N-Q 1 tdf-nq905.txt TDF N-Q PE 9/30/05 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-08874 --------- TEMPLETON DRAGON FUND, INC. -------------------------------------------------- (Exact name of registrant as specified in charter) 500 EAST BROWARD BLVD., SUITE 2100, FORT LAUDERDALE, FL 33394-3091 -------------------------------------------------------------------- (Address of principal executive offices) (Zip code) CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906 ------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (954) 527-7500 -------------- Date of fiscal year end: 12/31 ----- Date of reporting period: 9/30/05 -------- ITEM 1. SCHEDULE OF INVESTMENTS. TEMPLETON DRAGON FUND, INC. QUARTERLY STATEMENT OF INVESTMENTS SEPTEMBER 30, 2005 -------------------------------------------------------------------------------- CONTENTS Statement of Investments ................................................. 3 Notes to Statement of Investments ........................................ 6 [LOGO](R) FRANKLIN TEMPLETON INVESTMENTS Franklin o TEMPLETON o Mutual Series Quarterly Statement of Investments | 1 This page intentionally left blank. TEMPLETON DRAGON FUND, INC. STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2005 (UNAUDITED)
------------------------------------------------------------------------------------------------- COUNTRY SHARES VALUE ------------------------------------------------------------------------------------------------- COMMON STOCKS 95.5% AIR FREIGHT & LOGISTICS 0.1% Sinotrans Ltd., H ......................... China 3,017,000 $ 1,059,770 ------------ AIRLINES 0.3% (a)Air China Ltd., H ......................... China 8,850,000 2,737,943 ------------ AUTO COMPONENTS 1.0% Cheng Shin Rubber Industry Co. Ltd. ....... Taiwan 10,208,938 8,321,459 ------------ AUTOMOBILES 0.1% Chongqing Changan Automobile Co. Ltd., B .. China 2,082,470 880,486 ------------ CAPITAL MARKETS 0.9% Yuanta Core Pacific Securities Co. ........ Taiwan 11,818,290 7,549,916 ------------ COMMERCIAL BANKS 6.3% Chinatrust Financial Holding Co. Ltd. ..... Taiwan 7,191,024 6,197,384 HSBC Holdings PLC ......................... United Kingdom 1,749,481 28,460,230 Mega Financial Holdings Co. Ltd. .......... Taiwan 27,217,000 17,223,094 ------------ 51,880,708 ------------ COMMUNICATIONS EQUIPMENT 0.4% D-Link Corp. .............................. Taiwan 3,277,239 3,397,177 ------------ COMPUTERS & PERIPHERALS 5.8% Acer Inc. ................................. Taiwan 12,965,943 25,786,932 Advantech Co. Ltd. ........................ Taiwan 2,736,514 6,844,274 Asustek Computer Inc. ..................... Taiwan 3,171,863 8,506,601 Lite-On Technology Corp. .................. Taiwan 5,891,622 6,577,710 ------------ 47,715,517 ------------ CONSTRUCTION MATERIALS 0.2% Anhui Conch Cement Co. Ltd., H ............ China 1,306,000 1,296,295 China Resources Cement .................... China 872,000 141,630 ------------ 1,437,925 ------------ DISTRIBUTORS 3.0% China Resources Enterprise Ltd. ........... China 12,628,000 20,673,219 Test-Rite International Co. Ltd. .......... Taiwan 5,227,963 4,048,716 ------------ 24,721,935 ------------ DIVERSIFIED TELECOMMUNICATION SERVICES 0.5% China Telecom Corp. Ltd., H ............... China 10,278,000 3,875,291 ------------ ELECTRIC UTILITIES 4.5% Cheung Kong Infrastructure Holdings Ltd. .. Hong Kong 11,060,000 36,925,358 ------------ ELECTRICAL EQUIPMENT 0.4% Phoenixtec Power Co. Ltd. ................. Taiwan 3,632,945 3,557,901 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS 2.2% Delta Electronics Inc. .................... Taiwan 10,439,970 17,837,498 ------------
Quarterly Statement of Investments | 3 TEMPLETON DRAGON FUND, INC. STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2005 (UNAUDITED) (CONTINUED)
-------------------------------------------------------------------------------------------------------- COUNTRY SHARES VALUE -------------------------------------------------------------------------------------------------------- COMMON STOCKS (CONT.) FOOD & STAPLES RETAILING 17.7% Dairy Farm International Holdings Ltd. .......... Hong Kong 39,843,978 $145,828,959 ------------- FOOD PRODUCTS 0.8% UNI-President Enterprises Corp. ................. Taiwan 16,612,030 6,682,756 ------------- HOTELS RESTAURANTS & LEISURE 2.4% Hong Kong & Shanghai Hotels Ltd. ................ Hong Kong 17,869,838 19,810,201 ------------- HOUSEHOLD DURABLES 1.1% TCL Multimedia Technology Holdings Ltd. ......... China 48,960,000 9,088,113 ------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS 3.5% Datang International Power Generation Co. Ltd., H China 26,502,000 20,326,632 Guangdong Electric Power Development Co. Ltd., B China 11,270,600 5,143,043 Huadian Power International Corp. Ltd., H ....... China 7,428,000 2,058,639 Huaneng Power International Inc., H ............. China 1,454,000 1,077,710 ------------- 28,606,024 ------------- INDUSTRIAL CONGLOMERATES 4.9% CITIC Pacific Ltd. .............................. China 7,081,000 19,807,248 (a)LG Corp. ........................................ South Korea 355,170 8,968,596 Shanghai Industrial Holdings Ltd. ............... China 5,774,000 11,685,472 ------------- 40,461,316 ------------- IT SERVICES 0.3% Travelsky Technology Ltd., H .................... China 2,837,000 2,559,925 ------------- LEISURE EQUIPMENT & PRODUCTS 0.4% Premier Image Technology Corp. .................. Taiwan 2,363,850 3,468,970 ------------- MACHINERY 2.0% China International Marine Containers Co. Ltd., B China 12,791,872 12,845,215 Yung Tay Engineering Co. Ltd. ................... Taiwan 5,686,000 3,606,705 ------------- 16,451,920 ------------- METALS & MINING 0.1% Aluminum Corp. of China Ltd., H ................. China 1,028,000 649,321 (b)China Oriental Group Co. Ltd., 144A ............. China 422,000 100,636 ------------- 749,957 ------------- OFFICE ELECTRONICS 0.1% Kinpo Electronics Inc. .......................... Taiwan 1,526,700 639,470 ------------- OIL, GAS & CONSUMABLE FUELS 10.7% China Petroleum & Chemical Corp., H ............. China 103,150,000 47,202,761 (b)PetroChina Co. Ltd., 144A ....................... China 9,200,000 7,708,520 PetroChina Co. Ltd., H .......................... China 40,050,000 33,557,199 ------------- 88,468,480 -------------
4 | Quarterly Statement of Investments TEMPLETON DRAGON FUND, INC. STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2005 (UNAUDITED) (CONTINUED)
----------------------------------------------------------------------------------------------------------------------- COUNTRY SHARES VALUE ----------------------------------------------------------------------------------------------------------------------- COMMON STOCKS (CONT.) REAL ESTATE 9.3% Cheung Kong Holdings Ltd. ....................................... Hong Kong 2,575,000 $ 29,077,105 Hang Lung Group Ltd. ............................................ Hong Kong 16,159,042 31,140,574 Henderson Investment Ltd. ....................................... Hong Kong 7,485,000 10,661,637 Hong Kong Land Holdings Ltd. .................................... Hong Kong 1,904,000 5,978,560 ------------- 76,857,876 ------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 4.2% Elan Microelectronics Corp. ..................................... Taiwan 3,454,491 1,389,687 Faraday Technology Corp. ........................................ Taiwan 471,162 826,314 Samsung Electronics Co. Ltd. .................................... South Korea 10,780 6,074,403 Siliconware Precision Industries Co. Ltd. ....................... Taiwan 3,319,489 3,350,948 Sunplus Technology Co. Ltd. ..................................... Taiwan 6,575,395 6,023,474 Taiwan Semiconductor Manufacturing Co. Ltd. ..................... Taiwan 10,645,921 17,098,660 ------------- 34,763,486 ------------- TEXTILES APPAREL & LUXURY GOODS 0.6% Tack Fat Group International Ltd. ............................... Hong Kong 26,080,000 2,454,145 Tainan Enterprises Co. Ltd. ..................................... Taiwan 1,864,460 2,207,991 ------------- 4,662,136 ------------- TRANSPORTATION INFRASTRUCTURE 2.6% China Merchants Holdings (International) Co. Ltd. ............... China 3,166,874 7,103,131 Cosco Pacific Ltd. .............................................. China 5,520,000 10,744,491 Hainan Meilan International Airport Co. Ltd., H ................. Hong Kong 2,626,000 1,396,331 Hopewell Holdings Ltd. .......................................... Hong Kong 936,000 2,467,397 ------------- 21,711,350 ------------- WIRELESS TELECOMMUNICATION SERVICES 9.1% China Mobile (Hong Kong) Ltd., fgn. ............................. China 13,876,000 67,970,068 Taiwan Mobile Co. Ltd. .......................................... Taiwan 7,047,764 6,711,044 ------------- 74,681,112 ------------- TOTAL COMMON STOCKS (COST $455,502,456) ......................... 787,390,935 ------------- SHORT TERM INVESTMENTS (COST $32,425,664) 3.9% MONEY FUND 3.9% (c)Franklin Institutional Fiduciary Trust Money Market Portfolio ... United States 32,425,664 32,425,664 ------------- TOTAL INVESTMENTS (COST $487,928,120) 99.4% ..................... 819,816,599 OTHER ASSETS, LESS LIABILITIES 0.6% ............................. 4,542,937 ------------- NET ASSETS 100.0% ............................................... $824,359,536 =============
(a) Non-income producing. (b) Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Fund's Board of Directors. At September 30, 2005, the value of these securities was $7,809,156, representing 0.95% of net assets. (c) The Franklin Institutional Fiduciary Trust Money Market Portfolio is managed by an affiliate of the Fund's investment manager. Quarterly Statement of Investments | See Notes to Statement of Investments. | 5 TEMPLETON DRAGON FUND, INC. NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) Templeton Dragon Fund, Inc. (the Fund), is registered under the Investment Company Act of 1940 as a closed-end, non-diversified investment company. 1. INCOME TAXES At September 30, 2005, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: Cost of investments .................................. $ 488,879,819 ============== Unrealized appreciation .............................. $ 343,139,132 Unrealized depreciation .............................. (12,202,352) -------------- Net unrealized appreciation (depreciation) ........... $ 330,936,780 ============== For information on the Fund's policy regarding valuation of investments and other significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report. 6 | Quarterly Statement of Investments ITEM 2. CONTROLS AND PROCEDURES. (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective. (b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q. ITEM 3. EXHIBITS. (a) Certifications pursuant to Section 30a-2 of the Investment Company Act of 1940 of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and Galen G. Vetter, Chief Financial Officer. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TEMPLETON DRAGON FUND, INC. By /s/JIMMY D. GAMBILL ----------------------- Jimmy D. Gambill Chief Executive Officer - Finance and Administration Date November 21, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/JIMMY D. GAMBILL ----------------------- Jimmy D. Gambill Chief Executive Officer - Finance and Administration Date November 21, 2005 By /s/GALEN G. VETTER ------------------------------ Galen G. Vetter Chief Financial Officer Date November 21, 2005