Half-year Financial Report

Aberdeen Asia Focus PLC

Legal Entity Identifier (LEI): 5493000FBZP1J92OQY70

ANNOUNCEMENT OF UNAUDITED HALF YEARLY RESULTS

for the six months ended 31 January 2026

Aberdeen Asia Focus PLC (the "Company" or "AAS"), which invests in a diversified portfolio of quoted smaller companies with strong growth prospects across a range of Asian industries and economies, is pleased to report a strong set of half yearly results for the six months ended 31 January 2026, building on previous good performance and following its entry into the FTSE 250.

Highlights:

· During the period the Company delivered a NAV total return of +11.4% and a share price total return of +13.0%, outperforming the MSCI AC Asia ex Japan Small Cap Index, which returned +9.0% over the same period.

· The portfolio's outperformance was primarily driven by strategic exposure to specialist companies within the AI and electronics ecosystem. Key contributors included:

o  Newly added Taiwanese companies like MPI Corp and Sino-American Silicon Products (SAS), capitalising on AI and 5G demand;

o  High-growth opportunities in Hong Kong and China, such as WuXi XDC in biotech and ASMPT in advanced packaging for semiconductors;

o  Korean holdings Hansol Chemical and Leeno Industrial, solid AI-linked performers;

o  Selective capital deployed in India, such as the addition of Karur Vysya Bank, targeting strong fundamentals and long-term potential.

· Net gearing reduced to 7.6% (10.2% at 31 July 2025).

· Two interim dividends paid in the first six months of the Company's financial year of 1.6p per Ordinary share. The Board has set a target dividend of at least 6.43p per Ordinary Share for the financial year ending 31 July 2026.

Krishna Shanmuganathan, the Company's Chair commented:

"This Company's steadfast commitment to optimising shareholder returns continues to deliver, highlighted by another strong six months of performance. Our NAV total return grew by 11.4%, while the share price rose by 13.0%, both outperforming the MSCI AC Asia ex Japan Small Cap Index's 9.0% return. This share price outperformance, coupled with strong portfolio delivery, has led to a narrowing of the discount to 8.9% (from 13.1% a year earlier), supported by increased engagement and strategic share buybacks.

"Our long-term track record remains exceptional. Since inception in 1995, our NAV total return of +3365.8% equates to an annualised +12.4% rise, demonstrating consistent outperformance against the benchmark. This enduring success has also led to the Company's recognition as a double 'ISA Millionaire' Trust by the Association of Investment Companies (AIC). We are also greatly encouraged by the increase in retail shareholders over the last 12 months (from 26.8% to 30.0%), which we believe both recognises our outstanding long-term performance and reflects our significant promotional efforts during the period.

"These impressive results, both short and long-term, are a testament to the strategy, applied consistently by the Manager in a fluctuating and increasingly volatile global environment. This patient stock picking approach is well-suited to navigating these times, giving us confidence of being able to continue to deliver sustainable returns for shareholders into the future."

Performance Highlights

Financial Calendar & Highlights

Financial Highlights

Chair's Statement

Your Company delivered a strong first half, continuing to build on the robust performance of the previous financial year. Over the six months ended 31 January 2026, the Company's net asset value (NAV) grew by 11.4% on a total return basis, while the share price rose by 13.0%. This compared with a total return of 9.0% for the MSCI AC Asia ex Japan Small Cap Index, all in sterling terms.

The share price outperformance against the NAV reflects both solid portfolio performance and a narrowing of the discount. Your Board sees this as an encouraging sign that demand for the Company's shares has continued to strengthen in response to further good performance.

To reflect the Manager's recent rebranding to Aberdeen Group plc, the Company was renamed "Aberdeen Asia Focus PLC", with effect from 14 October 2025. The Company's ticker symbol, AAS, remains unchanged.

On a more sombre note, on behalf of the Board and shareholders, we extend our deepest condolences to the family of Nigel Cayzer, Chair of the Company until 2022, following his tragic recent passing.

Investment Performance

The portfolio's outperformance was driven primarily by the Manager's stock picks rather than broad market moves, reflecting the Manager's long‑standing focus on investing in under‑researched Asian smaller companies with durable business models, solid fundamentals and clear structural tailwinds.

The portfolio benefited from exposure to specialist companies in niche areas within the AI and electronics ecosystem across Taiwan and Korea, and selected industrial names introduced over the past year, as market returns were narrowly concentrated within the AI thematic and its related supply chains.

Given the more volatile market environment, your Manager adopted a more defensive stance, reducing gearing and adding selective exposure in Southeast Asia, where valuations looked more compelling.

India delivered more subdued returns with mixed earnings. Although the portfolio is underweight to India versus the benchmark, it remains the largest country exposure, with capital deployed selectively where valuations and fundamentals justify doing so.

Throughout the period, the Manager remained disciplined in taking profits from winners. While this approach carried the risk of being too early in realising gains, your Board believes this is prudent risk management, especially given the sharp run-up in share prices across parts of the technology sector.

Further detail on the portfolio and the Manager's market views can be found in the Investment Manager's Report.

Company Recognition

Over the period, the Company's net assets grew significantly, and we were proud to see the Company join the FTSE 250, which should enhance the Company's visibility and liquidity.

Your Company was recognised by the Association of Investment Companies (AIC) as a double 'ISA Millionaire' Trust, with the highest return of any Asia-focused trust and the 5th best across all asset classes. Over the period since the introduction of ISAs in April 1999 the AIC figures show that the Ordinary shares have delivered a total return of 5,892% equating to a total ISA investment value, assuming full annual contributions, of £2.38 million.

The Company was also recognised by AJ Bell as the leading investment company in the 'Asian Equity - Active' category at their 2025 awards, as voted by private investors. Another accolade came from Citywire's annual Investment Trust Awards in 2025, where the Company was named the best Asia Pacific trust.

Online Investor Presentation

It is pleasing to see that the number of retail shareholders has increased over the last 12 months (from 26.8% to 30.0%), recognition of the Company's outstanding long-term performance and reflecting the significant efforts that have been made to promote the Company to a wider audience. In an effort to spread our engagement with shareholders more evenly through the year, the Board has decided to move the timing of its annual interactive Online Shareholder Presentation away from proximity to the AGM. The next Online Shareholder Presentation will therefore be held at 11:00 a.m. on Tuesday 5 May 2026. During the presentation, Shareholders will receive updates from myself and the Investment Manager and there will be the opportunity for an interactive question and answer session where we will endeavour to answer as many questions as time allows. Full registration details can be found at: asia-focus.co.uk.

Protecting Shareholders' Interests

During the period the Ordinary shares have traded at an average discount of 11.6% and we have bought back 5.8 million Ordinary shares (3.9% of the Company's outstanding shares) in the market at a discount to the prevailing NAV per share (six months to 31 January 2025: 3.4 million). The discount narrowed significantly to 8.9% as of 31 January 2026, from 13.1% a year earlier. At the time of writing the discount has widened slightly to 9.7%.

Share buybacks stepped up over the past half year, both to provide liquidity to the market and in seeking to address the discount at which the shares trade relative to the NAV.

This narrowing of the discount reflects your Company's continued outstanding performance, increased engagement with investors, especially in marketing efforts, and the impact of buybacks. We will continue to look at ways to improve the Company's market rating, while recognising that long‑term investment performance remains the most important driver of shareholder value.

Since the introduction of the five‑year conditional tender offer in August 2021, the Company's NAV total return per share has remained ahead of the benchmark, returning 50.8% versus the benchmark return of 37.2% to the end of January 2026.

Over the longer term, your Company's NAV total return per share has returned an outstanding 12.4% per annum in absolute terms since inception, reflecting your Manager's excellent investment track record of delivering sustained returns to shareholders. This is significantly in excess of the returns of both the 7.1% per annum for the large-cap index (MSCI AC Asia Pacific ex Japan Index), and 5.3% per annum for the MSCI AC Asia ex Japan Small Cap Index.

We invest in Asian smaller companies which are established, listed businesses that are often overlooked by mainstream Asia funds. Your portfolio managers remain focused on discovering Asia's next generation of market leaders; high-quality businesses that offer superior growth without excess volatility.

Revenue, Dividends and Gearing

Your Board remains firmly committed to the Company's progressive dividend policy recognising the importance of income alongside capital growth for many shareholders.

Underlying earnings per share for the period amounted to 2.0p (2025: 2.6p), slightly down as the portfolio is further tilted towards growth stocks, but revenue from the portfolio continues to cover the Ordinary dividend, with the shares yielding 1.7%, as at 31 January 2026.

Two interim dividends of 1.6p per Ordinary share were paid in respect of the first six months of the Company's financial year, on 19 December 2025 and 24 March 2026. The Board has set a target dividend of at least 6.43p per Ordinary Share for the financial year ending 31 July 2026.

Your Board aims to maintain its long-standing progressive dividend policy, which has now been in place for 30 years. Indeed, this year we expect the Company to join the AIC's Next Generation of 'Dividend Heroes', awarded to companies that have grown their dividend annually for 10 or more years. 

During the period, the variable portion of your Company's gearing was reduced by £10 million after a period of strong performance, reducing the net gearing to 7.6% as at 31 January 2026, down from 10.2% as at 31 July 2025. This will enable your Manager to deploy funds more tactically at the appropriate time.

Outlook

The US‑Israeli military strikes on Iran have re-introduced a significant source of global risk, particularly through heightened geopolitical tension and volatility in oil prices. We are also likely to see significant impact on overall risk appetite.

This comes after the latest trade developments where the US Supreme Court's decision to overrule US President Donald Trump's tariffs and his subsequent efforts to work around the ruling underscore the fluidity of and continued uncertainty around tariff developments.

Against this backdrop, your Company's portfolio of securities offers resilience against global uncertainty. Many of these companies generate their revenues from domestic demand across Asia and benefit from long-term structural growth trends. This domestic orientation is complemented by highly selective export exposure, which is mainly in global leaders that offer specialised, difficult‑to‑replicate offerings and pricing power. This reflects your Manager's conscious decision to protect earnings durability across cycles, while retaining exposure to globally competitive franchises that can enhance portfolio value.

Looking ahead, Asia's domestic resilience, global leadership and structural growth will continue to create attractive long‑term opportunities. Your Manager's disciplined and patient stock picking approach with a clear focus on companies with strong balance sheets, earnings resilience and cash flow visibility is well suited to navigating periods of uncertainty while delivering sustainable returns for shareholders over the long run.

Krishna Shanmuganathan Chair,27 March 2026 Investment Manager's Review

Overview

Over the six months to January 2026, Asian small-cap equities posted gains, with performance reflecting a gap between markets with direct exposure to investment in artificial intelligence (AI) and those with less linkage to this theme. The MSCI AC Asia ex Japan Small Cap Index rose by 9.0% in sterling terms, further supported by easing financial conditions, resilient earnings across most parts of Asia, and a softening of trade tensions at the margin. Investors also grew more comfortable about a clearer US monetary policy outlook after the US Federal Reserve cut policy rates by 25 basis points.

Against this backdrop, the best-performing markets in Asia were those most aligned with the AI thematic and the supporting supply chains, notably Taiwan and South Korea. In both markets, earnings delivery for the companies held in the portfolio has been well ahead of expectations underpinning share price gains.

By contrast, markets with limited AI exposure struggled. India was the key laggard, owing to concerns over US tariffs, rupee weakness, and an earnings slowdown.

China delivered mixed returns, with early gains from capital inflows and pro‑growth, pro‑innovation policy support fading as activity softened, Japan tensions rose, and investors took profits. Still, areas linked to tech and robotics outperformed, even as the market lagged its regional peers.

Portfolio Review

The portfolio outperformed its benchmark by 100 basis points over the review period, as the AI thematic that drove market returns also led to some strong moves across your holdings in the IT hardware supply chain and industrials sector. We remain positive on the AI theme but are mindful of stretched valuations following the strong run-up. Hence, we are carefully managing exposure and single-stock risks in this area. More broadly, we continue to refine and refresh the portfolio towards holdings with good growth prospects, steady cash flow and clearer earnings visibility, targeting a diversified portfolio of around 50 well-run companies with industry-leading positions.

On key performance drivers, in Taiwan, Chroma ATE, a provider of specialist testing equipment for advanced electronic and semiconductor components, and Taiwan Union Technology, a leading maker of copper clad laminate used in printed circuit boards, saw their share prices rise sharply. These businesses are benefiting from AI-related demand and a unique industry position that is translating into solid earnings and cash flow.

Taiwan remains one of the largest country exposures, given its deep pool of high‑quality smaller companies that lead niche segments across semiconductors, electronics and industrial supply chains, and are benefiting from the increase in global tech capex. We continue to find compelling ideas there. In August, we added MPI Corp, a niche player in semiconductor probe cards and testing that is well-positioned to ride the AI and 5G testing wave. In October, we introduced Sino‑American Silicon Products (SAS), which has a stake in GlobalWafers, a leading silicon wafer supplier. Through GlobalWafers and other units, SAS is a critical supplier to the global semiconductor industry, producing high‑purity silicon ingots and wafers used across logic, memory and power devices. Importantly, the company also trades at a material discount to its listed subsidiaries, offering a yield of c.5% at the time of purchase. Against this, we sold two Taiwanese holdings where conviction had waned, namely Sunonwealth Electric and Chief Telecom.

Other solid AI-linked performers included Korean holdings Leeno Industrial, which makes spring test pins and integrated chip test sockets, and Hansol Chemical, a supplier of key materials for semiconductors and advanced manufacturing. Hansol was a position that we had been adding to, funded by taking profits off Taiwan and other winners. Beyond memory, the AI-driven demand for power infrastructure also buoyed industrial group Hyundai Electric, a manufacturer of transformers, motors and smart grid systems that we initiated a year ago.

Elsewhere, Precision Tsugami, which sells high-end computer numerical control (CNC) machine tools, was a stellar performer. The company is benefiting from China's shift towards higher-value manufacturing across electric vehicles, AI hardware and robotics, all of which needs high-precision machinery. Demand is also rising for advanced machine tools used in power electronics, servers and automation equipment. Higher-than-expected earnings, along with dividends and buybacks, led to its share price almost doubling, and we have taken some profits here.

More broadly, profit-taking has been somewhat of a theme for us during the period, with elevated valuations in parts of the technology sector prompting us to be disciplined in slicing positions that had done exceptionally well. While this risks locking in gains too early, we felt it was the prudent thing to do from a risk management perspective, given the extent of the re-rating across a few stocks.

China also highlighted how fast market conditions can turn, and why we needed to remain grounded and avoid over-exuberance. Among your holdings, Kingdee International Software, a provider of enterprise software solutions, rallied early in 2025 as sentiment towards China improved and the business delivered on its growth targets, but later corrected on concerns around the disruption from agentic AI. Yantai China Pet Foods re‑rated on strong results but subsequently faced headwinds from perceived tariff risks and profit‑taking. NetEase Cloud Music also rose on solid results amid a tepid consumer environment, before falling back on limited near‑term catalysts and rising competition from ByteDance's 'Soda Music' platform, which targets the low-end and free user segment.

Given the above, we turned slightly more defensive and added selectively to inexpensive names in Southeast Asia. One example is Thai Life Insurance, one of Thailand's leading life insurers with a large agency network and competent management (please see the case study on Thai Life Insurance). Elsewhere, we also introduced Chifeng Jilong Gold Mining, a quality Chinese gold producer with meaningful scale and first-quartile cost competitiveness. It generates strong returns and solid margins, supported by a robust balance sheet and disciplined capital management, and trading at a significant discount to peers.

We also looked for attractive growth opportunities in companies like WuXi XDC and ASMPT, both listed in Hong Kong. WuXi XDC helps biotech and pharmaceutical companies make complex advanced drug treatments, especially a type of targeted cancer drug that delivers medicine directly to tumour cells. Record project wins and a rising order backlog underpin its solid earnings. Its integrated platform, technology focus, and expansion into Singapore support scale, execution, and exposure to long‑term biotech growth without single‑drug risk. Singapore‑based ASMPT is well placed to benefit from rising demand for AI and high‑bandwidth memory. It is gaining share in advanced packaging for semiconductors, while its more legacy business is showing early signs of recovery.

In India, the portfolio's underweight position versus the benchmark proved beneficial during a period of market weakness, offsetting declines in some of your holdings where earnings growth failed to meet high expectations. Affle 3i underperformed as risk appetite weakened for small and mid‑caps and the rise of agentic AI hurt sentiment towards software-related businesses. Cholamandalam Financial Holdings was weighed down by concerns over rising credit costs and slower industry growth in the financial sector. Vijaya Diagnostic Centre lagged after a slowdown in its core pathology business off a high base. Despite the short-term weakness, India remains our largest country exposure, and we continue to look for opportunities. During the period, we added Karur Vysya Bank, a regional bank with strong asset quality, low credit costs and high provision coverage. The bank delivers solid returns, strong cost efficiency, and steady growth through branch expansion and higher CASA penetration, making it a reliable long‑term compounder.

Outlook

After a strong 2025 and a solid start to 2026, we remain constructive but measured. Earnings in general still look healthy for the coming year, with our holdings still expected to deliver a similar level of earnings growth of 10-15%, with portfolio diversification across themes, sectors and geographies providing an additional margin of safety.

However, geopolitical risks and policy uncertainty argue against complacency. Trade tensions, shifting industrial policy and uneven domestic recoveries mean that outcomes are likely to diverge further across countries and sectors.

Another meaningful risk is the increasing reliance of markets on the AI narrative and as a result the rising earnings expectations for companies in the associated supply chain. While we are still positive on Asian technology stocks as we move into 2026, particularly in the hardware space given their role as an enabler of all AI applications, we have taken significant profits and we are looking at other areas where we see clearer upside.

More broadly, our focus is less on headline growth but more on identifying areas where we see potential mispriced opportunities. In India, the earnings downgrade cycle appears to have bottomed as macro conditions turn more supportive, while valuations are now more palatable. We retain our underweight but continue monitoring for clearer signs of earnings stability to build up existing positions.

In China, the opportunity lies at the stock level and we remain extremely selective. We prefer newer consumption trends, such as music subscriptions, travel and pet food, over traditional staples, and we are building exposure to automation and productivity themes such as robotics and advanced technology.

At the portfolio level, diversification across countries and sectors provides exposure to a wide range of long‑term growth themes in Asia. We have focused on high‑quality companies with predominantly domestic growth drivers that can perform through difficult market conditions. This is complemented by a select group of export‑oriented businesses that are global leaders in what they do, with unique products or services.

Over its 30‑year history, the Company has delivered average net asset value growth exceeding 12% per annum, underpinned by disciplined stock selection and a focus on earnings resilience. As dispersion widens across Asian markets, the region's often-overlooked small-cap compounders offer an increasingly attractive source of both growth and diversification, but returns will increasingly hinge on active stock selection and valuation discipline.

Disclosures

Investment Objective and Policy

Investment Objective

The Company aims to maximise total return to shareholders over the long term from a portfolio made up predominantly of quoted smaller companies in the economies of Asia excluding Japan.

Investment Policy

The Company may invest in a diversified portfolio of securities (including equity shares, preference shares, convertible securities, warrants and other equity-related securities) predominantly issued by quoted smaller companies spread across a range of industries and economies in the Investment Region. The Investment Region includes Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, South Korea, Laos, Malaysia, Myanmar, Pakistan, The Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam, together with such other economies in Asia as approved by the Board.

The Company may invest up to 10% of its net assets in collective investment schemes, and up to 10% of its net assets in unquoted companies, calculated at the timeof investment.

The Company may also invest in companies traded on stock markets outside the Investment Region provided over 75% of each company's consolidated revenue, operating income or pre-tax profit is earned from trading in the Investment Region or the company holds morethan 75% of their consolidated net assets in the Investment Region.

When the Board considers it in shareholders' interests, the Company reserves the right to participate in rights issues by an investee company.

Risk Diversification

The Company will invest no more than 15% of its gross assets in any single holding including listed investment companies at the time of investment.

Gearing

The Board is responsible for determining the gearing strategy for the Company. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. Gearing is subject to a maximum gearing level of 25% of NAV at the time of draw down.

Principal Risks and Uncertainties

The principal risks and uncertainties affecting the Company are set out in detail on pages 19 and 20 of the Annual Report and Financial Statements for the year ended 31 July 2025 and these have not changed.

They can be summarised under the following headings:

- Shareholder and Stakeholder Risk;

- Investment Risk;

- Operational Risk;

- Governance & Regulatory risk; and

- Major Events and Geopolitical risk.

Macroeconomic risks arising from geopolitical uncertainty such as the ongoing conflicts in Ukraine and the Middle East as well as tensions in Taiwan continue to present a significant risk to world markets. In addition to the risks listed above, the Board is also very conscious of the risks emanating from increased environmental, social and governance challenges. As climate change pressures mount, the Board continues to monitor, through its Manager, the potential risk that investee companies may fail to keep pace with the appropriate rates of change and adaption. In all other respects, the Company's principal risks and uncertainties have not changed materially since the date of the 2025 Annual Report.

Going Concern

The Directors have conducted a thorough review of the Company's ability to continue as a going concern and have also considered the revenue and ongoing expenses forecasts for the current year. 

The Board monitors the Company's covenant compliance and gearing levels regularly and is satisfied that there is sufficient headroom in place and flexibility if required. The Board has set overall limits for borrowing and reviews regularly the Company's level of gearing, cash flow projections and compliance with banking covenants.

The Company's assets consist of a diverse portfolio of listed equities which in most circumstances are realisable within a short timescale. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the next 12 months. Accordingly, the Board continues to adopt the going concern basis in preparing the financial statements.

Directors' Responsibility Statement

The Directors are responsible for preparing this half-yearly financial report in accordance with applicable law and regulations. The Directors confirm that to the best oftheir knowledge:

- the condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting);

- the Interim Board Report (constituting the interim management report) includes a fair review of the information required by rule 4.2.7R of the UK Listing Authority Disclosure Guidance and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related-party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could so do).

Krishna Shanmuganathan Chair,27 March 2026

Ten Largest Investments

As at 31 January 2026

Portfolio

Investment Case Studies

Hang Lung Properties

In which year did we first invest?

May 2024

% Holding:

1.5%

Where is their head office?

Hong Kong

What does the company do?

Hang Lung Properties (HLP) is a leading real estate developer and landlord. It primarily builds, owns, and manages world-class commercial complexes, focusing on high-end luxury shopping malls and office buildings in prime locations across mainland China and Hong Kong.

Why do we like the company?

HLP operates some of the highest-quality shopping malls in mainland China. We like the company because it is well-positioned to benefit from the growing spending power of Chinese consumers. Its malls are known for housing top-tier international luxury brands, and we are seeing positive news from across its portfolio.

The Chanel store at its top luxury mall Plaza 66 in Shanghai has completed a major renovation, restoring its full multi storey format for top tier customers. During the works, sales were constrained by a much smaller temporary space, so a clear rebound in sales is expected. HLP also opened new Laopu stores in Shanghai, with strong sales contributions from day one, underlining the continued appeal of its malls to leading brands like Laopu, a gold jeweller. At Plaza 66, an asset upgrade is underway that will lift retail space by around 10%.

Looking ahead, a new luxury mall in Hangzhou is set to open in 2026 and is already more than 80% pre committed. This should mark the end of a heavy investment phase, with capital spending falling and cash flow improving, supporting a potential dividend recovery from 2027-28.

Management has been prudent in adopting a defensive approach to protect the business through the recent economic slowdown. They have adjusted leases to lock in more fixed base rent and rely less on rent linked to store sales. This strategy has helped stabilise rental income, making it more resilient, even as retail conditions remain challenging.

At current levels, the shares trade well below the value of its underlying properties and offer a dividend yield of more than 5%, which we believe is supported by steady rental income.

How has the company performed since we invested in it?

Since we invested in it in May 2024, the share price of HLP has returned 33.40% in GBP terms (from 1 June 2024 to 31 January 2026), compared to the MSCI AC Asia ex Japan Small Cap Index return of 19.24%. The stock has benefited from improving investor sentiment as tenant sales in mainland China have stabilised and begun to grow again, and as the company's capital spending cycle has passed its peak.

Alongside HLP, we hold a complementary position in parent Hang Lung Group (HLG), at around an additional 1.0%. HLG trades at an even lower valuation and has a stronger balance sheet, while the scrip dividend from its subsidiary HLP has enabled the parent to both maintain its dividend payouts and steadily increase its stake in the core operating asset, which is an alignment that we are comfortable with.

While challenges remain, particularly in the office segment where supply is still elevated, we believe the market is increasingly recognising that HLP's core mall portfolio is stabilising. With improving retail momentum, new project contributions and an attractive dividend yield, we remain positive on its medium-term prospects.

On a broader level, we are positive on the outlook for consumption in China, given the large amounts of excess household savings. Although consumption growth has been sluggish, we believe that we are near the bottom. As consumer confidence continues to improve, we are likely to see a gradual recovery from here. As the cycle turns from contraction to stabilisation, this should also benefit HLP, which has some of the best-located malls across China. 

Thai Life Insurance Public Co. Ltd

In which year did we first invest?

September 2025

% Holding:

1.6%

Where is their head office?

Bangkok, Thailand

What does the company do?

Thai Life Insurance is among the major life insurers in Thailand. It offers life, health and savings products mainly through its own sales agents, complemented by partnerships with banks (bancassurance). It is the third-largest insurer in the country, by gross written premiums, and it has built a strong franchise in products that have higher margins, such as protection policies and add-on or rider coverage.

Why do we like the company?

Thai Life has one of the strongest life insurance franchises in Thailand, supported by experienced management and the biggest agency force across the country.

While peers rely on bancassurance, Thai Life's agency-led model means that it has more control over sales quality and product mix while enhancing cross-selling opportunities. The personal touch is also important as agents can build long-term relationships with clients and act as a trusted adviser for protection and health insurance. The business is further backed by conservative and long-standing promoters, whom we trust because of their focus on balance sheet strength and franchise value.

On its product mix, the company is improving its profitability by selling more higher-margin protection and health insurance, rather than lower-margin savings policies. These protection products are also less affected by changes in interest rates, which makes its earnings more resilient if interest rates stay low.

On the growth front, we see opportunity in health insurance. Market leader AIA plans to stop selling certain full-coverage health policies from March 2026 and shift to co-payment structures where customers pay part of the cost themselves. Thai Life will continue to offer full-coverage health plans whilst maintaining underwriting discipline, and with one of the largest agency networks in Thailand it is well placed to capture customers who prefer broader insurance coverage. Health products with riders or add-ons are typically more profitable, so any growth in this segment should support future earnings.

Thai Life's prospects and outlook are supported by a very strong capital position. As of December 2025, Thai Life's capital adequacy ratio (CAR) was 555.9%. While this was 64 percentage points lower than a year earlier, it is still far above the 140% regulatory minimum. The drop mainly reflected a one-off boost in December 2024 linked to an investment vehicle change.

In addition, a large share of its earnings (around 80%) comes from insurance and underwriting, not investment income. This shows the business is a high-quality insurer, rather than one relying on market returns. Thai Life's cash generation is also strong, with expected undiscounted cash flows (after tax) from the existing book at close to 100% of embedded value, and meaningful cash coming through in the first one to five years.

Its shares currently offer a dividend yield of around 5%, and we believe this is sustainable because of its steady earnings and a sizeable existing book of business that provides good visibility over future profits.

How has the company performed since we invested in it?

Since we invested in it in September 2025, the share price of Thai Life Insurance has returned 15.62% in GBP terms (from 1 October 2025 to 31 January 2026), compared to the MSCI AC Asia ex Japan Small Cap Index's gain of about 5.46%. The stock has benefited from improving investor sentiment as the market recognises its resilient premium growth which has meaningfully outpaced the industry average and its deeply discounted valuation. While the final quarter of 2025 presented slight headwinds, we believe the market is correctly looking past this short-term softness to focus on the company's sustainable profit momentum and unique market share opportunities in 2026.

Condensed Statement of Comprehensive Income (unaudited)

Condensed Statement of Financial Position (unaudited)

Condensed Statement of Changes in Equity (unaudited)

Condensed Statement of Cash Flows (unaudited)

Notes to the Financial Statements

For the six months ended 31 January 2026

Alternative Performance Measures ("APMs")

Copies of the Company's Half Yearly Report for the six months ended 31 January 2026 will be posted to shareholders in April 2026 and will be available thereafter on the Company's website: asia-focus.co.uk *.

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.

* Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

abrdn Holdings Limited

Secretaries

27 March 2026