JPMorgan China Growth & Income PLC · LSE:JCGI
JPMorgan China Growth & Income — Shareholder Meeting (January 2024)
31 slides from JPMorgan China Growth & Income's shareholder meeting presentation, Jan 26, 2024
Slide 1: Annual General Meeting
Annual General Meeting 26 January 2024 Rebecca Jiang, Portfolio Manager Simmy Qi, Portfolio Manager JPMorgan China Growth & Income plc This is a marketing communication. Please refer to the KID (JPMorgan China Growth & Income plc) before making any final investment decisions FOR INSTITUTIONAL / WHOL
Slide 2: Results for the financial year ended 30 September 2023
JPMorgan China Growth & Income plc Results for the financial year ended 30 September 2023 • The year under review was marked by a series of unexpected challenges. The most prominent was China’s Financial year ended 30 September 2023 abrupt exit from its stringent zero COVID policy last December. Fol
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: Capturing China's best quality growth opportunities
Where are the Best Sustainable Growth Opportunities? Long term compounders within structural growth sectors Technology Capturing China’s Carbon Neutrality best quality growth opportunities Consumption The above portfolio characteristics are shown for illustrative purposes only and are subject to cha
Slide 5: Greater China investment professionals
Greater China investment professionals Anuj Arora Howard Wang Head of EMAP Equities Team Head of Greater China Exp: 21,18 Exp: 29,19 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: Asset Management China (AMC)
Asset Management China (AMC) April 2023 Number of AMC January 2023 investors (Dec 2023) 34 Received regulatory approval from China International Fund China Securities Regulatory Management Co., Ltd. (CIFM) Commission (CSRC) to complete received the approval to complete acquisition of China Internati
Slide 7: Portfolio update
Portfolio update ASSET MANAGEMENT
Slide 8: China equities: Growth vs. Value
China equities: Growth vs. Value GTM GTC 63 Growth vs. Value valuations* Growth vs. Value relative performance MSCI China Growth fwd. P/E ratio/Value fwd. P/E ratio MSCI China Growth/Value performance, Jan. 2006 = 100 7.0 400 Growth Growth outperforming value expensive relative to value 6.0 350 300
Slide 9: Global investor positioning in Chinese assets
Global investor positioning in Chinese assets GTM GTC 67 Total net flows into China equities % of investors with no China A-share exposure USD billions, active and passive, 4-week moving average 1.2 100% Cumulative flows since Oct. '22 low (USD billions) 90% 1.0 A-shares -0.05 Off-shore listed 3.80
Slide 10: Performance
Morningstar Overall RatingsTM Performance Overall JPMorgan China Growth & Income plc as of 31 December 2023 Market Value JPMorgan China Growth & Annualised performance (%) Income plc GBP 204m Three Six One Three Five Ten months months year years years years JPMorgan China Growth & Income plc -10.26
Slide 11: Performance attribution
Performance attribution JPMorgan China Growth & Income plc – Financial year ending 30 September 2023 Attribution summary Stock: -7.40 Sector: -3.17 MSCI CHINA Net Return in Benchmark GBP Sector attribution (%) Top contributors Relative Stock Impact weight (%) return (%) (%) Stock selection Asset all
Slide 12: Portfolio characteristics
Portfolio characteristics JPMorgan China Growth & Income plc Benchmark MSCI CHINA Net Return in GBP as of 31 December 2023 Market capitalization (USD) Portfolio Benchmark Portfolio % Benchmark % 70.0 12-Month Forward Price to Earnings (x) 14.2 9.2 60.0 57.9 Price to book (x) 2.5 1.2 50.0 Dividend yi
Slide 13: Sector and country positions
Sector and country positions JPMorgan China Growth & Income plc Benchmark MSCI CHINA Net Return in GBP as of 31 December 2023 Active and absolute sector positions Relative to benchmark (%) 15.0 11.1 10.0 5.3 4.3 2.4 0.4 5.0 0.0 -5.0 -0.6 -1.4 -10.0 -1.6 -1.8 -3.2 -1.7 -4.1 -15.0 -7.0 -10.7 Informati
Slide 14: Portfolio Positions
Portfolio Positions JPMorgan China Growth & Income plc Benchmark MSCI CHINA Net Return in GBP as of 31 December 2023 Portfolio weight Fund Relative Top 10 Holdings Top 5 overweights (%) weight (%) position (%) Tencent Holdings Ltd 11.2 Ke Holdings Inc-Cl A 3.4 2.8 PDD Holdings Inc 6.3 Kanzhun Ltd -
Slide 15: Recent New Initiations: Foxconn Industrial Internet
Recent New Initiations: Where are the opportunities in China? Foxconn Industrial Internet (Information Technology, 26% Expected Return) Scarce overseas AI exposure FII is a subsidiary of Taiwan-based Hon Hai Precision, a global leader in making server and networking equipment as well as metallic c
Slide 16: Recent New Initiations: Sunresin
Recent New Initiations: Where are the opportunities in China? Sunresin (Materials, 23% Expected Return) A promising compounder specialized in high-end industrial-use purification resins Sunresin specializes in high-end adsorption resins widely used in many scenarios, including ultrapure water, met
Slide 17: Recent New Initiations: China Resources MixC
Recent New Initiations: Where are the opportunities in China? China Resources MixC (Materials, 30% Expected Return) Strong growth through COVID CR MixC charges management fees from home owners and commercial mall owners, making its 18,000 16,000 business model less cyclical and relatively immune 1
Slide 18: Importance of engagement – Silergy Corp
Importance of engagement – Silergy Corp Manufacturer and seller of Integrated Circuits Who engaged? Our continued engagement ● Effective board oversight of cybersecurity Paul Chan Janet Wong ● Low board independence and board diversity Analyst SI Team Issues ● Human rights due diligence along its su
Slide 19: Market outlook
Market outlook ASSET MANAGEMENT
Slide 20: Property: unlikely to trigger systematic financial risk
Property: unlikely to trigger systematic financial risk, but remains and GTM GTC overhand on sentiment 56 51 MSCI China Real Estate Index June 2020 = 100 140 Initially a self-deflated crisis. In 2022, incremental policy loosening focused on preventing systematic risk rather 120 than rejuvenating t
Slide 21: Importance of Chinese trade to the world
Importance of Chinese trade to the world GTM GTC 9 China’s share in global trade China’s major trading partners USD billions, rolling 12-month sum, goods only % of world total trade, goods only 16% 2022: 15% -$500 -$300 -$100 $100 $300 $500 $700 U.S. $340 14% Hong Kong $267 12% EU $236 Exports 10% A
Slide 22: The good: Lots of tiny stimuli done and more in the pipeline
The good: Lots of tiny stimuli done and more in the pipeline No single game changer. Look for cumulative effect. Areas Timeline Policies August ’23 Halved the stamp duty on securities transaction. Capital markets August ’23 Put restrictions on secondary issuance and controlling shareholders sell-dow
Slide 23: China valuations trading close to historic lows
China valuations trading close to historic lows MSCI China Price-to-Earnings ratio (x) MSCI China Price-to-Book ratio (x) 20 6 PE NTM 5th percentile 25th percentile 18 5 16 14 4 12 10 3 Current PB 1.21 8 Current PE 9.05 2 2009 GFC 6 2003 SARS 4 1 2016 China 2 slowdown 0 0 Mar-14 Mar-15 Mar-16 Mar-17
Slide 24: Summary
Summary 24 JPMorgan ASSET MANAGEMENT
Slide 25: Chinese equity market corrections and subsequent performance
Chinese equity market corrections and subsequent performance GTM GTC 54 Previous vs. current Chinese equity market corrections MSCI China 70% Peak-to-trough correction 4 weeks after trough 12 weeks after trough 26 weeks after trough 53% 50% 32% 34% 26% 27% 30% 25% 19% 19% 13% 12% 8% 10% 10% -10% -30
Slide 26: 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 27: Summary
Summary Consumption recovery is led by service, albeit the normalization of consumer confidence takes longer than expected Domestic policy is turning more pro-growth and pro-business Policies tilted to support growth from prevent systematic risks. More to expect in 2024 Opportunities Valuati
Slide 28: Appendix
Appendix JPMorgan 28 ASSET MANAGEMENT
Slide 29: Performance attribution
Performance attribution JPMorgan China Growth & Income plc – CY2023 Attribution summary Stock: -9.79 Sector: -4.77 MSCI CHINA Net Return in Benchmark GBP Sector attribution (%) Relative Stock Impact Top contributors weight (%) return (%) (%) Stock selection Asset allocation Netease Inc 2.32 17.86 0.
Slide 30: Investment objective and risk profile
Investment objective and risk profile JPMorgan China Growth & Income plc Risk profile Exchange rate changes may cause the value of underlying overseas investments to go down as well as up. Investments in emerging markets may involve a higher element of risk due to political and Investment objective
Slide 31: 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
JPMorgan China Growth & Income — Shareholder Meeting (January 2024) on 6ix