UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-06686
JF China Region Fund, Inc.
(Exact name of registrant as specified in charter)
One Beacon Street, 18th Floor
Boston, MA 02108
(Address of principal executive offices) (Zip code)
Cleary, Gottieb Steen & Hamilton
1 Liberty Plaza
New York, NY 10036
(Name and Address of Agent for Service)
Registrant’s telephone number, including area code: (800) 441-9800
Date of fiscal year end: December 31
Date of reporting period: January 1, 2010 through June 30, 2010
ITEM 1. REPORTS TO STOCKHOLDERS.
The following is a copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
Objectives | 1 | |||||
Management | 1 | |||||
Forward-Looking Statements | 2 | |||||
Market Information | 2 | |||||
Highlights | 3 | |||||
Chairman’s Statement | 4 | |||||
Investment Advisor’s Report | 5 | |||||
Top Ten Holdings | 7 | |||||
Investment Portfolio | 8 | |||||
Statement of Assets and Liabilities | 11 | |||||
Statement of Operations | 12 | |||||
Statement of Changes in Net Assets | 13 | |||||
Financial Highlights | 14 | |||||
Notes to Financial Statements | 15 | |||||
Results of the Annual Stockholders’ Meeting | 19 | |||||
Other Information | 19 | |||||
Fund Management | 20 | |||||
Dividend Reinvestment and Cash Purchase Plan | 23 | |||||
Directors and Administration | 24 |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 1 |
• | The Wall Street Journal (daily online at www.WSJ.com/Free) |
• | The Wall Street Journal under “Closed-End Funds” (every Saturday) |
• | www.jfchinaregion.com |
2 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
JUNE 30, 2010 US$ (Unaudited) | DECEMBER 31, 2009 US$ (Audited) | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net Assets | $ | 89.7 million | $98.5 | million | ||||||||||
Net Asset Value Per Share | $ | 13.91 | $15.2 | 7 | ||||||||||
Market Data | ||||||||||||||
Share Price on the New York Stock Exchange | $ | 11.99 | $13.7 | 8 | ||||||||||
Discount to Net Asset Value | 13.8% | 9.8 | % | |||||||||||
Total Return for the Six Months Ended June 30, 2010 | ||||||||||||||
Net Asset Value | (8.9 | )% | ||||||||||||
Share Price | (13.0 | )% | ||||||||||||
JFC Benchmark Index* | (7.6 | )% | ||||||||||||
MSCI Hong Kong Index (Total) | (3.5 | )% | ||||||||||||
MSCI China Index (Total) | (6.0 | )% | ||||||||||||
MSCI Taiwan Index (Total) | (12.8 | )% |
* | JFC Benchmark Index: MSCI Golden Dragon Index (Total). The MSCI Golden Dragon Index (Total) is comprised of 24.1% of the MSCI Hong Kong Index (Total), 42.7% of the MSCI China Index (Total) and 33.2% of the MSCI Taiwan Index (Total). Prior to March 2001, 25% Taiwan Weighted Index, 20% BNP Paribas China Index, 50% MSCI Hong Kong, 5% HSBC; Prior to March 1999, 60% Hong Kong All Ordinaries, 30% Credit Lyonnais Securities Asia All China B Index, 10% Taiwan Weighted Index. Prior to January 1997, Peregrine Greater China Index. | |
** | Commencement of operations. Source: J.P. Morgan Asset Management. |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 3 |
JUNE 30, 2010
• | To increase the portfolio’s concentration through increased weightings to the Advisor’s highest-conviction stock selections; |
• | A likely corresponding reduction in portfolio turnover, as holding higher-conviction selections is expected to result in longer holding periods; |
• | To increase the Fund’s exposure to mid cap / small cap companies in the Greater China markets; |
• | That Mr. Emerson Yip will be the Fund’s lead portfolio manager. He will work closely with his Greater China colleagues at J.P. Morgan Asset Management, the parent company of the Advisor, located in Hong Kong; |
• | Seek to increase China A-Share exposure by approximately $20m at the time of investment. This strategic investment is in addition to the Fund’s current ability to invest up to 10% of its total assets in other China A-Share investment companies. |
• | Change its benchmark to a composite comprising the CSI 300 Index and the MSCI Golden Dragon Index in proportion to the Fund’s holdings in China A-Shares and other Greater China shares. |
Chairman
4 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 5 |
tighten monetary policy prematurely. Indeed, there is talk of a second fiscal stimulus in China that could further fuel liquidity and growth in Hong Kong. Sentiments remain a key determinant for short term performance but the market should be supported by strong fundamentals and reasonable valuations. Despite continued policy noise, property counters are well supported by the fundamental demand/supply situation amidst ample liquidity while banks are able to selectively find avenues of growth in China related lending. Over the long term, China’s decision to de-peg the Renminbi (‘RMB’) should mean that Hong Kong’s economy and equities stand to benefit from both incoming capital, taking advantage of the RMB appreciation, as well as the internationalization of the RMB for trade and other purposes.
August 26, 2010
6 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
AT JUNE 30, 2010 (Unaudited)
| % OF NET ASSETS | |||||
---|---|---|---|---|---|---|
Taiwan Semiconductor Manufacturing Co., Ltd. (‘TSMC’) manufactures and markets integrated circuits. The Company provides the following services: wafer manufacturing, wafer probing, assembly and testing, mask production and design services. The Company’s integrated circuits are used in computer, communication, consumer electronics, automotive and industrial equipment industries. | 5.3 | |||||
China Construction Bank Corp. ‘H’ provides a complete range of banking services and other financial services to individual and corporate customers. The Bank’s services include retail banking, international settlement, project finance and credit card services. | 5.3 | |||||
China Mobile, Ltd. through its subsidiaries, provides cellular telecommunications services in the People’s Republic of China and Hong Kong. | 5.0 | |||||
Industrial & Commercial Bank of China ‘H’ provides a broad range of personal and corporate commercial banking services all over China. The Bank’s businesses include deposit, loan, credit card, fund underwriting and trust, and foreign currency settlement and trading. | 4.8 | |||||
CNOOC, Ltd. through its subsidiaries, explores, develops, produces, and sells crude oil and natural gas. | 4.7 | |||||
China Life Insurance Co., Ltd. ‘H’ offers a wide range of life, accident and health insurance products and services. | 3.7 | |||||
Hon Hai Precision Industry Co., Ltd. manufactures and markets personal computer (‘PC’) connectors and cable assemblies used in desktop PCs and PC servers. | 3.4 | |||||
Cheung Kong Holdings Ltd. through its subsidiaries, develops and invests in real estate. The Company also provides real estate agency and management services, operates hotels, and invests in securities. | 2.7 | |||||
Tencent Holdings, Ltd. provides internet, mobile, and telecommunication value-added services in China. The Company has an instant messaging community in China. Tencent also provides online advertising services. | 2.6 | |||||
Bank of China, Ltd. ‘H’ provides a complete range of banking and other financial services to individual and corporation customers worldwide. The Bank’s services include retail banking, Great Wall credit card and debit card services, consumer credit, foreign currency transaction, corporate banking, settlement and clearing, investment banking, and fund management businesses. | 2.6 |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 7 |
AT JUNE 30, 2010 (Unaudited)
DESCRIPTION | | HOLDINGS (IN SHARES) | | MARKET VALUE (IN US$) | ||||||
---|---|---|---|---|---|---|---|---|---|---|
COMMON STOCKS (unless otherwise noted) | ||||||||||
CHINA (40.3%) | ||||||||||
Commercial Banks (12.5%) | ||||||||||
Bank of China Ltd., ‘H’ | 4,497,000 | 2,292,708 | ||||||||
China Construction Bank Corp., ‘H’ | 5,729,000 | 4,664,483 | ||||||||
Industrial & Commercial Bank of China, ‘H’ | 5,749,000 | 4,223,026 | ||||||||
11,180,217 | ||||||||||
Construction Materials (1.4%) | ||||||||||
BBMG Corp., ‘H’ | 693,000 | 722,644 | ||||||||
China National Building Material Co., Ltd., ‘H’ | 302,000 | 486,340 | ||||||||
1,208,984 | ||||||||||
Energy Equipment & Services (0.9%) | ||||||||||
China Oilfield Services Ltd., ‘H’ | 670,000 | 792,446 | ||||||||
Food & Staples Retailing (1.2%) | ||||||||||
Lianhua Supermarket Holdings Co., Ltd., ‘H’ | 284,000 | 1,044,909 | ||||||||
Food Products (2.5%) | ||||||||||
China Yurun Food Group Ltd. | 362,000 | 1,145,938 | ||||||||
Tingyi Cayman Islands Holding Corp. | 448,000 | 1,105,775 | ||||||||
2,251,713 | ||||||||||
Health Care Equipment & Supplies (0.0%) | ||||||||||
Trauson Holdings Co. (a) | 89,000 | 41,146 | ||||||||
Insurance (6.3%) | ||||||||||
China Life Insurance Co., Ltd., ‘H’ | 733,000 | 3,261,690 | ||||||||
China Pacific Insurance Group Co., Ltd., ‘H’ | 198,000 | 792,061 | ||||||||
Ping An Insurance Group Co. of China Ltd., ‘H’ | 195,000 | 1,611,456 | ||||||||
5,665,207 | ||||||||||
Internet Software & Services (2.6%) | ||||||||||
Tencent Holdings Ltd. | 140,900 | 2,361,331 | ||||||||
Machinery (0.7%) | ||||||||||
Sany Heavy Equipment International Holdings Co., Ltd. | 526,000 | 589,030 | ||||||||
Marine (0.6%) | ||||||||||
China Shipping Development Co., Ltd., ‘H’ | 446,000 | 569,893 | ||||||||
Metals & Mining (0.7%) | ||||||||||
Jiangxi Copper Co., Ltd., ‘H’ | 353,000 | 666,388 | ||||||||
Multiline Retail (2.5%) | ||||||||||
Intime Department Store Group Co., Ltd. | 907,000 | 914,350 | ||||||||
Parkson Retail Group Ltd. | 776,500 | 1,322,271 | ||||||||
2,236,621 | ||||||||||
Oil, Gas & Consumable Fuels (5.1%) | ||||||||||
China Petroleum & Chemical Corp., ‘H’ | 2,428,000 | 1,979,966 | ||||||||
China Shenhua Energy Co., Ltd., ‘H’ | 458,500 | 1,678,107 | ||||||||
Yanzhou Coal Mining Co., Ltd., ‘H’ | 456,000 | 893,624 | ||||||||
4,551,697 | ||||||||||
Real Estate Management & Development (1.2%) | ||||||||||
China Vanke Co., Ltd., ‘B’ | 1,032,486 | 1,085,934 | ||||||||
Specialty Retail (0.3%) | ||||||||||
Zhongsheng Group Holdings Ltd. (a) | 228,500 | 281,704 | ||||||||
Textiles, Apparel & Luxury Goods (1.8%) | ||||||||||
Anta Sports Products Ltd. | 410,000 | 746,613 | ||||||||
Li Ning Co., Ltd. | 266,000 | 881,326 | ||||||||
1,627,939 | ||||||||||
TOTAL CHINA | 36,155,159 | |||||||||
HONG KONG (31.4%) | ||||||||||
Auto Components (0.5%) | ||||||||||
Minth Group Ltd. | 368,000 | 439,507 | ||||||||
Commercial Banks (2.1%) | ||||||||||
BOC Hong Kong Holdings Ltd. | 496,500 | 1,138,770 | ||||||||
Industrial & Commercial Bank of China Asia Ltd. | 295,492 | 787,407 | ||||||||
1,926,177 | ||||||||||
Communications Equipment (0.3%) | ||||||||||
VTech Holdings Ltd. | 23,000 | 247,961 | ||||||||
Containers & Packaging (0.6%) | ||||||||||
AMVIG Holdings Ltd. | 1,006,000 | 530,977 | ||||||||
Distributors (1.2%) | ||||||||||
Li & Fung Ltd. | 244,000 | 1,101,414 | ||||||||
Diversified Financial Services (0.6%) | ||||||||||
Guotai Junan Securities Co., Ltd., ADR (a) | 1,004,000 | 554,418 |
8 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
DESCRIPTION | | HOLDINGS (IN SHARES) | | MARKET VALUE (IN US$) | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
COMMON STOCKS — continued | |||||||||||
Gas Utilities (0.6%) | |||||||||||
China Resources Gas Group Ltd. | 358,000 | 507,560 | |||||||||
Independent Power Producers & Energy Traders (1.0%) | |||||||||||
China Resources Power Holdings Co., Ltd. | 380,000 | 866,686 | |||||||||
Industrial Conglomerates (0.9%) | |||||||||||
Jardine Matheson Holdings Ltd. | 23,828 | 837,316 | |||||||||
Marine (2.1%) | |||||||||||
Orient Overseas International Ltd. (a) | 138,000 | 995,980 | |||||||||
Shun Tak Holdings Ltd. | 1,730,000 | 904,224 | |||||||||
1,900,204 | |||||||||||
Oil, Gas & Consumable Fuels (4.7%) | |||||||||||
CNOOC Ltd. | 2,453,000 | 4,214,917 | |||||||||
Real Estate Management & Development (10.8%) | |||||||||||
Cheung Kong Holdings Ltd. | 207,000 | 2,403,113 | |||||||||
China Resources Land Ltd. | 528,000 | 1,003,532 | |||||||||
Glorious Property Holdings Ltd. | 1,697,000 | 488,164 | |||||||||
Hang Lung Properties Ltd. | 387,000 | 1,498,420 | |||||||||
Kerry Properties Ltd. | 306,500 | 1,340,241 | |||||||||
Poly Hong Kong Investment Ltd. | 1,071,000 | 1,063,174 | |||||||||
Wharf Holdings Ltd. | 385,000 | 1,886,213 | |||||||||
9,682,857 | |||||||||||
Specialty Retail (0.5%) | |||||||||||
GOME Electrical Appliances Holdings Ltd. (a) | 1,439,000 | 439,818 | |||||||||
Textiles, Apparel & Luxury Goods (0.5%) | |||||||||||
Daphne International Holdings Ltd. | 450,000 | 458,848 | |||||||||
Wireless Telecommunication Services (5.0%) | |||||||||||
China Mobile Ltd. | 447,000 | 4,489,001 | |||||||||
TOTAL HONG KONG | 28,197,661 | ||||||||||
TAIWAN (26.8%) | |||||||||||
Chemicals (1.9%) | |||||||||||
Formosa Chemicals & Fibre Corp. | 331,000 | 763,335 | |||||||||
Formosa Plastics Corp. | 431,110 | 912,360 | |||||||||
1,675,695 | |||||||||||
Commercial Banks (1.1%) | |||||||||||
Taishin Financial Holdings Co., Ltd. (a) | 2,509,245 | 976,162 | |||||||||
Computers & Peripherals (1.9%) | |||||||||||
Acer, Inc. | 289,630 | 677,845 | |||||||||
Compal Electronics, Inc. | 892,000 | 1,072,960 | |||||||||
1,750,805 | |||||||||||
Diversified Financial Services (1.4%) | |||||||||||
Fubon Financial Holding Co., Ltd. (a) | 1,108,000 | 1,244,847 | |||||||||
Electrical Equipment (0.9%) | |||||||||||
Silitech Technology Corp. | 308,000 | 795,606 | |||||||||
Electronic Equipment, Instruments & Components (6.4%) | |||||||||||
Chimei Innolux Corp. (a) | 856,975 | 890,807 | |||||||||
Hon Hai Precision Industry Co., Ltd. (a) | 845,716 | 3,000,533 | |||||||||
Largan Precision Co., Ltd. | 30,700 | 493,012 | |||||||||
Nan Ya Printed Circuit Board Corp. | 94,000 | 384,700 | |||||||||
Unimicron Technology Corp. | 636,000 | 938,219 | |||||||||
5,707,271 | |||||||||||
Food & Staples Retailing (0.7%) | |||||||||||
President Chain Store Corp. | 221,000 | 654,097 | |||||||||
Insurance (1.7%) | |||||||||||
Cathay Financial Holding Co., Ltd. (a) | 1,015,000 | 1,517,848 | |||||||||
Shin Kong Financial Holding Co., Ltd. (a) | 318 | 110 | |||||||||
1,517,958 | |||||||||||
Real Estate Management & Development (1.1%) | |||||||||||
Huaku Development Co., Ltd. (a) | 392,000 | 974,769 | |||||||||
Semiconductors & Semiconductor Equipment (9.7%) | |||||||||||
Advanced Semiconductor Engineering, Inc. | 1,782,000 | 1,422,538 | |||||||||
MediaTek, Inc. | 105,638 | 1,487,674 | |||||||||
Powertech Technology, Inc. | 214,000 | 600,078 | |||||||||
Richtek Technology Corp. | 55,300 | 467,266 | |||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 2,504,057 | 4,722,651 | |||||||||
8,700,207 | |||||||||||
TOTAL TAIWAN | 23,997,417 |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 9 |
AT JUNE 30, 2010 (Unaudited) (continued)
DESCRIPTION | | HOLDINGS (IN SHARES) | | MARKET VALUE (IN US$) | ||||||
---|---|---|---|---|---|---|---|---|---|---|
INVESTMENT COMPANY | ||||||||||
HONG KONG (0.4%) | ||||||||||
JF China Pioneer A-Share Fund (a) | 16,843 | 378,462 | ||||||||
TOTAL INVESTMENTS (98.9% of Net Assets) (Cost $80,061,889) | 88,728,699 | |||||||||
Other assets in excess of liabilities (1.1% of Net Assets) | 983,312 | |||||||||
NET ASSETS (100.0%) | 89,712,011 |
As of June 30, 2010, aggregate cost for Federal income tax purposes was $80,061,889. The aggregate unrealized gain for all securities is as follows | |||||||||||
Excess of market value over cost | 11,438,079 | ||||||||||
Excess of cost over market value | (2,771,269 | ) | |||||||||
Net unrealized gain | 8,666,810 |
NOTES TO INVESTMENT PORTFOLIO:; | ||
ADR – | American Depositary Receipt | |
(a) | Non-income producing security. | |
B | Chinese security traded on the Shenzhen Stock Exchange or Shanghai Stock Exchange. | |
H | Chinese security traded on the Hong Kong Stock Exchange. |
10 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
AT JUNE 30, 2010 (Unaudited)
| (in US$) | |||||
---|---|---|---|---|---|---|
ASSETS: | ||||||
Investments in non-affiliates, at value (cost $80,061,889) | 88,728,699 | |||||
Cash (including foreign currencies with a cost of $2,032,087 and value of $2,039,442) | 2,172,566 | |||||
Receivable for securities sold | 5,087,411 | |||||
Dividends receivable | 330,902 | |||||
Total Assets | 96,319,578 | |||||
LIABILITIES: | ||||||
Payables | ||||||
Payable for securities purchased | 6,371,793 | |||||
Accrued liabilities | ||||||
Investment advisory fees | 84,329 | |||||
Directors’ fees and expenses | 3,326 | |||||
Custodian and accounting fees | 46,402 | |||||
Administration fees | 41,061 | |||||
Other | 60,656 | |||||
Total Liabilities | 6,607,567 | |||||
Net Assets | 89,712,011 | |||||
Net assets consist of: | ||||||
Common stock, $0.01 par value (100,000,000 shares authorized; 6,447,637 shares issued and outstanding) | 64,476 | |||||
Paid-in capital | 98,994,145 | |||||
Undistributed net investment income | 318,670 | |||||
Accumulated realized loss on investments and foreign currency transactions | (18,340,570 | ) | ||||
Accumulated net unrealized appreciation on investments, foreign currency holdings, and other assets and liabilities denominated in foreign currencies | 8,675,290 | |||||
Net Assets | 89,712,011 | |||||
Net Asset Value Per Share ($89,712,011 ÷ 6,447,637) | 13.91 |
JUNE 30, 2010 | JP CHINA REGION FUND, INC. 11 |
FOR THE SIX MONTHS ENDED JUNE 30, 2010 (Unaudited)
| (in US$) | |||||
---|---|---|---|---|---|---|
INVESTMENT INCOME: | ||||||
Dividends from non-affiliates (net of foreign withholding tax of $81,966) | 1,081,775 | |||||
Total Investment Income | 1,081,775 | |||||
EXPENSES: | ||||||
Investment advisory fees | 463,803 | |||||
Directors’ fees and expenses | 123,068 | |||||
Custodian and accounting fees | 75,186 | |||||
Administration fees | 43,390 | |||||
Insurance fees | 22,149 | |||||
Shareholder service fees | 12,313 | |||||
Shareholder report fees | 17,577 | |||||
Audit fees | 30,745 | |||||
Legal fees | 63,486 | |||||
NYSE listing fee | 12,339 | |||||
Other expenses | 25,378 | |||||
Total Expenses | 889,434 | |||||
Net Investment Income | 192,341 | |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY HOLDINGS AND OTHER ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES: | ||||||
Net realized gain (loss) | ||||||
Investments in non-affiliates | 2,293,938 | |||||
Foreign currency transactions | (11,456 | ) | ||||
Net realized gain | 2,282,482 | |||||
Net change in unrealized appreciation/depreciation | ||||||
Investments in non-affiliates | (11,228,376 | ) | ||||
Foreign currency translations | 8,334 | |||||
Change in net unrealized appreciation/depreciation | (11,220,042 | ) | ||||
Net realized and unrealized gain on investments, foreign currency holdings and other assets and liabilities denominated in foreign currencies | (8,937,560 | ) | ||||
Net increase in net assets resulting from operations | (8,745,219 | ) |
12 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
FOR THE PERIODS INDICATED
| Six Months Ended June 30, 2010 (Unaudited) (in US$) | | Year Ended December 31, 2009 (in US$) | |||||||
---|---|---|---|---|---|---|---|---|---|---|
INCREASE IN NET ASSETS: | ||||||||||
Operations | ||||||||||
Net investment income | 192,341 | 147,802 | ||||||||
Net realized gain (loss) on investment transactions | 2,282,482 | (6,407,057 | ) | |||||||
Net change in unrealized appreciation (depreciation) on investments, foreign currency holdings and other assets and liabilities denominated in foreign currencies | (11,220,042 | ) | 43,858,914 | |||||||
Net (decrease) increase in net assets resulting from operations | (8,745,219 | ) | 37,599,659 | |||||||
DISTRIBUTIONS TO STOCKHOLDERS: | ||||||||||
Net investment income | — | (398,980 | ) | |||||||
Total distributions to shareholders | — | (398,980 | ) | |||||||
Total increase (decrease) in net assets | (8,745,219 | ) | 37,200,679 | |||||||
NET ASSETS: | ||||||||||
Beginning of period | 98,457,230 | 61,256,551 | ||||||||
End of period (including undistributed net investment income of $318,670 and $126,329, respectively) | 89,712,011 | 98,457,230 | ||||||||
SHARE TRANSACTIONS | ||||||||||
Opening number of shares | 6,447,637 | 6,447,637 | ||||||||
Closing number of shares | 6,447,637 | 6,447,637 |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 13 |
FOR THE PERIODS INDICATED
| For the Six Months Ended June 30, 2010 (Unaudited) (in US$) | | For the Year Ended December 31, 2009 (in US$) | | For the Year Ended December 31, 2008 (in US$) | | For the Year Ended December 31, 2007 (in US$) | | For the Year Ended December 31, 2006 (in US$) | | For the Year Ended December 31, 2005 (in US$) | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
For a share outstanding throughout each year: | ||||||||||||||||||||||||||
Net asset value, beginning of period | 15.27 | 9.50 | 30.24 | 22.82 | 16.04 | 14.06 | ||||||||||||||||||||
Net investment income | 0.03 | 0.02 | 0.32 | 0.11 | 0.07 | 0.13 | ||||||||||||||||||||
Net realized and unrealized gain (loss) | (1.39 | ) | 5.81 | (16.36 | ) | 12.54 | 6.80 | 1.91 | ||||||||||||||||||
Total from investment operations | (1.36 | ) | 5.83 | (16.04 | ) | 12.65 | 6.87 | 2.04 | ||||||||||||||||||
Dividends from net investment income | — | (0.06 | ) | (0.01 | ) | (1.25 | ) | (0.09 | ) | (0.06 | ) | |||||||||||||||
Distributions from net realized gains | — | — | (4.69 | ) | (3.98 | ) | — | — | ||||||||||||||||||
Total distributions | — | (0.06 | ) | (4.70 | ) | (5.23 | ) | (0.09 | ) | (0.06 | ) | |||||||||||||||
Net asset value, end of period | 13.91 | 15.27 | 9.50 | 30.24 | 22.82 | 16.04 | ||||||||||||||||||||
Market value, end of period | 11.99 | 13.78 | 8.77 | 25.47 | 22.80 | 13.71 | ||||||||||||||||||||
Total Investment Return | ||||||||||||||||||||||||||
Per share market value * | (13.0 | %) | 57.8 | % | (45.6 | %) | 35.0 | % | 67.1 | % | 7.6 | % | ||||||||||||||
RATIOS/SUPPLEMENTAL DATA | ||||||||||||||||||||||||||
Net assets, end of period | 89,712,011 | 98,457,230 | 61,256,551 | 138,632,521 | 104,623,906 | 73,558,649 | ||||||||||||||||||||
Ratios of total expenses to average net assets | 1.92 | % | 2.12 | % | 1.92 | % | 1.54 | % | 1.95 | % | 2.08 | % | ||||||||||||||
Ratios of net investment income to average net assets | 0.41 | % | 0.19 | % | 0.98 | % | 0.39 | % | 0.36 | % | 0.90 | % | ||||||||||||||
Portfolio turnover rate | 34.8 | % | 101.0 | % | 114.8 | % | 118.8 | % | 192.4 | % | 121.8 | % | ||||||||||||||
Number of shares outstanding at end of period (in thousands) | 6,448 | 6,448 | 6,448 | 4,585 | 4,585 | 4,585 |
* | The total investment return excludes the effect of commissions. Dividends and distributions, if any, are assumed for the purpose of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan or if specified in accordance with the terms of the distribution. |
14 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
AT JUNE 30, 2010 (Unaudited)
• | Level 1 — quoted prices in active markets for identical securities | |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | |
• | Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
| Level 1 Quoted prices | | Level 2 Other significant observable inputs | | Level 3 Significant unobservable inputs | | Total | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total Investments in Securities # | $ | 88,728,699 | $ | — | $ | — | $ | 88,728,699 |
# | All portfolio holdings designated as Level 1 are disclosed individually in the Investment Portfolio. Please refer to the Investment Portfolio for industry specifics of the portfolio holdings. |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 15 |
AT JUNE 30, 2010 (Unaudited) (continued)
• | investments, other assets, and liabilities at the prevailing rates of exchange on the valuation date; |
• | investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions. |
16 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 17 |
AT JUNE 30, 2010 (Unaudited) (continued)
political and social conditions, which may result in greater market volatility. In addition, these securities may not be as liquid as U.S. securities. At June 30, 2010, the Fund had 40.7%, 32.2%, and 27.1% of its total investments invested in China, Hong Kong, and Taiwan, respectively.
18 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
Nominees | | Votes For | | Votes Withheld | | Shares Not Voted | | Total Voting Shares | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Alexander R. Hamilton | 5,253,332 | 140,241 | 1,054,064 | 6,447,637 | ||||||||||||||
John R. Rettberg | 5,255,534 | 138,039 | 1,054,064 | 6,447,637 |
Proxy Voting Record
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 19 |
Name, (DOB), Address and Position(s) with Fund | | Term of Office and Length of Time Served | | Principal Occupation(s) During Past 5 Years | | Number of Portfolios in Fund Complex Overseen by Director* | | Other Trusteeships/ Directorships Held by Director | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Independent Directors | |||||||||||||||||||
The Rt. Hon. The Earl of Cromer (June 3, 1946) Finsbury Dials 20 Finsbury Street London, EC2Y 9AQ United Kingdom Chairman and Class I Director | Three year term ends in 2012; Chairman and Director since 1994. | Chairman of the Board of the Fund; Chairman of the Board, Western Provident Association (insurance), London Asia Capital plc (financial); Sunrise New Energy Group Limited (utility); Pedder Street Asia Absolute Return Fund Limited (financial); LG Asia Plus Fund Limited (financial); Director, Schroder AsiaPacific Fund Limited (financial) and Chief Executive Officer, Cromer Associates Limited (family business). | 1 | See Principal Occupation. | |||||||||||||||
Alexander Reid Hamilton (October 4, 1941) P.O. Box 12343 General Post Office Hong Kong Class II Director | Three year term ends in 2013; Director since 1994. | Director of Citic Pacific Limited (infrastructure), China Cosco Holdings Company Limited (shipping), Esprit Holdings Limited (clothing retail), Shangri-La Asia Limited (hotels) and Octopus Cards Limited (financial services). | 1 | See Principal Occupation. | |||||||||||||||
Julian M. I. Reid (August 7, 1944) Finsbury Dials, 20 Finsbury Street London, EC2Y 9AQ United Kingdom Class III Director | Three year term ends in 2011; Director since 1998. | Chief Executive Officer of 3a Funds Group (financial); Director and Chairman of Morgan’s Walk Properties Limited (property); Director and Chairman of The Korea Fund, Inc. (financial); Director and Chairman of Prosperity Voskhod Fund (financial); Director and Chairman of ASA Limited (financial) and Director of 3a Global Growth Fund Limited (financial). | 1 | See Principal Occupation. |
20 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
Name, (DOB), Address and Position(s) with Fund | | Term of Office and Length of Time Served | | Principal Occupation(s) During Past 5 Years | | Number of Portfolios in Fund Complex Overseen by Director* | | Other Trusteeships/ Directorships Held by Director | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Independent Directors (continued) | |||||||||||||||||||
John R. Rettberg (September 1, 1937) 1 Beacon St. Boston, MA 02108 USA Class II Director | Term ends in 2013; Director since 2008 | Trustee, JPMorgan Alternative Products mutual fund Board 1997 to 2009. | 1 | See Principal Occupation. | |||||||||||||||
Interested Director & President of the Fund | |||||||||||||||||||
Simon J Crinage (May 10, 1965) Finsbury Dials, 20 Finsbury Street London, EC2Y 9AQ United Kingdom Class I Director and President | Term as Director ends in 2012; Director since May, 2009 & President since 2003 | Managing Director, J.P. Morgan Asset Management. | 1 | None. |
* | The Fund is the only fund in the Fund Complex. |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 21 |
(continued)
Name, (DOB), Address and Position(s) with Fund | | Term of Office and Length of Time Served | | Principal Occupation(s) During Past 5 Years | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Officers who are not Directors | |||||||||||
Michael J. James (May 11, 1967) Finsbury Dials, 20 Finsbury Street London, EC2Y 9AQ United Kingdom Treasurer | Since 2006** | Treasurer of the Fund; Vice President, J.P. Morgan Asset Management. | |||||||||
Christopher D. Legg (March 12, 1982) Finsbury Dials, 20 Finsbury Street London, EC2Y 9AQ United Kingdom Secretary | Since 2008** | Secretary of the Fund; Associate, J.P. Morgan Asset Management. | |||||||||
Muriel Y.K. Sung (September 25, 1966) 8 Connaught Road Central/Hong Kong Chief Compliance Officer | Since 2004** | Chief Compliance Officer of the Fund; Vice President, J.P. Morgan Asset Management. |
** | The officers of the Fund serve at the discretion of the Board. |
22 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
(Unaudited)
a) | shareholders may elect to receive dividend and capital gain distributions in the form of additional shares of the Fund (the Share Distribution Plan). |
b) | shareholders may make optional payments (any amount between $100 and $3,000) which will be used to purchase additional shares in the open market (the Share Purchase Plan). |
Computershare Trust Company, N.A. P. O. Box 43010 Providence, RI 02940-3010 USA Telephone No.: 800-426-5523 (toll-free) www.computershare.com |
JUNE 30, 2010 | JF CHINA REGION FUND, INC. 23 |
(Unaudited)
Officers and Directors | The Rt. Hon. The Earl of Cromer — Director and Chairman of the Board Simon J. Crinage — Director and President Alexander R. Hamilton — Director Julian M. I. Reid — Director John R. Rettberg — Director Michael J. James — Treasurer Christopher D. Legg — Secretary Muriel Y.K. Sung — Chief Compliance Officer | |||||||||
Investment Adviser | JF International Management Inc. P.O. Box 3151 Road Town, Tortola British Virgin Islands | |||||||||
Administrator | J.P. Morgan Investor Services, Co. 1 Beacon Street, 18th Floor Boston, Massachusetts 02108 U.S.A. | |||||||||
Custodian | JPMorgan Chase Bank N.A. 1 Beacon Street, 18th Floor Boston, Massachusetts 02108 U.S.A. | |||||||||
Independent Registered Public Accounting Firm | PricewaterhouseCoopers LLP 300 Madison Avenue New York, New York 10017 U.S.A. | |||||||||
Legal Counsel | Cleary Gottlieb Steen & Hamilton LLP New York: 1 Liberty Plaza New York, New York 10006 U.S.A. | |||||||||
Hong Kong: Bank of China Tower 1 Garden Road Hong Kong | ||||||||||
Registrar, Transfer Agent, and Dividend Paying Agent | Computershare Trust Company, N.A. P. O. Box 43010 Providence, Rhode Island 02940-3010 U.S.A. |
24 JF CHINA REGION FUND, INC. | JUNE 30, 2010 |
© JPMorgan Chase & Co., 2010 All rights reserved. June 2010. |
ITEM 2. CODE OF ETHICS.
Not required for this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required for this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required for this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not required for this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
(a) Schedule of Investments is included as part of Item 1.
(b) Not applicable to the Fund.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not required for this filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
| (a) | Not applicable to a semiannual report. |
| (b) | There has been no change, as of the date of this filing, in any of the portfolio managers identified in response to paragraph (a)(1) of this Item in the registrant’s most recently filed annual report on Form N-CSR. |
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the Fund.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the Fund’s board of directors since the Fund filed its last form N-CSR.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Fund's principal executive and principal financial officers have concluded that the Fund's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this Form N-CSR based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the 1934 Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the Fund's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the Fund's second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting.
ITEM 12. EXHIBITS.
| (a)(1) Not required for this filing. |
| (a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940. |
| (a)(3) Not required for this filing. |
| (a)(4) Not required for this filing. |
(b) The certifications required by Rule 30a-2(b) of the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
JF China Region Fund, Inc.
By: | /s/_____________________________ |
Simon Crinage
President and Principal Executive Officer
September 3, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/___________________________ |
Simon Crinage
President and Principal Executive Officer
September 3, 2010
By: | /s/____________________________ |
Michael J. James
Treasurer and Principal Financial Officer
September 3, 2010