Baillie Gifford Shin Nippon Annual Results

Over the year the Company's net asset value per share (after deducting borrowings at fair value†) declined by 24.1% compared to a 4.3% decline in the comparative index^* (the net asset value per share (after deducting borrowings at book value) also decreased by 24.1%). The share price decreased by 28.5% as the shares moved from a premium of 5.4% to a discount of 0.8%.

In sterling terms over three years, the Company's comparative index is up 10.4%, whilst the net asset value (with borrowings at fair value^†) and share price are up by 10.9% and 1.9% respectively.

• The share price weakness of many high growth holdings is disappointing to note given their fundamentals; most companies are continuing to achieve rapid sales and profit growth.
• Camping equipment manufacturer Snow Peak was the top positive contributor to relative and absolute performance, with its shares more than doubling over the past year.
• Sportswear manufacturer Descente and semiconductor equipment manufacturer Jeol were other strong performers.
• Many of the internet holdings performed poorly in share price terms. Despite exceptional operational performance, Bengo4.com was among the largest negative contributors to performance
• Other detractors from performance included online food ordering and delivery company Demae Can and online real estate company GA Technologies.
• Shin Nippon's investment philosophy is to seek and invest in disruptive and fast-growing smaller businesses run by young and dynamic entrepreneurs in Japan. The Board and Managers continue to believe that remaining true to this investment philosophy will result in significant shareholder returns in the long run.

^* The Company's comparative index for the year to 31 January 2022 was the MSCI Japan Small Cap Index (total return† in sterling terms).

† Alternative Performance Measure – see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

Source: Refinitiv/Baillie Gifford and relevant underlying index providers.

Shin Nippon aims to achieve long term capital growth through investment principally in small Japanese companies which are believed to have above average prospects for growth. At 31 January 2022 the Company had total assets of £643.8m (before deduction of bank loans of £91.1m).

The Company is managed by Baillie Gifford & Co, an Edinburgh based fund management group with around £252 billion under management and advice as at 11 March 2022.