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January 2015
For Non-Professional Investors
September 2013
Contents
Please pay particular attention to the risk of investment in China and other markets in the Asian region and in companies
with medium or small capitalization. The value of the funds can be extremely volatile and could go down substantially
within a short period of time. It is possible that the entire value of your investment could be lost.
Value Partners High-Dividend Stocks Fund and Value Partners Greater China High Yield Income Fund may invest in
higher-yielding debt and equity securities that are below investment grade; additionally, Value Partners Greater China High
Yield Income Fund may invest in debt securities issued by special purpose vehicles. Such investments can involve material
risks, e.g. counterparty risk, liquidity risk, credit risk and default risk, and may expose the Fund to significant losses.
Investors should note that there is no guarantee that the underlying securities in Value Partners High-Dividend Stocks Fund
and Value Partners Greater China High Yield Income Fund will pay out dividends. Therefore, there is no guarantee that
those funds investment strategies will succeed. There is also no guarantee of dividend or distribution payments during the
period an investor holds units in such funds, and a positive dividend yield does not represent/imply positive return.
Value Partners China A-Share Select Fund intends to invest predominantly in China A Shares directly, via its Managers
RQFII quota. Investors will be subject to certain risks including repatriation risk, custodial risk, regulatory risk and risks
associated with the Managers RQFII status. In addition, the RQFII policy and rules are relatively new and there may be
uncertainty in implementation and such policy and rules are subject to change. All these may adversely impact the fund. The
fund and its primary investments are denominated in RMB. RMB is currently not a freely convertible currency and is
subject to foreign exchange control policies, as well as repatriation restrictions imposed by the PRC government. Investors
whose base currencies of investments are not in RMB should take into account the potential risk of loss arising from
fluctuations in value between such currencies and the RMB.
The funds may also invest in derivatives which can involve material risks, e.g. counterparty default risk, insolvency or
liquidity risk, and may expose the funds to significant losses.
You should not make investment decision on the basis of this material alone. Please read the explanatory memorandum for
details and risk factors.
Pages
Value Partners Classic Fund
5-12
13-14
15-16
17-18
19-20
21-22
23-24
25-26
China
Taiwan
Classic Fund
Taiwan Fund
CIES
Eligible*
* Value Partners China Greenchip Fund Limited is one of the eligible collective
investment schemes for the purpose of the Hong Kong Capital Investment Entrant
Scheme (CIES).The CIES was suspended by the Hong Kong Government with effect
from 15 January 2015 until further notice.
28 Mar 2012
USD 1,100.4m
USD 61.45m
0.2%
-13.9%
-10.5%
1.1%
-14.0%
-
10.5%
-5.7%
-
21.2%
-15.7%
20.9%
-15.7%
-
2002
85.6%
34.9%
86.7%
92.1%
87.6%
3.9%
20.1%
79.7%
41.5%
-
83.6%
33.1%
83.1%
33.1%
-
2003
1.5%
13.2%
2.0%
0.8%
1.9%
8.4%
1.9%
8.9%
19.7%
-
5.8%
13.4%
5.6%
13.4%
-
2004
16.1%
8.4%
19.5%
3.9%
19.8%
11.6%
19.8%
12.2%
20.1%
-
15.9%
9.8%
15.6%
9.8%
-
2005
43.7%
39.0%
83.4%
86.9%
82.9%
48.1%
82.9%
35.0%
28.2%
-
41.8%
35.3%
41.2%
35.3%
-
2006
36.3%
43.4%
66.7%
56.6%
66.2%
56.0%
66.2%
44.2%
34.8%
-
41.1%
45.3%
40.4%
45.3%
-
2007
-35.7%
-42.4%
-47.9%
-57.4%
-46.4%
-51.1%
-45.2%
-50.8%
-44.8%
-50.8%
-46.8%
-54.1%
-
-47.9%
-46.5%
-48.1%
-46.5%
-
2008
58.0%
81.6%
76.4%
116.7%
56.6%
62.4%
87.1%
62.3%
86.0%
62.3%
82.8%
68.2%
-
82.9%
56.6%
82.0%
56.6%
7.7%
-0.3%
2009
19.2%
13.3%
21.3%
37.8%
8.6%
4.9%
21.3%
4.6%
23.9%
4.6%
25.8%
15.2%
-
20.2%
8.6%
19.6%
8.6%
21.2%
8.6%
2010
-13.0%
-19.7%
-19.5%
-25.0%
-17.0%
-18.2%
-22.4%
-18.4%
-17.8%
-18.4%
-11.9%
-16.6%
-
-17.2%
-17.4%
-17.6%
-17.4%
-17.6%
-17.4%
2011
13.0%
26.1%
18.2%
16.9%
24.8%
26.9%
22.0%
9.3%
22.7%
11.6%
22.7%
25.2%
18.6%
7.2%
14.0%
27.7%
13.4%
27.7%
13.4%
27.7%
2012
1.2%
13.7%
12.2%
9.1%
16.5%
6.6%
3.7%
9.2%
3.6%
8.3%
3.6%
8.1%
3.4%
7.5%
11.2%
6.5%
10.6%
6.5%
10.8%
6.5%
2013
1.1%
2.1%
5.1%
9.4%
2.4%
5.5%
8.0%
14.6%
8.0%
10.6%
8.0%
9.4%
2.8%
9.4%
13.5%
5.5%
13.0%
5.5%
13.3%
5.5%
2014
YTD
15.5%
54.2%
39.3%
25.3%
509.2%
206.2%
479.5%
1,368.9%
173.7%
306.3%
316.8%
654.1%
303.3%
26.1%
2,570.3%
417.3%
1,113.9%
205.8%
53.1%
28.0%
Since
inception
No part of this document, or any information contained herein, may be distributed, reproduced, taken or transmitted into the United States or its territories or possession. Any failure to comply with the restrictions may constitute a violation of the relevant laws.
*Indices combine the price return indices up to 31 December 2004 with the total return indices thereafter. Total return indices include dividend reinvestment whereas price return indices does not take into account reinvestment of dividends.
Starting from July 2009, the MSCI China Index will be used as the reference index for the entire history of the fund. Hang Seng H Shares Index, Shanghai Composite Index and Shenzhen Composite Index were no longer shown for comparison.
Disclaimer: Investors should note investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should read the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Information in this report has been obtained from sources
believed to be reliable but Value Partners Limited does not guarantee the accuracy or completeness of the information provided by third parties. This report has not been reviewed by the Securities and Futures Commission. Issuer: Value Partners Limited
3 Mar 2008
HKD 5,243.58m
USD 141.41m
27 Nov 2003
8 Apr 2002
USD 342.07m
USD 2,888.49m
(Total Class A1, A2MDis & Z)
USD 1,466.04m
(Total A, B & C units)
Fund size
14 Jul 2000
28 Sep 2012
2 Sep 2002
15 Oct 2009
15 May 1996
1 Apr 1993
Inception
date
Recent performance
HHHH
Morningstar RatingTM1
As at 31-12-2014
31 December 2014
B Units - USD121.39
2 Pages
C Units - USD15.31
Value Partners Classic Fund (the fund) primarily invests in stock markets of the Asia-Pacific region, with a Greater China focus.
Please pay particular attention to the risk of investment in China and other markets in the Asian region and in companies
with medium or small capitalization. The value of the fund can be extremely volatile and could go down substantially
within a short period of time. It is possible that the entire value of your investment could be lost.
The fund may also invest in derivatives which can involve material risks, e.g. counterparty default risk, insolvency or
liquidity risk, and may expose the fund to significant losses.
You should not make investment decision on the basis of this material alone. Please read the explanatory memorandum
for details and risk factors.
Performance update
Investment objective
The fund aims to achieve consistent superior return and uses a
bottom-up approach to invest in value stocks in the Asia Pacific
region, particularly those in Greater China region, which the
Manager believes are being traded at deep discounts to their
intrinsic value.
+2,570.3%
2000
1200
Annual performance 2
800
A Units
(USD)
+83.6%
+5.8%
+15.9%
+41.8%
+41.1%
-47.9%
+82.9%
+20.2%
-17.2%
+14.0%
+11.2%
+13.5%
+417.3%
400
0
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
NAV
267.03
121.39
15.31
118.7352
12.42
12.24
12.28
ISIN
KYG9316N1025
KYG931701018
KYG9316N1280
KYG9316N1280
KYG9316N1363
KYG9316N1447
KYG9316N1512
Bloomberg
VLPARAI KY
VLPARBI KY
VLPARCI KY
VLPARCI KY
VLCHAUD KY
VLCHCAD KY
VLCHNZD KY
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
B Units
(USD)
+83.1%
+5.6%
+15.6%
+41.2%
+40.4%
-48.1%
+82.0%
+19.6%
-17.6%
+13.4%
+10.6%
+13.0%
C Units
(USD)
N/A
N/A
N/A
N/A
N/A
N/A
+7.7% 4
+21.2%
-17.6%
+13.4%
+10.8%
+13.3%
Value Partners Classic Fund A Units (USD): Monthly performance from 1 Jan 2003 to 31 Dec 2014
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
C Units
(USD)
+4.7%
+13.3%
+42.4%
+42.2%
+53.1%
+8.5%
18.8%
1600
1993
Jan
+6.2%
+2.9%
+0.7%
+9.2%
+2.1%
-14.0%
-3.2%
-5.8%
-1.5%
+7.8%
+7.9%
-5.5%
Feb
+4.9%
+4.5%
+3.4%
+3.5%
+2.5%
+6.1%
-0.2%
+2.2%
-1.6%
+6.3%
-2.5%
+2.3%
Mar
+0.7%
+0.1%
-1.1%
+6.7%
+2.5%
-9.5%
+8.2%
+7.1%
+5.4%
-5.7%
-2.9%
-4.0%
Apr
-2.2%
-2.9%
+0.3%
+4.6%
+5.0%
+10.9%
+8.2%
+3.1%
+3.5%
+1.6%
+0.6%
-1.6%
May
+9.3%
-6.1%
-1.2%
-5.6%
+3.7%
-2.2%
+20.1%
-6.1%
-1.3%
-10.2%
+1.2%
+2.0%
Jun
+4.5%
-0.8%
+4.0%
-2.6%
+4.8%
-8.3%
+1.3%
+1.1%
-3.2%
-2.1%
-9.0%
+4.6%
Jul
+9.8%
-0.1%
+1.6%
+3.2%
+12.6%
-5.3%
+11.5%
+5.0%
+2.8%
-1.3%
+2.3%
+6.2%
Aug
+6.9%
-0.1%
-0.1%
+0.7%
-7.4%
-8.6%
+0.1%
+0.2%
-7.5%
+1.7%
+0.5%
+3.0%
Sep
+6.3%
+4.2%
+3.1%
+0.8%
+10.5%
-11.0%
+2.5%
+10.5%
-19.8%
+6.4%
+2.2%
-1.5%
Oct
+8.5%
+0.7%
-1.9%
+5.0%
+8.9%
-31.0%
+7.5%
+3.8%
+15.3%
+2.3%
+6.2%
+1.6%
Nov
+1.4%
+3.9%
+3.8%
+6.4%
-9.6%
+5.2%
+5.9%
-0.7%
-7.8%
+1.9%
+4.8%
+1.9%
Dec
+6.5%
+0.0%
+2.5%
+4.6%
+1.6%
+13.4%
+2.2%
-0.7%
+1.0%
+5.9%
+0.4%
+4.6%
Annual
+83.6%
+5.8%
+15.9%
+41.8%
+41.1%
-47.9%
+82.9%
+20.2%
-17.2%
+14.0%
+11.2%
+13.5%
9th Floor, Nexxus Building, 41 Connaught Road Central, Hong Kong Tel : (852) 2880 9263 Fax : (852) 2565 7975
Email : vpl@vp.com.hk Website : www.valuepartners.com.hk
5
Portfolio characteristics
Industry 7
Pharmaceuticals,
biotechnology & life sciences
Automobiles & components
%
8.4
Energy
Insurance
Real estate
Insurance
Pharmaceuticals,
biotechnology & life sciences
Banks
6.5
5.1
4.8
4.8
3.6
Utilities
Insurance
3.3
2.5
8.1
3.4
These stocks constitute 51% of the fund. The top ten securities holdings only
include companies and/ or REITs the fund invested, excluding any index tracking
fund or ETF.
As at 31 Dec 2014
Price/earnings ratio
Price/book ratio
Dividend yield
2015 10
13.8 times
2.4 times
2.5%
Fund facts
Manager:
Base currency:
Trustee:
Custodian:
Launch date:
A, B and C units are invested in the same fund, A and B units were no longer
issued from 12 Apr 2002 and 15 Oct 2009 respectively. Only C units are
currently available. Unit price is published daily in the South China Morning Post,
the Hong Kong Economic Journal and the Hong Kong Economic Times.
25%
23%
16%
15%
11%
5%
3%
2%
2%
A Units
Minimum subscription
Minimum subsequent
subscription
Subscription fee
Management fee
Performance fee 11
Redemption fee
Dealing day
Sector exposure 7 8
Health care
Consumer discretionary
Insurance
Utilities
Information technology
Energy
Real estate
Banks
Others
Telecom services
Cash 9
Fee structure
18%
17%
14%
13%
10%
8%
6%
5%
5%
4%
2%
B Units
C Units
USD10,000
Closed
Closed
or equivalent
USD5,000
Nil
Nil
or equivalent
Closed
Closed
up to 5%
0.75% p.a.
1.25% p.a.
1.25% p.a.
15% of profit (High-on-high principle)
Nil
Daily
Daily
Daily dealing
redemption
redemption
Recent awards
GREATER CHINA
EQUITY
OUTSTANDING ACHIEVER
1. 2014 Morningstar, Inc. All Rights Reserved (for A Units). 2. Source: HSBC Institutional Trust Services (Asia) Limited and Bloomberg, in USD, NAV to NAV, with dividends reinvested.
Performance data is net of all fees. 3. Index refers to Hang Seng Price Return Index up to 31 Dec 2004, thereafter it is the Hang Seng Total Return Index. Hang Seng Total Return Index
includes dividend reinvestment whereas Hang Seng Price Return Index does not take into account reinvestment of dividends. 4. Calculated based on the since inception return of C Untis.
5. The fund may invest in financial derivative instruments (FDI) for hedging purposes. In adverse situations, the funds use of FDI may become ineffective in hedging and the fund may suffer
significant losses. Each hedged share class will hedge the funds base currency back to its currency of denomination on a best efforts basis. However, the volatility of the hedged classes
measured in the funds base currency may be higher than that of the equivalent class denominated in the funds base currency. Risks associated with FDI include counterparty risk, credit
risk and liquidity risk. Such exposure may lead to a high risk of capital loss. The AUD/CAD/NZD Hedged Classes are not recommended for investors whose base currency of investment is
not in the aforesaid currencies. 6. Investors should note that the base currency of C Units is in USD. The HKD is for reference only and should not be used for subscription or redemption
purpose. Conversion to the base currency of C Units will normally take place at the prevailing rate (as determined by the Funds Trustee or Custodian) on the corresponding fund dealing
day. Investor should be aware of possible risks resulting from fluctuations of exchange rates against USD. 7. Classification is based on Global Industry Classification Standard (GICS).
8. Exposure refers to net exposure (long exposure minus short exposure). Due to rounding, percentages shown may not add up to 100%. 9. Cash refers to net cash on hand excluding cash for
collaterals and margins. 10. The profile is based on market consensus forecast as derived from S&P Capital IQ and Bloomberg. Note that the managers internal estimates may differ significantly
from S&P Capital IQ and Bloomberg estimates. 11. Performance fee will only be charged if the NAV at the end of the financial year or upon realization of units exceeds the high watermark, which
is the all-time year-end high of the funds NAV. If in any one year, the fund suffers a loss, no performance fee can be charged in subsequent years until the loss is recovered fully (the high-on-high
principle). 12. Class A Units of the fund selected as one of the top 100 funds based on fund size, track record, Morningstars Star rating and one year absolute ranking as at month end Oct 2011.
13. Value Partners Classic Fund is not authorized as a hedge fund by the Securities and Futures Commission (SFC) in Hong Kong according to the Code on Unit Trusts and Mutual Funds. SFC
authorization is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all
investors nor is it an endorsement of its suitability for any particular investor or class of investors.
Investors should note investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should read the explanatory
memorandum for details and risk factors in particular those associated with investment in emerging markets. Information in this report has been obtained from sources believed to be reliable but
Value Partners Limited does not guarantee the accuracy or completeness of the information provided by third parties. This report has not been reviewed by the SFC. Issuer: Value Partners Limited.
VPCF_Master_201412
Value Partners Classic Fund (the Fund) primarily invests in stock markets of the Asia-Pacific region,
with a Greater China focus.
Please pay particular attention to the risk of investment in China and other markets in the Asian region
and in companies with medium or small capitalization. The value of the Fund can be extremely volatile
and could go down substantially within a short period of time. It is possible that the entire value of your
investment could be lost.
The Fund may also invest in derivatives which can involve material risks, e.g. counterparty default
risk, insolvency or liquidity risk, and may expose the Fund to significant losses.
You should not make investment decisions on the basis of this material alone. Please read the
explanatory memorandum for details and risk factors.
Value Partners Classic Fund (the Fund) finished 2014 on a high after a relatively volatile year. Chinese
equities drifted lower in the first half of the year, only to rally towards the end as the Shanghai-Hong Kong
Stock Connect and a loosening monetary stance helped drive equity markets higher. The Fund delivered a
positive return of 13.5% for the year. For reference, the Hang Seng Index gained 5.5% for the year while the
MSCI China Index rose 8.0%.
China reforms and supportive macros
The China story continues to remain compelling as we are only in the early stage of reform programs
announced in 2013. While investors are still wrestling with the reality that Chinas growth continues to slow,
we think that this could be a positive factor in delaying the recognition of reform dividends. In 2014, China
tackled some of the more difficult aspects on its reform agenda, such as raising SOE (state-owned enterprise)
profitability and efficiency. SOE reform measures are expected to continue, notably in the areas of asset
divestment, industry consolidation, mixed ownership and equity incentive schemes. Furthermore, the
Communist Party had its recent Fourth Plenum focusing on rule of law for the first time. The blueprint
improves judicial procedures and the separation of judicial and administrative functions. These changes will
play a significant role in Chinas long-term economic growth and political stability, benefiting those who are
doing business in China. These types of reforms are not easy to execute and demonstrate the significant
political clout and determination of the current administration.
From a macro perspective, a stronger US dollar environment and lower commodity prices will aid to
maintain low inflation in China and leave room for further interest rate cuts. A more accommodative
monetary policy environment is suitable in a time of significant reform. This will help minimize financial
market shocks as the rapid pace of reforms may expose its weakest links. We expect the Chinese
government to continue providing support to domestic growth by continuing infrastructure projects and
housing stimulus plans to maintain economic growth rate at around 7% to 7.5%.
Performance driven by A shares and stock selection in 2014
From a portfolio strategy perspective, the Fund has remained fully invested throughout much of the year,
underpinning our positive view on equity markets. We have further engaged in our high conviction ideas and
remained aggressive in employing our active strategy. In 2014, our significant additions in A shares and
stock selection were the key performance drivers of the Fund.
At the beginning of 2014, our portfolio started with an exposure of approximately 10% in Chinese A shares.
With the anticipated launch of the Shanghai-Hong Kong Stock Connect and low market valuations, we
recognized potentials for strong A-share performance. With the support from our Shanghai research team
since 2009, we significantly increased the Funds A-share exposure to 27%1 as of the end of October ahead
of the official launch of the Stock Connect. We favored stocks that are dually listed in the Shanghai and
Hong Kong stock exchanges, as well as selected companies that are cheaper in the A-share market. We also
favored high-yielding stocks and unique opportunities available in the A-share market. Despite the
lukewarm take-up of the Stock Connect, we were able to take advantage of the broader A-share rally.
The CSI 300 Index has gained 52.1% (in US$ terms) over the year, particularly spurred by interest rate cuts
and recovering retail participation in the domestic stockmarket in the final month.
From a stock selection perspective, our positions in China healthcare, properties and energy have particularly
yielded a positive impact on the portfolio. Going forward, we will continue to find attractive value stocks,
especially in old economy sectors including banking, insurance and property. Healthcare, as one of the
few new economy sectors, will however remain one of our favorites.
Investment case study Lijun International Pharmaceutical
Lijun International Pharmaceutical (Lijun) is a healthcare company that has been one of our top holdings
and key performance contributors. It is one of the top three largest makers of infusion products in China.
Intravenous infusion solutions are a critical component of Chinas developing healthcare system, and Lijun
has experienced stable double-digit growth in the past five years. While Lijuns competitors focus on the
lower end of the market, Lijun pioneers in producing non-PVC soft bag injections with a market share of
over 30%. The advantages of non-PVC soft bag injections over traditional glass-based injection bottles
include lower weight for transportation and lower risk of breakage. Therefore, we expect non-PVC soft bags
to grow faster than the overall market. In addition, Lijun operates the largest single-factory production
facility for large-volume infusion products, giving it cost advantage with economies of scale. Lijuns strong
branding and low-cost production also help the company to generate a gross margin of over 50% in the first
half of 2014. On the back of an experienced management team and the capacity for further expansion, we
are hopeful that Lijun will continue to deliver strong earnings growth. While the overall healthcare sector
has performed strongly in the past two years, Lijun is currently trading at 12.7 times of 2015 forward
price-to-earnings ratio, which is reasonable given its business prospects.
Amidst a volatile environment, we believe this is a good time for Value Partners to thrive further as our
region is refocusing on stock picking and fundamental value. While we expect markets to remain somewhat
volatile, we are optimistic about the outlook for Chinese equities. We are also well-positioned to take
advantage of market fluctuations.
Corporate update
Value Partners has continued to grow from strength to strength in 2014. Our assets under management
(AUM) have grown by more than 20% in 2014 to over US$12.6 billion. Our performance also continued
to win us industry accolades. Among our numerous awards in 2014 include Asian Fund House of the Year
and Asset Management Company of the Year (Hong Kong) 2. In addition, we are pleased to report that
Value Partners Group has won the Enterprise Award in the DHL/SCMP Hong Kong Business Awards 2014,
a distinguished title given to entrepreneurs and companies that have made important contributions to
Hong Kong and the neighboring Pearl River Delta. This is the second time that we were given this renowned
title after receiving it in 2005, from a different judging panel. Meanwhile, in the Benchmark Fund of the
Year Awards 2014, we were named the Outstanding Achiever in the China Equity and High Yield Fixed
Income categories.
Page 2
8
Value Partners leading position in Asian fund management is also reflected in the industry leadership role
played by our Chairman and Co-Chief Investment Officer, Dato Cheah Cheng Hye. In 2014, Dato Cheah
was invited to speak at many industry events in Hong Kong, Shanghai and Singapore, organized by
professional and public organizations, including the Hong Kong Securities and Futures Commission (SFC);
the CFA Institute; The Hong Kong Society of Financial Analysts; and Business China Singapore, a
government-supported group seeking to strengthen business ties between Singapore and China. Dato Cheah
spoke mainly on investing and corporate governance. Also, from early 2014, Dato Cheah delivered a speech
at various gatherings entitled Chinese stocks: From Ugly Duckling to Beautiful Princess, predicting a
renaissance for the Chinese equity market, arising from President Xi Jinpings program emphasizing
deregulation, market-opening, a growing role for private enterprise and much improved corporate
governance. We are beginning to see the renaissance in action.
In closing this report, wed like to convey our heartfelt thanks to our investors for their continued support and
the confidence they have placed in us. The recovery of value stocks showed that our value discipline has
once again borne fruit as we stay true to our convictions. We look forward to achieving new highs and
bringing another prosperous year for investors.
Value Partners Investment Team
9 January 2015
1
Including exposure from both direct A-share investment and indirect investment through China A-Share Access
Products (CAAPs).
Value Partners was named Asian Fund House of the Year in AsianInvestors Investment Performance Awards 2014
and Asset Management Company of the Year (Hong Kong) in The Asset Triple A Investor and Fund Management
Awards 2014.
Fund performance mentioned referred to Value Partners Classic Fund A Unit. All performance figures are sourced
from HSBC Institutional Trust Services (Asia) Limited and Bloomberg (Data computed in US$ terms on NAV-to-NAV
basis with dividends reinvested) as at 31 December 2014. Performance data is net of all fees.
Individual stock performance is not indicative of fund performance.
Investors should note that investment involves risk. The price of units may go down as well as up and past performance
is not indicative of future results. Investors should read the explanatory memorandum for details and risk factors in
particular those associated with investment in emerging markets. This commentary has not been reviewed by the
Securities and Futures Commission. Issuer: Value Partners Limited.
Page 3
9
10
Market cap:
US$24.7 billion
China Vanke
(Code: 000002 CH)
Market cap:
US$8.9 billion
Market cap:
US$143.8 billion
Real estate
Insurance
Insurance
Nuclear power
producer
CGN Power
(Code: 1816 HK)
Market cap:
US$19.8 billion
Industry
Stock
Price: CNY13.90
P/E: 7.4x
P/B: 1.5x
Yield: 3.7%
Price: HK$22.20
P/EV*: 1.0x
Yield: 0.0%
Price: HK$30.45
P/EV*: 1.3x
Yield: 1.7%
Price: HK$3.37
P/E: 19.0x
P/B: 2.0x
Yield: 1.7%
Valuation
(2015 Estimates)
Page 4
China Vanke is Chinas largest developer of residential properties in terms of contracted sales.
It has over 300 projects that are located in over 60 cities in mainland China. We see China
Vankes land bank as one of the most diversified among its peers, which may help it deliver
faster sales growth. In 2014, its contracted sales rose 26% despite a decline in the overall
Chinese property market, which further solidifies its leading position in the industry. Being the
largest homebuilder in China, it may benefit from the more accommodative policy environment
in China since mid-2014, and the interest rate cuts in November 2014 has further helped
reviving homebuyers confidence.
China Taiping Insurance (CTI) engages in the underwriting of direct life insurance business,
property and casualty insurance business, and reinsurance business. The company has seen
peer-beating growth in life NBV (new business value) in 2014 on the back of specific
advantages in terms of its large scale agent recruitment. With a focus on life insurance, it is
also well positioned to benefit from measures by the Chinese government to let the insurance
industry play a bigger role in the social security network in the medium to long term.
China Life Insurance (China Life), together with its subsidiaries, is the largest integrated
insurer in China. It has the most extensive distribution and service network among all insurance
companies in China, covering life insurance, property & casualty insurance, pension plans
(corporate annuity), asset management and industrial investment. Following its management's
efforts to scale down bancassurance and focus on growing agency over the past few years,
China Life is finally able to execute on its much needed changes and restore its growth profile.
Meanwhile, it is expected to benefit from better investment returns and improving business
performance amidst rate cut cycles.
Listed in Hong Kong in December 2014, CGN Power is the leading nuclear power producer in
China with the biggest total installed capacity as of June 2014. Its nuclear power stations are
strategically located in economically developed regions in China that have a strong demand for
electricity. Within Chinas energy spectrum, nuclear power is unique in that it has the lowest
earnings volatility. As the Chinese government supports clean energy development, CGN Power
is well positioned to benefit from the potential growth of the nuclear power industry in the
coming years.
Remarks
11
Market cap:
US$4.3 billion
Market cap:
US$271.0 billion
Drug manufacturer
and distributor
Banks
Auto manufacturer
Chongqing Changan
Automobile
(Code: 200625 CH)
Market cap:
US$12.0 billion
Industry
Stock
Price: HK$9.99
P/E: 27.1x
P/B: 4.2x
Yield: 0.1%
Price: HK$5.66
P/E: 5.5x
P/B: 1.0x
Yield: 6.4%
Price: HK$17.56
P/E: 7.0x
P/B: 2.1x
Yield: 2.1%
Valuation
(2015 Estimates)
Page 5
Luye Pharma Group (Luye Pharma) is a leading pharmaceutical company which focuses on
the manufacturing and selling of pharmaceutical products in three of the fastest growing
therapeutic areas in China including oncology, cardiovascular system, and alimentary tract and
metabolism. In the first half of 2014, the groups nationwide distribution network enabled it to
sell its products to over 8,000 hospitals in the PRC. Given its strong product pipeline, proven
R&D capabilities and sales and marketing networks, Luye is well positioned to continue gaining
market share despite an increasingly competitive market environment.
Industrial & Commercial Bank of China (ICBC) is the largest commercial bank in China in
terms of assets and deposits. An extensive network of over 17,000 branches and a huge
customer base gives it both scale and funding advantages. ICBC has a liquid balance sheet, low
exposure to interbank, excess reserves and industry high capital adequacy.
Remarks
12
Drug manufacturer
and distributor
Price: CNY41.10
P/E: 25.1x
P/B: 7.3x
Yield: 1.2%
Price: HK$79.10
P/EV*: 1.0x
Yield: 1.3%
Price: HK$8.60
P/E: 10.7x
P/B: 1.0x
Yield: 4.3%
Valuation
(2015 Estimates)
Tasly Pharmaceutical (Tasly) is a leading traditional Chinese medicine (TCM) developer and
distributor with a focus on the treatment of cardiovascular and cerebrovascular diseases. Given
the high potential of essential drug tendering ramp-up in most provinces in 2015 in China, Tasly
will likely continue to enjoy strong sales growth going forward. The company has a strong
potential for product internationalization to drive future growth. Its Compound Danshen
Dripping Pills is undergoing a Phase III clinical trial in the US and could potentially become the
first TCM product to enter the US market as a prescription drug.
Ping An Insurance (Ping An) is a leading provider of insurance service in China. It is one of
the first Chinese non-state-owned financial conglomerates that provide insurance (both life and
non-life), banking, securities, trust and asset management services to customers in the country.
In the current tough operating environment, Ping An is well-positioned amongst peers given its
superior agency force and multi-product platform.
PetroChina is the largest integrated oil company in Asia by market capitalization. It has crude
reserves of nearly 11 billion barrels and gas reserves of over 69,000 billion cubic feet. Its
downstream assets consist of refining, and a service-station marketing network of over 20,000
stations. PetroChina is expected to benefit from growth in gas usage as China targets to diversify
their energy reliance from coal. The SOE reform undergoing will also push the company to
adopt measures for better cost control and returns for investors.
Remarks
Page 6
Note: The above investments made up 50.5% of Value Partners Classic Fund as at 31 December 2014. The stock prices are based on the closing of 31 December 2014.
Market cap:
US$6.8 billion
Tasly Pharmaceutical
(Code: 600535 CH)
Market cap:
US$95.6 billion
Ping An Insurance
(Code: 2318 HK)
Insurance
Energy
PetroChina
(Code: 857 HK)
Market cap:
US$305.4 billion
Industry
Stock
HHHHH
Morningstar RatingTM1
As at 31-12-2014
31 December 2014
2 Pages
Value Partners High-Dividend Stocks Fund (the fund) primarily invests in stock markets of the Asia-Pacific region, with a Greater China
focus.
The fund will primarily invest in higher-yielding equities and debt securities, while maintaining a flexible allocation to other assets
including gold, REITs and cash.
The fund may invest in higher-yielding debt and equity securities that are below investment grade. Such investments can involve
material risks, e.g. counterparty risk, liquidity risk, credit risk and default risk, and may expose the fund to significant losses.
Investors should note that there is no guarantee that the underlying securities in the fund will pay out dividends. Therefore, there is no
guarantee that the funds investment strategies will succeed. There is also no guarantee of dividend or distribution payments during the
period an investor holds units in the fund, and a positive dividend yield does not represent/imply positive return.
Please pay particular attention to the risk of investment in China and other markets in the Asian region and in companies with medium
or small capitalization. The value of the fund can be extremely volatile and could go down substantially within a short period of time. It is
possible that the entire value of your investment could be lost.
The fund may also invest in derivatives which can involve material risks, e.g. counterparty default risk, insolvency or liquidity risk, and
may expose the fund to significant losses.
You should not make investment decision on the basis of this material alone. Please read the explanatory memorandum for details and
risk factors.
Investment objective
Performance update
800
+654.1%
600
400
+303.3%
Class A1
(USD)
+0.6%
+9.4%
+48.1%
+64.3%
+654.1%
+17.8%
19.0%
One month
One year
Three years
Five years
Since launch
Annualized return ^
Annualized volatility ^
Class A2 MDis
(USD)
+0.6%
+9.4%
N/A
N/A
+26.1%
+10.9%
N/A
Index*
-2.1%
+2.8%
+30.0%
+29.7%
+303.3%
+12.0%
21.1%
200
0
-100
2002
Classes 4
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
NAV
74.64
578.8631
11.56
10.56
10.56
10.60
10.57
ISIN
KYG931731056
KYG931731056
KYG9318L1041
KYG9318L1538
KYG9318L1207
KYG9318L1389
KYG9318L1462
Bloomberg
VALASHY KY
VALASHY KY
VALHYA2 KY
VALHA2H KY
VALHA2A KY
VALHA2C KY
VALHA2N KY
Dividend
per unit 5
0.0499
0.0458
0.0639
0.0503
0.0641
Annualized
yield 6
5.2%
5.2%
7.3%
5.7%
7.3%
Ex-dividend
date
31-12-2014
31-12-2014
31-12-2014
31-12-2014
31-12-2014
Value Partners High-Dividend Stocks Fund - Class A1 (USD): Monthly performance from 1 Jan 2003 to 31 Dec 2014
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Jan
+6.2%
+5.0%
+1.4%
+4.0%
+3.8%
-14.3%
-3.0%
-1.6%
+0.4%
+7.5%
+3.7%
-4.4%
Feb
+7.1%
+5.0%
+3.8%
+6.7%
+7.1%
+3.3%
+1.2%
+0.2%
-1.6%
+4.7%
+0.4%
+1.8%
Mar
-3.2%
-0.5%
-2.0%
+3.6%
-1.5%
-5.6%
+7.5%
+7.0%
+2.6%
-1.7%
-0.8%
+0.7%
Apr
-2.0%
-2.5%
+0.5%
+6.3%
+4.1%
+8.3%
+8.9%
+5.1%
+5.7%
+2.2%
+1.5%
+0.2%
May
+8.8%
-4.2%
-0.6%
-5.2%
+6.6%
-3.6%
+18.9%
-6.4%
-2.3%
-6.5%
+1.7%
+3.8%
Jun
+4.6%
-1.3%
+3.0%
-3.3%
+3.0%
-8.1%
+5.4%
+3.5%
-2.1%
+1.5%
-5.6%
+1.8%
Jul
+14.4%
+1.2%
+2.4%
+5.1%
+8.4%
-3.4%
+9.2%
+2.4%
+2.5%
+2.4%
+2.3%
+5.9%
Aug
+8.0%
-0.3%
-1.1%
+0.6%
-1.3%
-8.4%
-3.8%
+1.5%
-5.2%
+0.4%
-0.1%
+1.2%
Sep
+4.8%
+2.5%
+1.7%
+2.4%
+5.0%
-10.5%
+3.3%
+8.0%
-15.1%
+5.5%
+2.5%
-4.1%
Oct
+4.2%
-0.6%
-1.0%
+3.3%
+8.6%
-29.4%
+10.2%
+5.6%
+9.2%
+3.1%
+2.7%
+0.3%
Nov
+2.2%
+5.2%
+2.7%
+5.4%
-7.9%
+6.6%
+3.9%
+0.0%
-4.7%
+1.7%
+1.6%
+1.8%
Dec
+6.0%
-0.5%
+0.9%
+2.3%
+2.5%
+11.3%
+2.1%
-1.2%
+0.2%
+2.4%
-1.5%
+0.6%
Annual
+79.7%
+8.9%
+12.2%
+35.0%
+44.2%
-46.8%
+82.8%
+25.8%
-11.9%
+25.2%
+8.1%
+9.4%
9th Floor, Nexxus Building, 41 Connaught Road Central, Hong Kong Tel : (852) 2880 9263 Fax : (852) 2565 7975
Email : vpl@vp.com.hk Website : www.valuepartners.com.hk
13
Industry 8
Banks
Banks
Real estate
%
4.9
3.7
3.6
Transportation
Household & personal
products
Banks
Real estate
2.9
2.6
2.4
2.3
2.3
2.2
2.1
These stocks constitute 29% of the fund. The top ten securities holdings only
include companies and/ or REITs the fund invested, excluding any index tracking
fund or ETF.
Fund facts
Manager:
Base currency:
Trustee:
Custodian:
Launch date:
Dividend policy 3:
Unit price is published daily in the South China Morning Post, the Hong Kong
Economic Journal and the Hong Kong Economic Times.
24%
16%
16%
10%
8%
7%
5%
5%
4%
2%
2%
89
Consumer discretionary
Banks
Real estate
Industrials
Information technology
Bonds
Telecom services
Energy
Utilities
Insurance
Consumer staples
Materials
Others 10
REITs
Cash 11
16%
15%
13%
12%
8%
5%
5%
5%
5%
3%
3%
3%
3%
3%
2%
2015 12
8.5 times
1.3 times
5.0%
10.2%
Fee structure
Sector exposure
As at 31 Dec 2014
Price/earnings ratio
Price/book ratio
Dividend yield
Yield to maturity/put
Class A1
Minimum subscription
Minimum subsequent
subscription
Subscription fee
Management fee
Performance fee 13
Redemption fee
Dealing day
Class A2 MDis
USD10,000 / HKD80,000 /
AUD10,000 / CAD10,000 /
NZD10,000
USD5,000
/ HKD40,000 /
USD5,000 or
AUD5,000 / CAD5,000 /
HKD equivalent 7
NZD5,000
Up to 5%
1.25% p.a.
15% of profit (High-on-high principle)
Nil
Daily
USD10,000 or
HKD equivalent 7
Recent awards
Lipper Fund Awards 2014 (Hong Kong)
Best Asia Pacific (Ex-Japan) Equity
5 Years Category 14
~ Lipper
Morningstar Hong Kong Fund Awards 2014 15
Best Asia Ex-Japan Equity Fund
~ Morningstar
Fund of the Year Awards 2013
Outstanding Achiever Asia Pacific Equity
Category 16
~ Benchmark
1. 2014 Morningstar, Inc. All Rights Reserved (for Class A1). 2. Source: HSBC Institutional Trust Services (Asia) Limited and Bloomberg, in USD, NAV to NAV, with dividend reinvested.
Performance data is net of all fees. 3. The Manager currently intends to make monthly dividend distribution in respect of the A2 MDis Classes; actual dividend payout will be subject to the Managers
discretion. Distribution may be paid from capital of the fund. Investors should note that where the payment of distributions are paid out of capital, this represents and amounts to a return or
withdrawal of part of the amount that have been originally invested or capital gains attributable to that and may result in an immediate decrease in the value of units. For A1 Class units, Manager will
review dividend distribution at its discretion once a year (last dividend payout date: 21 Nov 2005). Please refer to the explanatory memorandum for more details. 4. The fund may invest in financial
derivative instruments (FDI) for hedging purposes. In adverse situations, the funds use of FDI may become ineffective in hedging and the fund may suffer significant losses. Each hedged share
class will hedge the funds base currency back to its currency of denomination on a best efforts basis. However, the volatility of the hedged classes measured in the funds base currency may be
higher than that of the equivalent class denominated in the funds base currency. Risks associated with FDI include counterparty risk, credit risk and liquidity risk. Such exposure may lead to a high
risk of capital loss. The AUD/CAD/NZD Hedged Classes are not recommended for investors whose base currency of investment is not in the aforesaid currencies. 5. The receiving bank may charge
a fee for incoming payments. Such fees will reduce the actual amount of dividends received by the investor. 6. Annualized yield of Class A2 MDis is calculated as follows: (dividend amount/NAV
as of ex-dividend date) x 12. Investors should note that yield figures are estimated and for reference only and do not represent the performance of the fund, and that there is no guarantee as to the
actual frequency and/or amount of dividend payments. 7. Investors should note that the base currency of the fund is in USD. The HKD equivalent NAV per unit is for reference only and should not
be used for subscription or redemption purpose. Conversion to the base currency of the fund will normally take place at the prevailing rate (as determined by the funds Trustee or Custodian) on the
corresponding fund dealing day. Investors should be aware of possible risks resulting from fluctuations of exchange rates against USD. 8. Classification is based on Global Industry Classification
Standard (GICS). 9. Exposure refers to net exposure (long exposure minus short exposure). Due to rounding, percentages shown may not add up to 100%. 10. Others include 0.5% cash for
collaterals and margins. 11. Cash refers to net cash on hand excluding cash for collaterals and margins. 12. The profile is based on market consensus forecast as derived from S&P Capital IQ and
Bloomberg. Note that the managers internal estimates may differ significantly from S&P Capital IQ and Bloomberg estimates. Investors should note that all yield figures are for reference only and
do not represent the actual performance of the fund or the dividend yield received by investors, nor does a positive yield imply a positive return. Dividend yield is calculated based on the equity
portion of the fund, whereas Yield to maturity/put is calculated based on the debt portion of the fund by taking the average of yields of individual holdings (being the higher of the yield to maturity
and yield to put of each bond/convertible bond) after excluding event-driven investment with extremely high yield. 13. Performance fee will only be charged if the NAV at the end of the financial year
or upon realization of units exceeds the high watermark, which is the all-time year-end high of the funds NAV. If in any one year, the fund suffers a loss, no performance fee can be charged in
subsequent years until the loss is recovered fully (the high-on-high principle). 14. Based on data as of year-end 2013. 15. The 2014 Morningstar award was based on data of eligible funds in their
respective Morningstar category up to 31 Dec 2013. 16. Based on data as of 30 Sep 2013.
Investors should note investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should read the explanatory
memorandum for details and risk factors in particular those associated with investment in emerging markets. Information in this report has been obtained from sources believed to be reliable but
Value Partners Limited does not guarantee the accuracy or completeness of the information provided by third parties. This report has not been reviewed by the Securities and Futures Commission.
Issuer: Value Partners Limited.
HDF_Master_201412(R)
Name
Bank of China
China Construction Bank
China Vanke
(Stock code: 000002CH - A shares)
Daqin Railway
Amorepacific Corp.
Portfolio characteristics
14
HHHH
Morningstar RatingTM1
As at 31-12-2014
31 December 2014
2 Pages
Please pay particular attention to the risk of investment in China and other markets in the Asian region and in companies
with medium or small capitalization. The value of the fund can be extremely volatile and could go down substantially
within a short period of time. It is possible that the entire value of your investment could be lost.
The fund may also invest in derivatives which can involve material risks, e.g. counterparty default risk, insolvency or
liquidity risk, and may expose the fund to significant losses.
You should not make investment decision on the basis of this material alone. Please read the explanatory memorandum
for details and risk factors.
Investment objective
Performance update
One month
One year
Note: On inception, in Jul 2000, the funds objective was to invest primarily in
B shares. In Jul 2001, the mandate was extended to include H shares. In Mar
2005, the mandate was further extended to include China A shares.
Three years
Annualized return
%
1600
+1,368.9%
1200
Five years
Since launch
Annualized volatility
China Convergence
Fund
+5.4%
+14.6%
+36.8%
+28.8%
+1,368.9%
+20.4%
25.9%
Annualized return and volatility are calculated from inception on 14 Jul 2000.
Volatility is a measure of the theoretical risk in terms of standard deviation; in
general, the lower the number, the less risky the investment, and vice versa.
800
400
+173.7%
0
-200
2000
2002
2004
2006
2008
2010
2012
2014
Jan
Feb
Mar
2003
+9.5%
+2.4%
2004
+2.4%
+6.7%
2005
+1.9%
2006
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Annual
+0.0%
+1.1%
+7.8%
+4.1%
+11.3%
+4.5%
+2.3%
+14.5%
+1.6%
+9.0%
+92.1%
+1.0%
-11.0%
+1.3%
-4.3%
+1.0%
-1.3%
+5.7%
-0.2%
+3.7%
-2.9%
+0.8%
+6.8%
+1.3%
+0.4%
-4.0%
-0.7%
+0.7%
-0.3%
+1.0%
-5.4%
+0.9%
+1.6%
+3.9%
+16.5%
+4.8%
+8.5%
+3.6%
+0.7%
-2.3%
-0.3%
+1.8%
+3.8%
+5.5%
+11.6%
+11.5%
+86.9%
2007
+3.5%
+3.2%
+3.8%
+11.8%
+8.0%
+2.8%
+11.7%
+0.8%
+7.6%
+11.8%
-12.5%
-4.0%
+56.6%
2008
-15.7%
+7.4%
-11.5%
+9.2%
-4.4%
-12.3%
-2.4%
-8.8%
-9.9%
-15.6%
+0.2%
+10.2%
-45.2%
2009
-3.0%
-2.3%
+12.4%
+11.6%
+17.9%
+4.3%
+11.9%
-7.0%
+4.6%
+8.4%
+6.8%
+1.5%
+87.1%
2010
-6.1%
+2.4%
+6.2%
+2.3%
-4.8%
+1.6%
+3.9%
+1.6%
+10.8%
+4.5%
+1.2%
-2.6%
+21.3%
2011
-3.2%
-0.9%
+4.8%
+2.2%
-2.5%
-2.4%
+1.5%
-7.3%
-19.4%
+13.5%
-7.6%
-0.3%
-22.4%
2012
+7.6%
+6.6%
-5.5%
+1.0%
-8.4%
-3.8%
-3.5%
+0.6%
+5.8%
+2.7%
+0.1%
+7.4%
+9.3%
2013
+7.5%
-2.0%
-2.9%
-0.6%
+2.7%
-9.9%
+3.5%
+1.8%
+2.2%
+3.9%
+5.6%
-1.8%
+9.2%
2014
-5.6%
+1.0%
-3.6%
-1.0%
+1.2%
+3.4%
+8.8%
+1.3%
-1.2%
+3.2%
+1.6%
+5.4%
+14.6%
9th Floor, Nexxus Building, 41 Connaught Road Central, Hong Kong Tel : (852) 2880 9263 Fax : (852) 2565 7975
Email : vpl@vp.com.hk Website : www.valuepartners.com.hk
15
Industry
Real estate
%
6.7
6.2
5.3
3.3
3.1
2.9
2.8
2.8
2.7
2.6
These stocks constitute 38% of the fund. The top ten securities holdings only
include companies and/ or REITs the fund invested, excluding any index
tracking fund or ETF.
37%
China A Shares
35%
Hong Kong
17%
China B Shares
Red Chips
12%
5%
Others
1%
Cash 6
-8%
Real estate
18%
Utilities
14%
Industrials
14%
Consumer discretionary
13%
Insurance
10%
Health care
9%
Consumer staples
9%
Information technology
Materials
Other financials
Cash
7%
5%
4%
3%
-8%
2015 7
12.2 times
2.0 times
2.6%
Fund facts
Manager:
Base currency:
Trustee:
Custodian:
Launch date:
Bloomberg and
ISIN codes:
Unit price is published daily in the South China Morning Post, the Hong Kong
Economic Journal and the Hong Kong Economic Times.
Fee structure
USD10,000
Minimum subscription
Minimum subsequent
subscription
Subscription fee
Management fee
Performance fee 8
Redemption fee
Dealing day
USD5,000
Up to 5%
1.25% p.a.
15% of profit (High-on-high principle)
Nil
Daily
Sector exposure 4 5
Energy
As at 31 Dec 2014
Price/earnings ratio
Price/book ratio
Dividend yield
Recent awards
Morningstar 2010 Fund Awards (Hong Kong)
Best Greater China Equity Fund
~ Morningstar
Top 100 Funds of the Year 2010
China Equity 9
~ Benchmark Magazine
1. 2014 Morningstar, Inc. All Rights Reserved. 2. Source: HSBC Institutional Trust Services (Asia) Limited and Bloomberg, in USD, NAV to NAV, with dividends
reinvested. Performance data is net of all fees. 3. Starting from Jul 2009, the MSCI China Index will be used as the reference index for the entire history of the fund.
Hang Seng H Shares Index, Shanghai Composite Index and Shenzhen Composite Index were no longer shown for comparison. 4. Classification is based on Global
Industry Classification Standard (GICS). 5. Exposure refers to net exposure (long exposure minus short exposure). Due to rounding, percentages shown may not add
up to 100%. 6. Cash refers to net cash on hand excluding cash for collaterals and margins. 7. The profile is based on market consensus forecast as derived from S&P
Capital IQ and Bloomberg. Note that the managers internal estimates may differ significantly from S&P Capital IQ and Bloomberg estimates. 8. Performance fee will
only be charged if the NAV at the end of the financial year or upon realization of units exceeds the high watermark, which is the all-time year-end high of the funds
NAV. If in any one year, the fund suffers a loss, no performance fee can be charged in subsequent years until the loss is recovered fully (the high-on-high principle).
9. Based on fund size, track record, Morningstars Star rating and one year absolute ranking as at month end Oct 2010.
Investors should note investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should
read the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Information in this report has been
obtained from sources believed to be reliable but Value Partners Limited does not guarantee the accuracy or completeness of the information provided by third parties.
This report has not been reviewed by the Securities and Futures Commission. Issuer: Value Partners Limited.
CCF_Master_201412
Name
China Vanke
(Stock code: 000002CH - A shares)
Chongqing Changan Automobile
Inner Mongolia Yili Industrial
CGN Power
New China Life Insurance
Ping An Insurance
Sunac China
China Vanke
(Stock code: 2202HK - H shares)
ZTE Corp.
Portfolio characteristics
4
16
HHHHH
Morningstar RatingTM1
As at 31-12-2014
31 December 2014
2 Pages
Please pay particular attention to the risk of investment in China and other markets in the Asian region and in companies
with medium or small capitalization. The value of the fund can be extremely volatile and could go down substantially
within a short period of time. It is possible that the entire value of your investment could be lost.
The fund may also invest in derivatives which can involve material risks, e.g. counterparty default risk, insolvency or
liquidity risk, and may expose the fund to significant losses.
You should not make investment decision on the basis of this material alone. Please read the explanatory memorandum
for details and risk factors.
Performance update
Investment objective
The fund aims to achieve medium to long-term capital appreciation
by investing primarily in investments which are related to
the Mainland of the Peoples Republic of China (PRC) and
investments whose value the Manager believes would be boosted
by a Renminbi (RMB) appreciation. The Manager will also invest
in investments whose value the Manager believes would increase
even if the RMB exchange rate remains unchanged.
500
Chinese Mainland
Focus Fund
+6.5%
One month
MSCI China
Index 3
+1.2%
One year
+10.6%
+8.0%
Three years
+33.7%
+37.3%
Five years
+36.2%
+17.3%
Since launch
+306.3%
+316.8%
Annualized return
+13.5%
+13.7%
Annualized volatility
21.8%
27.0%
Annualized return and volatility are calculated from inception on 27 Nov 2003.
Volatility is a measure of the theoretical risk in terms of standard deviation; in
general, the lower the number, the less risky the investment, and vice versa.
600
400
+316.8%
+306.3%
300
200
100
0
2003
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Annual
+3.9%
2003
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
+3.9%
2004
+5.5%
+7.6%
-0.3%
-11.3%
+0.7%
-3.4%
+1.9%
-1.4%
+4.6%
+1.4%
+6.0%
-1.7%
+8.4%
2005
+1.6%
+4.9%
-3.3%
+0.7%
-2.6%
+1.6%
+1.6%
+0.5%
+1.8%
-3.0%
+4.5%
+3.3%
+11.6%
2006
+12.3%
+2.8%
+7.9%
+2.0%
-5.1%
-0.6%
+0.6%
+1.3%
+1.6%
+4.4%
+7.6%
+6.3%
+48.1%
2007
+1.5%
+3.7%
+4.4%
+5.3%
+5.0%
+3.3%
+15.8%
-3.1%
+8.6%
+12.9%
-8.7%
-0.9%
+56.0%
2008
-17.5%
+5.7%
-10.1%
+10.1%
-2.9%
-11.0%
-2.7%
-7.8%
-9.9%
-16.2%
-0.5%
+9.9%
-44.8%
2009
-3.2%
-2.1%
+11.8%
+11.4%
+17.7%
+3.4%
+12.3%
-7.1%
+5.2%
+8.8%
+6.7%
+1.8%
+86.0%
2010
-5.7%
+1.9%
+6.5%
+2.8%
-4.7%
+1.5%
+4.9%
+1.7%
+10.6%
+6.4%
-1.1%
-2.0%
+23.9%
2011
-2.5%
-0.9%
+4.8%
+3.4%
-1.2%
-2.2%
+1.8%
-7.6%
-19.5%
+15.6%
-7.8%
+0.6%
-17.8%
2012
+6.7%
+6.8%
-5.7%
+1.4%
-8.6%
-3.5%
-2.7%
+0.7%
+5.5%
+4.5%
+1.4%
+6.0%
+11.6%
2013
+8.1%
-3.2%
-3.3%
-0.1%
+0.4%
-8.8%
+2.4%
+4.5%
+2.9%
+4.1%
+4.5%
-2.3%
+8.3%
2014
-5.7%
-1.7%
-2.4%
-1.8%
+1.4%
+4.0%
+7.7%
+0.4%
-2.0%
+2.8%
+1.8%
+6.5%
+10.6%
9th Floor, Nexxus Building, 41 Connaught Road Central, Hong Kong Tel : (852) 2880 9263 Fax : (852) 2565 7975
Email : vpl@vp.com.hk Website : www.valuepartners.com.hk
17
Portfolio characteristics
Industry 4
Insurance
Real estate
%
7.6
6.7
6.4
5.6
5.5
3.3
3.3
2.9
2.8
Utilities
2.7
These stocks constitute 47% of the fund. The top ten securities holdings only
include companies and/ or REITs the fund invested, excluding any index
tracking fund or ETF.
China A Shares
41%
H Shares
31%
Hong Kong
18%
China B Shares
Red Chips
United States
12%
2%
1%
Cash 6
-8%
Consumer discretionary
19%
Real estate
16%
Utilities
15%
Health care
13%
Insurance
12%
Industrials
9%
Consumer staples
9%
Energy
Materials
Other financials
Cash 6
6%
4%
4%
2%
-8%
Fund facts
Manager:
Base currency:
Trustee:
Custodian:
Launch date:
Bloomberg and
ISIN codes:
Unit price is published daily in the South China Morning Post, the Hong Kong
Economic Journal and the Hong Kong Economic Times.
Fee structure
Minimum subscription
Minimum subsequent subscription
Subscription fee
Management fee
Performance fee 8
USD10,000
USD5,000
Up to 5%
1.25% p.a.
15% of profit
(High-on-high principle)
Nil
Daily
Sector exposure 4 5
Information technology
2015 7
11.5 times
2.0 times
2.9%
Redemption fee
Dealing day
3%
Others
As at 31 Dec 2014
Price/earnings ratio
Price/book ratio
Dividend yield
Recent awards
Lipper Fund Awards 2013 (Hong Kong)
Best China Equity Fund (5 Years) 9
~ Lipper
Lipper Fund Awards 2012 (Hong Kong)
Best China Equity Fund (3 Years) 10
~ Lipper
1. 2014 Morningstar, Inc. All Rights Reserved. 2. Source: HSBC Institutional Trust Services (Asia) Limited and Bloomberg, in USD, NAV to NAV, with dividends
reinvested. Performance data is net of all fees. 3. Starting from Jul 2009, the MSCI China Index will be used as the reference index for the entire history of the fund. Hang
Seng H Shares Index, Shanghai Composite Index and Shenzhen Composite Index were no longer shown for comparison. 4. Classification is based on Global Industry
Classification Standard (GICS). 5. Exposure refers to net exposure (long exposure minus short exposure). Due to rounding, percentages shown may not add up to 100%.
6. Cash refers to net cash on hand excluding cash for collaterals and margins. 7. The profile is based on market consensus forecast as derived from S&P Capital IQ and
Bloomberg. Note that the managers internal estimates may differ significantly from S&P Capital IQ and Bloomberg estimates. 8. Performance fee will only be charged if
the NAV at the end of the financial year or upon realization of units exceeds the high watermark, which is the all-time year-end high of the funds NAV. If in any one year,
the fund suffers a loss, no performance fee can be charged in subsequent years until the loss is recovered fully (the high-on-high principle). 9. Based on data as of yearend 2012. 10. Based on data as of year-end 2011. 11. Based on fund size, track record, Morningstars Star rating and one year absolute ranking as at month end Oct
2010.
Investors should note investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should
read the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Information in this report has been
obtained from sources believed to be reliable but Value Partners Limited does not guarantee the accuracy or completeness of the information provided by third parties.
This report has not been reviewed by the Securities and Futures Commission. Issuer: Value Partners Limited.
CMF_Master_201412
18
HHHHH
Morningstar RatingTM1
As at 31-12-2014
31 December 2014
2 Pages
CIES Eligible*
Please pay particular attention to the risk of investment in China and other markets in the Asian region and in companies
with medium or small capitalization. The value of the fund can be extremely volatile and could go down substantially within a
short period of time. It is possible that the entire value of your investment could be lost.
The fund may also invest in derivatives which can involve material risks, e.g. counterparty default risk, insolvency or
liquidity risk, and may expose the fund to significant losses.
You should not make investment decision on the basis of this material alone. Please read the explanatory memorandum for
details and risk factors.
Performance update
Investment objective
The fund aims to achieve medium-term capital growth by means
of investing in companies established in Greater China or which
derive a majority of their revenue from business related to Greater
China, whether in the form of direct investment in, or trade with,
Greater China. This includes companies incorporated and/or listed
outside Greater China.
One month
One year
Three years
Five years
Since launch
Annualized return
Annualized volatility
900
700
300
+206.2%
100
Investors should note that figures for Non-Redeemable Class N shares shown
above may differ from those of classes currently available for subscription (namely
Class A and Class A2 QDis), due to differences in launch date of these classes.
For Class A, the since launch return, annualized return and annualized volatility
are +72.3%, +7.3% and 25.1% respectively.
0
-100
2002
Class A
(HKD)
-0.4%
+2.4%
+48.8%
+53.8%
+509.2%#
+15.2%#
21.9%#
Annualized return and volatility are calculated from inception on 8 Apr 2002.
Volatility is a measure of the theoretical risk in terms of standard deviation; in
general, the lower the number, the less risky the investment, and vice versa.
+509.2%#
+479.5%
500
Classes 7
Class A HKD
Class A USD
Class A AUD Hedged
Class A CAD Hedged
Class A NZD Hedged
Class A2 QDis HKD
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Annualized
yield 6
2.0%
2.0%
1.9%
1.4%
NAV
60.92
10.26
10.37
10.35
10.39
11.30
ISIN
KYG9317M1033
KYG9317M1603
KYG9317M1371
KYG9317M1454
KYG9317M1520
KYG9317M1116
Bloomberg
VPCHIGC KY
VPCHAUS KY
VPCHAAH KY
VPCHACH KY
VPCHANH KY
VPCA2QD KY
Value Partners China Greenchip Fund Limited Class A (HKD): Monthly performance from 1 Jan 2003 to 31 Dec 2014 2
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Jan
+7.3%
+1.4%
+1.2%
+10.7%
+3.1%
-18.6%
+0.2%
-1.3%
-2.6%
+6.0%
+6.4%
-3.0%
Feb
+7.1%
+6.3%
+4.2%
+4.0%
+4.8%
+1.4%
-0.2%
+3.0%
-2.9%
+10.5%
+0.0%
+4.0%
Mar
-3.5%
-1.2%
-2.7%
+9.2%
+3.8%
-9.6%
+10.2%
+8.1%
+4.0%
-3.9%
-2.2%
-2.6%
Apr
-1.5%
-8.7%
-1.1%
+0.5%
+4.7%
+10.2%
+13.1%
+4.2%
+2.7%
-2.4%
+1.2%
-1.2%
May
+10.9%
-1.1%
-1.4%
-3.7%
+9.6%
-2.2%
+25.0%
-5.4%
-2.5%
-4.6%
+3.3%
+1.9%
Jun
+5.9%
-2.8%
+1.6%
-1.6%
+5.7%
-11.8%
+1.9%
+0.9%
-5.0%
-3.2%
-8.9%
+2.9%
Jul
+12.7%
+0.8%
+1.1%
+1.9%
+9.7%
-5.7%
+14.0%
+4.2%
+5.1%
-0.5%
+1.8%
+1.1%
Aug
+6.2%
-0.3%
+0.0%
+1.4%
-9.1%
-10.0%
-4.8%
+1.7%
-10.5%
+3.7%
+1.7%
+0.6%
Sep
+2.2%
+3.7%
+11.0%
+1.4%
+3.6%
-12.1%
+6.9%
+13.4%
-17.2%
+6.3%
+3.0%
-1.8%
Oct
+9.5%
+0.6%
-3.2%
+3.7%
+5.8%
-26.1%
+7.9%
+4.2%
+8.8%
+3.1%
+4.8%
+0.6%
Nov
+3.0%
+5.4%
+3.6%
+6.7%
-7.4%
+0.8%
+6.2%
+1.3%
-3.4%
+4.9%
+4.5%
+0.6%
Dec
+5.0%
-1.6%
+1.5%
+3.6%
-1.0%
+7.8%
+2.5%
-0.5%
-2.1%
+3.7%
+0.7%
-0.4%
Annual
+85.6%
+1.5%
+16.1%
+43.7%
+36.3%
-57.4%
+116.7%
+37.8%
-25.0%
+24.8%
+16.5%
+2.4%
9th Floor, Nexxus Building, 41 Connaught Road Central, Hong Kong Tel : (852) 2880 9263 Fax : (852) 2565 7975
Email : vpl@vp.com.hk Website : www.valuepartners.com.hk
19
Bank of China
TCL Communication
Technology
ENN Energy
Techtronic Industries
Ju Teng International
Far Eastern Department
Stores
Texwinca Holdings
CNOOC
Industry 8
Automobiles & components
%
5.6
Pharmaceuticals,
biotechnology & life sciences
Banks
4.4
3.0
2.5
2.3
3.6
2.8
2.6
2.6
2.5
These stocks constitute 32% of the fund. The top ten securities holdings only
include companies and/ or REITs the fund invested, excluding any index
tracking fund or ETF.
37%
H Shares
26%
Red Chips
13%
China A Shares
10%
China B Shares
8%
Taiwan
Sector exposure
8%
Others
1%
Cash 10
-2%
Consumer discretionary
26%
Insurance
15%
Information technology
14%
9%
Utilities
8%
Industrials
7%
Health care
7%
Real estate
7%
Energy
4%
Telecom services
3%
Consumer staples
2%
Cash 10
-2%
2015 11
12.0 times
2.1 times
3.2%
Fund facts
Manager:
Base currency:
Administrator:
Custodian:
Launch date:
Dividend policy 4:
Unit price is published daily in the South China Morning Post and the Hong Kong
Economic Times.
HKD80,000 or equivalent 12
HKD40,000 or equivalent 12
Up to 5%
1.5% p.a.
15% of profit (High-on-high principle)
Nil
Daily
89
Banks
As at 31 Dec 2014
Price/earnings ratio
Price/book ratio
Dividend yield
Recent awards
Lipper Fund Awards 2014 (Hong Kong)
Best Greater China Equity Fund (5 Years) 14
~ Lipper
Lipper Fund Awards 2013 (Hong Kong)
Best Greater China Equity Fund (5 Years) 15
~ Lipper
Lipper Fund Awards 2012 (Hong Kong)
Best Greater China Equity Fund (3 Years) 16
~ Lipper
* Value Partners China Greenchip Fund Limited is one of the eligible collective investment schemes for the purpose of the Hong Kong Capital Investment Entrant Scheme (CIES).
The CIES was suspended by the Hong Kong Government with effect from 15 January 2015 until further notice.
1. 2014 Morningstar, Inc. All Rights Reserved. 2. Unless otherwise specified, fund performance shown in this document refers to the returns on Non-Redeemable Class
N shares, which was launched on 8 Apr 2002. Source: HSBC Institutional Trust Services (Asia) Limited and Bloomberg, in HKD, NAV to NAV, with dividends reinvested.
Non-Redeemable Class N shares of the fund are closed for subscription from 26 Mar 2007; existing and new investors may subscribe for/redeem Class A or A2 QDis shares.
3. Index refers to Hang Seng Price Return Index up to 31 Dec 2004, thereafter it is the Hang Seng Total Return Index. Hang Seng Total Return Index includes dividend
reinvestment whereas Hang Seng Price Return Index does not take into account reinvestment of dividends. 4. The Manager currently intends to make quarterly dividend
distribution in respect of the A2 QDis Class; actual dividend payout will be subject to the Managers discretion. 5. The receiving bank may charge a fee for incoming payments.
Such fees will reduce the actual amount of dividends received by the investor. 6. Annualized yield of Class A2 QDis is calculated as follows: (dividend amount/NAV as of
ex-dividend date) x 4. Investors should note that yield figures are estimated and for reference only and do not represent the performance of the fund, and that there is no
guarantee as to the actual frequency and/or amount of dividend payments. 7. The fund may invest in financial derivative instruments (FDI) for hedging purposes. In adverse
situations, the funds use of FDI may become ineffective in hedging and the fund may suffer significant losses. Each hedged share class will hedge the funds base currency
back to its currency of denomination on a best efforts basis. However, the volatility of the hedged classes measured in the funds base currency may be higher than that of the
equivalent class denominated in the funds base currency. Risks associated with FDI include counterparty risk, credit risk and liquidity risk. Such exposure may lead to a high risk
of capital loss. The AUD/CAD/NZD Hedged Classes are not recommended for investors whose base currency of investment is not in the aforesaid currencies. 8. Classification
is based on Global Industry Classification Standard (GICS). 9. Exposure refers to net exposure (long exposure minus short exposure). Due to rounding, percentages shown
may not add up to 100%. 10. Cash refers to net cash on hand excluding cash for collaterals and margins. 11. The profile is based on market consensus forecast as derived
from S&P Capital IQ and Bloomberg. Note that the managers internal estimates may differ significantly from S&P Capital IQ and Bloomberg estimates. 12. Investors should
note that the base currency of the fund is in HKD. Conversion to the base currency of the fund will normally take place at the prevailing rate (as determined by the funds Trustee
or Custodian) on the corresponding fund dealing day. Investors should be aware of possible risks resulting from fluctuations of exchange rates against USD/AUD/CAD/NZD.
13. Performance fee will only be charged if the NAV at the end of the financial year or upon realization of units exceeds the high watermark, which is the all-time year-end
high of the funds NAV. If in any one year, the fund suffers a loss, no performance fee can be charged in subsequent years until the loss is recovered fully (the high-on-high
principle).14. Based on data as of year-end 2013. 15. Based on data as of year-end 2012. 16. Based on data as of year-end 2011.
Investors should note investment involves risk. The price of shares may go down as well as up and past performance is not indicative of future results. Investors should read
the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Information in this report has been obtained from
sources believed to be reliable but Value Partners Limited does not guarantee the accuracy or completeness of the information provided by third parties. This report has not
been reviewed by the SFC. Issuer: Value Partners Limited.
CG_Master_201412
Name
Chongqing Changan
Automobile
Luye Pharma
Portfolio characteristics
20
HHHH
Morningstar RatingTM1
As at 31-12-2014
31 December 2014
2 Pages
Performance update
Investment objective
The fund aims to achieve long term capital growth through primarily
investing in equity and equity linked securities of companies that
are listed on (a) the Taiwan Stock Exchange; or (b) the GRE Tai
Securities Market; or (c) any stock exchange but which have their
main operations or majority of assets in or derive the majority of their
income from Taiwan. This includes companies incorporated and/or
quoted outside Taiwan.
80
60
-0.2%
-0.8%
-2.2%
One year
+2.1%
+5.1%
+9.4%
Three years
+46.4%
+39.2%
+39.5%
Since launch
+54.2%
+39.3%
+25.3%
Annualized return
+6.5%
+5.0%
+3.4%
Annualized volatility
20.8%
27.2%
27.0%
+54.2%
+39.3%
+25.3%
40
20
0
-20
-40
-60
2008
2009
2010
2011
2012
2013
2014
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2008
N/A
N/A
+4.5%
+1.0%
-0.2%
-5.9%
-5.0%
-6.2%
-11.9%
-25.3%
+6.2%
+4.2%
Annual
-35.7%
2009
-4.4%
-1.3%
+12.0%
+1.6%
+17.9%
-3.4%
+7.9%
-2.2%
+11.4%
+2.1%
+3.8%
+3.7%
+58.0%
2010
-5.4%
-0.1%
+6.5%
+4.6%
-10.6%
+1.7%
+5.7%
+1.3%
+6.3%
+1.4%
+1.1%
+6.9%
+19.2%
2011
+2.5%
-3.5%
+0.9%
+8.0%
-1.4%
-0.5%
+7.2%
-10.3%
-12.9%
+5.7%
-7.8%
+0.8%
-13.0%
2012
+4.5%
+11.5%
+0.1%
-4.0%
-2.7%
+0.3%
+2.9%
+5.1%
+5.4%
-4.1%
+4.1%
+1.5%
+26.1%
2013
+0.5%
-0.2%
+0.5%
+3.7%
-0.6%
-3.6%
+3.1%
+1.1%
+2.1%
+4.0%
+1.3%
+1.4%
+13.7%
2014
+0.5%
+5.1%
+2.6%
-1.6%
+3.3%
+2.2%
-1.2%
+1.1%
-5.5%
-2.4%
-1.3%
-0.2%
+2.1%
9th Floor, Nexxus Building, 41 Connaught Road Central, Hong Kong Tel : (852) 2880 9263 Fax : (852) 2565 7975
Email : vpl@vp.com.hk Website : www.valuepartners.com.hk
21
Portfolio characteristics
Industry 3
Semiconductors &
semiconductor equipment
Retailing
%
10.3
4.6
4.2
3.9
93%
7%
Sector exposure 3 4
Information technology
Cash 5
Price/book ratio
2.4 times
Dividend yield
4.6%
Fund facts
Manager:
Base currency:
Trustee:
Custodian:
Launch date:
Bloomberg and
ISIN codes:
Unit price is published daily in the South China Morning Post, the Hong Kong
Economic Journal and the Hong Kong Economic Times.
Fee structure
62%
Consumer discretionary
Industrials
2015 6
13.3 times
4.4
These stocks constitute 27% of the fund. The top five securities holdings
only include companies and/ or REITs the fund invested, excluding any index
tracking fund or ETF.
As at 31 Dec 2014
Price/earnings ratio
11%
9%
7%
Consumer staples
4%
Others
3%
Other financials
3%
Health care
2%
Minimum subscription
Minimum subsequent
subscription
Subscription fee
US$10,000
Management fee
1.25% p.a.
Performance fee 7
US$5,000
Up to 5%
Redemption fee
Dealing day
Nil
Daily
1. 2014 Morningstar, Inc. All Rights Reserved. 2. Source: HSBC Institutional Trust Services (Asia) Limited and Bloomberg, in USD, NAV to NAV, with dividends
reinvested. Performance data is net of all fees. 3. Classification is based on Global Industry Classification Standard (GICS). 4. Exposure refers to net exposure (long
exposure minus short exposure). Due to rounding, percentages shown may not add up to 100%. 5. Cash refers to net cash on hand excluding cash for collaterals and
margins. 6. The profile is based on market consensus forecast as derived from S&P Capital IQ and Bloomberg. Note that the managers internal estimates may differ
significantly from S&P Capital IQ and Bloomberg estimates. 7. Performance fee will only be charged if the NAV at the end of the financial year or upon realization of units
exceeds the high watermark, which is the all-time year-end high of the funds NAV. If in any one year, the fund suffers a loss, no performance fee can be charged in
subsequent years until the loss is recovered fully (the high-on-high principle).
Investors should note investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should
read the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Information in this report has been
obtained from sources believed to be reliable but Value Partners Hong Kong Limited does not guarantee the accuracy or completeness of the information provided by
third parties. This report has not been reviewed by the Securities and Futures Commission. Issuer: Value Partners Hong Kong Limited.
TW_Master_201412
22
31 December 2014
2 Pages
Investment objective
To provide capital appreciation to investors through primarily
investing in Greater China debt securities including but not
limited to high yield, convertible, and mainland Chinese
offshore bonds.
Commentary
Portfolio Review:
December has historically been an extremely quiet month with
very limited liquidity in the market. This year is of no exception, but
the negative impact on prices as a result of market illiquidity was
exacerbated by the continuously weak oil prices that are yet to find
a bottom and a few negative headlines in the Asian credit market.
The Asian credit market posted a negative month in December, with
high-yielding bonds underperformed. During the month, the portfolio
was little changed.
Outlook:
In terms of valuation, we see values are more abundant in Chinas
high-yield space (especially property) than other Asian high-yield
credits. While occasional market disruptions as a result of temporary
negative headlines may be expected, those times may present
opportunities for acquiring good credits at attractive prices.
20
+15.5%
10
0
-10
3/2012
Performance update 1
The Fund
(P Acc USD)
One
month
-2.9%
Three
Six
months months
-2.4%
-2.6%
One
year
Since
launch
+1.1%
+15.5%
2014
2013
2012
(Since launch)
+1.1%
+1.2%
+13.0%
Sector 2
Real estate
Banks
Real estate
Real estate
Real estate
Real estate
Real estate
Diversified financials
Real estate
Real estate
Country
China/
Hong Kong
Japan
%
2.3
China/
Hong Kong
China/
Hong Kong
China/
Hong Kong
China/
Hong Kong
China/
Hong Kong
China/
Hong Kong
China/
Hong Kong
China/
Hong Kong
1.8
1.8
1.8
1.7
1.7
1.7
1.7
1.7
1.7
1. Source: HSBC Institutional Trust Services (Asia) Limited, in USD, NAV to NAV, with dividends reinvested. Performance data is net of all fees.
2. Classification is based on Global Industry Classification Standard (GICS).
9th Floor, Nexxus Building, 41 Connaught Road Central, Hong Kong Tel: (852) 2880 9263 Fax: (852) 2565 7975
Email: vpl@vp.com.hk Website: www.valuepartners.com.hk
23
Sector exposure 2 3
Real estate
Others
Banks
Energy
Consumer durables & apparel
Software & services
Diversified financials
Cash 4
Capital goods
Retailing
Materials
Average duration
Yield to Maturity 5
Number of bond issuers
49.0%
11.2%
10.9%
5.6%
4.1%
3.9%
3.4%
3.2%
3.1%
3.0%
2.6%
P MDis USD
P MDis HKD
P MDis SGD Hedged
A MDis AUD Hedged
A MDis CAD Hedged
A MDis NZD Hedged
Classes 8
10.4%
113
Geographical exposure 3
67.3%
24.0%
0.4%
3.2%
17.1%
53.3%
22.8%
3.6%
3.1%
1.8%
1.1%
0.7%
14.3%
P Acc USD
P Acc HKD
P MDis USD
P MDis HKD
P MDis SGD Hedged
A MDis AUD Hedged
A MDis CAD Hedged
A MDis NZD Hedged
Manager:
Base currency:
Administrator:
Custodian:
Launch date:
Dividend policy 7:
NAV
11.55
11.46
8.97
8.93
9.57
9.16
9.20
9.25
ISIN
KYG9319N1097
KYG9319N1253
KYG9319N1170
KYG9319N1337
KYG9319N1824
KYG9319N2327
KYG9319N2400
KYG9319N2574
Bloomberg
VPGCPUA KY
VPGCPHA KY
VPGPUMD KY
VPGPHMD KY
VPPSHMA KY
VPGCAUD KY
VPGCCAD KY
VPGCHNZ KY
Minimum subscription
Subscription fee
Management fee
Performance fee
Dealing day
70.4%
B
Currency breakdown
USD
CNY
HKD
GBP
SGD
AUD
Ex-dividend
date
31-12-2014
31-12-2014
31-12-2014
31-12-2014
31-12-2014
31-12-2014
3.2%
Investment grade
High yield
Average credit rating
Annualized
yield 9
10.0%
10.1%
9.4%
12.3%
10.7%
12.3%
Fund facts
8.7%
Credit ratings
A
BBB
BB
B & Below
Others 6
Cash 4
Dividend
amount / unit
0.0750
0.0750
0.0750
0.0941
0.0821
0.0947
3.1 years
China/Hong Kong
Others
Indonesia
Classes 8
79.1%
HK$80,000/USD10,000 or equivalent
Up to 5%
1.5% p.a.
Nil
Daily
Recent award
3. Exposure refers to net exposure (long exposure minus short exposure). Due to rounding, percentages shown may not add up to 100%. 4. Cash refers to net cash on hand
excluding cash for collaterals and margins. 5. Investors should note that Yield to Maturity is for reference only and does not represent the actual performance of the Fund or
the dividend yield received by investors, nor does a positive yield imply a positive return. 6. Including bonds whose issuers do not seek credit ratings (Convertible Bonds 9.4%;
Dim Sum Bonds 6.0%; Greater China Bonds 5.3%; Singapore Bonds 1.1%; Philippines Bonds 1.1%). 7. The manager intends to declare and pay monthly dividends equal to
all or substantially all of the net income attributable to each of the Distribution Classes. However, there is neither a guarantee that such dividends will be made nor will there
be a target level of dividend payout. No dividends will be paid with respect to the Accumulation Classes. Distribution may be paid from capital of the fund. Investors should
note that where the payment of distributions are paid out of capital, this represents and amounts to a return or withdrawal of part of the amount that have been originally
invested or capital gains attributable to that and may result in an immediate decrease in the value of units. Please refer to the Explanatory Memorandum for further details
including the distribution policy. 8. The fund may invest in financial derivative instruments (FDI) for hedging purposes. In adverse situations, the funds use of FDI may
become ineffective in hedging and the fund may suffer significant losses. Each hedged share class will hedge the funds base currency back to its currency of denomination
on a best efforts basis. However, the volatility of the hedged classes measured in the funds base currency may be higher than that of the equivalent class denominated in the
funds base currency. Risks associated with FDI include counterparty risk, credit risk and liquidity risk. Such exposure may lead to a high risk of capital loss. The AUD/CAD/
NZD/SGD Hedged Classes are not recommended for investors whose base currency of investment is not in the aforesaid currencies. 9. Annualized yield of Class MDis is
calculated as follows: (dividend amount/NAV as of ex-dividend date) x 12. Investors should note that yield figures are estimated and for reference only and do not represent
the performance of the fund, and that there is no guarantee as to the actual frequency and/or amount of dividend payments.
This document is prepared by Value Partners Hong Kong Limited for information purposes only. Neither Value Partners Hong Kong Limited nor the Directors of the company
accept any responsibility whatsoever for the accuracy or completeness of the information provided by third parties contained in this document. It should not be copied or
distributed to third parties without the written consent of Value Partners Hong Kong Limited.
This document does not constitute a prospectus, an offer or an invitation to subscribe any securities, or a recommendation in relation to any securities.
Investors should note investment involves risk and past performance is not indicative of future results.
Investors should refer to the explanatory memorandum for details and risk factors in particular those associated with investment in China and other markets in the Asian
region, non-investment grade debt securities, and in companies with medium or small capitalization.
This document has not been reviewed by the Securities and Futures Commission. Issuer: Value Partners Hong Kong Limited.
GCHY_Master_201412
24
31 December 2014
2 Pages
Investment objective
To achieve long-term capital growth and income appreciation by
predominately investing in RMB-denominated equities in the PRC
utilizing the Managers RQFII quota.
Performance update 1
One month
N/A
Since launch
N/A
+37.3%
CSI 300
Index
+25.8%
+44.6%
50%
30%
Shenzhen A Shares
18%
Cash 4
Bonds
Shanghai
Composite
Index
+20.6%
Class A
RMB (CNH)
Shanghai A Shares
2%
Sector exposure 2 3
Cash 4
Real estate
17%
Insurance
16%
18%
Consumer discretionary
10%
Industrials
10%
Health care
Information technology
10%
8%
Materials
4%
Utilities
3%
Bonds
2%
Telecom services
2%
9th Floor, Nexxus Building, 41 Connaught Road Central, Hong Kong Tel : (852) 2880 9263 Fax : (852) 2565 7975
Email : vpl@vp.com.hk Website : www.valuepartners.com.hk
25
Fund facts
Name
Industry 3
China Vanke
Real estate
8.3
Ping An Insurance
Insurance
7.5
Daqin Railway
Transportation
6.7
SAIC Motor
6.0
Insurance
5.3
These stocks constitute 34% of the fund. The top five securities holdings only
include companies and/ or REITs the fund invested, excluding any index tracking
fund or ETF.
Portfolio characteristics
As at 31 Dec 2014
2015 5
Price/earnings ratio
12.9 times
Price/book ratio
2.3 times
Dividend yield
2.8%
NAV
ISIN
Bloomberg
11.81
HK0000220001
VPCAARM HK
HK0000220019
VPCAAUU HK
11.59
HK0000220027
VPCAAUH HK
HK0000220035
VPCAAHU HK
11.64
HK0000220043
VPCAAHH HK
HK0000220076
VPCAAGU HK
11.53
HK0000220084
VPCAAGH HK
11.58
HK0000220100
VPCAAAH HK
10.94
HK0000220126
VPCAACH HK
11.49
HK0000220068
VPCAAEH HK
11.53
HK0000220142
VPCAANH HK
PRC custodian:
Launch date:
Fee structure
Class A
Minimum subscription
RMB60,000 or equivalent
RMB30,000 or equivalent
Subscription fee
Up to 5%
Management fee
1.5% p.a.
Performance fee 7
Dealing day
Daily
1. Performance data will be shown after 6 months from its launch. 2. Exposure refers to net exposure (long exposure minus short exposure). Due to rounding,
percentages shown may not add up to 100%. 3. Classification is based on Global Industry Classification Standard (GICS). 4. Cash refers to net cash on hand excluding
cash for collaterals and margins. 5. The profile is based on market consensus forecast as derived from S&P Capital IQ and Bloomberg. Note that the managers internal
estimates may differ significantly from S&P Capital IQ and Bloomberg estimates. 6. The fund may invest in financial derivative instruments (FDI) for hedging purposes.
In adverse situations, the funds use of FDI may become ineffective in hedging and the fund may suffer significant losses. Each hedged share class will hedge the funds
base currency back to its currency of denomination on a best efforts basis. However, the volatility of the hedged classes measured in the funds base currency may be
higher than that of the equivalent class denominated in the funds base currency. Risks associated with FDI include counterparty risk, credit risk and liquidity risk. Such
exposure may lead to a high risk of capital loss. The AUD/CAD/EUR/GBP/HKD/NZD/USD Hedged Classes are not recommended for investors whose base currency of
investment is not in the aforesaid currencies. 7. Performance fee will only be charged if the NAV at the end of the financial year or upon realization of units exceeds the high
watermark, which is the all-time year-end high of the funds NAV. If in any one year, the fund suffers a loss, no performance fee can be charged in subsequent years
until the loss is recovered fully (the high-on-high principle).
Source: The Hong Kong and Shanghai Banking Corporation Limited and Bloomberg, in RMB, NAV to NAV, with dividends reinvested. Performance data is net of all fees.
Investors should read the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Information herein
has been obtained from sources believed to be reliable but Value Partners Hong Kong Limited does not guarantee the accuracy or completeness of the information
provided by third parties. This document has not been reviewed by the Securities and Futures Commission. Issuer: Value Partners Hong Kong Limited.
26