abrdn Asia Focus plc

A fundamental, high conviction portfolio of well-researched Asian small caps.

Daily prices as of 06 Jul 2022

Share Price 247.50p

Estimated NAV cum income 289.94p

Estimated NAV ex income 285.62p

Dividend Yield 2.5%

Premium / (Discount) to NAV cum income -12.9%

Premium / (Discount) to NAV ex income -11.6%

Source: Morningstar

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Latest news

An update from our investment manager, Flavia Cheong - 26 May 2022

Volatility remains in play. The Fed has delivered a 0.5% interest rate increase as expected and is signalling more hikes to come this year, although increases beyond 0.5% appear to be off the table. While this has removed some uncertainty, other stress points persist for Asian equities. China continues to dominate interest. Market response to stimulus pledges and policy moves has been lukewarm in the face of Covid resurgences, a sluggish property market and a weak macro backdrop. However, we are seeing more supportive comments from the central government recently, which could help to support sentiment, albeit the market appears to be waiting for more substantial and concrete policy stimulus. Meanwhile, Omicron remains a key risk, although most of Asia is moving towards living with Covid. Further afield, the Russia-Ukraine war has driven oil and commodity prices upwards, hurting consumption, increasing input costs for companies and ultimately weighing on the growth of economies, including those here in Asia. We are receiving more updates from our holdings around rising input costs and the pressure on margins. Encouragingly, the earnings of many of our holdings have either met or exceeded our expectations in the latest results reporting season. However, quite a few have turned more cautious over the short-term outlook for this year, citing the impact of rising raw material costs and a rising interest rate environment. Here, we would note the impact of outsized macro and geopolitical risks rather than a significant deterioration of fundamentals across the region. As investors ourselves, we focus on quality firms with strong balance sheets and robust cash flow that we believe can provide a sustainable income stream to investors. We see market corrections as an opportunity to add to our long-term quality holdings affordably. Asian equity valuations are also trading in line with historical averages, and the significant sell-offs in certain markets in the region have actually resulted in much more palatable valuations, as opposed to prohibitively high valuations in the past. This creates opportunities for investors who are invested for the long run.

 


 

Online Shareholder Presentation

In advance of the AGM, in order to provide certainty, whilst encouraging and promoting interaction and engagement with our shareholders, the Board held an interactive Online Shareholder Presentation on Wednesday 19 January 2022. At the presentation, shareholders received updates from the Chairman and Manager, followed by an interactive question and answer session. A recording of the presentation is available to watch on demand below.

Watch on demand now >

Changes to the Company approved on 27 January 2022

On 30th November 2021, the Board of abrdn Asia Focus announced annual results for the year ended July 2021, alongside its intention to propose a number of changes to the Company as follows:

- Amend the investment policy to allow more flexibility to invest in growing small companies across Asia;
- Strengthen the management team by adding Flavia Cheong, abrdn’s Head of Equities, Asia Pacific, as joint lead manager with Hugh Young. The investment management team will be bolstered to reflect the increasing importance of China;
- Increase the target dividend by 100% to 32.0 pence per ordinary share for the financial year ending 31 July 2022, payable quarterly and thereafter maintain the progressive dividend policy of the last 25 years;
- Reduce the running costs of the Company. abrdn have agreed to an amended, tiered management fee, still payable on market capitalisation. The amended fee will be 0.85% per annum for the first £250m, 0.6% per annum for the next £500m and 0.5% per annum for market capitalisation of £750m and above. It is currently set at 0.96% of market capitalisation;
- Increase the marketability of the Company’s ordinary shares for small investors by introducing a five for one ordinary share split; and
- Introduce a performance-linked tender offer, which would be triggered in the event of underperformance of the NAV per ordinary share versus the MSCI AC Asia ex Japan Small Cap Index over a five-year period commencing 1 August 2021.

All of these changes were approved by shareholders at the Annual General Meeting held on 27th January 2022. For full details please read the announcements below.

*This is third-party research. You will leave abrdn Asia Focus’s website and enter Kepler’s to view.

Key people

Flavia Cheong

Flavia Cheong

Head of Equities - Asia Pacific

Flavia Cheong is the Head of Asia Pacific Equities on the Asian Equities team at abrdn, where, as well as sharing responsibility for company research, she oversees regional portfolio construction. Before joining abrdn in 1996, she was an economist with the Investment Company of the People’s Republic of China, and earlier with the Development Bank of Singapore. Flavia graduated with a BA in Economics and an MA (Hons) in Economics from the University of Auckland. She is a CFA charterholder.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

Hugh Young

Hugh Young

Chairman of Asia Pacific

Hugh Young is the Chairman for the abrdn business in Asia. He was previously the Head of Asia Pacific for Aberdeen Standard Investments, a main board director and Head of Investments for Aberdeen Asset Management (before its merger with Standard Life plc). Hugh joined the company in 1985 to manage Asian equities from London, having started his investment career in 1980. He founded the company's regional headquarters in Singapore in 1992. Hugh is a director of a number of group subsidiary companies and group-managed investment trusts and funds. Hugh graduated with a BA (Hons) in Politics from Exeter University.

Gabriel Sacks

Gabriel Sacks

Investment Director

Chartered Financial Analyst, MA in Land Economy from Cambridge University. Joined the company in 2008 as part of the London-based Global Emerging Markets Equities team and transferred to Asian Equities in 2018.

Neil Sun

Neil Sun

Investment Manager

Neil joined abrdn's Asian Equities team in 2018 having previously worked as a Research Analyst at Deutsche Bank and prior to that JPMorgan Asset Management. Neil has passed level II of the CFA Program.

  • Flavia Cheong

    Flavia Cheong

    Head of Equities - Asia Pacific

    Flavia Cheong is the Head of Asia Pacific Equities on the Asian Equities team at abrdn, where, as well as sharing responsibility for company research, she oversees regional portfolio construction. Before joining abrdn in 1996, she was an economist with the Investment Company of the People’s Republic of China, and earlier with the Development Bank of Singapore. Flavia graduated with a BA in Economics and an MA (Hons) in Economics from the University of Auckland. She is a CFA charterholder.

    CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Hugh Young

    Hugh Young

    Chairman of Asia Pacific

    Hugh Young is the Chairman for the abrdn business in Asia. He was previously the Head of Asia Pacific for Aberdeen Standard Investments, a main board director and Head of Investments for Aberdeen Asset Management (before its merger with Standard Life plc). Hugh joined the company in 1985 to manage Asian equities from London, having started his investment career in 1980. He founded the company's regional headquarters in Singapore in 1992. Hugh is a director of a number of group subsidiary companies and group-managed investment trusts and funds. Hugh graduated with a BA (Hons) in Politics from Exeter University.

  • Gabriel Sacks

    Gabriel Sacks

    Investment Director

    Chartered Financial Analyst, MA in Land Economy from Cambridge University. Joined the company in 2008 as part of the London-based Global Emerging Markets Equities team and transferred to Asian Equities in 2018.

  • Neil Sun

    Neil Sun

    Investment Manager

    Neil joined abrdn's Asian Equities team in 2018 having previously worked as a Research Analyst at Deutsche Bank and prior to that JPMorgan Asset Management. Neil has passed level II of the CFA Program.

Nigel Cayzer

Nigel Cayzer

Chairman

Chairman of Oryx International Growth Fund Limited and a director of a number of other investment companies.
Charlotte Black

Charlotte Black

Independent Non-Executive Director

Ms Black is a Fellow of the Chartered Institute for Securities & Investment and an independent public affairs consultant. She was until 2015 director, Corporate Affairs at Brewin Dolphin Holdings PLC, having previously served within that company as Marketing Director and in investment management roles. Charlotte has served on the boards of a number of industry related entities including The Wealth Management Association, The Chartered Institute for Securities & Investment and Euroclear PLC.

Lindsay Cooper

Independent Non-Executive Director

Mr Cooper is a Singapore permanent resident and member of the Institute of Chartered Accountants of Scotland. After working in corporate finance in Hong Kong in the early 1990's, Lindsay co-founded Arisaig Partners in 1996, an independent Investment Management business where, for 20 years, he had investment responsibility for the USD3bn Arisaig Asia Consumer Fund. Following semi-retirement Lindsay founded Chic & Unique Pte Ltd, a boutique hotels and hospitality business with operations in Asia and Europe and, more recently, founded Chi Tree Health, a preventative healthcare enterprise in Singapore. Mr Cooper is also closely involved with two charities: representing Singapore on the Magic Bus Global Board; and as a non-executive director on the board of Angkor Hospital for Children (AHC) in Siem Reap, Cambodia.

Randal Dunluce

Randal Dunluce

Independent Non-Executive Director

A Partner of Sarasin & Partners LLP responsible for the management of private client and charity portfolios as well as selfinvested personal pension schemes. He is chairman of Sarasin’s London partnership. He is also a non–executive director of a number of other private companies.
Image of Krishna Shanmuganathan

Krishna Shanmuganathan

Independent Non-Executive Director

A partner in Scylax Partners in 2016 and prior to that was managing partner at Hakluyt & Company (Asia), a risk advisory company, having established and led the Asia Pacific offices of the firm, based in Singapore. Before that Krishna held research and analyst roles at Fidelity International and Cambridge Associates after a successful and varied career in the Foreign & Commonwealth Office. He holds a number of other non-executive appointments including being on the advisory board of Serendipity Capital, chairman of the trustees of St Jude India Child Care Centres UK and a trustee of Solefield School Educational Trust.

  • Nigel Cayzer

    Nigel Cayzer

    Chairman

    Chairman of Oryx International Growth Fund Limited and a director of a number of other investment companies.
  • Charlotte Black

    Charlotte Black

    Independent Non-Executive Director

    Ms Black is a Fellow of the Chartered Institute for Securities & Investment and an independent public affairs consultant. She was until 2015 director, Corporate Affairs at Brewin Dolphin Holdings PLC, having previously served within that company as Marketing Director and in investment management roles. Charlotte has served on the boards of a number of industry related entities including The Wealth Management Association, The Chartered Institute for Securities & Investment and Euroclear PLC.

  • Lindsay Cooper

    Independent Non-Executive Director

    Mr Cooper is a Singapore permanent resident and member of the Institute of Chartered Accountants of Scotland. After working in corporate finance in Hong Kong in the early 1990's, Lindsay co-founded Arisaig Partners in 1996, an independent Investment Management business where, for 20 years, he had investment responsibility for the USD3bn Arisaig Asia Consumer Fund. Following semi-retirement Lindsay founded Chic & Unique Pte Ltd, a boutique hotels and hospitality business with operations in Asia and Europe and, more recently, founded Chi Tree Health, a preventative healthcare enterprise in Singapore. Mr Cooper is also closely involved with two charities: representing Singapore on the Magic Bus Global Board; and as a non-executive director on the board of Angkor Hospital for Children (AHC) in Siem Reap, Cambodia.

  • Randal Dunluce

    Randal Dunluce

    Independent Non-Executive Director

    A Partner of Sarasin & Partners LLP responsible for the management of private client and charity portfolios as well as selfinvested personal pension schemes. He is chairman of Sarasin’s London partnership. He is also a non–executive director of a number of other private companies.
  • Image of Krishna Shanmuganathan

    Krishna Shanmuganathan

    Independent Non-Executive Director

    A partner in Scylax Partners in 2016 and prior to that was managing partner at Hakluyt & Company (Asia), a risk advisory company, having established and led the Asia Pacific offices of the firm, based in Singapore. Before that Krishna held research and analyst roles at Fidelity International and Cambridge Associates after a successful and varied career in the Foreign & Commonwealth Office. He holds a number of other non-executive appointments including being on the advisory board of Serendipity Capital, chairman of the trustees of St Jude India Child Care Centres UK and a trustee of Solefield School Educational Trust.

 

Financial calendar

Year End 31 July
Accounts Published December
Annual General Meeting January
Dividend Paid February

Trust details

abrdn Asia Focus plc

Registered Office:
Bow Bells House
One Bread Street
London
EC4M 9HH

Registered in England and Wales as an Investment Company Number 3106339

Launch Date: October 1995

Risk Warning
Risk warning
The value of investments and the income from them can go down as well as up and you may get back less than the amount invested. Please refer to the relevant Key Information Document (KID) prior to making an investment decision. Please be aware of scams that can affect investors.