Baillie Gifford China Growth Trust (BGCG) H2 2025 earnings summary

Executive summary

• Achieved a NAV total return of 35.4% for the year to 31 January 2025, outperforming the MSCI China All Shares Index benchmark by 3%.

• Share price total return was 29.4%, slightly underperforming the benchmark due to a widening discount.

• Government stimulus and policy shifts in China drove a substantial rally in equities, benefiting growth strategies.

• Board actions included a 4.5% share buyback, introduction of a performance-related Conditional Tender Offer for 2028, and renewal of the loan facility.

• Portfolio focused on high-conviction growth companies, with significant exposure to technology, consumer, and industrial sectors.

Financial highlights

• NAV per share increased from 193.06p to 259.07p, a 34.2% rise year-over-year.

• Shareholders' funds rose to £153.1m from £119.4m, up 28.3%.

• Revenue earnings per share grew 4.5% to 2.53p.

• Final dividend proposed at 2.20p, a 10% increase.

• Ongoing charges ratio increased slightly to 1.12%.

• Discount to NAV widened to 10.4% from 6.2%.

• Portfolio turnover was 19.1%.

Outlook and guidance

• Board remains positive on long-term prospects for China, citing structural growth drivers in technology, manufacturing, and consumption.

• Volatility expected to persist due to geopolitical and economic uncertainties.

• Conditional Tender Offer in 2028 provides downside protection if NAV total return underperforms the benchmark.

• Valuations remain attractive, with Chinese equities trading at a 45% discount to global markets.