-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KcfotSg0ZgLYD94thfHuAA/DDAEkKdbYqzLi9ZFzCuNS97MRDNyxtwnJbs/HD+UT i4d+CfZY4eYGJi0C6mN/+w== 0000950109-96-000336.txt : 19960125 0000950109-96-000336.hdr.sgml : 19960125 ACCESSION NUMBER: 0000950109-96-000336 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951130 FILED AS OF DATE: 19960124 SROS: NASD SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLETON CHINA WORLD FUND INC CENTRAL INDEX KEY: 0000909226 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 593192206 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-07876 FILM NUMBER: 96506500 BUSINESS ADDRESS: STREET 1: BROWARD FINANCIAL CENTRE STREET 2: 500 EAST BROWARD BLVD STE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394-3091 BUSINESS PHONE: 3055277500 MAIL ADDRESS: STREET 1: 500 EAST BROWARD BLVD SUITE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394 N-30B-2 1 QUARTERLY REPORT Templeton China World Fund - -------------------------------------------------------------------------------- Your Fund's Objective: The Templeton China World Fund seeks long-term capital appreciation through equity investments in "China companies." - -------------------------------------------------------------------------------- January 16, 1996 Dear Shareholder: This update for the quarter ended November 30, 1995, includes your Fund's long- term performance, a listing of its investments, and a brief discussion by Dr. Mark Mobius on a topic of current interest. Please keep in mind that this summary is one of four reports you will receive during the Fund's fiscal year. Next quarter, you will receive the semi-annual report covering the six months ending February 29, 1996, which is more comprehensive. It will include a discussion of the financial markets and a summary of the Fund's performance and investment direction during the period. The portfolio manager's outlook and the Fund's financial statements and investment portfolio will also be included. If you have any questions regarding this report, you may call the Franklin Templeton Fund Information Department, toll free, at 1-800/342-5236. - -------------------------------------------------------------------------------- Templeton China World Fund Cumulative Total Returns* Periods Ended 11/30/95
Since Inception One-Year (9/9/93) Based on change in net asset value 0.58% -6.56% Based on change in market price -16.17% -22.91%
*Cumulative total return calculations show the change in value of an investment over the periods indicated. These calculations assume reinvestment of all distributions and capital gains, either at net asset value or at market price on the reinvestment date, in accordance with the dividend reinvestment plan. Past performance is not predictive of future results. Investing in geographically concentrated developing markets involves special considerations, which may include increased risks related to market and currency volatility, adverse social and political developments, and the relatively small size and lesser liquidity of these markets. While short-term volatility can be disconcerting, declines of as much as 40% to 50% are not unusual in emerging markets. For example, the Hong Kong market has increased 695% in the last 15 years, but has suffered six declines of more than 20% during that time. (Source: Bloomberg. Based on quarterly percentage change over 15 years ended September 30, 1995.) - -------------------------------------------------------------------------------- 1 The Following Letter was Written by Dr. Mobius During a Trip to Shanghai. Shanghai is at the heart of an area that has been described as the largest market in Asia. Some analysts have said that the largest concentration of consumers in the Asia Pacific area is not Japan, not southern China, and not any single country, but the Yangtze River Delta region. This market includes Shanghai and the provinces of Jiangsu, Anhui and Zhejiang. It is estimated to contain almost 200 million people, a population larger than Indonesia's or Japan's. Although foreign investors who came to China in the 1980s concentrated on Guangdong, the focus shifted to the Yangtze River Delta in the 1990s. One quarter of China's increased economic production comes from this region, which has been growing faster than Taiwan and South Korea. In addition to Shanghai, the autonomous townships and village enterprises in the vicinity have grown a great deal. These areas offer lower taxes and cheap credit to export-oriented enterprises and are not restricted by the quotas and targets to which the state enterprises are subject. Progress in Shanghai is really amazing. As we came off the newly completed north-south elevated highway, which had just been finished and was festooned with banners celebrating its opening, we noticed numerous buildings being completed throughout the city. A Shanghai municipal official told us that the Pudong New Area development, which will result in an entirely new city at the mouth of the Yangtze River, will have a major port, a new airport, office buildings, housing, and a new stock exchange. He said that although Hong Kong was now the largest port in China, Shanghai would eventually surpass it and become China's financial and trade center. He added that this did not mean Hong Kong would become smaller, but that all of China's financial activity and trade would increase. We visited several companies in Shanghai, all of which are benefiting in one way or another from the region's extraordinary growth. Shanghai Shangling Electric Appliances Co. makes refrigera- 2 [MAP OF CHINA APPEARS HERE] tors, air-conditioners, and microwave ovens that are in demand as changing lifestyles increase the desire for fast- and frozen-foods. Shangling has a close relationship with Mitsubishi of Japan, whose influence was apparent when we visited. Our three hosts were wearing crisp white- and blue-striped uniform shirts. Everyone in the plant wore uniforms, and the company brochure and annual report had the bright, quality feel of a major Japanese appliance company. Next, we visited the Lian Hua plant, a joint-venture fiber and textiles factory started by the Shanghai Chemical Fibre Corporation and a Hong Kong company controlled by a Taiwanese investor. On this dark, rainy day, they were trying to save electricity, and no lights were on in their offices. Between January 1993 and December 1994, electricity prices rose by 55%, and we were told they were expected to continue rising. To save money, the company increases production at night when electricity costs are lower. Ironically, our next visit was to a company that makes light bulbs. Shanghai Jianbao Industry has 3 recognized that the light bulb business offers only low profit margins and has begun to diversify. One of its new ventures produces chicken essence, another makes chemicals, another makes packaging materials, and one is engaged in port construction. We also made a series of visits to automobile-related companies such as Shanghai Tyre and Rubber Company, Shanghai Diesel, which assembles diesel engines under license from U.S.-based Caterpillar Corporation, and Volkswagen. One of the managers at the Volkswagen plant told me that working in China involved language difficulties and meant using an interpreter, which is time consuming. The plant was not very different from other automobile plants we had visited, with its moving assembly line, conveniently placed parts bins, and workers adding various parts to the cars moving along the line. Our last visit was to the enormous Shanghai Yaohua Pilkington glass plant, where the production line was humming. The manufacturing process starts with a mixture of silica, waste glass and soda ash feeding into a white hot furnace. This inferno of material, reminiscent of volcanic lava with a crust on top, flows from the furnace onto a bed of molten tin and then to the cooling process, which reveals the smooth glass. Just walking from one end to another took about half an hour. There are 85 cities and towns in the Yangtze River Delta, and 35 have populations of more than one million. Although the Chinese previously were not allowed to move from one area to another, the situation has completely changed, and the region is now attracting migrants at an estimated rate of nine million per year. This has created infrastructure, housing, and security problems, and in order to provide the necessary water, sewerage, rail, roads, power and housing services, local governments in the area will require more and more foreign investment. We shall, of course, continue to monitor the situation as we pursue future investment opportunities for the benefit of the Fund's shareholders. Sincerely, /s/ J. Mark Mobius J. Mark Mobius, Ph.D. President Templeton China World Fund, Inc. 4 Templeton China World Fund, Inc. Investment Portfolio, November 30, 1995 (unaudited) - --------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE - ------------------------------------------------------------------------------------------------- COMMON STOCKS: 92.2% - ------------------------------------------------------------------------------------------------- Appliances & Household Durables: 3.5% Hualing Holdings Ltd. H.K. 1,330,500 $ 209,855 Semi-Tech (Global) Co., Ltd. H.K. 2,192,013 3,372,371 Shanghai Narcissus Electric Appliances Co. Ltd., B Chn. 2,858,000 571,600 Shanghai Vacuum Electron Devices Co. Ltd., B Chn. 9,054,586 2,127,828 Shenzhen Huafa Electronics Co. Ltd., B Chn. 2,442,000 435,682 Shenzhen Konka Electronic Group Co. Ltd., B Chn. 651,000 378,738 Tsann Kuen Enterprise Co. Ltd., B Chn. 5,834,000 1,214,332 ------------ 8,310,406 - ------------------------------------------------------------------------------------------------- Automobiles: 2.2% Jardine International Motor Holdings Ltd. H.K. 3,704,000 4,142,213 Qing Ling Motors Co. Ltd., H Chn. 5,000,000 1,234,664 ------------ 5,376,877 - ------------------------------------------------------------------------------------------------- Banking: 9.0% HSBC Holdings PLC H.K. 1,416,889 20,882,668 JCG Holdings Ltd. H.K. 813,000 599,116 ------------ 21,481,784 - ------------------------------------------------------------------------------------------------- Broadcasting & Publishing: 0.1% Leefung-Asco Printers Holdings Ltd. H.K. 1,143,000 165,504 - ------------------------------------------------------------------------------------------------- Building Materials & Components: 2.2% K Wah International Holdings Ltd. H.K. 15,437,956 2,355,142 K Wah International Holdings Ltd., wts. H.K. 1,445,978 51,409 Shanghai Yaohua Pilkington Glass, B Chn. 3,152,000 2,773,760 ------------ 5,180,311 - ------------------------------------------------------------------------------------------------- Chemicals: 4.0% Shanghai Chlor-Alkali Chemical Co. Ltd., B Chn. 9,459,000 2,440,422 Shanghai Pechemical Co. Ltd., H Chn. 15,480,000 4,352,868 Shenzhen Petrochemical (Group) Shareholding Co. Ltd., B Chn. 5,088,720 1,398,018 Zhuhai Sez Lizhu Pharmaceutical, B Chn. 4,309,600 1,504,340 ------------ 9,695,648 - ------------------------------------------------------------------------------------------------- Construction & Housing: 2.6% Hopewell Holdings Ltd. H.K. 10,329,344 5,842,465 Wai Kee Holdings Ltd. H.K. 3,626,000 478,160 ------------ 6,320,625 - -------------------------------------------------------------------------------------------------
5 Templeton China World Fund, Inc. Investment Portfolio, November 30, 1995 (unaudited) (cont.) - --------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE - -------------------------------------------------------------------------------------------- COMMON STOCKS (CONT.) - -------------------------------------------------------------------------------------------- Electrical & Electronics: 1.0% China Treasure Telecomunications Holdings Ltd. H.K. 1,870,000 $ 83,408 Gold Peak Industries (Holdings) Ltd. H.K. 1,746,000 795,699 Great Wall Electronic International Ltd. H.K. 12,668,000 1,031,796 Shanghai Automation Instrumentation Co., B Chn. 680,300 126,536 Yaego Corp. Twn. 260,000 435,991 ------------ 2,473,430 - -------------------------------------------------------------------------------------------- Electronic Components & Instruments: 0.2% S. Megga International Holdings Ltd. H.K. 8,508,000 384,982 - -------------------------------------------------------------------------------------------- Financial Services: 1.4% Min Xin Holdings H.K. 1,000,000 182,291 Peregrine Investments Holdings Ltd. H.K. 1,581,000 2,054,202 Sun Hung Kai & Co. Ltd. H.K. 4,318,000 1,010,431 ------------ 3,246,924 - -------------------------------------------------------------------------------------------- Food & Household Products: 4.5% C.P. Pokphand Co. Ltd. H.K. 2,540,000 1,034,402 Dairy Farm International Holdings LTd. H.K. 6,860,255 5,625,409 Fairwood Holdings Ltd. H.K. 4,530,000 427,530 President Enterprises Corp. Twn. 2,622,360 2,861,193 Shanghai New Asia Group Co. Ltd., B Chn. 384,000 195,840 Vitasoy International Holdings Ltd. H.K. 1,682,000 723,041 ------------ 10,867,415 - -------------------------------------------------------------------------------------------- Industrial Components: 1.1% Shanghai Refrigerator Compressor Co. Ltd., B Chn. 574,900 229,960 Shanghai Rubber Belt Co. Ltd., B Chn. 4,170,270 679,754 Shanghai Shangling Electric Appliance, B Chn. 835,900 526,617 Shanghai Tyre & Rubber Co. Ltd., B Chn. 5,530,100 1,271,923 ------------ 2,708,254 - -------------------------------------------------------------------------------------------- Leisure & Tourism: 0.3% Glynhill International Ltd. H.K. 1,950,000 53,698 Shanghai Jin Jiang Tower Co. Ltd., B Chn. 2,589,952 776,986 ------------ 830,684 - -------------------------------------------------------------------------------------------- Machinery & Engineering: 2.2% China Textile Machinery Co. Ltd., B Chn. 13,612,200 2,123,503 Guangzhou Shipyard International Co. Ltd., H Chn. 1,316,000 338,574 Northeast Electric Transmission & Transformation H.K. 34,000 6,593
6 Templeton China World Fund, Inc. Investment Portfolio, November 30, 1995 (unaudited) (cont.) - --------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE - ----------------------------------------------------------------------------------------------- COMMON STOCKS (CONT.) - ----------------------------------------------------------------------------------------------- Machinery & Engineering (cont.) Shanghai Erfangji Textile Machinery Co. Ltd., B Chn. 10,677,510 $ 1,793,822 Shanghai Industrial Sewing Machine Corp. Chn. 2,155,100 331,885 Shanghai Steel Tube Co. Ltd., B Chn. 5,263,500 757,944 ------------ 5,352,321 - ----------------------------------------------------------------------------------------------- Merchandising: 2.2% Dickson Concepts (International) Ltd. H.K. 2,689,000 1,946,812 Fortei Holdings Ltd. H.K. 9,582,000 445,968 Joyce Boutique Holdings Ltd. H.K. 2,835,000 667,067 Le Saunda Holdings Ltd. H.K. 1,776,000 137,765 LI & Fung Ltd. H.K. 146,980 109,263 Linkful International Holdings Ltd. H.K. 1,700,000 129,672 Wo Kee Hong Holdings Ltd. H.K. 8,256,000 1,611,729 Yaohan Hongkong Corp. Ltd. H.K. 6,888,000 365,109 ------------ 5,413,385 - ----------------------------------------------------------------------------------------------- Metals & Mining: 0.2% Maanshan Iron & Steel Co. Ltd., H Chn. 3,524,000 578,609 - ----------------------------------------------------------------------------------------------- Miscellaneous Materials & Commodities: 0.1% Luoyang Glass Co. Ltd., H Chn. 500,000 155,141 - ----------------------------------------------------------------------------------------------- Multi-Industry: 16.7% Cheung Kong Holdings Ltd. H.K. 3,468,000 19,727,728 China Southern Glass Co. Ltd., B Chn. 1,505,840 579,177 CNT Group Ltd. H.K. 16,802,770 988,411 Jardine Matheson Holdings Ltd. H.K. 669,257 4,049,005 Jardine Strategic Holdings Ltd. H.K. 1,834,000 4,823,420 Jardine Strategic Holdings Ltd., wts. H.K. 167,000 44,255 Lai Sun Garment International Ltd. H.K. 2,508,000 2,610,169 Shenzhen Gintian Industrial Co. Ltd., B Chn. 2,433,680 1,000,543 Shenzhen Tellus Machinery & Electronics Co. Ltd., B Chn. 3,036,720 510,380 Stelux International Holdings Ltd. H.K. 8,475,084 2,169,474 Swire Pacific Ltd., B H.K. 445,000 546,549 Wheelock & Co. Ltd. H.K. 1,820,000 3,023,568 ------------ 40,072,679 - ----------------------------------------------------------------------------------------------- Real Estate: 27.7% China Overseas Land & Investment Ltd. H.K. 6,048,000 1,079,037 Hang Lung Development Co. Ltd. H.K. 8,729,000 13,824,387 Hang Lung Development Co. Ltd., wts. H.K. 872,900 143,322 Lai Sun Development Co. Ltd. H.K. 21,838,000 2,738,608
7 Templeton China World Fund, Inc. Investment Portfolio, November 30, 1995 (unaudited) (cont.) - --------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE - ------------------------------------------------------------------------------------------------ COMMON STOCKS (CONT.) - ------------------------------------------------------------------------------------------------ Real Estate (cont.) New World Development Co. Ltd. H.K. 5,574,485 $ 23,278,370 Prince Housing Development Corp. Twn. 2,184,600 1,487,728 Shanghai Jinqiao Export Processing Zone Development, B Chn. 4,421,560 1,857,055 Shanghai Lujiaxui Finance & Trade Zone Development Stock Co Ltd, B Chn. 894,000 563,220 Shanghai Outer Gaoqiao Free Trade Zone Development Co., B Chn. 616,000 232,848 Shenzhen Properties & Resources Development (Group) Ltd., B Chn. 4,802,600 999,649 Sun Hung Kai Properties Ltd. H.K. 2,395,100 19,275,618 Tian An China Investments Co. Ltd. H.K. 6,869,750 817,098 Tian An China Investments Co. Ltd., wts. H.K. 82,350 106 ------------ 66,297,046 - ------------------------------------------------------------------------------------------------ Recreation, Other Consumer Goods: 4.3% China First Pencil Co. Ltd., B Chn. 10,224,440 3,394,514 Fu Hui Jewellery Co. (H.K.) Ltd. H.K. 5,382,000 194,826 KTP Holdings Ltd. H.K. 2,122,000 90,533 Phoenix Co. Ltd. Chn. 3,894,800 701,064 Shanghai Forever Bicycle Co. Ltd., B Chn. 5,726,000 835,996 Shanghai Wingsung Stationery Co. Ltd., B Chn. 3,835,400 690,372 Shenzhen China Bicycles Co. (Holdings) Ltd., B Chn. 7,520,400 1,244,504 Yue Yuen Industrial (Holdings) Ltd. H.K. 12,180,000 3,086,375 ------------ 10,238,184 - ------------------------------------------------------------------------------------------------ Textiles & Apparel: 2.9% Goldlion Holdings Ltd. H.K. 7,592,000 4,883,088 Laws International Holdings Ltd. H.K. 5,726,000 592,225 Shanghai Lian Hua Fibre Corp., B Chn. 4,999,560 839,926 Top Form International Ltd. H.K. 1,252,000 79,313 Tungtex (Holdings) Co. Ltd. H.K. 964,000 93,472 Victor Onward Textile Industrial Co. Ltd., B Chn. 3,579,180 555,278 ------------ 7,043,302 - ------------------------------------------------------------------------------------------------ Transportation: 1.9% Chiwan Wharf Holdings Ltd., B Chn. 1,470,000 589,148 Cross Harbour Tunnel Co. Ltd. H.K. 1,052,000 2,040,104 IMC Holdings Ltd. H.K. 2,435,000 1,463,852 Shanghai Dazhong Taxi Shareholding Co. Ltd., B Chn. 700,000 541,100 ------------ 4,634,204 - ------------------------------------------------------------------------------------------------
8 Templeton China World Fund, Inc. Investment Portfolio, November 30, 1995 (unaudited) (cont.) - --------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE - ------------------------------------------------------------------------------------------- COMMON STOCKS (CONT.) - ------------------------------------------------------------------------------------------- Utilities Electrical & Gas: 1.5% Hongkong Electric Holdings Ltd. H.K. 565,500 $ 1,897,209 Shandong Huaneng Power Chn. 132,000 940,500 Wing Shan International Ltd. H.K. 5,544,000 637,909 ------------ 3,475,618 - ------------------------------------------------------------------------------------------- Wholesale & International Trade: 0.4% East Asiatic Co. (Hong Kong) Ltd. H.K. 6,760,000 873,961 ------------ TOTAL COMMON STOCKS: (cost $267,503,667) 221,177,294 - ------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT* - ------------------------------------------------------------------------------------------- SHORT TERM OBLIGATIONS: 2.6% (cost $6,132,935) - ------------------------------------------------------------------------------------------- U.S. Treasury Bills, 5.12% to 5.34%, with maturities to 1/25/96 U.S. 6,147,000 6,132,478 - ------------------------------------------------------------------------------------------- TOTAL INVESTMENTS: 94.8% (cost $273,636,602) 227,309,772 OTHER ASSETS, LESS LIABILITIES: 5.2% 12,358,863 ------------ TOTAL NET ASSETS: 100.0% $239,668,635 ============
* CURRENCY OF COUNTRY INDICATED. 9 Templeton China World Fund, Inc. Financial Highlights, November 30, 1995 (unaudited) - --------------------------------------------------------------------------------
NET ASSET VALUE TOTAL NET ASSETS PER SHARE ------------------------- ----------------- Net Asset Value: Beginning of period, September 1, 1995 $245,982,481 $ 12.07 Net investment income $ 1,645,385 $ .08 Distributions from net investment income (4,892,105) (.24) Net loss from security and foreign currency transactions (2,863,288) (.14) Distributions from net realized gains (203,838) (.01) ----------- ------- Net decrease in net asset value (6,313,846) (.31) ------------ -------- End of period, November 30, 1995 $239,668,635 $11.76 ============ ========
- --- This report is sent to the shareholders of Templeton China World Fund, Inc. for their information. It is not a prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in the report. 10 Templeton China World Fund, Inc. - -------------------------------------------------------------------------------- TRANSFER AGENT Chemical Mellon Shareholder Services Securities Transfer Services 450 West 33rd Street New York, NY 10001 800-526-0801 SHAREHOLDER INFORMATION Weekly comparative net asset value and market price information about Templeton China World Fund, Inc., shares is published each Monday in The Wall Street Journal, weekly in Barron's and each Saturday in The New York Times and other newspapers in a table called "Publicly Traded Funds". The Fund's New York Stock Exchange trading symbol is TCH. For current information about the net asset value, call 1-800-292-9293. If any shareholder is not receiving copies of the Reports to Shareholders be- cause shares are registered in a broker's name or in a custodian's name, he or she can write and request that his or her name be added to the Fund's mailing list, by writing Templeton China World Fund, Inc., 700 Central Avenue, St. Pe- tersburg, FL 33701. 11 - -------------------------------------------------------------------------------- - -------------------------------------------- TEMPLETON CHINA WORLD FUND, INC. 700 Central Avenue St. Petersburg, Florida 33701-3628 Investors should be aware that the value of investments made for the Fund may go up as well as down and that the Investment Manager may make errors in selecting securities for the Fund's portfolio. Like any investment in securities, the Fund's portfolio will be subject to the risk of loss from market, currency, economic, political, and other factors. The Fund and Fund investors are not protected from such losses by the Investment Manager. Therefore, investors who cannot accept the risk of such losses should not invest in shares of the Fund. To ensure the highest quality of service, telephone calls to or from our service departments may be monitored, recorded, and accessed. These calls can be determined by the presence of a regular beeping tone. - -------------------------------------------- [RECYCLED PAPER LOGO APPEARS HERE] TLTCH Q95 01/96 TEMPLETON CHINA WORLD FUND, INC. First Quarter Report November 30, 1995 [LOGO OF FRANKLIN TEMPLETON APPEARS HERE] - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----