARCH 2026
Legal Entity Identifier: 549300S8M91P5FYONY25
Information disclosed in accordance with the DTR 4.1.3
Highlights
- NAV total return of -9.5% in sterling terms, outperforming the MSCI China Index (the ‘Benchmark’), which returned -13.9%. Share price return of -8.5%, with the discount narrowing from the previous year end of 9.7% to 9.0%.
- For ten years cumulative ended 31st March 2026, NAV total return of +107.9% outperforming the Benchmark return of +78.7%. Share price return of +125.7%.
- Planned declaration of the Company’s fourth interim dividend of 3.39p per share on 2nd July 2026 bringing the annual dividend for the year ending 30th September 2026 to 13.56p per share, a 24% increase on the previous year’s annual dividend.
- During the six months reporting period, the Company repurchased 1,009,596 shares. Since the period end, 1,481,285 shares have been bought back into Treasury at an average discount of 10.3%.
The Chairman of JCGI, Alexandra Mackesy, commented:
“The Board is encouraged by the Investment Manager’s steps to improve our Company’s performance, particularly in terms of stock selection..[which]..contributed positively to relative performance during the six months ended 31st March 2026 and, over one year, on a total return basis in sterling terms the Company’s net asset value rose by 12.4%, outperforming the Benchmark by 10.8%.”
Portfolio Managers Rebecca Jiang, Howard Wang and Li Tan, commented:
“China’s near and longer-term economic prospects appear to be stabilising, thanks mainly to forward-looking, strategic government policy. We believe that this, combined with attractive valuations, and our continued focus on fundamental stock selection, leave the portfolio well-positioned to capitalise on the exciting opportunities likely to emerge as China pursues its long-term objectives.”
CHAIRMAN’S STATEMENT
Performance
Volatility stalked China markets yet again during the six months ended 31st March 2026. After a strong rebound during the year ending 30th September 2025, Chinese stock markets trod water ahead of Chinese New Year, before being buffeted by the shockwaves that hit global stock markets after the US and Israel attacked Iran in late February. After the previous year’s recovery, it was disappointing that the Company’s net asset value declined by 9.5% on a total return basis in sterling terms during the period under review. The share price fell by 8.5% on a total return basis in sterling terms, with the discount narrowing slightly from 9.7% to 9.0%. The Company’s exposure to the more resilient Shanghai and Shenzhen stock markets through China A shares (42% of the Company’s investment portfolio as at 31st March 2026) protected the portfolio somewhat, and this partly explains the Company’s 4.4% outperformance of its benchmark, the MSCI China Index, in NAV total return terms.
The Board is encouraged that the Portfolio Manager’s steps to improve our performance appear to be bearing fruit. Reinforced by the addition of two new portfolio analysts and benefitting from the support of an enlarged team of experienced analysts, our Investment Manager has adapted the portfolio to reflect the new realities that face investors and the attractive opportunities offered by China’s rapidly evolving corporate sector. They have also profited from recent successful initial public offerings (IPOs) in Hong Kong. Reflecting these enhancements, stock selection contributed positively to relative performance during the six months ended 31st March 2026, and, over one year, on a total return basis in sterling terms the Company’s net asset value rose by 12.4% and its share price by 13.1%, outperforming the MSCI China Index by 10.8% in NAV total return terms. In the month following the end of this reporting period, the Company’s performance bounced back into positive territory with a total return of +4.1% in sterling terms.
The Company’s relative outperformance of the MSCI China Index is explained in detail in the Investment Manager’s Report (page 11of the Company’s 31st March 2026 Half Year Report). This report provides a detailed commentary on the portfolio positioning, the investment strategy and the outlook for investing in Chinese companies.
Loan Facility and Gearing
The Board has given the Investment Manager the flexibility to manage gearing tactically within a range set at 10% net cash to 20% geared. During the period, the Company’s gearing ranged from 10.6% to 16.7%, reflecting the team’s increasingly positive view of the Chinese markets in the run up to Chinese New Year. After it became evident that hostilities between the US and Iran were likely to continue, the Investment Manager prudently reduced gearing, which stood at 12.3% as at 31st March 2026. The Investment Manager currently uses low cost and capital efficient Contracts for Difference (CFDs) to provide gearing.
Our Dividend Policy
On 2nd October 2025, the Company announced that the cum income Net Asset Value at the close of business on 30th September 2025 (the Company’s year-end) was 338.85 pence per share. In line with the Company’s distribution policy (see page 3 of the Company’s 31st March 2026 Half Year Report) the Directors declared the first quarterly interim dividend of 3.39 pence per share. Since then, two further dividend declarations have been made, on 2nd January 2026 and 31st March 2026, both of 3.39 pence per share. With the planned declaration of the Company’s fourth interim dividend of 3.39 pence per share on 2nd July 2026, in the absence of unforeseen circumstances, the annual dividend for the year ending 30th September 2026 will be 13.56 pence per share, a 24% increase on the previous year’s annual dividend of 10.92 pence per share. This increase reflects the Company’s improved Net Asset Value during the previous financial year.
Share Capital
At the time of writing, the Company’s issued share capital consists of 82,058,247 Ordinary shares, (excluding shares held in Treasury). During the six month reporting period, the Company bought back 1,009,596 shares (1.2% of issued shares) into Treasury at an average discount of 10.4%. No shares were issued. Since the period end, 1,481,285 shares have been bought back into Treasury, at an average discount of 10.3%.
When considering share buybacks, the Board reflects carefully on the Company’s size and what is in the best interests of all shareholders. This is particularly the case, when, in times of extended volatility such as during the period under review, the Investment Manager finds attractive opportunities to enhance long-term shareholder returns by investing in undervalued quality growth companies.
Approval of Change in Investment Policy and Restrictions
Following approval from The Financial Conduct Authority, the resolution changing the Company’s investment policy to amend its investment restrictions was approved at the Annual General Meeting (AGM) on 3rd February 2026. The maximum permitted exposure to an individual company is now increased to the lower of: (i) a 5% position over the Benchmark; or (ii) 20% of net assets. This now allows the Portfolio Managers to increase exposure to favoured stocks such as Tencent, as can be seen in the List of Investments on page 16 of the Company’s 31st March 2026 Half Year Report. During the period under review, the Investment Manager added to the Tencent position, purchasing 0.4 million more shares. Tencent represented 16.9% of the Company’s investment portfolio as at 31st March 2026 (see the Investment Manager’s Report on page 12 of the Company’s 31st March 2026 Half Year Report.).
Stay Informed
The Company delivers email updates with regular news and views, as well as the latest performance. If you have not already signed up to receive these communications 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 front of the Half Year Report.
Outlook
Until there is some clear resolution to the conflicts in the Middle East and between Russia and Ukraine, uncertainties will overhang all global financial markets. In the Middle East, much depends on whether there is a timely reopening of the Strait of Hormuz or a continuation of the blockade. Whatever the outcome, it is probable that the global oil markets will be disrupted for some time to come, and China will not escape unscathed. Our Investment Manager, however, points out that the Chinese economy appears better positioned than most others to withstand disruption to oil supplies, due to its long-term strategy of energy diversification. That said, prospects for individual companies in China will depend on their ability to pass on higher costs to their customers.
Meanwhile, relations between the US and China remain unpredictable. Little appears to have emerged from President Trump’s recent meeting with President Xi in Beijing. Tensions may well heighten in the run-up to the US mid-term elections, particularly in relation to trade issues. President Trump’s continued confusing pronouncements appear to have effectively enhanced China’s position globally, with political leaders from Canada and Russia to Taiwan and Iran visiting Beijing in recent months.
Against the difficult global macro-environment, the Chinese economy has performed better than expected, with GDP growth in the first quarter of 2026 reaching 5%. This was driven by the manufacturing sector and an unexpected 14.7% surge in exports. While domestic consumer sentiment remains subdued, China’s economic prospects appear to be stabilising, largely due to forward-looking government policy. Recently introduced government policies are expected to lift consumer spending from the second half of 2026. China’s 15th Five-Year Plan, which was approved in April, focuses on boosting domestic consumption and technological self-sufficiency, transition to renewable energy and developing further China’s AI capabilities. With Chinese markets’ valuations still below historical averages, our Investment Manager has taken advantage of recent market volatility to position the Company’s portfolio to benefit from these policies. The Board shares the Investment Manager’s optimism about the improving medium and long-term outlook for Chinese stock markets and believes that the Company will maintain its long-term track record of absolute gains and outperformance.