Baillie Gifford China Growth Trust (BGCG) H1 2024 earnings summary

Executive summary

• NAV total return rose 10.2% and share price total return 4.1% for the six months to 31 July 2024, underperforming the MSCI China All Shares Index, which gained 12.0%.

• Discount to NAV widened from 6.2% to 11.6% as share price lagged NAV growth.

• Portfolio remains focused on long-term growth themes: energy transition, advanced manufacturing, and digitalisation.

• Share buybacks of 1,450,295 shares (2.3% of share capital) were conducted and held in treasury.

• Cautious optimism maintained for long-term outlook despite macroeconomic and geopolitical headwinds.

Financial highlights

• Net asset value per share increased to 210.88p from 193.06p at 31 January 2024.

• Shareholders' funds rose to £127.4m from £119.4m over the period.

• Revenue earnings per share were 2.40p, up from 2.15p year-over-year.

• Total assets before deduction of bank loans reached £133.3m, up from £125.3m.

• Dividend of 2.00p per share paid in July 2024.

Outlook and guidance

• Chinese equities remain at historically low valuations, trading at a 60% discount to US equities.

• Forecast earnings growth for Chinese equities is among the highest globally, but risks remain from economic transition and geopolitics.

• Regulatory overhauls of large tech platforms are largely complete, and policy support is incrementally clearer.

• Long-term optimism for the asset class and Trust is maintained.