Aberdeen Asia Focus Reports Strong Half-Year Results Driven by AI and Electronics Exposure

Half-year beat for Aberdeen Asia Focus – AI and electronics bets pay off

I like it when an investment trust tells you clearly what drove results. Aberdeen Asia Focus PLC’s half-year to 31 January 2026 did just that. NAV total return was +11.4% and the share price total return was +13.0%, both ahead of the MSCI AC Asia ex Japan Small Cap Index at +9.0%.

The discount narrowed to 8.9% as performance and buybacks helped demand. The trust also joined the FTSE 250 during the period – a useful visibility booster that can tighten spreads and lift liquidity.

Key numbers investors should know

Metric	Six months to 31 Jan 2026	Prior/Reference
NAV total return	+11.4%	Index +9.0%
Share price total return	+13.0%	–
NAV per share	421.69p	381.72p at 31 Jul 2025
Share price	384.00p	343.00p at 31 Jul 2025
Discount to NAV	8.9%	10.1% at 31 Jul 2025
Net gearing	7.6%	10.2% at 31 Jul 2025
Ongoing charges ratio	0.89%	0.91% FY25
Interim dividends paid	2 x 1.6p	–
Target FY26 dividend	At least 6.43p	–
Net assets	£592.8 million	£558.6 million at 31 Jul 2025
Active share	95.8%	96.5% at 31 Jul 2025

What powered the outperformance – niche AI and electronics champions

The Manager’s stock selection did the heavy lifting. The trust focused on specialist suppliers in the AI and electronics ecosystem – a sweet spot for Asian small caps right now. In Taiwan, Chroma ATE and Taiwan Union Technology surged on AI-related demand for testing kit and high-end circuit board materials. New positions in MPI Corp and Sino-American Silicon Products (with exposure to GlobalWafers) added targeted AI and 5G leverage.

Korea also pulled its weight. Leeno Industrial and Hansol Chemical – both integral to semiconductor testing and materials – were strong, while Hyundai Electric benefited from power infrastructure needs linked to AI data centres. In China, Precision Tsugami – high-precision machine tools for EVs, robotics and AI hardware – almost doubled, prompting some profit-taking.

Selective additions outside tech to balance risk

• Southeast Asia defensives – additions included Thai Life Insurance, cited for a powerful agency network and attractive valuation, and Chifeng Jilong Gold Mining for low-cost gold exposure.
• Hong Kong growth – WuXi XDC, a biotech services platform, and ASMPT, a leader in advanced semiconductor packaging, tapped resilient end-markets.
• India – still the largest country exposure, but underweight versus the benchmark. The team added Karur Vysya Bank for its strong asset quality and efficiency.

Worth noting: management trimmed winners to manage single-stock risk after sharp reratings across parts of tech. That can feel early in roaring markets, but it is sensible risk control.

Income, dividends and costs – steady and sensible

Revenue earnings per share were 2.0p versus 2.6p a year earlier, reflecting a tilt towards growth stocks. Despite that, portfolio income covered dividends and the shares yielded 1.7% at 31 January 2026. Two interim dividends of 1.6p were paid, and the Board targets at least 6.43p for FY26. The progressive dividend policy has run for 30 years and the Board expects AAS to enter the AIC’s Next Generation of Dividend Heroes.

Costs remain competitive for an active small-cap strategy: the ongoing charges ratio is 0.89% on forecast, down from 0.91%.

Discount management and buybacks – doing the right things

Shareholders like action on discounts, and AAS delivered. The trust bought back 5.8 million shares – 3.9% of the register – during the half, helping narrow the discount to 8.9% from 13.1% a year earlier. The shares traded at an average 11.6% discount over the period. Retail ownership has grown to 30.0% from 26.8%, helped by stronger marketing and, I’d argue, by consistent returns.

Gearing – borrowing to enhance returns – was trimmed following strong performance. Net gearing fell to 7.6% from 10.2%, giving dry powder to redeploy if markets wobble.

Long-term record and FTSE 250 status

Since launch in 1995, NAV total return is +3,365.8%, equivalent to an annualised +12.4%. The share price annualised return since inception sits at +12.5%. Add in the recent step up into the FTSE 250 and recognition as a double ‘ISA Millionaire’ trust by the AIC, and you have a vehicle with both pedigree and profile.

What the risks and outlook look like from here

The Board flagged elevated geopolitical risk and tariff uncertainty, alongside oil price volatility. The Manager also cautions on market reliance on the AI narrative after a strong run. That is fair – parts of the supply chain are priced for perfection.

Against that, the portfolio is tilted to companies with domestic demand drivers across Asia and selective export leaders with pricing power. The Manager still expects holdings to deliver about 10-15% earnings growth, and has diversified across roughly 50 well-run businesses. India remains underweight but under close watch as valuations ease; in China, the focus is on newer consumption and automation rather than old staples.

Jargon buster – quick definitions

• NAV total return – the change in net asset value plus dividends reinvested.
• Share price total return – the share price move plus dividends reinvested.
• Discount – how far the share price sits below NAV. A lower discount is better for holders.
• Gearing – borrowing as a percentage of shareholders’ funds. It can magnify both gains and losses.

My take – quality execution with valuation discipline

Positives: clear outperformance versus the benchmark, disciplined profit-taking, a tighter discount helped by meaningful buybacks, and sensible gearing reduction. Costs are low for an active small-cap mandate and the income story remains intact, with a targeted 6.43p dividend for FY26.

Watch-outs: AI supply-chain exposure has been a tailwind – it could become a headwind if earnings miss lofty expectations. Macro and geopolitical risks remain live. And revenue EPS dipped as the portfolio leans into growth – fine by me, but income purists should note it.

Overall, this is what you want from an Asian small-cap trust in 2026 – specialist exposure to the right niches, balanced with genuine diversification and a manager willing to bank gains. If you want more colour direct from the source, the Online Investor Presentation is at 11:00 a.m. on Tuesday 5 May 2026 – details are on asia-focus.co.uk.