惠理大中華高收益債券基金 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND

半年度報告2014 SEMI-ANNUAL REPORT 2014 截至二零一四年六月三十日止六個月 For the six months ended 30 June 2014 Value Partners Hong Kong Limited 9th Floor, Nexxus Building 41 Connaught Road Central, Hong Kong Tel: (852) 2880 9263 Fax: (852) 2565 7975 Email: [email protected] Website: www.valuepartners.com.hk

In the event of inconsistency, the English text of this Semi-Annual Report shall prevail over the Chinese text. VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

Contents

Pages

General information 2 - 3

Manager’s report 4 - 6

Statement of financial position (unaudited) 7 - 8

Investment portfolio (unaudited) 9 - 19

Investment portfolio movements (unaudited) 20

SEMI–ANNUAL REPORT 2014 1 For the six months ended 30 June 2014 1 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

GENERAL INFORMATION

Directors Registered Office Mr Tse Wai Ming, Timothy P.O. Box 484 Mr Mo Chun Wah, Jonathan HSBC House (appointed on 3 July 2013) 68 West Bay Road Grand Cayman KY1-1106 Manager Cayman Islands Value Partners Hong Kong Limited 9th Floor, Nexxus Building Auditor 41 Connaught Road Central PricewaterhouseCoopers Hong Kong P.O. Box 258 George Town Directors of the Manager Grand Cayman, KY1-1104 Dato’ Cheah Cheng Hye Cayman Islands Mr Ho Man Kei, Norman Mr So Chun Ki Louis Legal Advisors With respect to Cayman Islands law Administrator Walkers HSBC Trustee (Cayman) Limited Walker House P.O. Box 484 87 Mary Street, George Town HSBC House Grand Cayman KY1-9001 68 West Bay Road Cayman Islands Grand Cayman KY1-1106 Cayman Islands With respect to Hong Kong and International law Custodian and Administrator’s Agent Deacons HSBC Institutional Trust Services (Asia) Limited 5th Floor, Alexandra House 1 Queen’s Road Central 18 Chater Road Central Hong Kong Hong Kong

SEMI–ANNUAL REPORT 2014 2 For the six months ended 30 June 2014 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

GENERAL INFORMATION (Continued)

Recent awards and achievements

Corporate awards

2014 • 2014 Top 100 Hedge Fund Value Partners was ranked as Asia’s largest hedge fund manager, and 58th worldwide – Institutional Investor’s Alpha Magazine, May 2014

• Investment Performance Awards 2014 Asian Fund House of the Year – AsianInvestor

• The Asset Triple A, Investor and Fund Management Awards 2014 Asset Management Company of the Year (Hong Kong) – The Asset

2013 • 2013 - Asia Hedge Fund 25 Value Partners was ranked no. 1 in Asia Hedge Fund 25 for 4 consecutive years (since 2010) – Institutional Investor’s Alpha Magazine, September 2013

• 2013 Outstanding Company Awards Outstanding Fund Management Business (Financial Sector) – Hong Kong’s Wen Wei Po

SEMI–ANNUAL REPORT 2014 3 For the six months ended 30 June 2014 3 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

MANAGER’S REPORT

The Asian credit markets started 2014 with a flood of new issue supply from Chinese property developers. Investors’ appetites were repeatedly tested as new deals were printed with increasingly more expensive pricing levels and attractive initial concession over existing issues vanished quickly as most deals were multiple times oversubscribed. As expected, it did not take long before the market showed signs of fatigue in absorbing the new supply. A poor showing of China’s preliminary Purchasing Managers’ Index (PMI) data and the possibility of an onshore trust defaults finally triggered a meaningful selloff in the China high yield space, which was then spread to the other Asian credit markets. The market recovered briefly towards the end of January, only to meet with further negative headlines from other emerging markets, most notably Turkey and South Africa. In January, we took profit on selected positions and were extremely selective in participating in new issues. We became more defensive in face of the continuous supply and raised our cash level accordingly. However, we added a few special-situation and less-followed names which we think offer good current income and interesting upside potential.

February can be best described as a directionless month with a slight bearish bias in the Asian credit market. Chinese high yield, in particular high beta Chinese property names, underperformed as weaker manufacturing data as well as continuous concerns over potential onshore trust defaults limited upside performance. The recent depreciation of the Renminbi orchestrated by the authority did not help sentiment either. In this environment, new issue supply has reduced dramatically and the limited window of opportunity for issuing new bonds was only open to issuers with better quality and generous pricings. We viewed this as a positive sign as the market exercised stricter discipline in risk/reward assessment. The portfolio was little changed during the month. We participated in a few selected new issues and took profit from some which we think have run their courses. Cash level was lowered as we invested our capital into a few beaten-down names with good fundamentals.

Spooked by the fear over an onshore default in mainland China, China’s high-yield credits, especially property developers, struggled in March. It was our belief that onshore defaults were isolated cases and offshore issuers, in which our Fund invested, were stronger candidates with sound credit profiles, better transparency and multiple funding channels. Nonetheless, the offshore market fell in sympathy in March. We maintained the view that onshore defaults (i) were a part of the Chinese government’s reform process and were therefore largely expected; (ii) were fundamentally conducive to the healthy development of the mainland financial markets; and (iii) were isolated cases whose impact on the offshore market was likely to be more sentimental than economic. During the month, we took profits on a few positions that have pretty much run their courses. We utilized some cash to participate in a select number of new issues that offer values and are expected to see technical support from a trading perspective.

April was a relatively quiet month for the secondary market but a rather busy one for primary issuance. Majority of the new issues came outside of China, which we viewed as technically supportive to China’s credit. The Fund was active in the primary market during the month and participated in select new issues which offer attractive valuations and stable credit profiles. We also found pockets of values in some less-crowded markets.

SEMI–ANNUAL REPORT 2014 4 For the six months ended 30 June 2014 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

MANAGER’S REPORT (Continued)

Conditions in the Asian credit markets were supportive in May. In fact, May was the first month this year that the benefits of carry trades were not eclipsed by negative mark-to- market. A generally supportive global equity market, improving China PMI and strong debut performance of a few new high-yield issues buoyed investors’ sentiment and risk appetites. During the month, the Fund continued to be active in both primary and secondary markets. We participated in several new high-yield issues which offered attractive concession over existing issues. We were also involved in one Asian convertible deal whose underlying equity, in our view, may provide good long-term value. Meanwhile, we took profit on some names whose values, we think, were fully priced in.

Following the rally in May, the Asian credit markets continued to march higher and posted another solid performance in June. China credits, the underperformer in earlier months of 2014, staged a strong comeback thanks to better China PMI data, strong global equity markets and, most importantly, its attractive relative valuation. Many new issues performed well on debut, and both the dealer community and investors were happy to add risks. In June, the Fund was active in both primary and the secondary markets. We swapped some existing positions with new issues that offered attractive valuation and market technical. We took profits on some sectors and individual names whose current valuation no longer offered attractive risk-reward profile. We initiated a new special-situation position and one convertible position. Both of which, in our view, may offer good upside potential.

Outlook

Despite the recent rally, China credits (especially high yield bonds) remain cheap compared to US, European and even other Asian credits. We reckon some of the money that was being “forced long” in other non-china exposure may begin to rotate back to China. On the horizon, the market may turn its attention to the upcoming earnings season which may introduce some volatility. We will monitor closely and seek to take advantage of any opportunity that arises.

Value Partners Hong Kong Limited 20 August 2014

Performance figures sourced from Bloomberg.

Investors should note investment involves risk and past performance is not indicative of future results.

Investors should refer to the explanatory memorandum for details and risk factors in particular those associated with investment in China and other markets in the Asian region, non-investment grade debt securities, and in companies with medium or small capitalization. The fund may also invest in derivatives and structured products which can involve material additional risks, e.g. counterparty default risk or insolvency, and may expose the fund to significant losses.

SEMI–ANNUAL REPORT 2014 5 For the six months ended 30 June 2014 5 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

MANAGER’S REPORT (Continued)

Value Partners Greater China High Yield Income Fund – NAV as at 30 June 2014

Classes NAV per share P Acc USD US$11.86 P Acc HKD HK$11.76 P MDis USD US$9.66 P MDis HKD HK$9.61 A MDis AUD Hedged AUD9.86 A MDis CAD Hedged CAD9.91 A MDis NZD Hedged NZD9.90

Return since launch From 28 March 2012 to 30 June 2014 Value Partners Greater China High Yield Income Fund 20% (P Acc USD) +18.6%

15%

10%

5%

0%

-5% 3/20129/20122/20137/2013612/2013 /2014

SEMI–ANNUAL REPORT 2014 6 For the six months ended 30 June 2014 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

STATEMENT OF FINANCIAL POSITION (UNAUDITED) AS AT 30 June 2014

30.6.2014 31.12.2013 US$ US$

Assets Financial assets at fair value through profit or loss 685,176,302 607,626,872 Amounts receivable on sales of investments 10,879,973 – Amounts receivable on subscription of shares 15,061,000 4,688,099 Interest receivables 12 35 Other receivables 1,794 2,789 Margin deposits 300,163 300,000 Bank balances 16,019,847 42,316,177

Total assets 727,439,091 654,933,972

Equity Administrative shares 100 100

Total equity 100 100

Liabilities Financial liabilities at fair value through profit or loss 234,594 264,827 Amounts payable on purchase of investments 7,775,020 – Amounts payable on redemption of shares 6,255,283 241,025 Management fee and performance fee payable 891,984 840,518 Distribution payable 5,429,305 4,849,799 Bank overdrafts 13,148 – Accruals and other payables 227,589 165,521

Liabilities (excluding net assets attributable to redeemable participating shareholders) 20,826,923 6,361,690

Net assets attributable to redeemable participating shareholders 706,612,068 648,572,182

SEMI–ANNUAL REPORT 2014 7 For the six months ended 30 June 2014 7 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

STATEMENT OF FINANCIAL POSITION (UNAUDITED) (Continued) AS AT 30 June 2014

30.6.2014 31.12.2013

Net asset value per unit – Class P USD Acc Shares 1,930,089 (31.12.2013: 2,030,075) shares outstanding US$11.86 US$11.43

– Class P USD MDis Shares 41,148,119 (31.12.2013: 42,204,741) shares outstanding US$9.66 US$9.76

– Class P HKD Acc Shares 2,016,962 (31.12.2013: 1,593,206) shares outstanding HK$11.76 HK$11.34

– Class P HKD MDis Shares 159,311,081 (31.12.2013: 135,943,062) shares outstanding HK$9.61 HK$9.71

– Class A AUD Hedged MDis Shares 6,988,732 (31.12.2013: 3,728,616) shares outstanding AUD9.86 AUD9.97

– Class A CAD Hedged MDis Shares 1,220,986 (31.12.2013: 696,831) shares outstanding CAD9.91 CAD10.02

– Class A NZD Hedged MDis Shares 1,038,713 (31.12.2013: 141,554) shares outstanding NZD9.90 NZD9.99

– Class A RMB Hedged MDis Shares 300,000 (31.12.2013: Nil) shares outstanding RMB10.10 –

SEMI–ANNUAL REPORT 2014 8 For the six months ended 30 June 2014 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Quoted debt securities

Australia Barminco Finance Pty Ltd (REG S) 9% 01/06/2018 4,000,000 3,789,200 0.54 Midwest Vanadium Pty Ltd (144A) (REG) STP 15/02/2018 (Flat Trading) 1,000,000 580,290 0.08 Midwest Vanadium Pty Ltd (REG S) (REG) STP 15/02/2018 3,400,000 1,970,451 0.28

6,339,941 0.90

British Virgin Islands Favor Sea Ltd (REG S) 11.75% 04/02/2019 6,000,000 6,922,735 0.98

Cayman Islands Banco Do Brasil (Cayman) (REG S) (REG) 9% PERP 9,500,000 9,418,490 1.33 BCP Singapore VI Cayman (REG S) 8% 15/04/2021 5,700,000 6,011,727 0.85 China Properties Group Ltd (REG S) (REG) 13.5% 16/10/2018 5,000,000 5,084,975 0.72 E-House China Hldgs Ltd (144A) (REG) Conv 2.75% 15/12/2018 1,835,000 1,693,374 0.24 Global A&T Electronics (REG S) (REG) 10% 01/02/2019 4,300,000 3,811,764 0.54

SEMI–ANNUAL REPORT 2014 9 For the six months ended 30 June 2014 9 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

Cayman Islands (Continued) Jinkosolar Holding Co Ltd (144A) Conv 4% 01/02/2019 3,400,000 3,423,618 0.49 Wuzhou Intl Holdings Ltd (REG S) 13.75% 26/09/2018 4,170,000 4,408,885 0.62

33,852,833 4.79

France Credit Agricole (REG S) (REG) VAR PERP (EXNP) 10,000,000 10,988,700 1.55

Germany Unicredit SPA VAR PERP 5,000,000 5,374,961 0.76

Hong Kong Agile Property Hldgs Ltd VAR PERP 9,000,000 8,301,188 1.17 Bank of East Asia Ltd VAR PERP 9,500,000 11,208,216 1.59 China Aoyuan Property GP 11.25% 17/01/2019 7,000,000 7,321,160 1.04 China Citic Bank Intl Ltd VAR PERP 750,000 799,549 0.11 China SCE Property Holdings (REG S) 11.5% 14/11/2017 13,400,000 14,367,532 2.03 China Power Intl Develop (REG) Conv 2.75% 18/09/2017 9,500,000 2,139,222 0.30

SEMI–ANNUAL REPORT 2014 10 For the six months ended 30 June 2014 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

Hong Kong (Continued) Cifi Holdings Group Co 12.25% 15/04/2018 12,500,000 14,171,139 2.01 Cifi Holdings Group Co (REG) 8.875% 27/01/2019 6,000,000 6,188,912 0.88 Citic Pacific Ltd (REG S) 6.8% 17/01/2023 5,200,000 6,084,560 0.86 Esun International Finance (REG) 8.375% 24/06/2018 52,500,000 8,584,910 1.21 Greentown China Holdings (REG) 8.5% 04/02/2018 3,000,000 3,123,415 0.44 HNA Group HK (REG) 7.5% 28/03/2015 23,500,000 3,878,447 0.55 KWG Property Holdings LTD (REG S) (REG) 8.975% 14/01/2019 7,600,000 8,099,427 1.15 KWG Property Holdings LTD (REG S) 8.625% 05/02/2020 5,750,000 5,937,100 0.84 Logan Property Holdings (REG S) (REG) 11.25% 04/06/2019 12,600,000 12,775,419 1.81 LOGO Star Ltd (REG) Conv 1.5% 22/11/2018 24,000,000 3,629,417 0.51 Maoye International Holdings (REG S) 7.75% 19/05/2017 4,800,000 5,007,176 0.71 PB Issuer No 2 Ltd Conv 1.75% 12/04/2016 3,500,000 3,515,821 0.50 Shenzhou International G (REG) Conv 0.5% 18/06/2019 60,000,000 7,853,953 1.11

SEMI–ANNUAL REPORT 2014 11 For the six months ended 30 June 2014 11 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

Hong Kong (Continued) Texhong Textile Group Lt (REG) 6.5% 17/01/2019 1,600,000 1,629,249 0.23 Times Property Hldg Ltd (REG) 12.625% 21/03/2019 13,550,000 14,465,837 2.05 Yancoal Int’l Trading VAR PERP 4,000,000 4,171,400 0.59 Yuzhou Properties Co (REG S) 11.75% 25/10/2017 11,200,000 12,615,363 1.79 Yuzhou Properties Co (REG) 8.625% 24/01/2019 14,600,000 14,830,455 2.10 Yuzhou Properties Co (REG) 8.75% 04/10/2018 10,000,000 10,197,458 1.44

190,896,325 27.02

Indonesia Berau Coal Energy (REG S) 7.25% 13/03/2017 11,850,000 11,830,092 1.68 BLT Finance (REG S) (REG) 7.5% 15/05/2014 (Defaulted) 2,500,000 289,063 0.04

12,119,155 1.72

SEMI–ANNUAL REPORT 2014 12 For the six months ended 30 June 2014 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

Japan Misumi Group Inc (REG) Conv 0% 22/10/2018 2,000,000 2,041,700 0.29 Nikkiso (Ser 6376) (BR) Conv 0% 02/08/2018 200,000,000 2,059,893 0.29 Paramount Bed HD (Ser 7817) (BR) Conv 0% 26/07/2018 200,000,000 2,112,705 0.30 Resorttrust Inc (BR) Conv 0% 27/07/2018 100,000,000 1,155,435 0.16

7,369,733 1.04

Luxembourg Consolidated Minerals Ltd (REG S) 8% 15/05/2020 10,500,000 10,434,678 1.48 Societe Generale (REG S) VAR PERP 11,500,000 12,303,318 1.74 TPK Holding Co Ltd (REG S) Conv 0% 01/10/2017 1,500,000 1,524,210 0.21

24,262,206 3.43

Netherlands Hyva Global (REG S) (REG) 8.625% 24/03/2016 6,500,000 6,886,682 0.97 Indo Energy Finance II (REG S) 6.375% 24/01/2023 5,000,000 4,337,861 0.62

11,224,543 1.59

SEMI–ANNUAL REPORT 2014 13 For the six months ended 30 June 2014 13 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

Singapore 21Vianet Group Inc (REG) 6.875% 26/06/2017 39,000,000 6,331,346 0.90 Alam Synergy Pte Ltd (REG S) 6.95% 27/03/2020 8,300,000 8,421,987 1.19 Alam Synergy Pte Ltd (REG S) 9% 29/01/2019 3,000,000 3,333,270 0.47 Alps Electric Co Ltd (REG) Conv 0% 25/03/2019 20,000,000 209,755 0.03 ASICS Corp (REG) Conv 0% 01/03/2019 200,000,000 2,303,472 0.33 Big Will Investments Ltd 10.875% 29/04/2016 4,500,000 4,985,546 0.71 Bumi Capital Pte Ltd (REG S) (REG) 12% 10/11/2016 4,900,000 2,580,585 0.36 Bumi Investment Pte Ltd (REG S) (BR) 10.75% 06/10/2017 4,000,000 2,116,928 0.30 CAIFU Holdings Ltd (REG S) (REG) 8.75% 24/01/2020 10,500,000 10,800,927 1.53 Central China Real Estate (REG S) (REG) 8% 28/01/2020 8,600,000 8,732,526 1.24 China Hongqiao Group (REG S) 7.625% 26/06/2017 2,000,000 2,080,278 0.29 China SCE Property Holdings Ltd (REG S) (REG) 10.5% 14/01/2016 30,300,000 5,228,849 0.74 Country Garden Hlgd Co (REG S) (REG) 11.125% 23/02/2018 11,500,000 13,046,239 1.85

SEMI–ANNUAL REPORT 2014 14 For the six months ended 30 June 2014 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

Singapore (Continued) CP Foods Holdings Ltd Conv 0.5% 15/01/2019 4,000,000 4,276,942 0.60 Enercoal Resources Ptd Ltd (REG) Conv 9.25% 05/08/2014 4,200,000 1,673,996 0.24 ENN Energy Holdings Ltd (REG) Conv 0% 26/02/2018 2,000,000 2,515,040 0.36 Epistar Corp (Ser 2448) (REG) Conv 0% 07/08/2018 2,000,000 2,525,880 0.36 Fantasia Holdings Group (REG S) 10.75% 22/01/2020 3,381,000 3,075,456 0.43 Fantasia Holdings Group (REG) 10.625% 23/01/2019 4,000,000 3,710,448 0.53 Fantasia Holdings Group 13.75% 27/09/2017 4,500,000 4,772,983 0.67 Fufeng Group Ltd (REG) Conv 3% 27/11/2018 44,000,000 7,292,129 1.03 Future Land Development (REG S) 10.25% 31/01/2018 10,000,000 10,182,231 1.44 Golden Legacy Pte Ltd (REG S) 9% 24/04/2019 7,000,000 7,496,230 1.06 Hainan Airline HK (REG) 6.25% 22/05/2017 34,000,000 5,500,890 0.78 Haitong International SE (REG) Conv 1.25% 18/07/2018 24,000,000 3,715,142 0.53 Hengan Intl Group Co (REG) Conv 0% 27/06/2018 15,000,000 2,000,374 0.28 Hynix Semiconductor Inc (REG) Conv 2.65% 14/05/2015 3,300,000 5,213,306 0.74

SEMI–ANNUAL REPORT 2014 15 For the six months ended 30 June 2014 15 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

Singapore (Continued) Indo Energy Finance (REG S) 7% 07/05/2018 3,000,000 3,033,327 0.43 Kaisa Group Holdings Ltd (REG S) (REG) 8.875% 19/03/2018 5,500,000 5,840,042 0.83 Kaisa Group Holdings Ltd (REG S) 10.25% 08/01/2020 13,200,000 14,652,884 2.07 Kaisa Group Holdings Ltd 12.875% 18/09/2017 10,500,000 12,407,396 1.76 Kawasaki Kisen Kaisha Conv 0% 26/09/2018 100,000,000 985,924 0.14 Kingsoft Corp Ltd (REG) Conv 1.25% 11/04/2019 26,000,000 3,200,421 0.45 KWG Property Holdings LT (REG) 13.25% 22/03/2017 11,000,000 13,065,223 1.85 LDK Solar Co Ltd 10% 28/02/2014 (Defaulted) 29,000,000 928,160 0.13 Longfor Properties (REG) 6.75% 29/01/2023 3,100,000 3,036,946 0.43 Lotte Shopping Co Ltd (Ser LOTT) (REG) Conv 0% 24/01/2018 7,200,000,000 7,188,401 1.02 Modern Land China Co 11% 22/01/2017 8,000,000 1,275,615 0.18 Mongolian Mining Corp (REG S) 8.875% 29/03/2017 10,000,000 6,763,506 0.96 Modernland Overseas PTE (REG S) 11% 25/10/2016 2,300,000 2,417,371 0.34 Ottawa Holdings Pte Ltd (REG S) 5.875% 16/05/2018 3,700,000 3,322,584 0.47

SEMI–ANNUAL REPORT 2014 16 For the six months ended 30 June 2014 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

Singapore (Continued) Pacific Emerald Ltd (REG S) 9.75% 25/07/2018 12,650,000 14,129,544 2.00 Pacnet Ltd (REG S) 9% 12/12/2018 4,200,000 4,592,154 0.65 Rexlot Holdings Ltd (REG) Conv 4.5% 17/04/2019 14,000,000 1,898,933 0.27 Rickmers Trust Mgmt (BR) 8.45% 15/05/2017 5,000,000 4,090,432 0.58 Shimao Property Holdings Ltd (REG) 6.625% 14/01/2020 4,000,000 4,077,330 0.58 Shimao Property Holdings Ltd (REG) 8.125% 22/01/2021 5,600,000 6,023,670 0.85 Shimao Property Holdings Ltd (REG) 11% 08/03/2018 6,000,000 6,822,647 0.96 Shizuoka Bank Ltd (REG) Conv 0% 25/04/2018 5,000,000 5,167,800 0.73 Shui On Development Holdings (REG S) VAR PERP 10,000,000 10,314,162 1.46 Shui On Development Holdings (REG) 8.7% 19/05/2018 6,450,000 6,527,980 0.92 Shui On Development Holdings 9.625% 10/06/2019 6,800,000 6,923,097 0.98 Sino-Ocean Land Per Fin (REG S) VAR PERP 3,420,000 3,696,461 0.52 SMC Global Power Holdings (REG) VAR PERP 3,500,000 3,687,565 0.52 SMFG Pref Cap GBP 2 (REG S) (REG) VAR PERP 5,700,000 14,332,430 2.03

SEMI–ANNUAL REPORT 2014 17 For the six months ended 30 June 2014 17 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

Singapore (Continued) Soho China Ltd (REG S) 7.125% 07/11/2022 9,000,000 9,062,527 1.28 Sparkle Assets Ltd (REG) 6.875% 30/01/2020 5,300,000 5,533,024 0.78 Sunac China Holdings Ltd (REG S) 12.5% 16/10/2017 4,000,000 4,512,047 0.64 Sunac China Holdings Ltd (REG) 9.375% 05/04/2018 8,700,000 9,044,223 1.28 Sumitomo Forestry Co Ltd (REG) Conv 0% 24/08/2018 100,000,000 1,006,116 0.14 Swiber Holdings Ltd (REG) VAR PERP 2,250,000 1,863,757 0.26 Takashimaya Co Ltd Conv 0% 11/12/2018 200,000,000 2,028,309 0.29 Texhong Textile Group Ltd (REG S) 7.625% 19/01/2016 2,800,000 2,979,683 0.42 Trad & Dev Bank Mongolia 10% 21/01/2017 25,000,000 4,085,731 0.58 Trad & Dev Bank Mongolia 8.5% 20/09/2015 11,200,000 11,427,665 1.62 Trillion Chance Ltd (REG) 8.5% 10/01/2019 4,000,000 4,214,260 0.60 VLL International Inc (REG) 7.45% 29/04/2019 2,000,000 2,082,621 0.29 Yamaguchi Financial GRP (REG) Conv 0% 20/12/2018 2,000,000 2,252,820 0.32

364,617,543 51.60

SEMI–ANNUAL REPORT 2014 18 For the six months ended 30 June 2014 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

INVESTMENT PORTFOLIO (UNAUDITED) (Continued) AS AT 30 JUNE 2014

Fair % of Holdings value net assets US$

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Continued)

Quoted debt securities (Continued)

United Kingdom Barclays Bank Plc 8.25% PERP 3,000,000 3,199,490 0.45

United States Rolta LLC (REG S) 10.75% 16/05/2018 4,300,000 4,510,302 0.64

Vietnam Vingroup JSC (REG S) 11.625% 07/05/2018 3,000,000 3,405,503 0.48

Currency forwards 92,332 0.01

Total financial assets at fair value through profit or loss 685,176,302 96.96

FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Currency forwards (234,594) (0.03)

Total investments, net 684,941,708 96.93

Total investments, at cost 668,525,895

SEMI–ANNUAL REPORT 2014 19 For the six months ended 30 June 2014 19 VALUE PARTNERS GREATER CHINA HIGH YIELD INCOME FUND (A Cayman Islands Unit Trust)

Investment portfolio movements (unaudited) FOR THE six months ENDED 30 JUNE 2014

% of net assets 30.6.2014 31.12.2013

Quoted debt securities Australia 0.90 0.58 British Virgin Islands 0.98 0.71 Cayman Islands 4.79 2.98 France 1.55 0.70 Germany 0.76 – Hong Kong 27.02 17.97 Indonesia 1.72 1.79 Ireland – 0.70 Japan 1.04 0.82 Luxembourg 3.43 0.37 Malaysia – 0.64 Netherlands 1.59 1.70 Singapore 51.60 61.83 United Kingdom 0.45 1.64 United States 0.64 0.65 Vietnam 0.48 0.50

96.95 93.58

Currency forwards (0.02) 0.07

Total investments, net 96.93 93.65

SEMI–ANNUAL REPORT 2014 20 For the six months ended 30 June 2014