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

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*

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

*   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.

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

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

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

For the year ended 31 January 2025

Cash flow statement

For the year ended 31 January

*   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

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

          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

          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).

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.

*   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

9.       The Annual Report and Financial Statements will be available on the Company's website bailliegiffordchinagrowthtrust† 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.

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.

*   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.

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.

*   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 particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any 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.