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Baillie Gifford China Growth TrustAnnouncement

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RNS Number : 9407Y  Baillie Gifford China Grwth TrstPLC  01 April 2026

RNS Announcement

Baillie Gifford China Growth Trust plc

Legal Entity Identifier: 213800KOK5G3XYI7ZX18

Results for the year to 31 January 2026

Regulated Information Classification: Additional regulated information
required to be disclosed under the applicable laws and regulations.

The following is the results announcement for the year to 31 January 2026
which was approved by the Board on 31 March 2026.

Over the year the Company's net asset value total return† was 34.0% and the
share price total return† was 38.8%, compared with a total return of 22.2%
for the MSCI China All Shares Index (in sterling terms).

†   Alternative Performance Measure - see Glossary of Terms and
Alternative Performance Measures at the end of this announcement. Source:
Refinitiv/Baillie Gifford and relevant underlying index providers.

Baillie Gifford China Growth Trust aims to achieve long term capital growth
through investment principally in Chinese companies which are believed to have
above average prospects for growth. At 31 January 2026 the Company had total
assets of £205.3m.

The Company is managed by Baillie Gifford & Co, an Edinburgh based fund
management group with approximately £183 billion under management and advice
as at 26 March 2026.

Past performance is not a guide to future performance. The value of an
investment and any income from it is not guaranteed and may go down as well as
up and investors may not get back the amount invested. The Company may borrow
money to make further investments. This is commonly referred to as gearing.
The risk is that, when this money is repaid by the Company, the value of these
investments may not be enough to cover the borrowing and interest costs, and
the Company makes a loss. If the Company's investments fall in value, gearing
will increase the amount of this loss. The more highly geared the Company, the
greater this effect will be.

Investment in investment trusts should be regarded as medium to long term. You
can find up to date performance information about China Growth at
bailliegiffordchinagrowthtrust.com
(https://www.bailliegifford.com/en/uk/individual-investors/funds/baillie-gifford-china-growth-trust/)

See disclaimer at the end of this announcement.

31 March 2026

For further information please contact:

Naomi Cherry, Baillie Gifford & Co

Tel: 0131 474 5548

Jonathan Atkins, Director, Four Communications

Tel: 0203 920 0555 or 07872 495396

Chair's statement
Introduction

The Board believe that Baillie Gifford China Growth Trust ('the Company') has
a unique investment strategy. There is no other open or closed end equity fund
offering a China growth style, investment in unlisted companies, prudent
gearing, a competitive cost and a commitment to discount management via a
buyback and a 100% performance related Conditional Tender Offer ('CTO').

The financial year to 31 January 2026 was a period where all the components of
the Company strategy contributed to deliver very strong performance for
shareholders. The strong performance over the past year therefore builds on
the recovery in the Company's performance, which started in 2024. Whilst
Baillie Gifford's long-term investment time horizon is five to ten years, it
remains encouraging that the Manager has continued to outperform when
conditions for growth investing have been more favourable.

In the past year the Board has remained focussed on enhancing shareholder
value including scrutiny of the Company's strategy and investment performance,
monitoring the prevailing discount at which the shares trade, and undertaking
share buybacks (2.9% in financial year to 31 January 2026), renewal of the
loan facility and the marketing of the Company.

Key Performance Indicators ('KPIs')

The Company has four KPIs:

•         Net Asset Value per share total return ('NAV TR') relative
to the benchmark

•         Share price total return relative to the benchmark

•         the discount of the share price to Net Asset Value ('the
discount')

•         the Ongoing Charges Ratio ('OCR')

The Company reported positive progress on all its KPIs.

The NAV TR was 34.0%, outperforming the benchmark by 11.8%. The share price
total return was 38.8%, also exceeding the benchmark by 16.6%. Encouragingly,
the discount of share price to Net Asset Value decreased to 7.4% as at 31
January 2026 (10.4% as at 31 January 2025).

The OCR fell to 1.06% in the year to 31 January 2026 (from 1.12% in the
financial year to 31 January 2025) due to the higher average Net Asset Value
('NAV') owing to investment gains.

In November 2024, the Company announced a CTO based on performance in the
four-year period to 30 November 2028. Further details can be found on page 76
of the Annual Report. Since the CTO measurement period commenced (29 November
2024 to 31 January 2026), the NAV TR outperformed the benchmark by 12.4%.

The very strong performance over the past two years is therefore sharply
reducing the underperformance since the Company's mandate change. Between 16
September 2020 and 31 January 2026, the Company NAV TR and share price total
return has underperformed the benchmark by 6.3% and 9.3%, respectively.

Total Return Performance*
                        Year to      Since                 Since

                        31 January   announcement          Mandate

                        2026         of Conditional        change (#)

                                     Tender Offer (†)      31 January

                                     to 31 January         2026

                                     2026
 NAV TR (%)             34.0         38.9                  -8.2
 Share price TR (%)     38.8         47.7                  -11.2
 Benchmark TR(‡) (%)    22.2         26.5                  -1.9

Whilst Investment Manager Baillie Gifford's investment time horizon is five to
ten years, it is very encouraging that the Manager has outperformed the
benchmark consistently since August 2024, when conditions for growth investing
in China have been favourable.

Investment Performance

China's equity performance in 2025 echoes Lenin's famous saying that "there
are decades when nothing happens; and there are weeks where decades happen".
It arguably marked a turning point in investor attitudes to Chinese equities.
The past year saw investors wake-up to the attraction of China's innovation in
critical technologies such as EVs, e-commerce, advanced manufacturing and AI,
all available at below historic average valuations. This, combined with a
re-evaluation of the risk and reward of passive global equity portfolios
dominated by US investments, triggered diversification outside the US,
including to China, where regulatory risk also receded. These factors provided
a tailwind to both the Chinese equity market and growth investing.

The Company's performance rebounded significantly in absolute and relative
terms. Analysis of the performance drivers shows management of the portfolio
consistent with the growth style, evidence of improved stock selection and a
contribution from improved valuation and sell discipline. Specifically,
outperformance was driven by strong contributions from several of the
Manager's highest conviction holdings. Key contributors were ByteDance, Zijin
Mining Group, Pop Mart and Zhongji Innolight. Detractors were Meituan, DPC
Dash and Sunny Optical Technology.

Further detail on investment performance can be found in the Managers' report
on page 12 of the Annual Report and Financial Statements.

Earnings and Dividend

In the year to 31 January 2026, the revenue earnings per ordinary share
increased by 17.8% from 2.53p to 2.98p. The Company's dividend policy is that
any dividend paid will be by way of a final dividend and be not less than the
minimum required for the Company to maintain its investment trust status.

The Board is proposing a final dividend of 2.50p, an increase of 14%, which,
subject to shareholder approval, will be paid on 22 July 2026 to shareholders
on the register at the close of business on 19 June 2026, with the shares
trading ex-dividend on 18 June 2026.

The increased income partly reflects the continuing improvement in dividend
pay-out ratios for portfolio companies because of improved capital discipline.
Whilst a positive, Baillie Gifford's focus is on managing the portfolio for
total return and most future total returns are expected to be from
capital gains.

Company Strategy

In the financial year ending 31 January 2026 the Board reviewed and reaffirmed
the relevance of the Company's strategy to shareholders. The annual Strategy
Day covered the investment objective, strategy limits, gearing, unlisted
investments, discount management, the investment manager's approach to
Environmental, Social and Governance research and investment performance.

Unlisted Investments

The Board believe owning unlisted investments benefits shareholders,
especially given the Company's closed-end status and Baillie Gifford's
expertise in successfully sourcing and investing in private Chinese
investments via its close relationships with founders and global investment
knowledge. However, trading unlisted investments is more complex due to lower
liquidity and the potential need for permission from the investee company to
sell to others, depending on individual arrangements. The Company has a limit
on unlisted investments of 20% of gross asset value of the Company, measured
at the time of investment. When above this figure, the existing investments
can continue to be held, but new positions or follow-on investments cannot be
made. The Investment Manager, under scrutiny from the Board, closely monitors
the proportion of the portfolio invested in unlisted investments and the
diversification of the investment portfolio.

The Company's primary private investment is ByteDance, which was 10.4% of
total assets on 31 January 2026. In September 2025 the manager made a private
investment in RedNote, a Chinese lifestyle content and commerce platform. In
total, unlisted investments represented 12.2% of total assets as at 31 January
2026 (9.1% as at 31 January 2025).

The valuation of private investments is undertaken by Baillie Gifford and
supplemented by independent input from S&P Global. This valuation is
overseen by the Board at the interim and annual results. The valuation of
unlisted investments is an estimate based on the price of recent investments
in secondary market trading and peer multiples and revenues. In addition, the
Board takes comfort that there is additional information available via
ByteDance's annual buybacks.

ByteDance made significant progress in 2025, becoming the world's third
largest private company measured by most recent funding round*. Since
acquisition to 31 January 2026, ByteDance has increased in value 158% in
sterling terms and is the largest single contributor to Company
outperformance. Whilst the ByteDance IPO is not imminent, it is an indication
of the value offered by private investment in China.

Gearing

A prudent level of gearing remains advantageous given that the long-term
returns forecast in China equities by Baillie Gifford exceed the cost of debt.
The Company is in discussions with lenders regarding renewal of the US$25m
loan facility, which is due to mature on 11 April 2026, and the Board does not
currently anticipate any issues with its renewal. The Board sets a gearing
limit to maintain prudent liquidity and adhere to its loan covenants. The
Board is mindful of high volatility in Chinese equities, the portfolio's
higher Beta compared to the benchmark and the Company ownership of unlisted
investments. Within the Board's limits, Baillie Gifford manages and reports
quarterly to the Board on the proposed use of gearing. Net gearing was 3.1% as
at 31 January 2026 (3.3% as at 31 January 2025).

Discount and Premium Management

The Board recognises the need to address any sustained and significant
imbalance of buyers and sellers which might otherwise lead to shares trading
at an anomalous discount or premium to NAV. The Board constantly monitors the
level of discount and regularly consults its advisers and shareholders to
determine appropriate measures. The Board is committed to using its share
purchase and issuance authorities where appropriate to mitigate such
imbalances. Details of the Discount/premium policy are on page 33 of the
Annual Report and Financial Statements.

In the 12 months to 31 January 2026 the Company bought back 1.7m shares
representing 2.9% of share capital excluding shares held in Treasury as at 31
January 2025. The buyback was conducted at an average discount of 10.4% and
enhanced the NAV per share by 0.3%.

The combination of investment performance, the commencement of the share
buyback in January 2024 and the introduction of the CTO in November 2024 has
significantly reduced the discount level and its volatility since 2023. The
average discount of share price to NAV has reduced from 11.3% in the year to
31 January 2025 to 9.6% in the year to 31 January 2026 and the discount was
significantly less volatile over the year.

China Risks

Risks related to investing in China are difficult to diversify given the
single country mandate and could adversely affect companies held within the
portfolio. These comprise the economic outlook and geopolitical risks,
including the potential impact of sanctions. The Board evaluates the risks
with Baillie Gifford and, where appropriate, with input from external advisers
and experts. A summary of Principal Risks is on page 35 of the Annual Report
and Financial Statements.

Marketing

The Board co-funds marketing with Baillie Gifford. This includes the website
(bailliegiffordchinagrowthtrust.com) and digital content from Baillie Gifford.
During the year the Board wrote to all shareholders who hold their shares via
the large investment platforms to invite them to sign-up for updates from the
Company. If you've not already signed up but would like to do so, please scan
the QR code located on the back cover of this Annual Report. In addition, the
Board continued to fund a programme of marketing targeting regional wealth
managers via its broker.

The Board

There were no changes to the Board during the year, and the Board remains
fully compliant with both the Parker review and the FTSE Women Leaders Review.
The Board has disclosed its ethnic diversity within the Corporate Governance
Statement in the Company's Annual Report on page 71. The Board conducted an
internal review of Board performance and concluded it was operating
effectively.

Annual General Meeting (the 'AGM')

The AGM will be held at 1 Moorgate Pl, City of London, London, EC2R 6EA on
Wednesday 27 May 2026, at 2pm. A presentation from Baillie Gifford will be
included and all shareholders are invited to attend. The Board encourages all
shareholders to exercise their votes on the AGM resolutions by completing and
submitting the form of proxy elections in advance of the meeting and
submitting any questions by emailing enquiries@bailliegifford.com or by
calling 0800 917 2113.

Outlook

Whilst the re-rating over the past two years has eliminated China equity
market's historical valuation discount, the Board remains positive about the
Company's prospects.

Firstly, China's ongoing structural transformation continues to offer
compelling opportunities for the Company's strategy of owning a concentrated
portfolio of China's most innovative growth stocks. The Company has exposure
to China's growing dominance in critical technologies such as energy
transition, e-commerce, advanced manufacturing and AI.

Secondly, whilst China stock valuations have increased to just above the
long-term average in the past two years, and the portfolio's valuation, as
measured by the price earnings ratio, is higher than the benchmark, the
Company's holdings are forecasted to deliver nearly double the benchmark's
earnings growth over the next three years. It is a comfort that the
portfolio's concentration in higher valuation names is significantly lower
than at past market peaks.

Thirdly, there is potential upside from earnings growth in innovation-led
growth companies, stabilisation of the property market and a recovery in
consumption, further government stimulus, a continued truce in US-China
relations and greater allocation to China equities by both foreign and
domestic investors.

However, there are also risks to investing in the Company, which can lead to
volatility and drawdowns. These include a deterioration in US‑China
relations, continuing geopolitical tension, portfolio concentration in AI
related businesses and deflation in China. The discount the portfolio trades
to global equities is arguably a comfort, as investors re-assess the
risk‑reward of passive global equity portfolios dominated by US technology
companies. Additionally, the Company's effective discount control through the
share buyback and CTO provide some protection against discount widening to
shareholders until November 2028.

The Board therefore continue to believe that a holding in the Company remains
an attractive part of an investor's long-term global equity allocation.

 

 

Nicholas Pink

Chair

31 March 2026

 

*   Source: LSEG/Baillie Gifford and relevant underlying index providers.
See disclaimer at the end of this announcement. All figures are stated on a
total return basis. Total return and discount are alternative performance
measures - see Glossary of terms and alternative performance measures at the
end of this announcement.

†   The Company announced the introduction of a performance related tender
offer (the 'Conditional Tender Offer') from 29 November 2024.

#   Baillie Gifford & Co Limited were appointed as Managers and Company
Secretaries on 16 September 2020.

‡   The benchmark is the MSCI China All Shares Index (in sterling terms).

Managers' report

Over the past 12 months, the Company delivered its second consecutive year of
strong performance for shareholders.

In a year when China's macro backdrop continued to evolve, the market
increasingly rewarded genuine corporate progress and innovation, and the
Company captured that strength particularly well. For the 12 months to 31
January 2026, the Company returned 34.0% on a NAV total return basis and 38.8%
on a share price total return basis, comfortably ahead of the 22.2% benchmark
return.

Looking back on 2025: the Chinese economy

In 2025, China delivered a steady but distinctly two-speed expansion. Real GDP
grew by 5.0%, broadly in line with the official target, though momentum eased
as the year progressed. The year is best understood less as a simple slowdown
and more as a transition away from a property-led growth model toward one
driven by productivity, innovation and new forms of consumption. While uneven,
this shift matters for investors as it reshapes the picture of where long-term
growth opportunities will emerge.

Exports and industrial activity once again provided resilience. Goods trade
increased 3.8% in value terms, with exports rising 6.1%, supported by
continued diversification toward Belt and Road Initiative (BRI) partner
countries, which accounted for just over half of total trade. BRI countries
are those that have signed a BRI cooperation document (often Memorandums of
Understanding) with China. China's official messaging commonly frames this as
"over 150 countries and over 30 international organisations" having signed
BRI cooperation documents. Hi-tech exports rose 13.2%, reflecting China's
growing presence in higher-value manufacturing.

This was echoed in production. Industrial value added grew 5.9%, led by
equipment manufacturing and hi-tech industries. Output growth in areas such as
3D-printing devices (+52.5%), industrial robots (+28.0%) and new energy
vehicles (+25.1%) highlighted how quickly 'innovation at scale' is translating
into real productive capacity. China's response to demographic and cost
pressures has increasingly been automation and digitisation, and the country
is now the world's largest industrial‑robot market, accounting for more than
half of global installations.

Another notable development was the extension of China's external footprint
beyond traditional 'hard goods' into higher-value technology, brands and
intellectual property. CATL (a holding in the portfolio) remained emblematic
of this shift, supplying batteries for around one-third of new electric
vehicles globally and a similar share of grid‑scale energy storage systems.
In consumer culture, companies such as Pop Mart illustrated how Chinese design
and intellectual property are increasingly resonating with overseas consumers.

Domestic consumption improved modestly but remained uneven. Retail sales grew
3.7% for the year, with online channels continuing to outperform. Targeted
policy support was visible in categories linked to trade-in programmes,
including communication equipment (+20.9%) and household appliances and
audio-visual equipment (+11.0%). Momentum, however, softened toward year-end,
and weak pricing conditions persisted, with flat consumer prices and declining
producer prices (-2.6%), reinforcing a sense of 'real growth but weak nominal
momentum'.

Confidence remained the key constraint, closely tied to housing. The property
downturn continued to weigh on activity, with real-estate development
investment down 17.2%, floor space sold down 8.7%, and new starts down 20.4%.
This helps explain subdued fixed-asset investment (-3.8%) and private
investment (-6.4%), even as 'upgrading' activity persisted in areas such as
equipment and technology, where investment rose 11.8%.

Policy signals during the year helped stabilise expectations. Support for the
private sector became clearer, fiscal policy adopted a more proactive stance,
and official messaging increasingly emphasised consumption as a strategic
priority, acknowledging the limits of investment-led growth amid
overcapacities. However, we do not expect a large, credit-fuelled stimulus of
the kind seen in past cycles. The more realistic path is continued targeted
support, aimed first at preventing further deterioration in the property
market and gradually improving household confidence, alongside selective
consumption incentives. In our view, this makes the recovery more likely to be
steady and uneven, rather than rapid. With households holding substantial
savings, the potential for a gradual shift toward spending or longer-duration
financial assets remains an important swing factor for the outlook. Household
deposits exceeded roughly RMB 160tn (about US$22tn vs China's economy of
US$30tn) by mid-2025 and continued to rise through the year. It means even a
modest change in behaviour at the margin can become macro-relevant.

Finally, 2025 was a year in which innovation became increasingly visible in
day-to-day economic activity. In AI, the emergence of tools such as DeepSeek
and the rapid proliferation of generative applications underscore the speed of
the Chinese ecosystem's evolution, supported by intense competition and policy
momentum.

AI for China

Artificial intelligence became a defining theme for China in 2025, moving
decisively from experimentation to deployment. For policymakers, AI is
increasingly viewed as a strategic lever to lift productivity, upgrade
industry and offset structural headwinds such as the ageing demographic. For
companies, the focus has shifted from demonstrating technical capability to
embedding AI into products, services and workflows at scale. From our
perspective as long-term investors, this transition from capability to
application is what ultimately matters.

China's national AI strategy places less emphasis on a single 'breakthrough
moment' and more on diffusion, the broad rollout of AI across manufacturing,
services and everyday economic activity. This approach plays to China's
strengths: scale, speed of iteration and the ability to integrate software
into physical systems. Rather than being confined to a small number of
frontier labs, AI in China is increasingly appearing in factories, devices,
enterprise tools, and consumer platforms.

In Shenzhen, a visit to private company Bambu Lab (not a holding in the
portfolio) captured this shift perfectly. China produces around 90% of the
world's consumer-grade 3D printers, with much of that manufacturing
concentrated in Shenzhen, giving companies such as Bambu an unusually dense
ecosystem of suppliers, engineers and rapid iteration loops. Rather than
talking about AI in abstract terms, the team showed us how a small on-device
neural network, essentially a compact digital brain built directly into the
printer's hardware, quietly monitors a print as it runs. This can detect
'spaghetti' failures (prints that detach or misprint, leaving a nest of
extruded filament) in real time and can intervene before material and time
are wasted.

It was a modest moment, but a powerful one: AI not as a headline feature, but
as something that simply makes everyday tools work better. More broadly, it
reflected how China's supply chains and engineering talent allow hardware,
software and AI to be combined and improved at remarkable speed.

Portfolio holding Tencent also offers a distinctive form of AI leverage
through gaming. As the world's leading game development, publishing and
operations platform, it is using AI not only to build games, but to provide
AI-enabled tools and services that make game creation faster and cheaper.
Tencent highlighted GiiNEX, its generative game AI engine, designed to
support developers throughout the production pipeline. In Tencent's own
examples, GiiNEX can compress tasks such as city modelling from days to
minutes and accelerate testing and simulation, which are often major
bottlenecks in modern game production.

Alongside this, Tencent's GCloud platform packages a range of game
technologies, solutions and services for development and operations,
reinforcing the idea of 'gaming-as-a-service' where Tencent can monetise not
just content, but the underlying toolchain that powers it.

In autonomous driving, our time spent with portfolio company Horizon Robotics
underscored how AI is being shaped for China's real-world driving conditions.
What stood out was the company's pragmatic focus on shipping capability, not
promises: Horizon emphasised advanced driver‑assistance systems that can be
deployed at scale by domestic automakers today, then improved quickly through
feedback from large volumes of real driving data. In an environment as complex
as China's roads, this step-by-step approach felt both commercially grounded
and technically credible. Over time, as Chinese automakers expand overseas, we
believe this software-and-compute stack has the potential to travel with them
- turning domestic scale into a meaningful globalisation opportunity.

A visit to private company Unitree (not a holding in the portfolio) offered a
different but equally striking perspective on China's robotics ambitions.
Watching a humanoid robot walk, balance and recover from external pushes was
impressive, but the more revealing insight came from the discussion around
cost. Unitree's emphasis is not only on capability but also on making robots
affordable enough to be widely deployed, a key philosophy that mirrors China's
broader approach to technology diffusion. The ambition is not to build a
handful of showcase machines, but to drive down costs so that humanoid and
quadruped robots can move from demonstrations into industrial, commercial, and
eventually consumer use.

Doubao owned by ByteDance (our largest unlisted holding in the portfolio), is
also a useful illustration of how quickly AI can diffuse in China when paired
with strong product design and distribution. By late December 2025, multiple
reports citing ByteDance internal data suggested Doubao's daily active users
had surpassed 100 million, achieved with unusually low user-acquisition and
marketing spend for a product of that scale. What we found striking on the
ground was how this growth has been driven: Doubao's creative tools - such as
image and video generation - are designed for sharing, and ByteDance can place
them directly into the everyday 'habits' people already have across its
ecosystem. In other words, adoption is increasingly being pulled by usefulness
and social sharing, rather than pushed by novelty - an important distinction
if AI is to become part of daily life at a national scale.

Time spent with MiniMax, a newer holding of the Company, reinforced the idea
that constraints can shape behaviour constructively. MiniMax is building
cutting-edge foundation models and turning them into real products - spanning
text, image, video and audio generation - bringing powerful generative AI
tools to consumers and businesses at scale. Management emphasised competing on
efficiency, delivering models strong enough for the vast majority of
real-world use cases at a fraction of the cost of leading US offerings. In a
recent interview, the founder described an ambition to achieve roughly 90% of
the capability at around one-tenth the cost, reflecting how price-sensitive
many users and enterprises are. As 'inference' (using a trained model to
answer questions or generate outputs, not training it) becomes the dominant
driver of compute demand, this emphasis on deployment cost, optimisation and
long context practicality increasingly looks like a durable advantage.

We believe China's long-term position in AI rests on reinforcing strengths
that favour diffusion at scale. Powerful platform distribution and intense
domestic competition create rapid feedback loops, helping AI move quickly from
novelty to habit. China can also integrate AI into the physical economy,
devices, factories and supply chains, where productivity gains can be tangible
and durable.

China's talent density is another advantage. NVIDIA chief executive Jensen
Huang has remarked that around half of the world's AI researchers are Chinese,
and Stanford's 2025 AI Index estimates that China accounts for around 70% of
granted AI patents.

Finally, AI is an energy-intensive technology. China's scale in renewables and
leadership in the clean-energy supply chain mean electricity can be materially
cheaper. In some regions, it is reportedly around half US levels, supporting
lower-cost training and, increasingly, inference at scale. Grid-scale storage
is a crucial enabler of that system, and CATL's leadership in energy storage
is an important piece of the puzzle. But transmission matters just as much:
China has built around 8,200 miles of ultra-high-voltage lines, far
outstripping the US at roughly 375 miles.

Our approach to AI exposure remains pragmatic. Rather than attempting to
identify a single 'winner' at the model layer, we focus on companies with
durable distribution, data advantages and clear paths to monetising AI within
existing business models. This underpins our continued conviction in holdings
such as Tencent, Alibaba and ByteDance, alongside selective exposure to
emerging AI specialists such as MiniMax.

AI is a marathon, not a sprint. China's advantage is unlikely to be defined by
a single moment or model, but by its ability to deploy AI broadly, efficiently
and at scale. Based on what we saw through 2025, that diffusion is already
underway - and it has the potential to become an important driver of
productivity and value creation over time.

Importantly, AI is not only a US-China contest. Much of the next wave of
adoption is likely to come from the rest of the world, particularly emerging
markets, where cost, local deployment and language support matter as much as
frontier performance. China's growing ecosystem of open and low-cost models is
increasingly being used internationally, allowing developers and businesses to
build AI capabilities without relying solely on expensive closed-model APIs.
In Africa, for example, Chinese models are gaining traction because they can
be deployed more flexibly on local infrastructure and lower the barriers for
startups and public services. More broadly, we believe AI's benefits should
not be confined to a handful of countries. It should be a general-purpose
technology that can raise productivity and widen opportunities globally.

Geopolitics: still a factor, but changing

Geopolitics remained a meaningful headwind in 2025, and the first half of the
year was volatile. The return of a Trump administration brought an early
tariff shock, including a 10% additional tariff on imports from China from
early February, and the year saw further tariff signalling and escalation
episodes that kept markets on edge. Technology remained the most sensitive
arena: US restrictions on advanced chips and AI-related exports continued to
tighten and evolve, raising costs and uncertainty for parts of the ecosystem
while reinforcing China's push for efficiency and domestic
capability-building.

 Later in the year, the relationship showed signs of tactical de-escalation
rather than reconciliation. High-level engagement between the US and China
helped reduce the risk of immediate escalation, but the underlying strategic
competition in technology and security remains unresolved. As a result, we
continue to assume that geopolitical frictions will be a persistent feature of
the investment backdrop rather than a one-off episode.

A further uncertainty entering 2026 is the Iran-related escalation and the
wider Middle East backdrop, which have increased the risk of disruption along
key energy and shipping routes, such as the Strait of Hormuz. In the near
term, the most direct channel is energy prices and freight/insurance costs,
which can affect global inflation and risk appetite and, by extension,
emerging-market valuations. Over a 5- 10-year horizon, our base case is not to
forecast any single outcome, but to assume that periodic flare-ups remain
possible and that markets will continue to price a geopolitical risk discount.
For the portfolio, most holdings are primarily exposed to domestic Chinese
demand rather than to Middle East trade flows; however, higher, more volatile
energy prices can still influence consumer confidence and input costs. At the
same time, energy insecurity can also reinforce structural tailwinds behind
electrification, efficiency, and energy storage, where China has clear
competitive strengths and where companies such as CATL are positioned as
enablers.

Against this backdrop, some idiosyncratic risks effectively resolved. The
TikTok situation culminated in a completed US transaction, with the agreed
structure involving a US-based entity under non‑Chinese control and
ByteDance retaining only a minority economic interest. With the deal now
confirmed, the previous "ban vs no ban" binary has given way to a more stable
operating framework, materially reducing the likelihood of abrupt disruption
relative to earlier periods.

Meanwhile, DeepSeek became a fresh geopolitical flashpoint by demonstrating
how quickly China's AI capabilities are advancing, intensifying scrutiny in
Washington. Sanctions and entity-list risk remain part of the landscape and
are inherently difficult to predict. We therefore incorporate sanctions
screening and export-control awareness into both pre-investment due diligence
and ongoing monitoring, drawing on a combination of internal analysis and
third-party risk tools. Overall, we continue to distinguish headline risk
from underlying exposure: most portfolio companies derive the majority of
revenues from China and other non‑US markets, where domestic and regional
demand remain the dominant long-term drivers.

Where does that leave us as growth investors in China?

For growth investors, China continues to present a large but highly selective
opportunity set. The country is home to a deep pool of innovative, ambitious
companies, but the discipline required to convert that opportunity into
attractive shareholder returns remains high. The key question is not whether
growth exists in China - it clearly does - but whether the expected return is
sufficient to compensate for the risks, volatility and uncertainty that
accompany investing in this market.

From a valuation perspective, the starting point remains supportive, but it is
important to be precise about the measure being used. On a headline basis,
broad China indices such as the MSCI China were trading in the mid-teens P/E
range around end‑January 2026, which is around to modestly above some
long-run averages depending on the time period chosen and whether one looks at
trailing or forward earnings. By contrast, the relative valuation remains
attractively discounted: at end-January 2026, MSCI China was trading at
roughly a mid-30% P/E discount to MSCI World (c. 16x versus c. 25x).

This matters for growth investors because valuation provides both downside
protection and the potential for meaningful upside when fundamentals improve.
Importantly, today's valuations coincide with a backdrop in which the most
disruptive phase of regulatory tightening appears to be behind us, policy
direction has become clearer, and several industries, particularly technology,
advanced manufacturing, and consumer services, are emerging from
cyclical lows.

However, the opportunity is not broad-based. We believe returns will be driven
by a narrower cohort of companies that can combine durable growth with
improving capital discipline, clear competitive advantages and the ability to
monetise innovation. In areas such as AI, advanced manufacturing, renewable
energy systems and selected consumer platforms, we continue to see businesses
with the potential to compound value over long time horizons.

At the same time, competition within China remains intense, and growth alone
is not sufficient. Execution, cost control and return on invested capital
matter more than ever.

Our experience over recent years has reinforced the importance of valuation
discipline and risk awareness within a growth framework. Periods of strong
performance can quickly give way to sharp corrections, particularly in a
market where sentiment can shift abruptly. Since the enhancements we described
last year, we have continued to work closely with Baillie Gifford's Investment
Risk team to embed a more systematic set of tools into the portfolio process.
These include clearer valuation reference points at purchase, regular
monitoring of portfolio-level valuation dispersion, and alerts to identify
anomalies where share prices move materially ahead of changes in underlying
fundamentals.

The benefits are practical rather than theoretical. During the year we used
these tools to support measured profit-taking in a small number of holdings
after unusually rapid share-price appreciation, and to recycle capital into
opportunities where we felt the prospective return was more attractive. This
discipline is not intended to dampen returns. Instead, it is designed to
improve the quality and durability of those returns through the cycle, while
ensuring that we remain long-term owners of exceptional companies without
becoming complacent about valuation.

At the firm level, Baillie Gifford remains deeply committed to China as a
long-term growth opportunity. We continue to invest in local presence,
research capability and risk oversight, recognising that successful investing
in China requires both long-term conviction and on-the-ground understanding.
Our approach remains unchanged: to identify a concentrated set of exceptional
growth companies, remain patient through volatility, and evolve the portfolio
as opportunities and risks change.

In summary, we believe China remains a compelling market for growth investors
who are willing to be selective, disciplined and long-term in their approach.
With valuations still supportive, innovation accelerating across multiple
sectors, and confidence showing tentative signs of improvement, we believe the
balance of risks and rewards remains attractive for long term investors.

Portfolio positioning and recent activity

We continue to run the Company as a concentrated portfolio of China's most
innovative growth businesses, typically holding 40-80 companies selected from
an investable universe of thousands. The portfolio remains differentiated,
with an active share of 62% and a one-year standard turnover of 19.1%,
consistent with our long-term investment horizon.

At a portfolio level, we aim to keep the Company anchored in structural
growth, particularly the platform economy powered by AI, consumer brands,
advanced manufacturing and the energy transition, while remaining selective in
areas where we see fewer attractive growth opportunities.

Portfolio activity throughout the year was purposeful rather than frequent. We
used market dislocations to refine the portfolio - adding where we saw durable
compounding at attractive prices and exiting where the growth outlook, risk
profile or valuation asymmetry became less compelling.

•         New holdings included a mix of structural growers and
diversifiers: MiniMax (AI), Anta Sports Products, Atour, H World
(consumer/services), Didi (mobility), Wanhua Chemical, China Yangtze Power
(quality infrastructure/clean power), and selected resources exposure
including Tianqi Lithium, Ganfeng Lithium, and Zijin Gold International.

•         We also continued to evolve our approach to private
companies. During the year we added a second private holding, RedNote (Little
Red Book), alongside ByteDance. The Company's investment policy permits
investment in unlisted securities up to 20% of gross asset value at the time
of investment, and our allocation to private companies remains within this
limit. RedNote is a consumer internet franchise at the intersection of social
discovery and commerce: users come for trusted recommendations and content-led
discovery, and merchants come for highly targeted demand generation. Our
investment followed a long period of monitoring and repeated engagement with
management, reflecting the additional diligence required for private
investments, where we focus heavily on governance, incentives, competitive
positioning and the durability of monetisation.

•         Sales/exits included Li Ning, Proya, Ke Holdings, Robam
Appliances, Shanxi Fen Wine, Yonyou, and others where our conviction reduced
or where risk/reward became less favourable.

Beyond outright exits, we also made selective sizing decisions. For example,
we materially trimmed Meituan as competitive intensity in food delivery and
instant retail escalated, and we redeployed capital toward opportunities where
we judged the prospective return to be more attractive.

By the end of the period, the portfolio's top ten investments included
Tencent, ByteDance, Alibaba, Ping An, CATL, Zijin Mining, Kweichow Moutai,
China Merchants Bank, China Construction Bank, and Weichai Power. It is a
combination of platform AI leaders, consumer franchises and energy-transition
enablers. Overall, the pattern of activity reflects our intent to keep the
portfolio focused on a concentrated set of high-conviction growth franchises,
while remaining willing to adjust exposures as fundamentals, valuations and
the opportunity cost of capital evolve.

Performance

The Company delivered strong absolute and relative returns. For the 12 months
to 31 January 2026, the Company generated a NAV total return of 34.0% and a
share price total return of 38.8%, compared with 22.2% for the benchmark.

Returns were supported by a broad-based recovery across growth equities in
China, with particularly strong contributions from several of our
highest-conviction holdings. Platform and AI-related exposure were an
important driver as market confidence improved and investors began to
re-engage with China's leading private-sector champions.

From a sector perspective, relative performance was driven primarily by stock
selection, with +8.3% coming from selection effects versus +1.9% from
allocation (total relative attribution: +10.4%).

In plain terms, allocation reflects where we positioned the portfolio at the
sector level, meaning the impact of being overweight or underweight sectors
relative to the benchmark. Selection reflects what we owned within those
sectors, meaning the impact of choosing individual stocks that performed
better or worse than the benchmark's holdings in the same sector.

The largest positive sector contributions came from:

•         Consumer discretionary (+2.1%) - the biggest driver of
relative returns. Industrials (+2.1%) - again dominated by selection (+2.2%),
with a broadly neutral allocation impact (-0.1%).

•         Financials (+1.6%) - positive despite a large underweight
in the sector (6.2% vs 19.5% index). The contribution came from a combination
of allocation (+0.7%) and selection (+0.8%), suggesting that our more
selective exposure was helpful relative to the broader sector.

•         Communication services (+1.4%) - driven mainly by
allocation (+1.3%), consistent with our structural overweight to platform
leaders.

•         Materials (+1.1%) and information technology (+0.9%) -
both mainly selection-led, reflecting strong stock-specific outcomes.

Other notable items:

•         A small additional tailwind came from capital structure.
The Company's modest net gearing added to returns in a rising market, while
our low allocation to cash and deposits was a slight drag on relative
performance. Taken together, these effects were minor but directionally
consistent with the benefit of being more fully invested during a strong year
for equities.

•         Most other sectors were close to neutral, with only
consumer staples (-0.1%) slightly negative.

Overall, the pattern is encouraging. The performance was not reliant on a
single sector call, and the majority of outperformance came from choosing the
right businesses within sectors rather than simply being in the 'right' parts
of the market.

Stock-specific contributors to relative performance were varied. Over the
year, the largest positive contributors were:

ByteDance (+1.70% relative contribution; average weight ~10.3%)

ByteDance was the single largest contributor to relative performance and
remains the Company's most significant unlisted holding. It represented 10.4%
of total assets at 31 January 2026, reflecting both business progress and
valuation uplifts.

Over the year, the investment case was supported by continued strong execution
in advertising and content monetisation, rapidly scaling AI activity, and the
successful completion of the TikTok US transaction. The agreed structure -
with TikTok's US operations housed in a US-based entity under non-Chinese
control and ByteDance retaining only a minority economic interest - has
reduced regulatory tail risk and provided greater clarity over TikTok's
long-term operating environment in its largest market.

In valuation terms, the Company's interim report noted that ByteDance's
valuation was revised upwards by about 30% in response to double-digit revenue
and cash flow growth, a higher valuation backdrop for its listed peer group,
and reduced uncertainty around TikTok's US outlook. Given the deal has now
completed, the valuation remains attractive even on a standalone basis,
assuming no value for the US business.

This is also a good point to reiterate how we value private holdings: the
process is overseen by Baillie Gifford's valuations committee, with
independent input from S&P Global, and is monitored for "trigger events",
such as material corporate or regulatory developments, that warrant updates
between regular cycles.

US-related uncertainty (TikTok) remained a key swing factor for sentiment, but
the risk profile became less binary as deadlines were repeatedly extended and
negotiations continued, allowing investors to place a less punitive value on
the US option than in earlier periods. We do not assume a definitive
resolution is "done" until agreements are finalised and implemented, but we
also note that our conviction in ByteDance does not depend on the US business:
as stated previously, we continue to view the growth opportunity and current
valuation as attractive even excluding the US operations.

Finally, on position size: the Company's investment policy limits any
individual holding to the lower of 20% or the benchmark weight plus 7.5%,
measured at the time of investment. Within those parameters, we remain
comfortable with ByteDance as a large holding given its scale, cash generation
and reinvestment capacity, and we continue to monitor it closely through our
private valuation framework and ongoing fundamental engagement.

Zijin Mining (H-shares) (+1.62% relative contribution; active weight ~+1.94%)

Zijin Mining was a significant contributor over the year. The shares benefited
from a constructive backdrop for metals, particularly gold and copper,
alongside continued operational delivery and progress on asset development.
Our overweight position versus the index was the main driver of the relative
contribution. In addition, investor sentiment was supported by corporate
actions during the period, including the planned separation and listing of
Zijin Gold International (also a portfolio holding), which helped to
crystallise value and increase focus on the group's fast-growing gold
business.

Pop Mart (+1.46% relative contribution; active weight ~+2.28%)

Pop Mart's contribution reflected both strong underlying momentum and a
continuing internationalisation story. Demand for its IP - especially its
character Labubu - helped drive rapid overseas growth, reinforcing the thesis
that this is not simply a domestic toy company, but an IP-led consumer
platform with growing global resonance.

Zhongji Innolight (+1.30% relative contribution; active weight ~+0.76%)

Zhongji Innolight was also a meaningful positive contributor. The shares
delivered an exceptional return over the year (+437%), and our overweight
position versus the benchmark translated this into a sizeable relative
contribution (+1.3%). Innolight is a leader in high-speed optical transceivers
- critical components in AI training clusters and data centre networks. It has
benefited from sustained growth in global AI-related capex and demand for
higher-bandwidth connectivity. Following such a rapid share price move, we
trimmed the position to realise some gains and reallocated capital to other
opportunities with more attractive prospective returns.

The three largest detractors were:

Meituan (-0.57% relative contribution; active weight ~+0.90%)

Meituan was the largest detractor as competition in local services
intensified, weighing on near-term margin expectations and investor sentiment.
While we remain positive on Meituan's long-term position in local commerce and
fulfilment, 2025 reminded us that competitive cycles in China can be sharp,
and markets often discount near-term pressure quickly. We did reduce our
position meaningfully in the middle of the year to take some profit from its
strong performance last year.

DPC Dash (-0.46% relative contribution; average weight +0.43%)

DPC Dash detracted as the market focused on the costs of expansion and the
path to sustainable profitability. Despite progress in execution and brand
momentum, investor concerns around operating leverage and the pace of store
rollout weighed on the shares during the period.

Sunny Optical Technology (-0.41% relative contribution; active weight ~+1.18%)

Sunny Optical Technology was affected amid a weaker demand environment for
parts of consumer electronics and ongoing pricing pressure across components.
While longer-term opportunities in automotive optics and higher-value modules
remain attractive, the year highlighted how cyclical end markets can still
dominate short-term performance.

Outlook for 2026

As we look ahead to 2026, our outlook for China is shaped less by any single
macro forecast and more by the direction of travel that became clearer through
2025. China's transition toward a growth model led by innovation, productivity
and consumption remains uneven, but it is progressing. It is increasingly
showing up in company‑level outcomes.

Policy is likely to remain supportive but pragmatic. We do not expect a sudden
credit-fuelled rebound or a return to the excesses of past cycles. Instead,
the focus should remain on stabilising confidence, particularly in housing,
while directing resources toward strategic priorities such as advanced
manufacturing, AI, clean energy, automation and healthcare innovation.
Incremental progress is the more likely path, but incremental change can still
be powerful in an economy of China's scale.

Domestic demand remains the key swing factor. The lessons of 2025 reinforced
that confidence, rather than capacity, is the binding constraint. With
household balance sheets strong and savings substantial, even modest
improvements in sentiment could translate into meaningful momentum.
A stabilising property market, clearer policy messaging and improving
labour-market dynamics would support this process. The timing is uncertain,
but the asymmetry is notable: small shifts in behaviour can have outsized
effects.

Innovation will remain central to China's growth trajectory in 2026. What
changed in 2025 is that innovation is increasingly visible in deployment. AI
is moving from experimentation to application across platforms, enterprises
and physical systems. As AI diffusion accelerates, factors such as scale,
integration with manufacturing and access to low‑cost clean energy are
likely to matter as much as headline breakthroughs. Over time, we believe this
can support productivity gains and new profit pools across multiple sectors.

Geopolitical uncertainty will continue to influence sentiment and valuations.
However, recent experience suggests these risks are persistent rather than
paralysing. Trade patterns are diversifying, companies are adapting their
structures, and China's domestic market remains large enough to support
long-term growth for many businesses. This reinforces the importance of
distinguishing between headline risk and underlying economic exposure.

Valuations remain an important part of the opportunity. Despite two
consecutive years of strong performance, Chinese equities continue to trade at
a meaningful discount to global markets. While the US market (60% of global
indices) continues to trade at elevated levels, Chinese equities offer a
compelling absolute value proposition. Currently, major Chinese indices are
trading at P/E levels of approximately 16x, well within their historical range
of 10x to 25x.

Beyond these low entry points, BG's conviction rests on the
'growth-inflection' potential within our portfolio. Using our investment risk
matrix, we identify 'outlier' companies in sectors like AI, automation, and
core technology that possess the fundamental characteristics to double in
value over a five-year horizon. We believe the market is currently
underestimating the compounding power of these domestic champions, providing a
margin of safety on an absolute basis while offering significant upside from
structural growth.

If policy execution continues to improve and confidence stabilises, there is
scope for valuation normalisation alongside earnings growth, particularly for
high-quality growth companies with durable competitive advantages.

For the Company, our focus in 2026 remains unchanged. We aim to own a
concentrated portfolio of exceptional Chinese growth companies, remain
disciplined on valuation and risk, and look beyond near-term volatility. The
past year reinforced that patience, selectivity and long-term conviction
matter in China. While challenges remain, the lessons of 2025 leave us
cautiously optimistic that the balance of risks and rewards continues to
improve for long‑term growth investors.

 

Linda Lin

Sophie Earnshaw

Baillie Gifford & Co

31 March 2026

 

Review of investments
A review of the Company's ten largest investments as at 31 January 2026.
Tencent

Tencent is a leading social media and entertainment platform. It has a
dominant position in online gaming and an ecosystem in WeChat that we believe
is one of the strongest in China. Monetisation of WeChat's over one billion
monthly active users represents one growth driver for the company. Further
growth opportunities are provided by Tencent's strong positions in cloud
infrastructure and consumer and SME lending, along with its portfolio of
investee companies which span online music streaming, ecommerce, and short
form video. Pony Ma, the founder and Chairman of the company, is indelibly
focused on the long term and has executed exceptionally well in one of China's
fastest moving industries.

ByteDance

ByteDance is a social media and short form video company and it represents
the Company's first private investment. It was founded in 2012 by Yiming
Zhang and the company has grown to rank amongst the world's largest companies
of its kind. Its short form video app, Douyin, is a market leader in China,
and TikTok, its global equivalent, is dominating the format globally.
ByteDance benefits from a technological edge in machine learning which it uses
to bring out new applications tailored to different media forms and different
demographics. The company's ability to innovate in this space is exceptional
and we believe one of the key drivers of its likely future success. We believe
ByteDance has the potential to be a generation defining media company.

Alibaba

Alibaba is a leading online retailer. Its ecommerce business is returning to
growth after a period of intensified competition and share loss. Steadily
increasing online penetration in segments such as grocery and Fast Moving
Consumer Goods remains a long term driver for the business, whilst the
company's efforts to integrate live streaming and social media into the
platform aim to revitalise the platform following stiff competition for
customers' and merchants' attention from competitors. In addition, Alibaba
retains a strong position in infrastructure as a service, or the cloud, where
it has a similar business to Amazon Web Services. The company has taken the
decision to focus on profitable growth as opposed to growth at any cost.
Alibaba's partnership structure and its capable and experienced management
team are well-aligned with shareholders.

Ping An Insurance

Ping An Insurance is one of China's leading financial services groups. It is
China's second largest life insurer, a market with growth potential driven by
China's emerging middle class and rising disposable income. It also has a
leading position in property and casualty insurance where it has consistently
delivered strong returns. In addition, it has consistently invested in
artificial intelligence and machine learning in order to increase the
efficiency and long-term viability of its core business. Again, this is a
company with a long-term, growth mind-set that we believe will deliver
substantial returns to shareholders.

CATL

CATL is a Chinese manufacturer of lithium-ion battery cells with dominant
market share both in cathode chemistries (LFP) and form factors (prismatic)
batteries which are poised to grow through electric vehicle (EV) uptake and
energy storage. The company is a national champion in China, which is the
world's largest EV and electricity generation market, and it is well aligned
with the state's decarbonisation objectives and emphasis on Chinese
self-sufficiency in the hard sciences and technology. Beyond its home market,
CATL's future growth could be further fuelled by its operations in Europe
where it already has a manufacturing presence and its presence in other
emerging markets. We like the magnitude and duration of the growth opportunity
combined with CATL's market leadership, which we believe can prove defensible
thanks to the company's partnerships with a wide variety of automakers who are
making the shift to electric vehicles and relying on CATL's cell-to-pack
battery technology to do so.

Zijin Mining Group

Zijin is a Chinese mining company that has been active in overseas
acquisitions in recent years and is now present in 12 countries with exposure
to an exciting portfolio of growth assets. The historic focus has been on gold
but is now shifting to copper, where production is forecast to double over the
next few years helped in particular by the company's exposure to the
world-class, low-cost Kamoa-Kakula project in the DRC. Copper demand is likely
to remain elevated amid the transition to net-zero, and given the potential
supply constraints involved in meeting such demand, we feel that Zijin has an
important role to play as an enabler of green infrastructure. We do not think
the upside to the commodity price, nor Zijin's growth potential, is being
adequately factored in by the market, and we also think that the company
suffers from an unfair ESG discount given the improvement that we have
observed in transparency and reporting.

Kweichow Moutai

Kweichow Moutai is one of the most important and iconic Chinese brands. It
manufactures premium baijiu (white alcohol) which has a heritage and respect
embedded within Chinese culture. Its unique brewing conditions and process
provide a core competitive advantage. When combined with supply scarcity and
limited competition in the very high-end market, Moutai is able to price at a
premium and maintain a loyal customer base. It is an extremely profitable
business. We believe in the strength and heritage of the brand, the
sustainability of revenue growth, and the longevity of its core competitive
advantage.

China Merchants Bank

China Merchants Bank is a leading consumer bank in China with a lengthy track
record and solid market share. It has outcompeted its state-owned rivals via
a relentless focus on the consumer. As such, it has built up an enviable
position in consumer lending and in wealth management, both segments with
strong growth potential. In terms of lending quality, this has been strong
through the cycle and we believe this is a bank that will continue to offer
attractive returns to shareholders.

China Construction Bank Corporation

We bought CCB because we think China's banking sector is closer to a
profitability trough than the market implies. Over the past decade, shadow
banking has been curtailed and legacy losses absorbed. Profitability has
compressed as margins have fallen, fees have been cut, and the sector has been
forced to absorb a certain degree of directed lending. However, recent steps
such as recapitalisations and deposit-rate cuts suggest that the burden is
starting to ease, while valuations remain very low (around 0.5x price to
book). In that context, we believe banks like CCB with strong retail
franchises benefit from the best risk-adjusted books; CCB stands out for its
scale in wealth/custody, deep urban footprint, prime mortgage exposure, strong
cost discipline and relatively sticky low-cost deposits. These factors give it
a better chance to defend margins and stabilise returns. Even assuming no
rerating, a c. 5% dividend yield plus modest earnings resilience offers a
credible path to double-digit total returns.

Weichai Power

Weichai Power is a state-owned enterprise with 35-40% market share in diesel
engines. Its products have been widely adopted for truck makers, buses,
construction machinery and industrial equipment. Heavy duty truck engines
represent roughly two thirds of revenues and profits. Weichai is expected to
benefit from continued development in China's industrial and infrastructure
sectors. In addition to the core engine business, Weichai also makes heavy
duty trucks through its fully-owned subsidiary, Shaanqi, and has a presence in
global warehouse logistics and automation via a majority stake in German
forklift maker Kion. Future growth is likely to come from diversification into
new products and markets both via expanding engine types and entering new
markets.

List of investments
at 31 January 2026
                                                                                                                     Value      % of total

 Name                                   Business                                                                     £'000      assets *
 Tencent                                Social media and entertainment company                                        24,628    12.0
 ByteDance(U)                           Social media and entertainment company                                        21,349    10.4
 Alibaba Group                          Online retailer, payments and cloud business                                  16,939    8.2
 Ping An Insurance                      Life and health insurance                                                     8,376     4.1
 CATL                                   Electric vehicle battery maker                                                6,537     3.2
 Zijin Mining Group                     Renewable energy enabler                                                      6,514     3.2
 Kweichow Moutai                        Luxury baijiu maker                                                           5,426     2.6
 China Merchants Bank                   Consumer lending and wealth management                                        4,870     2.4
 China Construction Bank Corporation    Commercial bank                                                               4,818     2.3
 Weichai Power                          Construction machinery and heavy duty trucks                                  4,737     2.3
 PDD Holdings                           Online retailer                                                               4,448     2.2
 Pop Mart                               Toy and collectibles maker                                                    4,128     2.0
 NetEase                                Gaming and entertainment business                                             3,765     1.8
 Midea Group                            White goods and robotics manufacturer                                         3,649     1.8
 RedNote(U)                             Lifestyle content and commerce platform                                       3,643     1.8
 Zhongji Innolight                      Optical transceiver and component maker for AI chips                          3,369     1.6
 Zijin Gold International               Gold miner                                                                    3,141     1.5
 BeOne Medicines                        Immunotherapy biotechnology company                                           3,079     1.5
 H World Group                          Hotel operator                                                                2,828     1.4
 BYD                                    Hybrid and EV automobiles                                                     2,731     1.3
 Meituan                                Online food delivery company                                                  2,719     1.3
 Jiangsu Azure                          Small form batteries                                                          2,550     1.2
 China Oilfield Services                Oilfield service provider                                                     2,433     1.2
 Naura Technology GP                    Integrated micro-electronics company                                          2,430     1.2
 Sungrow Power Supply                   Component supplier to renewables industry                                     2,327     1.1
 Wanhua Chemical Group                  Chemicals and advanced materials producer                                     2,304     1.1
 Shenzhen Inovance Technology           Factory automation company                                                    2,257     1.1
 ENN Energy                             Gas distributor and provider                                                  2,240     1.1
 Shandong Sinocera Functional Material  Advanced materials manufacturer                                               2,233     1.1
 Centre Testing International           Testing and inspection company                                                2,233     1.1
 Fuyao Glass Industry Group             Automotive glass manufacturer                                                 2,202     1.1
 Luxshare Precision Industry Co         Electronic components manufacturer                                            2,186     1.1
 China Yangtze Power                    Power generation operator                                                     2,163     1.1
 Haidilao International                 Hot pot restaurant brand                                                      2,155     1.0
 ANTA Sports Products                   Sportswear designer and manufacturer                                          2,021     1.0
 Atour Lifestyle Holdings Limited       Hotel operator                                                                2,010     1.0
 Sunny Optical Technology               Electronic components for smartphones and autos                               1,931     0.9
 Advanced Micro-Fabrication             Etch and deposition semiconductor equipment manufacturer                      1,874     0.9
 Shenzhou International                 Garment manufacturer                                                          1,794     0.9
 Luckin Coffee(†)                       Coffee retailer                                                               1,755     0.9
 Horizon Robotics                       AI chips used in autonomous driving and advanced driving assistance systems   1,738     0.8
 Tianqi Lithium                         Lithium product developer and manufacturer                                    1,597     0.8
 MiniMax                                Artificial intelligence company                                               1,546     0.8
 DiDi Global                            Passenger transportation platform operator                                    1,536     0.7
 Anker Innovations                      Consumer electronics                                                          1,368     0.7
 Zhejiang Sanhua Intelligent Controls   Heating and cooling component manufacturer                                    1,340     0.7
 Inner Mongolia Xingye Mining           Non-ferrous metals miner                                                      1,267     0.6
 Yifeng Pharmacy Chain                  Drug retailer                                                                 1,159     0.6
 SG Micro Corp                          Semiconductor designer                                                        1,146     0.6
 Kingsoft                               Software for SMEs and corporates                                              1,127     0.5
 Kingdee International Software         Software for SMEs and corporates                                              1,104     0.5
 Minth                                  Automotive parts manufacturer                                                 1,098     0.5
 Estun Automation                       Robotics and factory automation company                                       1,076     0.5
 DPC Dash                               Franchise fast food restaurant operator                                       1,035     0.5
 Ganfeng Lithium Group                  Lithium producer and processor                                                977       0.5
 Innovent Biologics                     Biopharmaceutical company                                                     836       0.4
 Silergy                                Semiconductors & semiconductor equipment                                      791       0.4
 Dongguan Yiheda Automation Co          Automation components                                                         593       0.3
 New Horizon Health(#)                  Early cancer detection                                                        -         0.0
 Total investments                                                                                                    204,126    99.4
 Net liquid assets(‡)                                                                                                 1,214      0.6
 Total assets*                                                                                                        205,340    100.0
 Borrowings                                                                                                          (7,745)    (3.8)
 Shareholders' funds                                                                                                  197,595    96.2

*   Total assets before deduction of loans.

(U)    Denotes unlisted investment (private company).

†   Includes investments in American Depositary Receipt (ADR).

#   Suspended.

‡   For a definition of terms used, see Glossary of terms and alternative
performance measures at the end of this announcement.

 

                  Listed     Suspended  Unlisted     Net liquid  Total

                  equities   equities   securities   assets      assets

                  %          %          %            %           %
 31 January 2026  87.2       -          12.2         0.6         100.0
 31 January 2025  90.5       0.1        9.1          0.3         100.0

Figures represent percentage of total assets.

Baillie Gifford - statement on stewardship

Baillie Gifford's overarching ethos is that we are 'Actual' investors. That
means we seek to invest for the long term. Our role as an engaged owner is
core to our mission to be effective stewards for our clients. As an active
manager, we invest in companies at different stages of their evolution across
many industries and geographies, and focus on their unique circumstances and
opportunities. Our approach favours a small number of simple principles
rather than overly prescriptive policies. This helps shape our interactions
with holdings and ensures our investment teams have the freedom and retain
the responsibility to act in clients' best interests.

Long-term value creation

We believe that companies that are run for the long term are more likely to be
better investments over our clients' time horizons. We encourage our holdings
to be ambitious, focusing on long-term value creation and capital deployment
for growth. We know events will not always run according to plan. In these
instances we expect management to act deliberately and to provide appropriate
transparency. We think helping management to resist short-term demands from
shareholders often protects returns. We regard it as our responsibility to
encourage holdings away from destructive financial engineering towards
activities that create genuine value over the long run. Our value will often
be in supporting management when others don't.

Alignment in vision and practice

Alignment is at the heart of our stewardship approach. We seek the fair and
equitable treatment of all shareholders alongside the interests of management.
While assessing alignment with management often comes down to intangible
factors and an understanding built over time, we look for clear evidence of
alignment in everything from capital allocation decisions in moments of stress
to the details of executive remuneration plans and committed share ownership.
We expect companies to deepen alignment with us, rather than weaken it, where
the opportunity presents itself.

Governance fit for purpose

Corporate governance is a combination of structures and behaviours; a careful
balance between systems, processes and people. Good governance is the
essential foundation for long-term company success. We firmly believe that
there is no single governance model that delivers the best long-term outcomes.
We therefore strive to push back against one-dimensional global governance
principles in favour of a deep understanding of each company we invest in. We
look, very simply, for structures, people and processes which we think can
maximise the likelihood of long-term success. We expect to trust the boards
and management teams of the companies we select, but demand accountability
if that trust is broken.

Sustainable business practices

A company's ability to grow and generate value for our clients relies on a
network of interdependencies between the company and the economy, society and
environment in which it operates. We expect holdings to consider how their
actions impact and rely on these relationships. We believe long-term success
depends on maintaining a social licence to operate and look for holdings to
work within the spirit and not just the letter of the laws and regulations
that govern them. Material factors should be addressed at the board level as
appropriate.

Income statement
For the year ended 31 January
                                               Notes   2026     2026      2026      2025     2025      2025

                                                      Revenue   Capital   Total    Revenue   Capital   Total

                                                      £'000     £'000     £'000    £'000     £'000     £'000
 Gains/(losses) on investments                 9      -         49,431    49,431   -         40,068    40,068
 Currency (losses)/gains                       13     -         645       645      -         (1)        (1)
 Income                                        2      3,039     -         3,039    2,718     -         2,718
 Investment management fee                     3      (309)     (926)     (1,235)  (246)     (737)     (983)
 Other administrative expenses                 4      (671)     -         (671)    (584)     -          (584)
 Net return before finance costs and taxation         2,059     49,150    51,209    1,888     39,330    41,218
 Finance costs of borrowings                   5      (113)     (339)     (452)    (149)     (448)     (597)
 Net return before taxation                           1,946     48,811    50,757   1,739      38,882    40,621
 Tax                                           6      (212)     -         (212)     (210)    -          (210)
 Net return after taxation                            1,734     48,811    50,545   1,529      38,882   40,411
 Net return per ordinary share                 7      2.98p     83.83p    86.81p    2.53p    64.39p    66.92p

 

The total column of this statement is the profit and loss account of the
Company. The supplementary revenue and capital return columns are prepared
under guidance published by the Association of Investment Companies.

All revenue and capital items in this statement derive from continuing
operations.

A Statement of Comprehensive Income is not required as all gains and losses of
the Company have been reflected in the above statement.

The accompanying notes are an integral part of the Financial Statements.

Balance sheet
                                                               As at 31 January      As at 31 January
                                                        Notes  2026       2026       2025       2025

                                                               £'000      £'000      £'000      £'000
 Fixed assets
 Investments held at fair value through profit or loss  9                 204,126               158,682
 Current assets
 Debtors                                                10     156                   40
 Cash and cash equivalents                              15     1,668                 975
                                                               1,824                  1,015
 Creditors
 Amounts falling due within one year                    11     (8,355)               (6,598)
 Net current liabilities                                                  (6,531)               (5,583)
 Total assets less current liabilities                                    197,595                153,099
 Capital and reserves
 Share capital                                          12                17,087                17,087
 Share premium account                                  13                -                     31,780
 Distributable capital reserve                          13                31,780                -
 Capital redemption reserve                             13                41,085                41,085
 Capital reserve                                        13                100,206               56,154
 Revenue reserve                                        13                7,437                  6,993
 Shareholders' funds                                                      197,595                153,099
 Net asset value per ordinary share*                    14                 344.44p              259.07p

 

The Financial Statements of Baillie Gifford China Growth Trust plc (Company
registration number 91798) were approved and authorised for issue by the Board
and were signed on 31 March 2026.

*   See Glossary of terms and alternative performance measures at the end of
this announcement.

Statement of changes in equity
For the year ended 31 January 2026
                                            Notes  Share     Share     Distributable  Capital      Capital   Revenue   Shareholders'

                                                   capital   premium   capital        redemption   reserve   reserve   funds

                                                   £'000     account   reserve        reserve      £'000     £'000     £'000

                                                             £'000     £'000          £'000
 Shareholders' funds at 1 February 2025             17,087   31,780    -              41,085       56,154    6,993     153,099
 Dividends paid during the year             8      -         -         -              -            -         (1,290)   (1,290)
 Net return after taxation                  7      -         -         -              -            48,811    1,734     50,545
 Ordinary shares bought back into treasury         -         -         -              -            (4,759)   -         (4,759)
 Cancellation of share premium account             -         (31,780)  31,780         -            -         -         -
 Shareholders' funds at 31 January 2026            17,087    -         31,780         41,085       100,206   7,437     197,595

For the year ended 31 January 2025
                                            Notes  Share     Share     Capital      Capital    Revenue   Shareholders'

                                                   capital   premium   redemption   reserve    reserve   funds

                                                   £'000     account   reserve      £'000      £'000     £'000

                                                             £'000     £'000
 Shareholders' funds at 1 February 2024            17,087    31,780     41,085      22,775     6,684     119,411
 Dividends paid during the year             8      -         -         -            -          (1,220)    (1,220)
 Net return after taxation                  7      -         -         -             38,882    1,529     40,411
 Ordinary shares bought back into treasury         -         -         -             (5,503)   -         (5,503)
 Shareholders' funds at 31 January 2025             17,087    31,780   41,085       56,154     6,993     153,099

 

Cash flow statement
For the year ended 31 January
                                                      Notes  2026      2026     2025        2025

                                                             £'000     £'000    £'000       £'000
 Cash flows from operating activities
 Net return before taxation                                  50,757             40,621
 Adjustments to reconcile company profit before tax to net cash flow from
 operating activities
 Net (gains)/losses on investments                    9      (49,431)            (40,068)
 Currency losses/(gains)                                     (645)               1
 Finance costs of borrowings                          5      452                597
 Other capital movements
 Changes in debtors                                          (116)               (16)
 Change in creditors                                          88                 40
 Taxation
 Overseas withholding tax suffered                    6      (212)              (212)
 Overseas withholding tax reclaims received                   -                  2
 Cash from operations*                                                 893                  965
 Interest paid                                                         (433)                 (534)
 Net cash inflow from operating activities                              460                  431
 Cash flows from investing activities
 Acquisitions of investments                          9      (42,356)           (31,284)
 Disposals of investments                             9      46,343             37,421
 Net cash inflow/(outflow) from investing activities                   3,987                 6,137
 Cash flows from financing activities
 Equity dividends                                     8      (1,290)            (1,220)
 Bank loans repaid                                           -                  (5,906)
 Bank loans drawn down                                       2,451              5,970
 Shares bought back                                   13     (4,759)             (5,503)
 Net cash outflow from financing activities                            (3,598)               (6,659)
 Increase/(decrease) in cash and cash equivalents                       849                 (91)
 Exchange movements                                                     (156)                140
 Cash and cash equivalents at start of year           15               975                  926
 Cash and cash equivalents at end of year             15                1,668               975

 

*   Cash from operations includes dividends received of £3,017,000 (2025 -
£2,697,000) and interest received of £22,000 (2025 - £21,000).

Notes to the Financial Statements
1.       Principal accounting policies

          The Financial Statements for the year to 31 January 2026
have been prepared in accordance with FRS 102 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland' on the basis of the
accounting policies set out below which are consistent with those applied for
the year ended 31 January 2025.

2.       Income
                            2026     2025

                            £'000    £'000
   Income from investments
   Overseas dividends       3,017    2,697
   Other income
   Interest                 22       21
   Total income             3,039     2,718

3.       Investment management fee

          Baillie Gifford & Co Limited, a wholly owned
subsidiary of Baillie Gifford & Co, was appointed as the Company's
Alternative Investment Fund Managers ('AIFM') and Company Secretaries on 16
September 2020. Baillie Gifford & Co Limited has delegated portfolio
management services to Baillie Gifford & Co. Dealing activity and
transaction reporting has been further sub-delegated to Baillie Gifford
Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited.

          The Investment Management Agreement between the AIFM and
the Company sets out the matters over which the Managers have authority in
accordance with the policies and directions of, and subject to restrictions
imposed by, the Board. The Investment Management Agreement is terminable on
not less than three months' notice or on shorter notice in certain
circumstances. Compensation would only be payable if termination occurred
prior to the expiry of the notice period. The annual management fee is (i)
0.75% of the first £50 million of net asset value; plus (ii) 0.65% of net
asset value between £50 million and £250 million; plus (iii) 0.55% of net
asset value in excess of £250 million, calculated and payable quarterly.

4.       Net return per ordinary share
                                  2026      2026      2026    2025      2025      2025

                                  Revenue   Capital   Total   Revenue   Capital   Total
   Net return per ordinary share  2.98p     83.83p    86.81p  2.53p     64.39p    66.92p

          Revenue return per ordinary share is based on the net
revenue return on ordinary activities after taxation of £1,734,000 (2025 -
£1,529,000), and on 58,224,680 (2025 - 60,389,282) ordinary shares, being the
weighted average number of ordinary shares in issue during each year.

          Capital return per ordinary share is based on the net
capital gain for the financial year of £48,811,000 (2025 - gain of
£38,882,000) and on 58,224,680 (2025 - 60,389,282) ordinary shares, being the
weighted average number of ordinary shares in issue during each year.

          There are no dilutive or potentially dilutive shares in
issue.

5.       Ordinary dividends
                                                       2026   2025   2026     2025

                                                                     £'000    £'000
   Amounts recognised as distributions in the period:
   Previous year's final dividend (paid 25 July 2025)  2.20p  2.00p  1,290    1,220

          Also set out below are the total dividends paid and
proposed in respect of the financial year, which is the basis on which the
requirements of section 1158 of the Corporation Tax Act 2010 are considered.
The revenue available for distribution by way of dividends for the year is
£1,734,000 (2025 - £1,529,000).

                                               2026   2025   2026     2025

                                                             £'000    £'000
   Dividends paid and proposed in the period:
   Proposed final dividend per ordinary share  2.50p  2.20p  1,385    1,296

(payable 22 July 2026)

 

6.       Fixed Assets Investments

          Investments in securities are financial assets held at fair
value through profit or loss on initial recognition. In accordance with FRS
102 the tables above provide an analysis of these investments based on the
fair value hierarchy described below which reflects the reliability and
significance of the information used to measure their fair value.

          Fair value hierarchy

          The levels are determined by the lowest (that is the least
reliable or least independently observable) level of input that is significant
to the fair value measurement for the individual investment in its entirety as
follows:

Level 1 - using unadjusted quoted prices for identical instruments in an
active market;

Level 2 - using inputs, other than quoted prices included within Level 1, that
are directly or indirectly observable (based on market data); and

Level 3 - using inputs that are unobservable (for which market data is
unavailable).

          The valuation techniques used by the Company are explained
in the accounting policies on page 98 of the Annual Report and Financial
Statements. The Company's unlisted ordinary share investments at 31 January
2026 were valued using the market approach using the price of recent
transaction. A sensitivity analysis of the unlisted securities is on page 110
of the Annual Report and Financial Statements.

   As at 31 January 2026              Level 1  Level 2  Level 3   Total

                                      £'000    £'000    £'000     £'000
   Securities
   Listed equities                    179,134  -        -         179,134
   Suspended equities*                -        -        -         -
   Unlisted equities                  -        -         24,992    24,992
   Total financial asset investments  179,134  -        24,992    204,126

 

     As at 31 January 2025              Level 1    Level 2  Level 3  Total

                                        £'000      £'000    £'000    £'000
     Securities
     Listed equities                    144,059    -        -        144,059
     Suspended equities*                -          -        194      194
     Unlisted equities                  -          -        14,429    14,429
     Total financial asset investments   144,059   -        14,623   158,682

*   New Horizon Health was a Listed equity from 1 February 2024 until
suspension on 28 March 2024.

7.       In the year to 31 January 2026 no shares were issued from
treasury (2025 - no shares were issued from treasury). The Company's
shareholder authority permits it to hold shares bought back in treasury. Under
such authority, treasury shares may be subsequently either sold for cash (at a
premium to net asset value per ordinary share) or cancelled. At 31 January
2026 the Company had authority to buy back 7,572,490 ordinary shares. During
the year to 31 January 2026, no ordinary shares (2025 - nil) were bought back
for cancellation and 1,728,219 ordinary shares (2025 - 2,756,602) were bought
back into treasury. Under the provisions of the Company's Articles of
Association share buy-backs are funded from the capital reserve.

8.       Cash and cash equivalents table
                                1 February  Cash flows  Exchange   31 January

                                2025        £'000       movement   2026

                                £'000                   £'000      £'000
     Cash and cash equivalents  975         849         (156)      1,668
     Loans due within one year  (6,094)     (2,452)     801        (7,745)
                                (5,119)     (1,603)     645        (6,077)

9.       The Annual Report and Financial Statements will be available on
the Company's website bailliegiffordchinagrowthtrust
(http://www.shinnippon.co.uk/) † on or around 9 April 2026.

10.     The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 January 2023 or 2022 but
is derived from those accounts. Statutory accounts for 2025 have been
delivered to the Registrar of Companies, and those for 2026 will be delivered
in due course. The auditor has reported on those accounts; their reports were
(i) unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.

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

Glossary of terms and alternative performance measures ('APM')

An alternative performance measure ('APM') is a financial measure of
historical or future financial performance, financial position, or cash flows,
other than a financial measure defined or specified in the applicable
financial reporting framework. The APMs noted below are commonly used measures
within the investment trust industry and serve to improve comparability
between investment trusts.

The APMs are presented in Pounds Sterling rounded to the nearest thousand,
except where otherwise indicated.

Total adjusted assets

This is the Company's definition of adjusted total assets, being the total
value of all assets less current liabilities, before deduction of all
borrowings.

Net asset value

Net asset value is the value of total assets less liabilities (including
borrowings). The net asset value per share ('NAV') is calculated by dividing
this amount by the number of ordinary shares in issue (excluding treasury
shares).

Net liquid assets

Net liquid assets comprisse current assets less current liabilities, excluding
borrowings.

Discount/premium (APM)

As stockmarkets and share prices vary, an investment trust's share price is
rarely the same as its NAV. When the share price is lower than the NAV it is
said to be trading at a discount. The size of the discount is calculated by
subtracting the NAV per share from the share price and is usually expressed as
a percentage of the NAV. If the share price is higher than the NAV, it is said
to be trading at a premium.

                                          2026     2025
 Closing NAV          (a)                 344.44p   259.07p
 Closing share price  (b)                 319.00p  232.00p
 Discount             ((b) - (a)) ÷ (a)   (7.4%)   (10.4%)

Total return (APM)

The total return is the return to shareholders after reinvesting the net
dividend on the date that the share price goes ex-dividend.

                                                              2026      2026          2025      2025

                                                              NAV       Share price   NAV       Share price
 Closing NAV per share/share price           (a)              344.44p   319.00p       259.07p   232.00p
 Dividend adjustment factor*                 (b)              1.008036  1.009167      1.008783  1.009852
 Adjusted closing NAV per share/share price  (c) = (a) x (b)  347.21p   321.92p       261.35p   234.29p
 Opening NAV per share/share price           (d)              259.07p   232.00p       193.06p   181.00p
 Total return                                (c) ÷ (d) -1     34.0%     38.8%         35.4%     29.4%

*   The dividend adjustment factor is calculated on the assumption that the
dividend of 2.20p (2025 - 2.00p) paid by the Company during the year was
reinvested into shares of the Company at the cum income NAV/share price, as
appropriate, at the ex-dividend date.

Ongoing charges (APM)

The total expenses (excluding borrowing costs) incurred by the Company as a
percentage of the average net asset value. The ongoing charges have been
calculated on the basis prescribed by the Association of Investment Companies.

A reconciliation from the expenses detailed in the Income statement is
provided below.

                                                                                     2026           2025
 Investment management fee                                                           £1,235,000     £983,000
 Other administrative expenses                                                       £671,000       £584,000
 Total expenses                            (a)                                       £1,906,000     £1,567,000
 Average daily cum-income net asset value  (b)                                       £179,418,000   £139,358,000
 Ongoing charges                            ((a) ÷ (b) expressed as a percentage)    1.06%          1.12%

Gearing (APM)

At its simplest, gearing is borrowing. Just like any other public company, an
investment trust can borrow money to invest in additional investments for its
portfolio. The effect of the borrowing on shareholders' funds is called
'gearing'. If the Company's assets grow, shareholders' funds grow
proportionately more because the debt remains the same. But if the value of
the Company's assets falls, the situation is reversed. Gearing can therefore
enhance performance in rising markets but can adversely impact performance in
falling markets.

Gearing is the Company's borrowings adjusted for cash and cash equivalents
expressed as a percentage of shareholders' funds.

Gross gearing is the Company's borrowings expressed as a percentage of
shareholders' funds.

                                 2026                       2025
                                 Gearing *  Gross           Gearing *  Gross

                                 £'000      Gearing (†)     £'000      Gearing (†)

                                            £'000                      £'000
 Borrowings                 (a)  7,745      7,745           6,094      6,094
 Cash and cash equivalents  (b)  1,668      -               975        -
 Shareholders' funds        (c)  197,595    197,595          153,099    153,099
                                 3.1%       3.9%            3.3%       4.0%

*   Gearing: ((a)-(b)) divided by (c), expressed as a percentage.

†   Gross gearing: (a) divided by (c), expressed as a percentage.

Leverage (APM)

For the purposes of the Alternative Investment Fund Managers ('AIFM')
Regulations, leverage is any method which increases the Company's exposure,
including the borrowing of cash and the use of derivatives. It is expressed as
a ratio between the Company's exposure and its net asset value and can be
calculated on a gross and a commitment method. Under the gross method,
exposure represents the sum of the Company's positions after the deduction of
sterling cash balances, without taking into account any hedging and netting
arrangements. Under the commitment method, exposure is calculated without the
deduction of sterling cash balances and after certain hedging and netting
positions are offset against each other.

Active share (APM)

Active share, a measure of how actively a portfolio is managed, is the
percentage of the portfolio that differs from its comparative index. It is
calculated by deducting from 100 the percentage of the portfolio that overlaps
with the comparative index. An active share of 100 indicates no overlap with
the index and an active share of zero indicates a portfolio that tracks the
index.

Unlisted (Private) Company

An unlisted (private) company means a company whose shares are not available
to the general public for trading and not listed on a stock exchange.

Variable Interest Entity ('VIE')

VIE structures are used by some Chinese companies to facilitate access to
foreign investors in sectors of the Chinese domestic economy which prohibit
foreign ownership. The purpose of the VIE structure is to give the economic
benefits and operational control of ownership without direct equity ownership
itself. The structures are bound together by contracts and foreign investors
are not directly invested in the underlying company.

Treasury shares

The Company has the authority to make market purchases of its ordinary shares
for retention as treasury shares for future reissue, resale, transfer or for
cancellation. Treasury shares do not receive distributions and the Company is
not entitled to exercise the voting rights attaching to them.

Third party data provider disclaimer

No third party data provider ('Provider') makes any warranty, express or
implied, as to the accuracy, completeness or timeliness of the data contained
herewith nor as to the results to be obtained by recipients of the data.

No Provider shall in any way be liable to any recipient of the data for any
inaccuracies, errors or omissions in the index data included in this document,
regardless of cause, or for any damages (whether direct or indirect) resulting
therefrom. No Provider has any obligation to update, modify or amend the data
or to otherwise notify a recipient thereof in the event that any matter stated
herein changes or subsequently becomes inaccurate.

Without limiting the foregoing, no Provider shall have any liability
whatsoever to you, whether in contract (including under an indemnity), in tort
(including negligence), under a warranty, under statute or otherwise, in
respect of any loss or damage suffered by you as a result of or in connection
with any opinions, recommendations, forecasts, judgements, or any other
conclusions, or any course of action determined, by you or any third party,
whether or not based on the content, information or materials contained
herein.

MSCI index data

The MSCI information may only be used for your internal use, may not be
reproduced or redisseminated in any form and may not be used as a basis for or
a component of any financial instruments or products or indices. None of the
MSCI information is intended to constitute investment advice or a
recommendation to make (or refrain from making) any kind of investment
decision and may not be relied on as such. Historical data and analysis should
not be taken as an indication or guarantee of any future performance analysis,
forecast or prediction. The MSCI information is provided on an 'as is' basis
and the user of this information assumes the entire risk of any use made of
this information. MSCI, each of its affiliates and each other person involved
in or related to compiling, computing or creating any MSCI information
(collectively, the 'MSCI Parties') expressly disclaims all warranties
(including, without limitation, any warranties of originality, accuracy,
completeness, timeliness, non-infringement, merchantability and fitness for a
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direct, indirect, special, incidental, punitive, consequential (including,
without limitation, lost profits) or any other damages (msci.com).

Sustainable Finance Disclosure Regulation ('SFDR')

The EU Sustainable Finance Disclosure Regulation ('SFDR') does not have a
direct impact in the UK due to Brexit, however, it applies to third-country
products marketed in the EU. As Baillie Gifford China Growth Trust is
marketed in the EU by the AIFM, Baillie Gifford & Co Limited, via the
National Private Placement Regime ('NPPR') the following disclosures have been
provided to comply with the high-level requirements of SFDR.

The AIFM has adopted Baillie Gifford & Co's stewardship principles and
guidelines as its policy on integration of sustainability risks in
investment decisions.

Baillie Gifford & Co believes that a company cannot be financially
sustainable in the long run if its approach to business is fundamentally out
of line with changing societal expectations. It defines 'sustainability' as a
deliberately broad concept which encapsulates a company's purpose, values,
business model, culture, and operating practices.

Baillie Gifford & Co's approach to investment is based on identifying and
holding high quality growth businesses that enjoy sustainable competitive
advantages in their marketplace. To do this it looks beyond current financial
performance, undertaking proprietary research to build up an in-depth
knowledge of an individual company and a view on its long-term prospects. This
includes the consideration of sustainability factors (environmental, social
and/or governance matters) which it believes will positively or negatively
influence the financial returns of an investment. The likely impact on the
return of the portfolio from a potential or actual material decline in the
value of investment due to the occurrence of an environmental, social or
governance event or condition will vary and will depend on several factors
including but not limited to the type, extent, complexity and duration of an
event or condition, prevailing market conditions and existence of any
mitigating factors.

Whilst consideration is given to sustainability matters, there are no
restrictions on the investment universe of the Company, unless otherwise
stated within in its Investment Objective & Policy. Baillie Gifford &
Co can invest in any companies it believes could create beneficial long-term
returns for investors. However, this might result in investments being made in
companies that ultimately cause a negative outcome for the environment or
society.

More detail on the Investment Managers' approach to sustainability can be
found in the ESG Principles and Guidelines document, available publicly on the
Baillie Gifford website bailliegifford.com and by scanning the QR code below.

The underlying investments do not take into account the EU criteria for
environmentally sustainable economic activities established under the EU
Taxonomy Regulation.

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