JPMorgan China Growth & Income PLC · LSE:JCGI
JPMorgan China Growth & Income — Shareholder Meeting (January 2025)
33 slides from JPMorgan China Growth & Income's shareholder meeting presentation, Jan 23, 2025
Slide 1: JPMorgan China Growth & Income plc Annual General Meeting
JPMorgan China Growth & Income plc Annual General Meeting 23 January 2025 Rebecca Jiang, Investment Manager Howard Wang, Investment Adviser This is a marketing communication. Please refer to the KID (JPMorgan China Growth & Income plc) before making any final investment decisions FOR INSTITUTIONAL /
Slide 2: Results for the financial year ended 30 September 2024
JPMorgan China Growth & Income plc Results for the financial year ended 30 September 2024 • The past year saw the Chinese economy continue to work through its structural challenges. Policy responses to these Financial year ended 30 September 2024 challenges were initially restrained but by late 2024
Slide 3: Investment philosophy
Investment philosophy The volatile and We are We focus on broad domestic growth-oriented fundamental, China market lends investors bottom-up stock itself to taking an who primarily selection, leveraging active, longer-term, invest in higher quality our comprehensive bottom-up companies research inve
Slide 4: Seeking China's high conviction quality growth opportunities
Bottom-up stock selection reflects key long-term structural growth opportunities Technology Seeking China’s high Carbon neutrality conviction quality growth opportunities Consumption The above portfolio characteristics are shown for illustrative purposes only and are subject to change without notice
Slide 5: Greater China investment professionals
Greater China investment professionals Anuj Arora Howard Wang Head of EMAP Equities Team Head of Greater China Exp: 22,19 Exp: 30,20 Portfolio Management Team China and Greater China Offshore Growth Strategies Greater China Dedicated Sector Analysts Howard Wang Rebecca Jiang Simmy Qi* David Gleeson
Slide 6: Portfolio update
Portfolio update ASSET MANAGEMENT
Slide 7: Expectation vs. Reality: reviewing our thoughts from the 2024 AGM
Expectation vs. Reality: reviewing our thoughts from the 2024 AGM • Consumption recovery led by service, albeit the normalisation of consumer confidence takes longer • Domestic policy turning more pro-growth and pro-business – continuous stimulus throughout ‘24 increased in 4Q • Policies tilted to s
Slide 8: Market outlook
Market outlook MSCI China Price-to-Book ratio (x) MSCI China Growth vs Value (29 Jan 2021 rebased to 100) 120 6 MSCI China MSCI China Growth 100 MSCI China Value 80 5 60 40 4 20 0 Jul-21 Jul-22 Jul-23 Jul-24 Jan-21 Sep-21 Nov-21 Jan-22 Sep-22 Nov-22 Jan-23 Sep-23 Nov-23 Jan-24 Sep-24 Nov-24 Mar-21 M
Slide 9: Performance
Performance JPMorgan China Growth & Income plc as of 31 December 2024 Market Value JPMorgan China Growth & GBP 228m Income plc Annualised performance (%) Three Six One Three Five Ten months months year years years years JPMorgan China Growth & Income plc -3.75 9.23 11.15 -16.38 -3.06 5.20 MSCI China
Slide 10: How do you explain the portfolio's three-year numbers?
How do you explain the portfolio’s three-year numbers? Bonds versus equities Style headwind Asset allocation Stock selection • Value cyclical (often higher • Underweight ‘bond • Stock selection in yielding, defensive) equivalents’ - bond healthcare - Wuxi outperformed for the past 3 equivalents outp
Slide 11: Performance attribution
Performance attribution JPMorgan China Growth & Income plc – Financial year ending 30 September 2024 Attribution summary Stock: -5.12 Sector: -3.43 MSCI CHINA Net Return in Benchmark GBP Sector attribution (%) Relative Stock Impact Top contributors weight (%) return (%) (%) Stock selection Asset all
Slide 12: Full Truck Alliance: digitalisation in long-haul, full-truck load, freight market
Full Truck Alliance: digitalisation in long-haul, full-truck load, freight market Industrials, 8% Expected Return • The “Uber” connecting truck drivers, freight-forwarding agents and increasingly direct shippers. • Strong network effect given orders being intercity, long-haul & non-standard goods. S
Slide 13: Kanzhun: digitalisation of recruitment in white and blue collar jobs
Kanzhun: digitalisation of recruitment in white and blue collar jobs Communication Services, 21% Expected Return • Kanzhun operates the largest online recruitment platform in China, with ~24% revenue market share (2024) by monthly active user and revenue. • Unlike traditional players, Kanzhun was mo
Slide 14: Portfolio characteristics
Portfolio characteristics As of 31 December 2024 Portfolio Benchmark Strategic classification 12-Month Forward Price to Earnings (x) 12.3 10.0 Price to book (x) 2.3 1.4 Dividend yield (%)* 1.9 2.4 Return on equity (%) 14.3 10.5 Net debt to equity (%)** -12.0 15.8 Five year expected growth rate (%)**
Slide 15: Sector and market positions
Sector and market positions JPMorgan China Growth & Income plc as of 31 December 2024 Sector positions Relative weight (%) Portfolio 14.2 11.4 32.8 5.3 5.2 2.9 4.7 2.0 0.0 17.5 8.1 2.6 0.0 5.5 -4.3 weight (%) Market positions Relative weight (%) Portfolio 3.5 100.9 27.2 73.7 0.0 -4.3 weight (%) Sour
Slide 16: Portfolio positions
Portfolio positions JPMorgan China Growth & Income plc as of 31 December 2024 Top 10 holdings Portfolio weight (%) Top 5 overweights Portfolio weight (%) Relative weight (%) Tencent 11.78 China Merchants Bank 4.26 3.01 Alibaba 6.80 Full Truck Alliance 2.46 2.46 Meituan 6.43 TSMC 2.33 2.33 Foxconn In
Slide 17: Improvements in capital allocation
Improvements in capital allocation • Chinese companies responding to slower KE Holdings (Beike) growth. • Capital allocation is improving across a broad range of companies. The number of companies in the A-share market announcing interim dividends in the first half of the year, went from 150 (2023),
Slide 18: Market outlook
Market outlook ASSET MANAGEMENT
Slide 19: The game may have changed
The game may have changed Government finally acknowledges a significant challenge to macro growth Problem Government acknowledging consumer wealth and consumer confidence as the driver behind challenge Address the lack of coordination which has hampered efforts in past (e.g. pro-capital Proces
Slide 20: The game may have changed (cont'd...)
The game may have changed (cont’d...) ... because the problem was less the ability to spend than the confidence to do so both due to employment prospects and negative wealth effect Consumer balance sheet - China - US 2023, USD trillions 90 Total assets: US$85tn 80 70 Homes: 50% 60 50 40 Other tangib
Slide 21: Households and corporates had the means but not the willingness to spend
Households and corporates had the means but not the willingness to spend outside of personal travel - which we now know China households are saving more while borrowing less Rmb tr Net increase in household savings Net increase in household debt 20.0 17.8 18.0 16.7 16.0 14.0 11.9 12.0 11.3 9.7 9.9 1
Slide 22: Key changes to domestic policies – business, consumer, and investor confidence on the mend
Key changes to domestic polices – business, consumer, and investor confidence on the mend Recent pivots • Direct cash handouts and targeted subsidies to disadvantaged group Consumption • A new round of auto and consumer goods trade-in program • Raise state pension in 2025 exceeding CPI • Changed the
Slide 23: China: Investing in the Age of Trump 2.0
China: Investing in the Age of Trump 2.0 • Policy Uncertainty: The incoming U.S. administration’s specific approach to tariffs and sanctions/trade restrictions remains unclear. Key initial appointees include both prominent Wall Street figures on the economic front and prominent U.S. / China hawks
Slide 24: Global trade flows
) Global trade flows U.S. goods imports by market Share of total U.S. goods imports 25% 16% 14% 20% 12% 10% 15% 8% 9, 10% 6% 4% 5% 2% 0% 0% Cet asia] 25 ) Exports by market Share of world goods exports ‘00 ‘02 ‘04 ‘06 ‘08 10 12 14 16 18 ‘20 '22 @ Vietnam @ China @ Eurozone @ Mexico @ Taiwan and Sout
Slide 25: Summary
Summary 25 JPMorgan ASSET MANAGEMENT
Slide 26: China: Sector earnings and valuations
China: Sector earnings and valuations MSCI China earnings growth estimates Earnings per share, year-over-year change, consensus estimates 60% 50% 40% 30% 20% 10% 0% -10% -20% Sector Weight (%) Financials 187 Industrials 48 Energy 32 MSCI China 100.0 24 Comm. Serv. Cons. Staples Cons. Diser. 5 Real E
Slide 27: Chinese equity market corrections and subsequent performance
Chinese equity market corrections and subsequent performance MI GTIA 60 Previous vs. current Chinese equity market corrections MSCI China 27
Slide 28: Domestic Chinese assets have to rotate into equities in the long term
Domestic Chinese assets have to rotate into equities in the long term GTM GTC 11 Government bond yield is trending down Household wealth by asset type % of total, as of Dec. 2022 Property Cash & deposits Equity & mutual funds A share CSI Index 12M dividend yield 10 year government bond YTM Insurance
Slide 29: Appendix
Appendix JPMorgan 29 ASSET MANAGEMENT
Slide 30: Performance attribution
Performance attribution JPMorgan China Growth & Income plc Attribution summary Stock: -6.36 Sector: -3.27 for 1 year ending 31 December 2024 Benchmark MSCI CHINA Net Return in GBP Sector attribution (%) Relative Stock Impact Top contributors weight (%) return (%) (%) Stock selection Asset allocation
Slide 31: Investment objective and risk indicator
Investment objective and risk indicator JPMorgan China Growth & Income plc INVESTMENT OBJECTIVE The Company aims to provide long-term capital growth from investment in 'Greater China' companies which are quoted on the stock exchanges of Hong Kong, China and Taiwan or which derive a substantial part
Slide 32: Important information
Important information This is a marketing communication and as such the views contained herein do not form part of an offer, nor are they to be taken as advice or a recommendation, to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion
Slide 33: JPMorgan China Growth & Income plc
JPMorgan China Growth & Income plc Annual General Meeting 23 January 2025 This is a marketing communication. Please refer to the KID (JPMorgan China Growth & Income plc) before making any final investment decisions FOR INSTITUTIONAL / WHOLESALE / PROFESSIONAL CLIENTS AND QUALIFIES INVESTORS ONLY—NOT
JPMorgan China Growth & Income — Shareholder Meeting (January 2025) on 6ix