Final Results

RNS Number : 3273S

JPMorgan Chinese Inv Tst PLC

17 November 2011

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN CHINESE INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER 2011

Chairman's Statement

Performance

During the period, the Company's total return on net assets, which comprises the change in net asset value ('NAV') with the dividend reinvested, decreased by 18.2%, underperforming the Company's benchmark, the MSCI Golden Dragon Index, with net dividends reinvested (in sterling terms), which decreased by 16.7%. Over the same period, the Company's Ordinary share price declined by 20.4%, which, when compared against the total return on net assets (-18.2%), reflects a widening of the Company's discount from 5.1% to 7.6%. The disappointing performance resulted mostly from the sharp fall in the Greater China markets in September but also from an even greater decline in the Company's portfolio in that month. The Investment Managers explain the performance of the Company in more detail in their report further on in this Annual Report.

Board of Directors

During the year, the Board, through its Nomination Committee, carried out an evaluation of the Directors, the Chairman, the Board itself and its committees. This is an important process and an effective means of evaluating the continuing efficacy of the Board.

The Nomination Committee discussed the matter of annual re-election of Directors as best practice under the UK Corporate Governance Code. However, given the Company's size, the Board agreed that it was not appropriate for the Directors to be subject to annual re-election. In accordance with the Company's Articles of Association, Sir Andrew Burns and William Knight will retire by rotation at the forthcoming Annual General Meeting and stand for re-election.

As I explained in last year's Annual Report, I will be retiring from the Board as both Chairman and Director of the Company after this year's Annual General Meeting. The Board resolved last year that, upon my departure, William Knight will assume the role of Chairman of the Company. Kathryn Matthews will take over from William Knight as Chairman of the Audit Committee.

I am grateful to shareholders for their support over the years whilst I have been Chairman of the Company.

Revenue and Dividends

The revenue for the year, after taxation, was £1,073,000 (2010:£1,181,000). The revenue return per share, calculated on the average number of shares in issue, was 1.38 pence (2010: 1.55 pence).

The Board is recommending a dividend of 1.30 pence (2010: 1.50 pence) per share in respect of the financial year ended 30th September 2011 given the Company's return on its Revenue Account. Subject to shareholders' approval at the Annual General Meeting, this dividend will be paid on 23rd December 2011 to shareholders on the register at close of business on 2nd December 2011.

As previously stated, shareholders should note that the Company's objective remains that of long term capital growth and dividends will vary from year to year accordingly.

Gearing

During the course of the year the Company replaced the £8 million revolving credit facility with Lloyds Bank with a similar but larger £20 million facility with Scotiabank. During the year the Company's gearing ranged from 104% to 107% and, at the time of writing, was 103%. The facility matures in January 2012 with an option to extend for another year. This gearing facility gives the Investment Managers the flexibility to tactically manage gearing within a range of 90% to 115% invested.

Subscription Shares

The Company issued Subscription shares to qualified shareholders on the basis of one Subscription share for every five Ordinary shares held on 16th April 2008. As a result of Class and General Meetings of Subscription shareholders and Ordinary shareholders held in June 2010 respectively, Subscription shareholders can choose to exercise their Subscription shares at a price of 168 pence per share at any time up to and including 15th May 2013, whereupon the rights under the Subscription shares will lapse. Since the Subscription shares were issued and up to the date of this report, 1,402,681 Subscription shares have been exercised into Ordinary shares raising proceeds of £3,728,871. Further details on the Subscription shares, including the apportionments for capital gains tax purposes and how they may be exercised, can be found on the Company's website at www.jpmchinese.co.uk

Share Issues and Repurchases

The Directors consider it to be in the interests of shareholders that the Company's share price reflects, as closely as possible, the NAV per share. The Directors have authority to issue new Ordinary shares for cash and to repurchase shares in the market for cancellation or to hold in Treasury.

During the year and up to the date of this report, the Company has issued 500,000 new Ordinary shares for a total consideration of £885,000 at a weighted average premium to NAV of 2.38%. During the same period, the Company has issued 56,740 new Ordinary shares following the exercise of Subscription shares for a total consideration of £95,323.

The Company did not repurchase any shares during the year. As previously stated, repurchases will only be made in the market at prices below the prevailing net asset value per share and the Board's policy is to hold any repurchased shares in Treasury. The Company will re-issue shares held in Treasury only at a premium to NAV.

The Board believes that its policy of share issuance and repurchases has helped to reduce discount volatility and recommends that the authorities be kept in place. Accordingly, it is seeking approval from shareholders to renew the share issue and repurchase authorities at the forthcoming Annual General Meeting.

Review of services provided by the Manager

During the year the Board carried out a thorough review of the investment management, secretarial and marketing services provided to the Company by the Manager, JPMorgan Asset Management (UK) Limited ('JPMAM'). Following this review, the Board has concluded that the continued appointment of the Manager on the terms agreed is in the interests of the shareholders as a whole.

The fees payable to the Manager comprise a fixed basic annual management fee of 1% of total assets per annum and a performance related fee of 15% of any outperformance of the NAV total return over the benchmark. The amount of the latter fee actually payable to the Manager is capped at 1% of the net asset value in any one year, with any excess being carried forward and either paid out (subject to the 1% cap) or absorbed by any underperformance in subsequent years.

The Company underperformed its benchmark in the financial year ended 30th September 2011 and this gave rise to a write back of performance fees accrued but not paid of £346,000. This amount, when offset against the £487,000 provision brought forward, resulted in the balance of £141,000, which is immediately payable.

The Company's Total Expense Ratio for the financial year, as a percentage of the average of the opening and closing net assets, was 1.40% before accounting for the performance fee and 1.51% after doing so. These ratios compare favourably with those of similar funds.

Annual General Meeting

This year's Annual General Meeting will be held at the Saddlers' Hall, 40 Gutter Lane, London, EC2V 6BR on Friday 16th December 2011 at 11.00 a.m.

Outlook

Although global markets remain nervous, the dramatic sell-off in the Greater China markets in September has priced in a great deal of bad news.  Assuming an acceptable European sovereign debt solution, we expect Chinese equities to have bottomed in the near-term. China's short-term priority is to control inflation and property prices; the measures taken to achieve these ends are reducing domestic demand and growth. However, we expect these policies to be relaxed during 2012, which the market may anticipate. As a result, in the absence of a further deterioration in the developed economies, domestic and international investors can be expected to resume buying Chinese equities.

Nigel Melville

Chairman

17th November 2011

Investment Managers' Report

In the year to 30th September 2011, the MSCI Dragon Index fell by 16.7% and the Company's total return on net assets fell by 18.2%, underperforming its benchmark by 1.5%. This underperformance resulted from a significant reversal in sentiment in the last three months of the Company's financial year and was in sharp contrast to the first nine months of the year when the Index rose by 3.6% and the return on net assets for the Company rose by 7.0%.

The underperformance was mainly caused by our overweight position in China and our stock selection in that market. The portfolio's holdings in property (Agile Property, China Vanke), materials (China National Building Material, Hidili Industry, Aluminium Corporation of China) and banks (Agricultural Bank of China) were the major detractors to performance, particularly in the last three months of the Company's financial year. Being underweight in Chinese telecommunication stocks, such as China Mobile and not owning China Unicom also hurt relative performance. Good stock selection in Taiwan and, to a lesser extent, Hong Kong did help however to offset some of these losses. During the review period we switched our holding of the JF China Pioneer A-Share Fund into the JF China New Generation Fund. JF China New Generation Fund provides the portfolio with greater exposure to mainland China's domestic consumption-driven companies and also exposure to fixed income instruments denominated in Renminbi.

Given the unexpected and dramatic falls in world markets as we approached the end of the Company's financial year, our decision to remain geared had a -1.2% impact on performance. The falls in markets took some stock valuations to levels not seen since the crisis in 2008. Price to book multiples in China even fell through their previous lows. In spite of this, corporate fundamentals remain solid in much of Greater China and we continue to believe that, as global financial concerns abate, investors will find substantial value in equities in the region. Accordingly, in China, we remain overweight in the property sector and have begun to increase our exposure once again to financials and certain materials stocks. We retain our structural position towards Chinese consumption-driven companies. We have also increased positions in Taiwanese semiconductors as inventories decline and reduced Taiwanese financials to fund these moves.

China review

Although positive macroeconomic indicators suggested China's economy was gaining momentum as it entered the last quarter of 2010, higher than expected Consumer Price Inflation (CPI) and the government's response to a 0.5% rise in the Reserve Requirement Ratio (RRR) and a 0.25% rise in interest rates led Chinese stock markets lower.

Over the first quarter in 2011, Chinese equities outperformed both Hong Kong and Taiwan as investors looked through the devastating consequences of the Tohoku earthquake and continuing uncertainty in the Middle East and North Africa. Nevertheless, despite showing a small positive return over the period, the threat of inflation meant that China underperformed other major markets.

In the second quarter, Chinese equities fell as a number of concerns including the extent of the slowdown in the domestic economy, the size of the local government debt problem and the continuous rise of inflation, dominated. The CPI reading continued to rise, hitting +5.5% in May, and the last month of that quarter was affected negatively by rumours of accounting irregularities and allegations of fraud in overseas listed Chinese companies, particularly in North America.

Chinese equities continued to fall in the third quarter with the MSCI China Index losing more than a quarter of its value as concerns rose that the government's measures to slow inflation would result in a significant slowdown in economic growth. Government measures to tighten liquidity triggered worries about the need for banks to raise capital. This combined with the external uncertainties of slowing US growth and European sovereign debt problems weighed heavily on investor sentiment.

China Outlook

Although the Purchasing Managers Index (PMI) is likely to remain weak in the short term, increased fiscal spending should alleviate the impact of the credit crunch and lead to a gradual recovery in economic activity. We believe that China's economy will avoid a hard landing. The combination of falling inflation and weakening manufacturing activities suggest that the government's policies are working and therefore there should be an increasing likelihood of some targeted easing in policy before the end of the year. The dramatic sell-off in shares seen in September has priced in much of the risks and we believe that as CPI pressures alleviate, investors will re-focus their attention on the growth prospects offered by Chinese equities.

Hong Kong Review

Inspite of the government's attempt to cool the property market over the fourth quarter of 2010, property shares still continued to lead the market higher, driven by the loose monetary conditions and a strong pick-up in economic activity.

However, this optimism did not last and Hong Kong equities underperformed both China and other regional markets over the first quarter of 2011. The liquidity of Chinese shares listed in Hong Kong meant that the Hong Kong market was more heavily impacted by global investors' urgent desire to reduce the risk in their portfolios.

Hong Kong equities continued their slide into the second quarter, weighed down by both global and China related concerns. On the global front, concerns over policy tightening in China, weaker global growth forecasts and the Euro fiscal debt crisis continued to dominate markets. Liquidity in Hong Kong also continued to tighten as the conversion to offshore Renminbi deposits, which account for 9% of total system deposits, saw rapid growth. In a bid to slow the increase in property prices, the Hong Kong government introduced a series of measures, including lowering the amount that could be borrowed for mid-sized properties. Inflation also continued to accelerate with the headline rate reaching 5.2% in May, the highest level for three years.

In the third quarter, Hong Kong equities fell by almost 20% as investors became increasingly concerned about the slowdown of growth in China. Despite the deteriorating outlook in China, inflation in Hong Kong remained persistent and the government maintained its tightening policies, keeping pressure on property developers and other segments of the economy. However, inspite of this, exports and unemployment figures in Hong Kong continued to show a positive trend.

Hong Kong Outlook

Global and China economic issues are likely to continue to weigh on the Hong Kong market in the near term. Nevertheless, the mid-October policy address by the Chief Executive did provide some clarity on the government's stance on the property market, including the launch of a subsidised home ownership scheme and continued revisions to land supply policy. Financial market weakness is likely to place office rentals under some stress while retail rentals remain robust, supported by a strong growth in visitors from mainland China.

While the policy stance in China has remained tight for longer than originally expected, it is reasonable to expect that there will be some form of stimulus either monetary or fiscal to prevent a significant slowdown actually occurring.

Taiwan Review

The Taiwan stock market responded positively to the mayoral election in the fourth quarter of 2010. Investors had been initially apprehensive but the election outcome turned out to reinforce the status quo with both the KMT and the DPP retaining their respective seats. The market gained further ground in December as investors focused on the benefits associated with the Economic Cooperation Framework Agreement (ECFA), a free trade agreement with China combined with an increasingly improving demand outlook and an acceleration in foreign investment.

Despite concerns that the appreciation of the New Taiwanese dollar could negatively impact the margins of technology companies, the Taiwan market had a good start to 2011 driven by strong foreign buying from the previous quarter. That trend reversed in mid-February as the optimism over the global outlook for technology and the positive spill-over effect from the ECFA faded and the strong inflows reversed as liquidity retreated from emerging markets.

In the second quarter of 2011, the Taiwan market rebounded strongly as supply disruptions following the Tohuku earthquake were resolved earlier than had been initially expected. However, rising risk in Europe and weak sentiment over demand for technology stocks dragged the Taiwan stock market down in June.

During the third quarter the Taiwan market fell sharply along with all other world markets on fears of a slowdown in global growth. However, it outperformed both MSCI Hong Kong and MSCI China as concerns over Chinese inflation and tight monetary conditions continued to overhang those markets. In line with other Asian currencies the New Taiwanese dollar had its sharpest fall for 10 years on concerns that slowing global growth would reduce demand for exports. Against this backdrop and with a benign inflation outlook, the Taiwan Central Bank decided to keep its discount rate unchanged at 1.875%.

Taiwan outlook

We continue to be positive about the Taiwan stock market because of the anticipated long term benefits that the EFCA will bring and an expected recovery in consumer spending in Taiwan. In the near term however external factors may continue to weigh on the market. Any sign that the Chinese government is beginning to loosen its domestic policies will add further impetus to a market where stock valuations have fallen to increasingly attractive levels.

Howard Wang

Emerson Yip

Shumin Huang

William Tong

Investment Managers

17th November 2011

Principal Risks

With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to the Company. These key risks fall broadly under the following categories:

•   Investment Underperformance: An inappropriate investment strategy, for example asset allocation or the level of gearing, may lead to underperformance against the Company's benchmark index and peer companies, resulting in the Company's shares trading on a wider discount. The Board manages these risks by diversification of investments through its investment restrictions and guidelines which are monitored and reported on by the Manager. JPMorgan Asset Management (UK) Limited ('JPMAM') provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, transaction reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the investment managers, who attend all Board meetings, and review data which show statistical measures of the Company's risk profile. The investment managers employ the Company's gearing within a strategic range set by the Board. The Board holds a separate Board meeting devoted to strategy each year.

•   Loss of Investment Team: A sudden departure of several members of the investment management team could result in a short-term deterioration in investment performance. The Manager takes steps to reduce the likelihood of such an event by ensuring appropriate succession planning and the adoption of a team-based approach.

•   Discount: A disproportionate widening of the discount relative to the Company's peers could result in a loss of value for Shareholders. In order to manage the Company's discount, which can be volatile, the Company operates a share repurchase programme.

•   Market: Market risk arises from uncertainty about the future prices of the Company's investments. It represents the potential loss that the Company might suffer through holding investments in the face of negative market movements. The Board considers asset allocation, stock selection and levels of gearing on a regular basis and has set investment restrictions and guidelines, which are monitored and reported on by JPMAM. The Board monitors the implementation and results of the investment process with the Manager.

•   Political and Economic: Changes in financial or tax legislation, including in the European Union, may adversely affect the Company. The Manager makes recommendations to the Board on accounting, dividend and tax policies and the Board seeks external advice where appropriate. In addition, the Company is subject to administrative risks, such as the imposition of restrictions on the free movement of capital. These risks are discussed by the Board on a regular basis.

•   Accounting, Legal and Regulatory: In order to qualify as an investment trust, the Company must comply with Section 1158 of the Corporation Tax Act 2010 ('Section 1158'). Details of the Company's approval are provided in the Annual Report. Were the Company to breach Section 1158, it may lose investment trust status and, as a consequence, gains within the Company's portfolio would be subject to Capital Gains Tax. The Section 1158 qualification criteria are continually monitored by JPMAM and the results reported to the Board each month. The Company must also comply with the provisions of the Companies Act 2006 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules. A breach of the Companies Act 2006 could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules could result in the Company's shares being suspended from listing which in turn would breach Section 1158. The Board relies on the services of its Company Secretary, JPMAM, and its professional advisers to ensure compliance with the Companies Act 2006 and the UKLA Listing Rules.

•   Corporate Governance and Shareholder Relations: Details of the Company's compliance with Corporate Governance best practice, including information on relations with shareholders, are set out in the Corporate Governance report within the Annual Report.

•   Operational: Disruption to, or failure of, JPMAM's accounting, dealing or payments systems or the custodian's records could prevent accurate reporting and monitoring of the Company's financial position. Details of how the Board monitors the services provided by JPMAM and its associates and the key elements designed to provide effective internal control are included with the Internal Control section of the Corporate Governance report within the Annual Report.

•   Financial: The financial risks faced by the Company include market price risk, interest rate risk, liquidity risk and credit risk.

Related Parties Transactions

During the financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company during the year.

Directors' Responsibilities

The Directors each confirm to the best of their knowledge that:

a)         the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and net return or loss of the Company; and

b)         the Annual Report, to be published shortly, includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board

William Knight,

Director

17th November 2011

Income Statement

for the year ended 30th September 2011

		2011			2010
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments held at fair value through profit or loss		-	(23,762)	(23,762)	-	17,011	17,011
Net foreign currency losses		-	(171)	(171)	-	(317)	(317)
Income from investments		3,546	-	3,546	3,223	-	3,223
Other interest receivable and similar income		1	-	1	1	-	1
Gross return/(loss)		3,547	(23,933)	(20,386)	3,224	16,694	19,918
Management fee		(1,285)	-	(1,285)	(1,098)	-	(1,098)
Performance fee writeback/(charge)		-	346	346	-	(110)	(110)
Other administrative expenses		(487)	-	(487)	(462)	-	(462)
Net return/(loss) on ordinary activities before finance costs and taxation		1,775	(23,587)	(21,812)	1,664	16,584	18,248
Finance costs		(269)	-	(269)	(127)	-	(127)
Net return/(loss) on ordinary activities before taxation		1,506	(23,587)	(22,081)	1,537	16,584	18,121
Taxation		(433)	-	(433)	(356)	-	(356)
Net return/(loss) on ordinary activities after taxation		1,073	(23,587)	(22,514)	1,181	16,584	17,765
Return/(loss) per Ordinary share ( note 3)		1.38p	(30.33)p	(28.95)p	1.55p	21.83p	23.38p

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information. The Total column represents all the information that is required to be disclosed in a Statement of Total Recognised Gains and Losses ('STRGL'). For this reason a STRGL has not been presented.

Reconciliation of Movements in Shareholders' Funds

	Called up		Exercised	Capital
	share	Share	warrant	redemption	Other	Capital	Revenue
	capital	premium	reserve	reserve	reserve	reserves	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30th September 2009	19,026	8,989	3	581	34,363	35,870	1,542	100,374
Issue of Ordinary shares to the market	125	612	-	-	-	-	-	737
Re-issue of Ordinary shares from Treasury	-	1,171	-	-	3,029	-	-	4,200
Exercise of Subscription shares into Ordinary shares	(13)	13	-	-	-	-	-	-
Issue of Ordinary shares on exercise of Subscription shares	317	1,496	-	-	-	-	-	1,813
Net return on ordinary activities	-	-	-	-	-	16,584	1,181	17,765
Dividends appropriated in the year	-	-	-	-	-	-	(1,120)	(1,120)
At 30th September 2010	19,455	12,281	3	581	37,392	52,454	1,603	123,769
Issue of Ordinary shares to the market	125	760	-	-	-	-	-	885
Exercise of Subscription shares into Ordinary shares	(1)	1	-	-	-	-	-	-
Issue of Ordinary shares on exercise of Subscription shares	15	81	-	-	-	-	-	96
Net (loss)/return on ordinary activities	-	-	-	-	-	(23,587)	1,073	(22,514)
Dividends appropriated in the year	-	-	-	-	-	-	(1,166)	(1,166)
At 30th September 2011	19,594	13,123	3	581	37,392	28,867	1,510	101,070

Balance Sheet

at 30th September 2011

		2011	2010
		£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		104,414	130,880
Current assets
Debtors		3,372	2,338
Cash and short term deposits		2,813	1,360
		6,185	3,698
Creditors: amounts falling due within one year		(9,529)	(10,322)
Net current liabilities		(3,344)	(6,624)
Total assets less current liabilities		101,070	124,256
Provisions for liabilities and charges
Performance fee		-	(487)
Net assets		101,070	123,769
Capital and reserves
Called up share capital		19,594	19,455
Share premium		13,123	12,281
Exercised warrant reserve		3	3
Capital redemption reserve		581	581
Other reserve		37,392	37,392
Capital reserves		28,867	52,454
Revenue reserve		1,510	1,603
Total equity shareholders' funds		101,070	123,769
Net asset value per Ordinary share (note 4)		129.8p	160.1p

Cash Flow Statement

for the year ended 30th September 2011

		2011	2010
		£'000	£'000
Net cash (outflow)/inflow from operating activities		(312)	290
Returns on investments and servicing of finance
Interest paid		(268)	(127)
Net cash outflow from returns on investments and servicing of finance		(268)	(127)
Capital expenditure and financial investment
Purchases of investments		(140,080)	(106,923)
Sales of investments		140,510	96,545
Other capital charges		(48)	(102)
Net cash inflow/(outflow) from capital expenditure and financial investment		382	(10,480)
Dividend paid		(1,166)	(1,120)
Net cash outflow before financing		(1,364)	(11,437)
Financing
Net drawdown of short term loan		1,728	5,055
Issue of Ordinary shares to the market		885	737
Re-issue of Ordinary shares from Treasury		-	4,200
Issue of Ordinary shares on exercise of Subscription shares		96	1,813
Net cash inflow from financing		2,709	11,805
Net increase in cash for the year		1,345	368

Notes to the Accounts

1.   Accounting policies

     Basis of accounting

     The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the AIC in January 2009.

     All of the Company's operations are of a continuing nature.

     The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments at fair value through profit or loss.

     The policies applied in these accounts are consistent with those applied in the preceding year.

2.  Dividends

     Dividends paid and proposed

		2011	2010
		£'000	£'000
	2010 Final dividend paid of 1.5p (2009: 1.5p)	1,166	1,120
	Final dividend proposed of 1.3p (2010: 1.5p)	1,012	1,160

     For the year ended 30th September 2010, the Company declared a dividend of £1,160,000 but the final dividend paid amounted to £1,166,000 due to share issues after the balance sheet date but prior to the share register record date.

     The final dividend proposed in respect of the year ended 30th September 2011 is subject to shareholder approval at the forthcoming Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the accounts for the year ending 30th September 2012.

3.  Return/(loss) per Ordinary share

     The revenue return per share is based on the revenue return attributable to the Ordinary shares of £1,073,000 (2010: £1,181,000) and on the weighted average number of shares in issue during the year of 77,769,707 (2010: 75,958,289 excluding shares held in Treasury).

     The capital loss per share is based on the capital loss attributable to the Ordinary shares of £23,587,000 (2010: £16,584,000 return) and on the weighted average number of shares in issue during the year of 77,769,707 (2010: 75,958,289 excluding shares held in Treasury).

     The total loss per share is based on the total loss attributable to the Ordinary shares of £22,514,000 (2010: £17,765,000 return) and on the weighted average number of shares in issue during the year of 77,769,707 (2010: 75,958,289 excluding shares held in Treasury).

     The Company has in issue 12,733,787 Subscription shares which are convertible into Ordinary shares at a price of 168 pence at any time up to and including 15th May 2013, whereupon the rights under the Subscription shares will lapse. There was no dilution of the return per Ordinary share in respect of the exercise rights attaching to the Subscription shares (year ended 30th September 2010: no dilution).

4.  Net asset value per Ordinary share

     The net asset value per share is based on the net assets attributable to the Ordinary shareholders of £101,070,000 (2010: £123,769,000) and on the 77,864,621 (2010: 77,307,881) shares in issue at the year end.

5.  Status of results announcement

      2010 Financial Information

The figures and financial information for 2010 are extracted from the published Annual Report and Accounts for the year ended 30th September 2010 and do not constitute the statutory accounts for that year.  The Annual Report and Accounts has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2011 Financial Information

The figures and financial information for 2011 are extracted from the Annual Report and Accounts for the year ended 30th September 2011 and do not constitute the statutory accounts for the year.  The Annual Report and Accounts includes the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Register of Companies in due course.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

ENDS

A copy of the annual report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.hemscott.com/nsm.do

The annual report will also shortly be available on the Company's website at www.jpmchinese.co.uk where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

JPMORGAN ASSET MANAGEMENT (UK) LIMITED

For further information please contact:

Christopher Cordrey

For and on behalf of

JPMorgan Asset Management (UK) Limited, Secretary - 020 7742 6000

17th November 2011

 

END

 

 

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