N-Q 1 d125090dnq.htm THE ASIA PACIFIC FUND, INC. The Asia Pacific Fund, Inc.

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS

OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number:    811-04710
Exact name of registrant as specified in charter:    The Asia Pacific Fund, Inc.
Address of principal executive offices:    655 Broad Street, 17th Floor
   Newark, New Jersey 07102
Name and address of agent for service:    Deborah A. Docs
   655 Broad Street, 17th Floor
   Newark, New Jersey 07102
Registrant’s telephone number, including area code:    973-367-7521
Date of fiscal year end:    03/31/2016
Date of reporting period:    12/31/2015

 

 

 


Item 1. Schedule of Investments


The Asia Pacific Fund, Inc.

Schedule of Investments

as of December 31, 2015 (Unaudited)

 

                      Shares      Value  

LONG-TERM INVESTMENTS — 99.4%

           

COMMON STOCKS — 85.3%

           

CHINA (INCLUDING HONG KONG AND MACAU SAR) — 63.2%

           

Agricultural Bank of China Ltd. (Class “H” Shares) (Banking)

           4,082,000       $ 1,669,659   

Anhui Conch Cement Co. Ltd. (Class “H” Shares) (Materials)

           180,000         484,255   

BAIC Motor Corp. Ltd. (Class “H” Shares) (Consumer Discretionary)

           1,963,000         1,965,520   

Bank of China Ltd. (Class “H” Shares) (Banking)

           8,835,000         3,944,375   

Belle International Holdings Ltd. (Consumer Discretionary)

           1,619,000         1,215,809   

BOC Hong Kong Holdings Ltd. (Banking)

           709,000         2,168,154   

Cheung Kong Property Holdings Ltd. (Real Estate-Developers)

           213,656         1,389,444   

China Construction Bank Corp. (Class “H” Shares) (Banking)

           5,341,000         3,659,423   

China High Speed Transmission Equipment Group Co. Ltd. (Industrials)

           1,510,000         1,215,786   

China Life Insurance Co. Ltd. (Class “H” Shares) (Insurance)

           1,336,000         4,318,269   

China Lilang Ltd. (Consumer Discretionary)

           1,891,000         1,395,671   

China Machinery Engineering Corp. (Class “H” Shares) (Industrials)

           894,000         656,365   

China Overseas Land & Investment Ltd. (Real Estate-Developers)

           1,016,000         3,565,809   

China Power International Development Ltd. (Utilities)

           4,097,000         2,368,315   

China Resources Cement Holdings Ltd. (Materials)

           1,766,000         542,329   

China Resources Power Holdings Co. Ltd. (Utilities)

           1,278,622         2,487,935   

China Shenhua Energy Co. Ltd. (Class “H” Shares) (Energy)

           397,500         624,712   

China State Construction International Holdings Ltd. (Industrials)

           210,000         364,720   

China Vanke Co. Ltd. (Class “H” Shares) (Real Estate-Developers)

           589,838         1,760,146   

Chongqing Changan Automobile Co. Ltd. (Class “B” Shares) (Consumer Discretionary)

           372,978         822,953   

Chow Sang Sang Holdings International Ltd. (Consumer Discretionary)

           479,000         788,645   

CIFI Holdings Group Co. Ltd. (Real Estate-Developers)

           6,042,000         1,348,722   

CK Hutchison Holdings Ltd. (Industrials)

           182,156         2,458,503   

CSI Properties Ltd. (Real Estate-Developers)

           30,750,000         1,051,445   

Dalian Wanda Commercial Properties Co. Ltd. (Class “H” Shares) (Real Estate-Developers)

           312,900         1,826,920   

Daqin Railway Co. Ltd. (Class “A” Shares) (Industrials)

           707,300         938,913   

Dongfeng Motor Group Co. Ltd. (Class “H” Shares) (Consumer Discretionary)

           442,000         590,850   

EGL Holdings Co. Ltd. (Consumer Discretionary)

           2,246,000         747,696   

Far East Consortium International Ltd. (Real Estate-Developers)

           2,977,938         1,133,530   

Far East Horizon Ltd. (Financials)

           864,000         803,793   

HKT Trust & HKT Ltd. (Stapled Shares) (Telecommunication Services)

           949,000         1,212,263   

Hopefluent Group Holdings Ltd. (Real Estate-Developers)

           4,568,000         1,279,032   

Huadian Power International Corp. Ltd. (Class “H” Shares) (Utilities)

           910,000         592,964   

Hui Xian Real Estate Investment Trust (Real Estate Investment Trusts)

           982,739         503,961   

Jiangnan Group Ltd. (Industrials)

           9,962,000         1,953,825   

Lee & Man Chemical Co. Ltd. (Industrials)

           1,246,000         369,778   

Longfor Properties Co. Ltd. (Real Estate-Developers)

           1,790,000         2,669,970   

MGM China Holdings Ltd. (Consumer Discretionary)

           339,200         424,544   

Modern Beauty Salon Holdings Ltd. (Consumer Discretionary)

           5,368,000         342,857   

Oi Wah Pawnshop Credit Holdings Ltd. (Banking)

           7,680,000         490,526   

PetroChina Co. Ltd. (Class “H” Shares) (Energy)

           1,440,000         943,891   

Pico Far East Holdings Ltd. (Consumer Discretionary)

           1,730,000         468,771   

Qingdao Port International Co. Ltd. (Class “H” Shares) (Industrials)

           4,248,000         1,896,514   

Shimao Property Holdings Ltd. (Real Estate-Developers)

           411,500         731,669   

Sino Land Co. Ltd. (Real Estate-Developers)

           596,000         873,615   

Sinomax Group Ltd. (Consumer Discretionary)

           13,310,000         1,391,101   

Sinopec Engineering Group Co. Ltd. (Class “H” Shares) (Industrials)

           2,739,000         2,339,621   

SITC International Holdings Co. Ltd. (Industrials)

           2,021,000         1,071,775   

Skyworth Digital Holdings Ltd. (Consumer Discretionary)

           2,846,025         1,858,167   

Spring Real Estate Investment Trust (Real Estate Investment Trusts)

           1,632,000         638,055   

Springland International Holdings Ltd. (Consumer Discretionary)

           1,608,000         371,394   

Sun Hung Kai Properties Ltd. (Financials)

           79,000         954,110   

Time Watch Investments Ltd. (Consumer Discretionary)

           2,404,000         335,007   

TK Group Holdings Ltd. (Industrials)

           3,786,000         1,074,729   

Wonderful Sky Financial Group Holdings Ltd. (Consumer Discretionary)

           2,344,000         629,095   

Yangtze Optical Fibre and Cable Joint Stock Ltd. Co. (Class “H” Shares) (Information Technology)

           1,322,000         1,603,448   

Yangzijiang Shipbuilding Holdings Ltd. (Telecommunication Services)

           1,737,800         1,348,177   

Yuexiu Real Estate Investment Trust (Real Estate Investment Trusts)

           441,000         236,716   
           

 

 

 
       76,914,241   
           

 

 

 


INDONESIA — 0.6%

                          

PT Bank Mandiri Persero Tbk (Banking)

           923,300         619,552   

PT Nusa Raya Cipta Tbk (Industrials)

           1,482,800         67,229   
           

 

 

 
         686,781   
           

 

 

 

MALAYSIA — 1.8%

           

Airasia Bhd (Industrials)

           2,167,600         651,264   

Mah Sing Group Bhd (Real Estate-Developers)

           1,722,625         581,765   

Nam Cheong Ltd. (Industrials)

           2,717,300         258,717   

Signature International Bhd (Consumer Discretionary)

           730,300         312,974   

UOA Development Bhd (Real Estate-Developers)

           751,300         360,470   
           

 

 

 
     2,165,190   
           

 

 

 

PHILIPPINES — 0.7%

           

Leisure & Resorts World Corp. (Consumer Discretionary)

           1,593,200         258,339   

Premium Leisure Corp. (Diversified Financial Services)

           10,364,000         140,962   

Semirara Mining and Power Corp. (Energy)

           181,540         526,622   
           

 

 

 
     925,923   
           

 

 

 

SINGAPORE — 5.1%

           

AIMS AMP Capital Industrial REIT (Real Estate Investment Trusts)

           267,056         258,976   

Asian Pay Television Trust (Consumer Discretionary)

           1,053,300         475,430   

CapitaLand Commercial Trust Ltd. (Real Estate Investment Trusts)

           505,600         481,388   

CapitaLand Retail China Trust (Real Estate Investment Trusts)

           334,300         351,299   

China Merchants Holdings Pacific Ltd. (Industrials)

           655,000         404,207   

Croesus Retail Trust (Real Estate Investment Trusts)

           825,158         471,386   

DBS Group Holdings Ltd. (Banking)

           173,500         2,042,256   

Ezion Holdings Ltd. (Energy)

           1,285,100         552,867   

Frasers Commercial Trust (Real Estate Investment Trusts)

           697,200         624,476   

Wing Tai Holdings Ltd. (Real Estate-Developers)

           487,400         603,277   
           

 

 

 
     6,265,562   
           

 

 

 

SOUTH KOREA — 7.4%

           

BGF retail Co. Ltd. (Consumer Staples)

           7,749         1,133,388   

Binggrae Co. Ltd. (Consumer Staples)

           1,959         114,444   

Dongbu Insurance Co. Ltd. (Insurance)

           32,657         1,957,944   

GS Retail Co. Ltd. (Consumer Staples)

           30,172         1,384,379   

It’s Skin Co. Ltd.* (Retail)

           704         91,861   

Korea Electric Power Corp. (Utilities)

           28,437         1,212,614   

Korea Ratings Corp. (Banking)

           2,615         112,401   

Maeil Dairy Industry Co. Ltd. (Consumer Staples)

           1,778         67,023   

SK Hynix, Inc. (Semiconductors & Semiconductor Equipment)

           27,993         734,113   

SK Telecom Co. Ltd. (Telecommunication Services)

           11,877         2,182,844   
           

 

 

 
     8,991,011   
           

 

 

 

TAIWAN — 3.5%

           

Farglory Land Development Co. Ltd. (Real Estate-Developers)

           338,000         352,437   

Johnson Health Tech Co. Ltd. (Consumer Discretionary)

           163,825         263,341   

Largan Precision Co. Ltd. (Information Technology)

           17,000         1,174,841   

Mega Financial Holding Co. Ltd. (Banking)

           884,410         572,159   

Mercuries Life Insurance Co. Ltd. (Financials)

           434,653         238,188   

Superalloy Industrial Co. Ltd. (Consumer Discretionary)

           119,955         444,075   

Taiwan Semiconductor Manufacturing Co. Ltd. (Semiconductors & Semiconductor Equipment)

           271,000         1,179,803   
           

 

 

 
     4,224,844   
           

 

 

 


THAILAND — 3.0%

           

AP Thailand PCL (Real Estate-Developers)

           2,238,000         332,730   

AP Thailand PCL, NVDR (Real Estate-Developers)

           213,100         31,682   

Bangchak Petroleum PCL (The) (Energy)

           1,318,700         1,209,312   

Digital Telecommunication Growth Infrastructure Fund (Class “F” Shares) (Telecommunication Services)

           1,034,600         356,511   

Jasmine Broadband Internet Infrastructure Fund (Class “F” Shares) (Capital Markets)

           1,387,500         352,803   

Namyong Terminal PCL (Industrials)

           33,200         14,577   

Somboon Advance Technology PCL (Consumer Discretionary)

           1,228,400         553,011   

Star Petroleum Refining PCL* (Oil & Gas)

           326,200         82,037   

Supalai PCL (Real Estate-Developers)

           3,100         1,568   

Supalai PCL (Real Estate-Developers)

           1,431,200         723,853   
           

 

 

 
     3,658,084   
           

 

 

 

TOTAL COMMON STOCKS
(cost $111,690,508)

   

     103,831,636   
           

 

 

 
               Units         

PARTICIPATORY NOTES† — 3.6%

           

China (including Hong Kong and Macau SAR)

           

Midea Group Ltd. (Class “A” Shares), expiring 12/22/16 (Financials)

           175,600         887,519   

Daqin Railway Co. Ltd. (Class “A” Shares), expiring 03/11/16 (Industrials)

           200,000         265,492   

Gree Electric Appliances, Inc. of Zhuhai (Class “A” Shares), expiring 03/10/16 (Industrials)

           880,747         3,099,216   

Haier Co. Ltd. (Class “A” Shares), expiring 02/23/16 (Consumer Staples)

           57,900         88,451   
           

 

 

 

TOTAL PARTICIPATORY NOTES
(cost $4,239,841)

   

     4,340,678   
           

 

 

 
               Shares         

PREFERENCE SHARES — 10.5%

           

South Korea

           

Amorepacific Corp. (Consumer Staples)

           17,759         3,483,493   

CJ CheilJedang Corp. (Consumer Staples)

           2,002         373,065   

Hyundai Motor Co. (Consumer Discretionary)

           6,994         596,478   

LG Corp. (Industrials)

           52,161         2,088,575   

Samsung Electronics Co. Ltd. (Semiconductors & Semiconductor Equipment)

           3,337         3,104,914   

Samsung Fire & Marine Insurance Co. Ltd. (Insurance)

           19,417         3,129,771   
           

 

 

 

TOTAL PREFERENCE SHARES
(cost $8,860,917)

   

     12,776,296   
           

 

 

 
               Units         

WARRANTS* (a)

           

Malaysia

           

Mah Sing Group Bhd, expiring 02/21/20
(cost $0) (Real Estate-Developers)

           423,637         15,294   
           

 

 

 

TOTAL LONG-TERM INVESTMENTS
(cost $124,791,266)

   

     120,963,904   
           

 

 

 

SHORT-TERM INVESTMENT — 1.9%

           
               Shares         

MONEY MARKET MUTUAL FUND

           

JPMorgan Prime Money Market Fund/Premier
(cost $2,372,894)

           2,372,894         2,372,894   
           

 

 

 


TOTAL INVESTMENTS — 101.3%
(cost $127,164,160)(b)

                                       123,336,798   

Liabilities in excess of other assets — (1.3)%

              (1,556,509
           

 

 

 

NET ASSETS — 100.0%

            $ 121,780,289   
           

 

 

 

 

The following abbreviations are used in the quarterly report:

 

NVDR    Non-Voting Depository Receipt
REIT    Real Estate Investment Trust

 

* Non-income producing security.
Participatory notes represented 3.6% of net assets and BOCI Financial Products Limited is the counterparty to the Fund and issuer of the securities.
(a) The amount represent fair value of derivative instruments subject to equity contracts risk exposure as of December 31, 2015.
(b) The United States federal income tax basis of investments and net unrealized depreciation were as follows:

 

Tax Basis

   $ 127,599,762   
  

 

 

 

Appreciation

     9,811,576   

Depreciation

     (14,074,540
  

 

 

 

Net Unrealized Depreciation

   $ (4,262,964
  

 

 

 

The book basis may differ from tax basis due to certain tax-related adjustments.

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1 - quoted prices generally in active markets for identical securities.

Level 2 - quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

Level 3 - unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of December 31, 2015 in valuing such portfolio securities:

 

     Level 1      Level 2      Level 3  

Investments in Securities

        

Common Stocks

        

China (including Hong Kong and Macau SAR)

   $ 75,154,095       $ —         $ 1,760,146   

Indonesia

     686,781         —           —     

Malaysia

     2,165,190         —           —     

Philippines

     925,923         —           —     

Singapore

     6,265,562         —           —     

South Korea

     8,991,011         —           —     

Taiwan

     4,224,844         —           —     

Thailand

     33,250         3,624,834         —     

Participatory Notes

        

China (including Hong Kong and Macau SAR)

     —           4,340,678         —     

Preference Shares

        

South Korea

     12,776,296         —           —     

Warrants

        

Malaysia

     —           —           15,294   

Money Market Mutual Fund

     2,372,894         —           —     
  

 

 

    

 

 

    

 

 

 

Total

   $ 113,595,846       $ 7,965,512       $ 1,775,440   
  

 

 

    

 

 

    

 

 

 

The following is a reconciliation of assets in which unobservable inputs (Level 3) were used in determining fair value:

 

     Common Stocks      Warrants  

Balance as of 03/31/15

   $ —         $ —     

Realized gain (loss)

     1,028,711         —     

Change in unrealized appreciation (depreciation)*

     (638,400      (3,008

Purchases

     —           —     

Sales

     (3,438,490      —     

Accrued discount/premium

     —           —     

Transfers into Level 3

     4,808,325         18,302   

Transfers out of Level 3

     —           —     
  

 

 

    

 

 

 

Balance as of 12/31/15

   $ 1,760,146       $ 15,294   
  

 

 

    

 

 

 

 

* Of which, $(641,408) was relating to securities held at the reporting period end.

Level 3 securities as presented in the table above are being fair valued using pricing methodologies approved by Board, which contain unobservable inputs as follows:

 

Level 3 Securities

   Fair Value as of
December 31,
2015
     Valuation
Methodology
   Unobservable Inputs

Common Stocks

     1,760,146       Stale Pricing    Unadjusted Last Trade Price

Warrants

     15,294       Stale Pricing    Unadjusted Last Trade Price
  

 

 

       
   $ 1,775,440         
  

 

 

       

It is the Fund’s policy to recognize transfers in and transfers out at the fair value as of the beginning of period. At the reporting period end, securities transferred levels as follows:

 

Investments in

Securities

   Amount Transferred      Level Transfer   

Logic

Common Stocks

   $ 4,808,325       L1 to L3    Last Trade Price to Stale Pricing

Warrants

   $ 18,302       L1 to L3    Last Trade Price to Stale Pricing


The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2015 were as follows:     

Industrials

    17.4

Real Estate-Developers

    16.9   

Consumer Discretionary

    13.5   

Banking

    12.6   

Insurance

    7.8   

Consumer Staples

    5.5   

Utilities

    5.4   

Telecommunication Services

    4.2   

Semiconductors & Semiconductor Equipment

    4.1   

Energy

    3.1   

Real Estate Investment Trusts

    2.9   

Financials

    2.4   

Information Technology

    2.2   

Money Market Mutual Fund

    1.9   

Materials

    0.8   

Capital Markets

    0.3   

Diversified Financial Services

    0.1   

Retail

    0.1   

Oil & Gas

    0.1   
 

 

 

 
    101.3   

Liabilities in excess of other assets

    (1.3
 

 

 

 
    100.0
 

 

 

 


Notes to Schedule of Investments (Unaudited)

Securities Valuation: The Fund holds portfolio securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to the Investment Manager, Value Partners Hong Kong Limited. Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers and alternative valuation methods when market quotations are not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.

Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Schedule of Investments.

Common stocks and preference shares, exchange-traded funds, and derivative instruments such as futures and options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 of the fair value hierarchy.

Participatory Notes (P-notes) are generally valued based upon the value of a related underlying security that trades actively in the market and are classified as Level 2 in the fair value hierarchy.

In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in absence of an ask price. These securities are classified as Level 2 of the fair value hierarchy.

Common stocks and preference shares traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 of the fair value hierarchy. Such securities are valued using model prices to the extent that the valuation meets the established confidence level for each security. If the confidence level is not met or the vendor does not provide a model price, securities are valued in accordance with exchange-traded common stocks and preference shares discussed above.

Investments in open end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset value on the date of valuation.

Portfolio securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 of the fair value hierarchy.

When determining the fair valuation of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.


Market values of investments traded in foreign currency are translated into U.S. dollars at the current rates of exchange.

Other information regarding the Fund is available in the Fund’s most recent Report to Shareholders. This information is available on the Securities and Exchange Commission’s website (www.sec.gov).

 


Item 2. Controls and Procedures

 

  (a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

 

  (b) There have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 3. Exhibits

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 – Attached hereto.


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.

 

(Registrant) The Asia Pacific Fund, Inc.
By (Signature and Title)*   

/s/ Deborah A. Docs

   Deborah A. Docs
   Secretary of the Fund                                

Date     February 18, 2016

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 (Signature and Title)*   

/s/ Raymond Tam

   Raymond Tam
   President and Principal Executive Officer
Date    February 18, 2016
By (Signature and Title)*   

/s/ M. Sadiq Peshimam

   M. Sadiq Peshimam
   Treasurer and Principal Financial Officer
Date    February 18, 2016

 

* Print the name and title of each signing officer under his or her signature.