HFL – Half-year Report

Page 1 of 17

LEGAL ENTITY IDENTIFIER: 2138008DIQREOD38O596


HENDERSON FAR EAST INCOME LIMITED
Unaudited results for the half-year ended 29 February 2024

This announcement contains regulated information


INVESTMENT OBJECTIVE
The Company seeks to provide shareholders with a growing total annual dividend per share, as well as capital
appreciation, from a diversified portfolio of investments from the Asia Pacific region.

PERFORMANCE
Total return performance (including dividends reinvested and excluding transaction costs)
6 months
%
1 year
%
3 years
%
5 years
%
10 years
%
NAV
1
8.2 -1.9 -4.3 2.1 57.3
Share price
2
4.6 -10.0 -12.1 -6.1 45.3
AIC sector
3
average NAV 4.2 -2.0 -2.7 24.3 113.7
FTSE World Asia Pacific ex Japan Index* 5.1 2.1 -6.0 25.9 107.8
MSCI AC Asia Pacific ex Japan High Dividend Yield
Index*
10.0 10.2 22.3 33.1 103.0
*The Company does not have a formal benchmark. It uses the FTSE World Asia Pacific ex Japan and MSCI AC Asia Pacific ex Japan High Dividend
Yield indices (sterling adjusted and with dividends reinvested) for comparison purposes only.

Financial highlights at
29 February 2024
at
31 August 2023
NAV per ordinary share 227.06p
222.12p
Share price 215.00p 218.00p
Net assets £368,577,000 £362,032,000
Discount
4
-5.3% -1.9%
Dividend yield 11.3%
5
11.1%
6


1. Net asset value per ordinary share total return
2. Share price total return using closing price
3. The AIC sector is the Asia Pacific Equity Income sector
4. The discount expresses, as a percentage, the difference between the closing share price and NAV, including current year revenue, as at the
period end date
5. Dividend yield based on a share price of 215.00p and dividends for the twelve months to 29 February 2024 totalling 24.40p per ordinary share
6. Dividend yield based on a share price of 218.00p and dividends for the twelve months to 31 August 2023 totalling 24.20p per ordinary share
Sources: Morningstar Direct

Page 2 of 17


INTERIM MANAGEMENT REPORT

CHAIRMAN’S STATEMENT

After a period of difficult relative and absolute performance, it was encouraging to see substantially better investment
returns during the first half of our financial year in response to previous restructuring and the planned changes intended
to improve capital returns. As Sat has succinctly outlined in the Fund Manager’s report, the changes to our portfolio
produced better results that reflected the key themes and altered country weightings that were implemented earlier.
Better results were supported by both macro factors and company specific developments across the region. Our
earlier decision to significantly reduce exposure to China as it struggles to adjust in a post-Covid environment has
proven a good one although we have now reached a point that some valuations in that market are too compelling to
ignore. As a result, we expect to add selectively in Chinese names at or around current levels, taking advantage of
what may well be unusual dividend and profit opportunities.

In general, it has been encouraging to see Asian markets increasingly responding to strong company-specific
fundamentals. Performance was also driven by such themes as corporate reform in Korea, strong macro-economic
data in India and Indonesia and the technology sector which has been a beneficiary of artificial intelligence. As we had
discussed in detail in the last annual report, the Fund Manager has made a number of changes to the Company’s
country and sector positioning to take advantage of these investment themes. As we have noted before, our revised
approach is intended to ensure that your Company benefits from the many structural growth opportunities in the region
whilst also capturing the potential for significantly higher dividends.

Market expectations for changes in interest rates and the prospect of an easing in monetary policy by central banks in
the US and Europe were also important for the direction of equities. There is now a clear expectation for rate cuts in
2024 and we believe that Asian markets are well placed to benefit in this environment. Inflation in Asia has remained
subdued and China has continued to pursue economic stimulation in the face of relatively slow growth. We would
expect rate cuts in the major developed economies to provide stimulus to the Asia region, which already offers
attractive valuations. We are also encouraged by efforts on the part of the Korean government to pursue policies to
improve shareholder returns and see this as another example of efforts in the region to address the current low
dividend payout ratios. This makes for a compelling blend of growth and income, providing a favourable backdrop for
the Company over the balance of the year.

Performance
I am pleased to be able to report that the NAV total return for the six months to 29 February 2024 was 8.2%, ahead of
the FTSE World Asia Pacific ex Japan Index which returned 5.1% and only slightly behind the MSCI AC Asia Pacific ex
Japan High Dividend Yield Index which returned 10.0%. This follows the rebalancing of the portfolio in the latter part of
the 2023 calendar year which was addressed in both my statement in the annual report, and the update from the Fund
Manager.

Dividends
For the financial year ending 31 August 2024, the Board has to-date declared the first and second interim dividends
each in the amount of 6.10p per ordinary share. This represents an increase of 1.7% on the dividends declared in the
first half of last year. The second interim dividend will be paid to shareholders on the register at 26 April 2024 and
trade ex-dividend on the 25 April 2024. Payment will be made on 31 May 2024.

Share repurchases
Nearly all investment trusts, regardless of their sector focus, saw a significant increase in their discount to net asset
value in September 2023, with the average trust discount reaching -19.0%. This reflected the rapid increase in interest
rates and thus, the shift in the perceived risk-free rate of return for fixed income and cash investments compared with
equities.

Our Company fared considerably better than most investment trusts with the discount reaching -6.2% at its widest, and
averaging only a discount of -3.9% for the six months to 29 February 2024. Having been a regular issuer of shares at
a premium, your Board decided that it was appropriate for the Company to repurchase shares during this period of an
expanded discount. Between 31 August 2023 and the date of this report, we have repurchased a total of 806,385
shares in the market as part of our ongoing discount management programme. The Board continues to closely monitor
the discount and the demand for the Company’s shares.

Page 3 of 17

Board composition
Carole Ferguson and Susie Rippingall joined the Board on 1 December 2023 and we said goodbye to David Mashiter
following the annual general meeting held on 24 January 2024. We believe this refreshed Board will bring new
challenge and different views on the oversight we bring to the Company’s business, which can only be good for
shareholders. We once again want to thank David for his outstanding contributions to the Company with our best
wishes for the future.

Outlook
While there will be new challenges during the second half of our financial year, there are certainly good reasons for
optimism about investment returns in the Asia Pacific region over the balance of our year. Attractive valuations, a
return to high growth and a revitalized focus on increasing dividends all suggest a positive outlook. There are exciting
opportunities across a number of sectors and markets in the region despite our ongoing macro-economic concerns in
China. We remain open to investment ideas within China given the current low valuations, but we have yet to see a
genuine resolution of the many structural issues that beset the People’s Republic of China. The government certainly
has the wherewithal to successfully tackle these, but they will take time to address.

The strength of the Asia Pacific region lies in the diversification of its many market economies at widely different stages
of development. This offers a combination of mature markets with high dividends and emerging markets offering
dividend growth. These differences are reflected in the composition of our portfolio and your Company is well placed to
capture growth as well as high dividends. This will be important as we seek to recapture capital performance whilst
maintaining a high income focus in the years ahead.

Ronald Gould
Chairman
25 April 2024

Page 4 of 17


FUND MANAGERS’ REPORT

Review
The drivers of market performance in the first half of the current financial year were a continuation of many of the
previously established growth themes in markets such as India, Indonesia, Korea and Taiwan. China underperformed
again despite a host of government measures to support the economy. Concern remained around property, local
government indebtedness, deflation and geopolitical risk, despite a meeting between Xi and Biden, which dampened
investors’ interest. At a global level the actions of the Federal Reserve once again dictated sentiment for equities. This
time, expectations of peaking interest rates after softer Consumer Price Index and employment data, followed by
supportive comments from the Federal Reserve, led to forecasts for rate cuts in 2024. This context was supportive for
equities generally.

The period ended positively with the FTSE World Asia Pacific ex Japan Index up 5.1% as a number of different market
themes flourished simultaneously. Strong guidance from the dominant US companies in the sector driving the artificial
intelligence (AI) sector revived this theme. This boosted the performance of the technology sector in our region
particularly in Korea and Taiwan. Another dominant theme was corporate reform, with the Korean government recently
announcing a wide-ranging initiative to improve shareholder returns, taking a leaf out of Japan’s book. This ‘Value-up’
initiative has been received very positively by the market. Finally, India was another bright spot as macro-economic
data continued to strengthen, which led to a broadening of market performance. This favoured the more value-
orientated sectors where we have exposure, such as energy and utilities. It is encouraging that the re-positioning of our
portfolio at the beginning of the period captured performance in many of these areas.

We remain focused on re-establishing the capital performance of the Company and a number of themes which are
unique to our region were highlighted in the most recent annual report. The portfolio had been re-positioned to take
advantage of opportunities with a compelling capital and dividend growth trajectory. These include the build-out of
green infrastructure, strong consumption trends, technology supply chains supporting global innovation as well as
financial inclusion as household wealth increases.

The Indian market was the best performer in the six month period as positive macro-economic data, robust corporate
results and local state election wins by Modi’s BJP boosted hopes of a continuation of the supportive economic policy
with a general election due to take place later this year. Taiwan also performed strongly, supported by positive
guidance from technology names such as TSMC and other AI beneficiaries. Korea delivered solid results driven by the
performance of technology names and latterly government efforts to improve shareholder returns.

China and Hong Kong were weak in the period owing to flagging economic growth and an ineffective response to key
domestic structural issues. However, we have tentatively added to our existing positions in these markets. This was
motivated by recent signs of stabilisation in the property market and some positive indicators following Chinese Lunar
New Year data, which indicated some pick-up in consumption trends and robust travel data. There are ongoing efforts
from the government to provide piecemeal stimulus to support the equity market which, along with compelling
valuations, may provide more opportunities. However, we remain comfortable with our current underweight position.
In terms of sectors, technology and utilities stand out as key performers whilst real estate was the notable
underperformer.

Performance
The NAV total return was 8.2% in sterling terms over the period, ahead of our peers and ahead of the FTSE World Asia
Pacific ex Japan Index which returned 5.1%. However, performance was behind the more concentrated MSCI AC Asia
Pacific ex Japan High Dividend Yield Index which returned 10.0%. We are seeing some early evidence that the
repositioning of the portfolio towards the key structural growth drivers in our region is having a positive impact on
performance.

The Company’s performance greatly benefitted from our Indian holdings with Bharat Petroleum, Power Grid, NTPC,
ONGC and HCL Technologies all appearing in our list of top contributors. The other positive area was technology with
the likes of TSMC, Mediatek and Samsung Electronics key contributors. Our other recent holdings of Kia Corp and
Wesfarmers, an Australian conglomerate, were also in the top ten contributors. Performance was negatively impacted
by our China holdings with JD.com, Guangdong Investment and Li Ning remaining weak as Chinese economic data
continued to falter.

Revenue

Page 5 of 17

The income from investments fell 18% from the same period last year, while income from option writing more than
doubled, increasing by 107%*. Total income fell by 3% compared to last year.

The key reason for the decline in income from investments was due to the change in ex-dividend dates for our Korean
holdings which are paying large dividends in March rather than the usual December date. This is part of a raft of
measures from the Korean government to reform corporate structures, a very positive development given our large
weighting.

We have modified our options strategy to focus largely on writing call options with much less emphasis on writing put
options. We feel this will reduce the risk profile of the strategy and has helped to increase income by using smaller
positions over a wider number of underlying holdings.

Portfolio activity
We view the current Korean corporate reform as potentially very exciting and added exposure ahead of the official
announcements. This was funded by reducing our positions in India where the market had performed well but where
we see less upside for our stocks following strong moves. Additionally, Korean stocks are demonstrating higher
dividend growth this year. We remain focused on opportunities arising from this reform with the purchase of insurers
DB Insurance and Samsung Fire & Marine and the auto companies Hyundai Motor and Kia Corp. All of these names
have performed strongly following the government’s reform announcements. We sold LG Corp and SK Telecom to fund
these positions.

We added Netease, a gaming company in China with an outstanding pipeline of new games, an established reputation
in the sector and the prospect of increasing dividends. We have added further to our existing positions in China where
valuations have become more attractive without any change in the fundamentals of the key areas in which we have
invested in, namely infrastructure, technology and domestic consumer brands.

Outlook
Whilst the challenges faced by China dominate headlines, there are numerous bright spots which we expect to be
positive for performance. We expect this to continue as the likes of India, Indonesia, Taiwan and South Korea provide
compelling exposure to growth themes in our region. There is also evidence of dividend growth in areas such as
Indonesian banks, Korean corporate reform names and Taiwanese technology companies. If the recent stabilisation in
China macro-economic data develops into a more positive trend, then this, along with potential interest rate cuts, in the
second half of 2024, could provide a further boost to our markets.

The growth differential between Asia and the rest of the world remains wide and valuations continue to be attractive.
We are observing significant opportunities to accumulate quality companies which are growing their earnings and
increasing their dividends across many of our markets. The outlook for dividends in the region remains robust. Positive
free cash flow generation alongside the strength of balance sheets, with record cash held by corporates, provides a
strong backdrop across several sectors and markets across our region.

Sat Duhra
Fund Manager
25 April 2024
*
Excludes interest

Page 6 of 17


PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties associated with the Company’s business can be divided into the following main
areas:

• Investment and strategy – adopting an inappropriate investment strategy or underperformance for an
extended period leading to a wide discount;
• Accounting, legal and regulatory – failure to maintain accurate accounting records or a breach of legal or
regulatory requirements resulting in financial or reputational loss;
• Operational – disruption to or failure of a third-party service provider leading to a loss of shareholder value;
• Financial – changes in market prices, currency exchange rates, interest rates or poor liquidity or counterparty
management leading to a loss of shareholder value

Further information on these risks and how they are managed is given in the annual report for the year ended
31 August 2023. In the view of the Board these principal risks and uncertainties are as applicable to the remaining six
months of the financial year as they were to the six months under review.


DIRECTORS’ RESPONSIBILITY STATEMENT
The directors (listed in note 13) confirm that, to the best of their knowledge:

• the unaudited condensed set of financial statements has been prepared in accordance with IAS 34 – Interim
Financial Reporting (‘IAS 34’) and gives a true and fair view of the assets, liabilities, financial position and profit or
loss of the Company as required by Disclosure Guidance and Transparency Rule (‘DTR’) 4.2.4R;

• the interim management report includes a fair review of the information required:

− by DTR 4.2.7R (indication of important events during the first six months of the financial year, and their impact
on the unaudited condensed set of financial statements, and a description of principal risks and uncertainties
for the remaining six months of the year); and

− by DTR 4.2.8R (disclosure of related party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial position or the performance of the
Company during the period; and any changes in related party transactions described in the latest annual report
that could have an impact in the first six months of the current financial year).

Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions. The directors remain responsible for establishing and controlling the process for doing so, and for
ensuring that the financial statements are complete and unaltered in any way.


On behalf of the Board
Ronald Gould
Chairman
25 April 2024

Page 7 of 17

INVESTMENT PORTFOLIO at 29 February 2024


Country of

Valuation % of

Company incorporation Sector £'000 Portfolio
1 Taiwan Semiconductor Manufacturing
1
Taiwan Technology 19,777 5.07
2 Samsung Electronics
2
South Korea Technology 13,698 3.52
3 Hyundai Motor
2
South Korea Consumer discretionary 12,343 3.17
4 Samsonite Hong Kong Consumer discretionary 12,203 3.13
5 Samsung Fire & Marine South Korea Financials 12,107 3.11
6 DB Insurance South Korea Financials 11,171 2.86
7 MediaTek Taiwan Technology 11,156 2.86
8 Midea Group China Consumer discretionary 10,476 2.69
9 BHP Group Limited Australia Basic Materials 10,355 2.66
10 VinaCapital Vietnam Opportunity Fund Vietnam
3
Financials 9,614 2.47

Top Ten Investments

122,900 31.54
11 ANTA Sports China Consumer discretionary 9,592 2.46
12 Rio Tinto Limited Australia Basic Materials 9,583 2.46
13 Swire Properties Hong Kong Real Estate 9,559 2.45
14 HSBC Hong Kong Financials 9,068 2.33
15 ASE Technology Taiwan Technology 8,847 2.27
16 Bank Negara Indonesia Indonesia Financials 8,773 2.25
17 Nari Technology China Industrials 8,582 2.20
18 Bank Mandiri Indonesia Financials 8,539 2.19
19 Kia South Korea Consumer discretionary 8,300 2.13
20 Macquarie Korea Infrastructure Fund South Korea Financials 8,284 2.13

Top Twenty Investments

212,027 54.41
21 Wesfarmers Australia Consumer discretionary 8,186 2.10
22 Guangdong Investment Hong Kong Utilities 8,027 2.06
23 Lenovo China Technology 8,006 2.05
24 Woodside Energy Australia Energy 7,957 2.04
25 Oversea-Chinese Banking Singapore Financials 7,626 1.96
26 HDFC Bank India Financials 7,378 1.89
27 NTPC India Utilities 7,277 1.87
28 HCL Technologies India Technology 7,254 1.86
29 CapitaLand Integrated Commercial Trust Singapore Real Estate 7,203 1.85
30 Power Grid India Utilities 7,183 1.84

Top Thirty Investments

288,124 73.93
31 Macquarie Group Australia Financials 7,174 1.84
32 Infosys India Technology 7,009 1.80
33 Fortescue Australia Basic Materials 6,890 1.77
34 CITIC Securities China Financials 6,781 1.74
35 Bharat Petroleum India Energy 6,544 1.68
36 United Overseas Bank Singapore Financials 6,481 1.66
37 Pilbara Minerals Australia Basic Materials 6,186 1.59
38 Spark New Zealand New Zealand Telecommunications 6,176 1.58
39 Goodman Group Australia Real Estate 6,072 1.56
40 Astra International Indonesia Consumer discretionary 6,028 1.55

Top Forty Investments

353,465 90.70

Page 8 of 17

Country of Valuation % of
Company incorporation Sector £'000 Portfolio
41 HKT Trust & HKT Hong Kong Telecommunications 5,679 1.46
42 Mapletree Logistics Singapore Real Estate 5,420 1.39
43 Hon Hai Precision Industry Taiwan Technology 5,296 1.35
44 Mega Financial Taiwan Financials 5,169 1.33
45 NetEase Hong Kong Consumer discretionary 3,662 0.94
46 AIA Group Hong Kong Financials 3,468 0.89
47 JD.com China Consumer discretionary 2,999 0.77
48 Alibaba Group China Consumer discretionary 2,440 0.63
49 PT Telkom Indonesia Telecommunications 2,087 0.53
50 Digital Telecommunications Infrastructure Fund Thailand Telecommunications 1,677 0.43

Top Fifty Investments

391,362 100.42
51 China Forestry
4
China Basic Materials - -
52 Lenovo Put 7.96 (exp 05/03/24) China Technology (3) -
53 NetEase Put 135 (exp 27/03/24) Hong Kong Technology (5) -
54 Pilbara Minerals Put 3.02 (exp 16/05/24) Australia Basic Materials (23) -
55 Alibaba Group Call 87.9 (exp 07/05/24) China Consumer discretionary (32) (0.01)
56 NetEase Put 151 (exp 07/05/24) Hong Kong Consumer discretionary (48) (0.01)
57 MediaTek Call 122 (exp 29/05/24) Taiwan Technology (67) (0.02)
58
Taiwan Semiconductor Manufacturing Call 139
(exp 13/05/24)
Taiwan Technology (68) (0.02)
59 AIA Group Call 66.4 (exp 02/05/24) Hong Kong Financials (119) (0.03)
60 JD.com Call 99.7 (exp 14/05/24) China Consumer discretionary (120) (0.03)

Top Sixty Investments

390,877 100.30
61 Pilbara Minerals Call 4.12 (exp 11/03/24) Australia Basic Materials (131) (0.03)
62 China Resources Put 21.9 (exp 30/05/24) Hong Kong Consumer discretionary (173) (0.05)
63 Anta Sports Call 73.5 (exp 02/05/24) China Consumer discretionary (267) (0.07)
64 Samsonite Call 24.8 (exp 01/03/24) Hong Kong Consumer discretionary (288) (0.07)
65 CITIC Securities Call 15.7 (exp 30/05/24) China Financials (310) (0.08)

Total Investments

389,708 100.00

1. American Depositary Receipts


2. Preferred shares


3. Incorporated in Guernsey with 100% exposure to Vietnam


4. Unquoted investment valued at £nil

Page 9 of 17

GEOGRAPHIC EXPOSURE

Portfolio at
29 February 2024
Portfolio at
31 August 2023
South Korea 16.9 10.7
Australia 16.0 17.2
Hong Kong 13.1 12.3
Taiwan 12.8 11.7
China 12.4 19.7
India 10.9 6.4
Singapore 6.9 7.5
Indonesia 6.5 6.3
Vietnam 2.5 3.2
New Zealand 1.6 1.9
Thailand 0.4 1.3
Japan - 1.8
Total 100.0 100.0



SECTOR EXPOSURE

Portfolio at
29 February 2024
Portfolio at
31 August 2023
Financials 28.5 28.2
Technology 20.8 16.0
Consumer discretionary 19.3 13.6
Basic materials 8.4 9.0
Real estate 7.3 9.4
Utilities 5.8 4.0
Telecommunications 4.0 8.3
Energy 3.7 6.7
Industrials 2.2 4.8
Total 100.0 100.0

Page 10 of 17





CONDENSED STATEMENT OF COMPREHENSIVE INCOME

Half-year ended
29 February 2024
(Unaudited)
Half-year ended
28 February 2023
(Unaudited)
Year ended
31 August 2023
(Audited)

Revenue
return
£’000
Capital
return
£’000

Total
return
£’000
Revenue
return
£’000
Capital
return
£’000

Total
return
£’000
Revenue
return
£’000
Capital
return
£’000

Total
return
£’000
Investment income
8,307 - 8,307 10,143 - 10,143 37,331 - 37,331
Other income
2,897 - 2,897 1,382 - 1,382 2,937 - 2,937
Gains/(losses) on
investments held
at fair value
through profit or
loss
- 20,953 20,953 - (24,791) (24,791) - (87,446) (87,446)
Net foreign
exchange
gains/(losses)
excluding foreign
exchange
(losses)/gains on
investments
- (725) (725) - (986) (986) - 318 318

----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total income
11,204 20,228 31,432 11,525 (25,777) (14,252) 40,268 (87,128) (46,860)

----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Expenses

Management fees
(694) (694) (1,388) (749) (749) (1,498) (1,456) (1,456) (2,912)
Other expenses
(280) (280) (560) (273) (273) (546) (525) (524) (1,049)

----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Profit/(loss)
before finance
costs and
taxation
10,230 19,254 29,484 10,503 (26,799) (16,296) 38,287 (89,108) (50,821)
Finance costs
(399) (399) (798) (248) (248) (496) (766) (766) (1,532)

----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Profit/(loss)
before taxation
9,831 18,855 28,686 10,255 (27,047) (16,792) 37,521 (89,874) (52,353)
Taxation
(1,203) 343 (860) (1,428) 159 (1,269) (4,302) 415 (3,887)

----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Profit/(loss) for
the period and
total
comprehensive
income/(loss)
8,628 19,198 27,826 8,827 (26,888) (18,061) 33,219 (89,459) (56,240)

----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Earnings/(losses)
per ordinary
share - basic and
diluted
(note 2)
5.30p 11.79p 17.09p 5.64p (17.18p) (11.54p) 20.92p (56.35p) (35.43p)
====== ====== ====== ====== ====== ====== ====== ====== ======

The total column of this statement represents the Condensed Statement of Comprehensive Income of the Company, prepared in accordance with
IAS 34.

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of
Investment Companies (‘AIC’). All items in the above statement derive from continuing operations.

All income is attributable to the equity shareholders of the Company. There are no minority interests.

Page 11 of 17






CONDENSED STATEMENT OF CHANGES IN EQUITY

Half-year ended 29 February 2024 (Unaudited)


Stated
capital
£’000

Distributable
reserve
£’000

Capital
reserves
£’000

Revenue
reserve
£’000


Total
£’000

Total equity at 31 August 2023 268,038 180,471 (108,047) 21,570 362,032
Total comprehensive income:
Profit for the period - - 19,198 8,628 27,826
Transactions with owners,
recorded directly to equity:
Dividends paid - (2,875) - (16,991) (19,866)
Buyback of shares for
treasury (1,415) - - - (1,415)

------------- ------------ ------------ ------------ ------------
Total equity at 29 February 2024 266,623 177,596 (88,849) 13,207 368,577

======= ======= ======= ======= =======

Half-year ended 28 February 2023 (Unaudited)


Stated capital
£’000

Distributable
reserve
£’000

Capital
reserves
£’000

Revenue
reserve
£’000


Total
£’000

Total equity at 31 August 2022
246,997 180,471 (18,588) 26,696 435,576
Total comprehensive income:
(Loss)/profit for the period - - (26,888) 8,827 (18,061)
Transactions with owners,
recorded directly to equity:

Dividends paid
- - - (18,780) (18,780)
Shares issued
11,782 - - - 11,782
Share issue costs
(22) - - - (22)

------------ ------------ ------------ ------------ ------------
Total equity at 28 February 2023
258,757 180,471 (45,476) 16,743 410,495

======= ======= ======= ======= =======

Year ended 31 August 2023 (Audited)


Stated capital
£’000

Distributable
reserve
£’000

Capital
reserves
£’000

Revenue
reserve
£’000


Total
£’000

Total equity at 31 August 2022
246,997 180,471 (18,588) 26,696 435,576
Total comprehensive income:
(Loss)/profit for the year - - (89,459) 33,219 (56,240)
Transactions with owners,
recorded directly to equity:

Dividends paid
- - - (38,345) (38,345)
Shares issued
21,083 - - - 21,083
Share issue costs
(42) - - - (42)

------------ ------------ ------------ ------------ ------------
Total equity at 31 August 2023
268,038 180,471 (108,047) 21,570 362,032

======= ======= ======= ======= =======

Page 12 of 17


CONDENSED BALANCE SHEET
29 February 2024
(Unaudited)
£’000
28 February 2023
(Unaudited)
£’000
31 August 2023
(Audited)
£’000


Non-current assets


Investments held at fair value through profit or
loss (note 8) 391,362 435,018 386,867
-------------- -------------- ------------

Current assets
Other receivables 17,118 6,833 2,587
Cash and cash equivalents 4,383 11,711 3,944
-------------- -------------- ------------
21,501 18,544 6,531
-------------- -------------- ------------
Total assets 412,863 453,562 393,398
-------------- -------------- ------------
Current liabilities
Investments held at fair value through profit or
loss - written options (note 8) (1,654) (1,216) (1,582)
Deferred taxation (42) (161) (149)
Other payables (7,015) (4,410) (1,444)
Bank loans (35,575) (37,280) (28,191)
-------------- -------------- ------------
(44,286) (43,067) (31,366)
-------------- -------------- ------------
Net assets 368,577 410,495 362,032
======== ======== ========
Equity attributable to equity shareholders
Stated share capital 266,623 258,757 268,038
Distributable reserve 177,596 180,471 180,471
Retained earnings:
Capital reserves (88,849) (45,476) (108,047)
Revenue reserve 13,207 16,743 21,570
-------------- -------------- ------------
Total equity 368,577 410,495 362,032
======== ======== =======

Net asset value per ordinary share (note 3) 227.06p 257.71p 222.12p

======== ======== =======

Page 13 of 17


CONDENSED STATEMENT OF CASH FLOWS

Half-year ended 29
February 2024
(Unaudited)£’000
Half-year ended
28 February 2023
(Unaudited)
£’000
Year ended
31 August 2023
(Audited)
£’000
Cash flows from operating activities

Profit/(loss) before taxation
28,686 (16,792) (52,353)
Add back:

Finance costs
798 496 1,532
(Profit)/losses on investments held at fair value
through profit or loss (20,953) 24,791 87,446
Withholding tax on investment income
(1,088) (885) (3,727)
Net foreign exchange loss/(profit) excluding
foreign exchange losses on investments 725 986 (318)
Decrease/(increase) in prepayments and accrued
income 93 (1,588) 839
(Increase)/decrease in amounts due from brokers
(14,504) (855) 37
Increase/(decrease) in other payables
262 (2,001) (1,064)
Increase in amounts due to brokers
5,310 2,666 -

-------------- -------------- --------------
Net cash (outflow)/inflow from operating
activities (671) 6,818 32,392

-------------- -------------- --------------
Cash flows from investment activities

Sales of investments
193,715 96,058 348,721
Purchases of investments
(177,530) (116,170) (383,956)

-------------- -------------- --------------
Net cash inflow/(outflow) from investing
activities 16,185 (20,112) (35,235)

-------------- -------------- --------------
Cash flow from financing activities

Loan drawdown
156,310 50,143 211,162
Loan repayment
(148,687) (28,784) (199,302)
Equity dividends paid
(19,866) (18,780) (38,345)
Buyback of shares for treasury
(1,070) - -
Share issue proceeds
- 10,718 21,083
Share issue costs
- (22) (42)
Interest paid
(798) (309) (1,522)

-------------- -------------- --------------
Net cash (outflow)/inflow from financing
activities
(14,111)
12,966 (6,966)

-------------- -------------- --------------
Increase/(decrease) in cash and cash
equivalents 1,403 (328) (9,809)
Cash and cash equivalents at the start of the
period/year 3,944 14,310 14,310
Exchange movements
(964) (2,271) (557)

-------------- -------------- --------------
Cash and cash equivalents at the end of the
period/year
4,383 11,711 3,944

======== ======== ========
Net debt

Cash and cash equivalents
4,383 11,711 3,944
Bank loans repayable within one year
(35,575) (37,280) (28,191)

-------------- -------------- --------------
Net debt
(31,192) (25,569) (24,247)

======== ======== ========

Page 14 of 17

Notes to the condensed financial statements

1. Accounting Policies:
(a) Basis of preparation
The condensed interim financial statements have been prepared on a going concern basis in accordance with IAS 34
and the Disclosure Guidance and Transparency Rules of the UK's Financial Conduct Authority.

The annual report and financial statements for the year ended 31 August 2023 were prepared in accordance with
International Financial Reporting Standards (‘IFRS’) as adopted by the European Union. Where presentational
guidance as set out in the Statement of Recommended Practice (the 'SORP') for investment trusts issued by the
Association of Investment Companies (the 'AIC') in July 2022 is consistent with the requirements of IFRS, the directors
have sought to prepare the financial statements on a basis consistent with the recommendations of the SORP. The
unaudited results for the half-year ended 29 February 2024 have been prepared in accordance with the same
accounting policies as those applied in the Company's financial statements for the year ended 31 August 2023.

There has been no change to the segmental reporting assessment compared to the 31 August 2023 financial
statements.

These condensed financial statements do not include all information required for a full set of financial statements. The
figures and financial information for the year ended 31 August 2023 are an extract based on the published financial
statements and should be read in conjunction with them.

The condensed financial statements for the half-years ended 29 February 2024 and 28 February 2023 have not been
audited or reviewed by the auditor.

(b) Investments held at fair value through profit or loss
All investments are classified upon initial recognition as held at fair value through profit or loss and are measured
initially and subsequently at fair value. These financial assets are designated on the basis that they are part of a group
of financial assets which are managed and have their performance evaluated on a fair value basis. Financial assets are
recognised/de-recognised at the trade date of the purchase/disposal. Proceeds will be measured at fair value, which
will be regarded as the proceeds of sale less any transaction costs. The fair value of the financial assets is based on
their quoted bid price at the balance sheet date, without deduction of the estimated future selling costs. The fair value
of option contracts is determined by reference to the Black-Scholes model. The fair values of unquoted financial
instruments within the portfolio are based on their last audited net asset value discounted where necessary to arrive at
a fair value.

Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal,
including exchange gains and losses, are recognised in the Statement of Comprehensive Income as ‘Gains/(losses) on
investments held at fair value through profit or loss’. Also included within this caption are transaction costs in relation to
the purchase or sale of investments, including the difference between the purchase price of an investment and its bid
price at the date of purchase.

(c) Material accounting judgements and estimates
The preparation of the Company’s financial statements requires management to make judgements, estimates and
assumptions that affect the amounts recognised in the financial statements; however, uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the
asset or liability affected in the future. As the majority of the Company’s financial assets are quoted securities, in the
opinion of the directors, the amounts included as assets and liabilities in the financial statements are not subject to
significant judgements, estimates or assumptions.

The obligations relating to the options valued at £1,654,000 (liability) (28 February 2023: £1,216,000 (liability), 31
August 2023: £1,582,000 (liability)) are valued by reference to the Black-Scholes model.

2. Earnings/(losses) per ordinary share
The earnings per ordinary share figure is based on the net profit after taxation of £27,826,000 (half-year ended 28
February 2023: loss £18,061,000; year ended 31 August 2023: loss £56,240,000) and on 162,852,122 ordinary shares
(half-year ended 28 February 2023: 156,514,227; year ended 31 August 2023: 158,745,879) being the weighted
average number of ordinary shares in issue during each of the periods, excluding shares held in treasury.

The earnings per ordinary share detailed above can be further analysed between revenue and capital, as below:

Half-year ended
29 February 2024
(Unaudited)

£’000
Half-year ended
28 February 2023
(Unaudited)

£’000
Year ended
31 August 2023
(Audited)
£’000
Net revenue profit 8,628 8,827 33,219
Net capital profit/(loss) 19,198 (26,888) (89,459)
Net total profit/(loss) 27,826 (18,061) (56,240)

Page 15 of 17

Weighted average number of ordinary shares
in issue during the period / year

162,852,122 156,514,227 158,745,879



Pence

Pence

Pence
Revenue earnings per ordinary share 5.30 5.64 20.92
Capital earnings/(loss) per ordinary share 11.79 (17.18) (56.35)
Total earnings/(loss) per ordinary share 17.09 (11.54) (35.43)

The Company has no securities in issue that could dilute the return per ordinary share. Therefore, the basic and diluted
earnings/losses per ordinary share are the same.

3. Net asset value per ordinary share
The net asset value per ordinary share is based on a net asset value of £368,577,000 (28 February 2023:
£410,495,000; 31 August 2023: £362,032,000) and 162,322,917 (28 February 2023: 159,283,564; 31 August 2023:
162,988,564) ordinary shares, being the number of ordinary shares in issue at each period end, excluding shares held
in treasury.

4. Transaction costs
Purchase transaction costs for the half-year ended 29 February 2024 were £236,000 (half-year ended 28 February
2023: £132,000; year ended 31 August 2023: £526,000). Sales transaction costs for the half-year ended 29 February
2024 were £329,000 (half-year ended 28 February 2023: £169,000; year ended 31 August 2023: £643,000).
Transaction costs for both purchases and sales principally consist of commission fees.

5. Stated share capital
At 29 February 2024, there were 162,988,564 shares in issue, of which 665,647 were held in treasury. The costs of
repurchasing shares for treasury is charged to Stated Capital.

During the half-year period ended 29 February 2024, 665,647 shares were repurchased for treasury at a cost of
£1,415,000 (half-year ended 28 February 2023: £nil, and year ended 31 August 2023: £nil). No shares have been
issued (half-year ended 28 February 2023: 4,335,000 shares for net proceeds of £11,760,000; year ended 31 August
2023: 8,040,000 shares for net proceeds £21,041,000).

Since the period end a further 140,738 shares have been repurchased for treasury at a cost of £312,000.

6. Dividends
The Company pays dividends on a quarterly basis. On 24 November 2023, a fourth interim dividend of 6.10p per
ordinary share was paid in respect of the year ended 31 August 2023. A first interim dividend, in respect of the year
ended 31 August 2024 of 6.10p per ordinary share was paid on 23 February 2024. The second interim dividend of
6.10p per ordinary share will be paid on 31 May 2024 to shareholders on the register on 26 April 2024. The Company’s
shares will be quoted ex-dividend on 25 April 2024 (24 April 2024 for shares traded on the New Zealand Stock
Exchange). Based on the number of shares in issue on 25 April 2024, the cost of this dividend will be £9.9m.

7. Management fee
The management fee calculation is a flat rate of 0.75% of net assets per annum, charged quarterly in arrears.

8. Financial Instruments
At the period end the carrying value of financial assets and financial liabilities approximates their fair value.

Financial instruments carried at fair value
Fair value hierarchy
The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair
value measurements are categorised into different levels in the fair value hierarchy based on the inputs to valuation
techniques used. The different levels are defined as follows:
• Level 1: inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the
measurement date.
• Level 2: inputs other than quoted market prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly.
• Level 3: inputs are unobservable inputs for the asset or liability.

Financial assets and financial liabilities at fair value through profit
or loss at 29 February 2024
Level 1
£'000
Level 2
£'000
Level 3
£’000
Total
£’000
Investments including derivatives:
- Equity investments 391,362 - - 391,362
- OTC derivatives (options) - (1,654) - (1,654)
391,362 (1,654) - 389,708

Page 16 of 17

Financial assets and financial liabilities at fair value through profit or
loss at 28 February 2023
Level 1
£'000
Level 2
£'000
Level 3
£’000
Total
£’000
Investments including derivatives:
- Equity investments 435,018 - - 435,018
- OTC derivatives (options) - (1,216) - (1,216)
435,018 (1,216) - 433,802


Financial assets and financial liabilities at fair value through profit or
loss at 31 August 2023
Level 1
£'000
Level 2
£'000
Level 3
£’000
Total
£’000
Investments including derivatives:

- Equity investments 386,867 - - 386,867
- OTC derivatives (options) - (1,582) - (1,582)

386,867 (1,582) - 385,285

Level 3 investments related to one holding of China Forestry was transferred into level 3 in 2012 and written to zero
market value during 2014 following a missed coupon payment, delayed publication of annual report and accounts and
resignation of Chief Financial Officer and Company Secretary. This investment has continued to be held at zero value
throughout 2023 and to 29 February 2024.

There have been no transfers into/out of and no movements in Level 3 investments during the half-years ended 29
February 2024 and 28 February 2023, and the year ended 31 August 2023.

The Company’s holdings in options are included within Level 2.

The valuation techniques used by the Company are explained in note 1(b).

Premiums from written options during the half-year ended 29 February 2024 were £2,811,000 (half-year ended 28
February 2023: £1,357,000; year ended 31 August 2023: £2,869,000).

9. Going concern
The assets of the Company consist almost entirely of securities that are readily realisable and, accordingly, the directors
believe that the Company has adequate financial resources to continue in operational existence for at least twelve months
from the date of approval of the financial statements. Having assessed the financial position and taking account of the
ability of the Company to draw down under the existing bank loan facility, as well as the likelihood of being able to renew
the facility, and the principal risks and uncertainties facing the Company, the Board has decided that it is appropriate for
the financial statements to be prepared on a going concern basis.

10. Net debt reconciliation



Bank loans and


Cash and overdraft repayable


cash equivalents within one year Total

£'000 £'000 £'000
Net debt as at 31 August 2023 3,944 (28,191) (24,247)
Cash flows 1,403 (7,623) (6,220)
Exchange movements (964) 239 (725)
Net debt as at 29 February 2024 4,383 (35,575) (31,192)



Cash and cash
equivalents
£'000
Bank loans and overdraft
repayable within one
year

£'000
Total
£'000
Net debt as at 31 August 2022 14,310 (17,206) (2,896)
Cash flows (328) (21,359) (21,687)
Exchange movements (2,271) 1,285 (986)
Net debt as at 28 February 2023 11,711 (37,280) (25,569)

Page 17 of 17


Cash and cash
equivalents
£'000
Bank loans and overdraft
repayable within one
year
£'000
Total
£'000
Net debt as at 31 August 2022 14,310 (17,206) (2,896)
Cash flows (9,809) (11,860) (21,669)
Exchange movements (557) 875 318
Net debt as at 31 August 2023 3,944 (28,191) (24,247)

11. Related party transactions
The Company's current related parties are its directors and the investment manager. There have been no material
transactions between the Company and the directors during the period, with only amounts paid to them being in
respect of remuneration.

In relation to the provision of services by the investment manager (other than fees payable by the Company in the
ordinary course of business and the provision of marketing services) there have been no material transactions with
investment manager affecting the financial position of the Company during the period under review.

12. Half-year report
The half-year report is available on the Company’s website (www.hendersonfareastincome.com). Shareholders will
be sent a copy of the abridged version of the half-year results in May 2024.

13. General information
a) Company Status
The Company is registered with limited liability in Jersey as a closed end investment company, number 95064, under
the Companies (Jersey) Law 1991 and is certified as a collective investment fund under the Collective Investment
Funds (Jersey) Law 1998. The Company has obtained a Fund Certificate under Articles 7 of the Collective Investment
Funds (Jersey) Law. The Company is listed on the London and New Zealand stock exchanges and became UK tax
resident with effect from 1 September 2018.

SEDOL/ISIN number: B1GXH75/JE00B1GXH751
London Stock Exchange (TIDM) code: HFEL
New Zealand Stock Exchange code: HFL
Global Intermediary Identification Number (GIIN): NTTIYP.99999.SL.826
Legal Entity Identifier (LEI): 2138008DIQREOD38O596

b) Directors, Secretary and Registered Office
The directors of the Company are Ronald Gould (Chairman), Julia Chapman, Timothy Clissold, Carole Ferguson,
Nicholas George and Susan Rippingall. The Corporate Secretary is Janus Henderson Secretarial Services UK
Limited. The registered office is IFC1, The Esplanade, St Helier, Jersey, JE1 4BP. The principal place of business is
201 Bishopsgate, London, EC2M 3AE.

c) Website
Details of the Company’s share price and net asset value, together with general information about the Company,
monthly factsheets and data, copies of announcements, reports and details of general meetings can be found at
www.hendersonfareastincome.com

For further information please contact:
Sat Duhra
Fund Manager
Henderson Far East Income Limited
Telephone: +65 6813 1035

Dan Howe
Head of Investment Trusts
Janus Henderson Investors
Telephone: 020 7818 4458

Harriet Hall
PR Director Investment Trusts
Janus Henderson Investors
Telephone: 020 7818 2919

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) are incorporated into, or form part of, this announcement.