SEMIANNUAL REPORT
APRIL 30, 2002
PRUDENTIAL
PACIFIC GROWTH FUND, INC.
FUND TYPE
Global stock
OBJECTIVE
Long-term growth of capital
This report is not authorized for distribution
to prospective investors unless preceded or
accompanied by a current prospectus.
The views expressed in this report and
information about the Fund's portfolio holdings
are for the period covered by this report and
are subject to change thereafter.
Prudential Financial is a service mark of
The Prudential Insurance Company of America,
Newark, NJ, and its affiliates.
(LOGO)
Prudential Pacific Growth Fund, Inc.
Performance at a Glance
INVESTMENT GOALS AND STYLE
The Prudential Pacific Growth Fund's (the Fund)
investment objective is long-term growth of
capital. The Fund invests primarily (normally
at least 80% of the Fund's net assets plus
borrowings made for investment purposes) in
stocks of companies in the Pacific Basin,
selecting a diversified portfolio aimed at
long-term growth of capital. The Fund is
subject to all of the risks associated with
foreign investing, including currency,
political and social risks, and potential
illiquidity. There can be no assurance that the
Fund will achieve its investment objective.
Geographic Concentration
Expressed as a percentage of
net assets as of 4/30/02
25.7% Korea
23.1 Japan
15.9 Taiwan
11.0 Australia
10.0 Hong Kong
5.5 Malaysia
3.5 Singapore
0.7 Thailand
0.7 India
3.9 Cash & Equivalents
Ten Largest Holdings
Expressed as a percentage of
net assets as of 4/30/02
5.4% Samsung Electronics Co., Ltd.
Electronic Components
3.8 Kookmin Bank
Banks
2.9 Nissan Motor Co., Ltd.
Automotive
2.8 Taiwan Semiconductor
Manufacturing Co., Ltd.
Electronic Components
2.7 Toyota Motor Corp.
Automotive
2.6 Takeda Chemical Industries, Ltd.
Drugs & Healthcare
2.5 Hang Seng Bank, Ltd.
Banks
2.4 Samsung Fire & Marine Ins. Co., Ltd.
Insurance
2.3 Sony Corp.
Electronics
2.3 Hon Hai Precision Industry Co., Ltd.
Electronics
Holdings are subject to change.
The Prudential Pacific Growth Fund's benchmark
has changed to the Morgan Stanley Capital
International (MSCI) All Country (AC) Pacific
Free Index because this Index better reflects
the countries that the investment adviser seeks
to position the portfolio in, based on the
Fund's mandate.
www.prudential.com (800) 225-1852
Semiannual Report April 30, 2002
Cumulative Total Returns1 As of 4/30/02
Six Months One Year Five Years Since Inception2
Class A 10.83% -9.23% -43.73% -7.15%
Class B 10.54 -9.97 -46.18 -14.21
Class C 10.48 -10.04 -45.88 -49.10
Class Z 10.66 -9.11 -43.44 -45.47
Lipper Pacific Region Funds Avg.3 13.47 -9.77 -24.89 ***
MSCI AC Asia Pacific Free Gross Index4 11.09 -11.79 -21.85 ****
MSCI AC Pacific Free Index5 10.21 -13.30 -26.94 *****
Average Annual Total Returns1 As of 3/31/02
One Year Five Years Since Inception2
Class A -11.18% -11.70% -1.22%
Class B -11.87 -11.73 -1.50
Class C -9.16 -11.66 -8.47
Class Z -6.38 -10.69 -9.39
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost.
1 Source: Prudential Investments LLC and
Lipper, Inc. The cumulative total returns do
not take into account sales charges. The
average annual total returns do take into
account applicable sales charges. The Fund
charges a maximum front-end sales charge of 5%
for Class A shares. Class B shares are subject
to a declining contingent deferred sales charge
(CDSC) of 5%, 4%, 3%, 2%, 1%, and 1%
respectively for the first six years.
Approximately seven years after purchase, Class
B shares will automatically convert to Class A
shares on a quarterly basis. Class C shares are
subject to a front-end sales charge of 1% and a
CDSC of 1% for shares redeemed within 18 months
of purchase. Class Z shares are not subject to
a sales charge or distribution and service
(12b-1) fees. The cumulative and average annual
total returns in the tables above do not
reflect the deduction of taxes that a
shareholder would pay on fund distributions or
following the redemption of fund shares. 2
Inception dates: Class A and Class B, 7/24/92;
Class C, 8/1/94; and Class Z, 3/1/96. 3 The
Lipper Average is unmanaged, and is based on
the average return for all funds in each share
class for the six-month, one-year, five-year,
and since inception periods in the Lipper
Pacific Region Funds category. Funds in the
Lipper Pacific Region Funds Average concentrate
investments in equity securities with primary
trading markets or operations concentrated in
the Western Pacific Basin region or a single
country within this region. 4 The MSCI AC Asia
Pacific Free Gross Index is an unmanaged,
weighted index comprising approximately 950
securities listed on the stock exchanges of
Australia, China (free), Hong Kong, India,
Indonesia, Japan, Korea, Malaysia, Pakistan,
the Philippines, Singapore, Sri Lanka, Taiwan,
and Thailand. 5 The MSCI AC Pacific Free Index
is an unmanaged, free float-adjusted market
capitalization index that is designed to
measure international equity market
performance. The Index comprises securities
from the following developed and emerging
market countries: Australia, China, Hong Kong,
Indonesia, Japan, Korea, Malaysia, New Zealand,
the Philippines, Singapore, Taiwan, and
Thailand.
Investors cannot invest directly in an index.
The returns for the Lipper Average and MSCI
Indexes would be lower if they included the
effect of sales charges or taxes.
*** Lipper Since Inception returns are 31.20%
for Class A and Class B, -20.00% for Class C,
and -23.62% for Class Z, based on all funds in
each share class.
**** MSCI AC Asia Pacific Free Gross Index
Since Inception returns are 13.99% for Class A
and Class B, -33.91% for Class C, and -32.97%
for Class Z, based on all funds in each share
class.
***** MSCI AC Pacific Free Index Since
Inception returns are 0.96% for Class A and
Class B, -40.03% for Class C, and -38.49% for
Class Z, based on all funds in each share
class.
1
(LOGO) June 14, 2002
DEAR SHAREHOLDER,
The Prudential Pacific Growth Fund has a strong
six-month return to report. This was in part
due to an economic recovery in the Pacific
Region that helped drive its inexpensively
priced stocks higher. However, while strong
stock selection helped your Fund outperform its
benchmark MSCI All Country (AC) Pacific Free
Index, some other funds' earlier commitments to
the region's economic recovery drove the
average return of its Lipper Pacific Region
peer group to an even higher level.
Optimism about any economy was not common
during the six-month review period. While
international investors detected signs of an
economic recovery, including renewed activity
in some industries, they had little conviction
that what they saw was real without the clear
prospect for a broad rise in corporate
profitability. Moreover, a few large
bankruptcies and the lax corporate oversight
that made them possible eroded investor
confidence in U.S. stocks. As a result, the
major international indexes fluctuated throughout
the period--up in November 2001, sharply down in
January 2002, and up again in February 2002.
Whether the news was good or bad, the market
response tended to be swift.
Your Fund's investment adviser gives a more
detailed view of the investing environment, as
well as the Fund's performance and the
prospects in the Pacific Region in the
following report.
Sincerely,
David R. Odenath, Jr., President
Prudential Pacific Growth Fund, Inc.
2
Prudential Pacific Growth Fund, Inc.
Semiannual Report April 30, 2002
INVESTMENT ADVISER'S REPORT
OVERVIEW OF MARKET AND PERFORMANCE
In a generally lackluster global investing
environment, Pacific Region stocks stood out
over the six months ended April 30, 2002. One
reason was that share prices already had fallen
so low that events such as the bankruptcy of
Enron and the questions it raised about
financial reporting had little impact on the
markets. Another reason was that many companies
in the Pacific Region tend to be early leaders
in an economic recovery because they
provide the raw materials and components that
more advanced economies need to ramp up
production of their more complicated products.
A third reason Pacific Region stocks performed
so well was that most global investors had been
avoiding the region for some time. When they
began to sense a market recovery, they moved
money into Pacific Region stocks. Many of these
markets rise substantially with the injection
of relatively small amounts of investment
money.
The Fund's return reflects significant gains on
several individual stocks in Korea,
particularly automobile and electronic
component companies. This was true, too, of
Japan, where we focused on well-run, globally
oriented firms such as Nissan Motor (see
Comments on Largest Holdings), Sony, Toyota
Motor, and Canon. The Fund also benefited from
an underweighted position in Japan, which was,
on average over the period, 28% of the
portfolio versus 63% of the MSCI AC Pacific
Free Index.
Usually, country factors such as domestic,
economic, and political conditions are the most
significant variables in this region, but over
this period, the strength of consumer spending,
the weakness in telecommunications
services and equipment companies, and the
weakness in technology were global factors. The
benefits of the early stage of an economic
recovery and the emergence of stronger domestic
markets applied to most of the Pacific Region,
with the exception of Japan's domestic market.
Moreover, the technical factors of low initial
share prices and rising global interest in
Pacific Region stocks also were region-wide.
3
Prudential Pacific Growth Fund, Inc.
Holdings expressed as a percentage of the Fund's net assets
Comments on Largest Holdings As of 4/30/02
---------------------------------------------------------------------
5.4% Samsung Electronics Co., Ltd./Electronic Components
Samsung Electronics is the global leader in
liquid crystal displays and computer memory
chips, and is the low-cost manufacturer of the
latter. We expect rising prices and recovering
demand to drive record profits in 2002. Even if
the price of commodity memory chips weakens
again, they are expected to be only a small
part of 2002 sales. More than half of the
company's revenues come from products used in
wireless telecommunications equipment, which is
in strong demand in Korea.
3.8 Kookmin Bank/Banks
Kookmin, Korea's leading bank, is the product
of a merger between the retail bank Kookmin and
the mortgage leader H&CB. Its management
reports good progress integrating the firms.
Earnings grew an impressive 21% in 2001. It has
improved its return on equity,
and has recently brought in consultants to
review its business development in a number of
areas, including credit cards.
2.9 Nissan Motor Co., Ltd./Automotive
Nissan's new management under Carlos Ghosn has
cut costs dramatically, severed the
old Japan ties, and aligned management's goals
with those of the shareholders. Nissan
will launch more new vehicles over the next 18
months than any other major auto firm.
Its three-year revival plan is one year ahead
of schedule, and it plans to increase sales by
a million units in the next three years. We
think this is achievable.
2.8 Taiwan Semiconductor Manufacturing Co., Ltd./Electronic Components
Taiwan Semiconductor is the world's leading
contract manufacturing foundry for
semiconductor (computer) chips. It has a
reputation for producing high volumes on
schedule. We expect it to maintain its leading
position at least for the next two years.
Prices are strengthening because almost 90% of
the industry's high-end production
capacity is in use, while launches of new
personal computer and telecommunications
equipment products are expected soon.
2.7 Toyota Motor Corp./Automotive
Toyota Motor is the world's third largest auto
manufacturer, with geographically diversified
sales. Toyota is gaining U.S. market share
because of its consistent quality and the weak
yen. Japanese sales are improving, and European
losses have fallen dramatically. Profits for
Toyota's fiscal year ended March 2002 were up
31%. It has returned 87% of its profits to
shareholders in the form of dividends and share
repurchases.
Holdings are subject to change.
4
www.prudential.com (800) 225-1852
Semiannual Report April 30, 2002
CONSUMERS DROVE GROWTH
Consumer spending was the healthiest part of
the global economy during the past recession.
The rise of consumer demand in the Pacific
Region countries adds a new element to this
story. It could be the beginning of a long-term
growth trend in these countries that is not
completely dependent on exports. If so, this
could be a historic turning point for the
Pacific Region, which has not had self-
sustaining domestic economies.
One consumer item in high demand was
automobiles, which, when combined with the
fact that Pacific Region auto manufacturers
had already been gaining market share in the
United States, led to strong industry
performance over the period. On an individual
stock basis, Nissan Motor (Japan) was one of
the largest contributors to the Fund's return.
In addition to the factors already mentioned,
Nissan is benefiting from a restructuring
regime--cutting costs and reducing the number of
Japanese suppliers--installed by Carlos Ghosn,
its first non-Japanese president. Moreover, its
new models have received excellent reviews.
Nissan is now making a profit for the first
time in several years. Hyundai Motor (Korea),
Toyota Motor (Japan, see Comments on Largest
Holdings), and Mazda Motor (Japan) also were
contributors to performance.
Consumer demand for electronic goods such as
DVDs and digital cameras has helped the
suppliers of components for these electronic
devices. The Fund had particularly significant
contributions from its position in United
Microelectronics (Taiwan), which makes memory
chips. Its shares also benefited from their
low initial price and a renewed investor interest
in Taiwan stocks. Samsung Electronics (Korea, see
Comments on Largest Holdings) was another large
contributor. Its position as the largest stock
in the MSCI Korea Index and as the best-managed
company in Korea, in the view of many, also
boosted its share price. Other beneficiaries
from the upswing in electronics included
Taiwan Semiconductor Manufacturing (see Comments
on Largest Holdings).
5
Prudential Pacific Growth Fund, Inc.
Semiannual Report April 30, 2002
We are particularly pleased with the large
share-price increase for Venture Manufacturing,
a Singapore-based electronics contract
manufacturer. Contract manufacturers are the
producers of products that are designed and
marketed by firms that own the brands. There
are relatively few shares of Venture on the
market, as most are owned by the founding
family. We were able to buy a position from the
family because of our local expertise. The
Fund's investment adviser has been in the
region for a long time, and is viewed as a
domestic investor, not foreign.
DOMESTIC CONSUMERS FUELED FINANCIAL FIRMS
The increase in consumer spending in the
Pacific Region created new
markets for financial firms. Banks, such as
Kookmin Bank (see Comments on Largest
Holdings), United Overseas Bank, and Hang Seng
Bank, benefited from consolidation in the
industry and an increase in consumer borrowing.
Credit card issuers are doing well. Once
consumers buy goods, they want to protect them.
Insurers such as Samsung Fire & Marine also
were among the largest contributors to the
Fund's return.
MINING AND METALS FEED REVIVING ECONOMIES
The Fund also had positive contributions from
companies making the materials that are
consumed by growing economies. Newcrest Mining
(Australia, gold) made the largest of these
contributions.
WHAT DIDN'T WORK
No single investment had a substantial negative
impact on the Fund. The largest impact came
from Nikon, which is not as competitive in the
growing digital camera market as it is in film
cameras. We sold our position.
6
www.prudential.com (800) 225-1852
We also had a loss on Hyundai Securities. We
think Hyundai is an excellent long-term
investment benefiting from the rising Asian
interest in investing. We were not the only
investors to have this opinion, and its share
price "got a little ahead of itself," as
investment professionals say. That means that
it rose faster than the company's earnings were
likely to grow. The share price experienced a
correction during this reporting period, but we
are confident that it will rise again.
LOOKING AHEAD
We continue to harbor doubts about Japan, so we
are focusing on blue-chip investments and
limiting our overall exposure to the country.
We reduced our exposure to Australia, not
because anything is wrong with Australia, but
because it is essentially a developed country
that has neither the volatility nor the growth
potential that characterizes most of the
region. We overweight it when things look bad
and reduce our exposure when there are more
exciting possibilities elsewhere.
We think the positive trends that drove the
market upward over this reporting period will
continue, but there may be a period of
consolidation after the large share-price gains
of the past few months. Over the long term,
however, the growth trend is now well
established, and Pacific Region stocks are
still bargain-priced compared to growth
stocks in the United States and Europe.
Prudential Pacific Growth Fund Management Team
7
SEMIANNUAL REPORT
APRIL 30, 2002
PRUDENTIAL
PACIFIC GROWTH FUND, INC.
FINANCIAL STATEMENTS
Prudential Pacific Growth Fund, Inc.
Portfolio of Investments as of April 30, 2002 (Unaudited)
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 96.1%
Common Stocks
-------------------------------------------------------------------------------------
Australia 11.0%
150,000 Aurion Gold, Ltd. $ 258,535
117,000 AWB, Ltd.(a) 241,863
102,000 Billabong International, Ltd. 465,524
30,000 Commonwealth Bank of Australia 529,151
192,000 Newcrest Mining, Ltd. 659,788
120,000 QBE Insurance Group, Ltd. 471,001
13,500 Rio Tinto, Ltd. 261,676
63,000 Santos, Ltd. 198,565
74,500 Suncorp-Metway, Ltd. 502,822
85,000 Westpac Banking Corp., Ltd. 741,187
158,000 WMC, Ltd. 781,339
48,500 Woodside Petroleum, Ltd. 352,341
--------------
5,463,792
-------------------------------------------------------------------------------------
Hong Kong 10.0%
206,000 CLP Holdings, Ltd. 808,242
296,000 Esprit Holdings, Ltd. 569,293
110,500 Hang Seng Bank, Ltd. 1,260,971
764,500 Hong Kong & China Gas Co., Ltd. 955,729
229,000 Hong Kong Electric Holdings, Ltd. 869,120
230,000 Johnson Electric Holdings, Ltd. 349,461
82,000 Li & Fung, Ltd. 131,425
--------------
4,944,241
-------------------------------------------------------------------------------------
India 0.7%
25,000 Reliance Industries, Ltd. (GDR) 315,250
-------------------------------------------------------------------------------------
Japan 23.1%
8,750 AIFUL Corp. 607,184
23,000 Canon, Inc. 881,308
12,000 Fuji Photo Film Co., Ltd. 381,308
133,000 Mazda Motor Corp. 397,757
3,600 Murata Manufacturing Co., Ltd. 227,944
7,500 Nintendo Co., Ltd. 1,051,402
See Notes to Financial Statements 9
Prudential Pacific Growth Fund, Inc.
Portfolio of Investments as of April 30, 2002 (Unaudited) Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
190,000 Nissan Motor Co., Ltd. $ 1,461,993
3,700 ORIX Corp. 306,892
6,400 Promise Co., Ltd. 337,445
57,000 Ricoh Co., Ltd. 1,063,201
20,900 Sony Corp. 1,123,130
29,000 Takeda Chemical Industries, Ltd. 1,269,314
8,000 Takefuji Corp. 578,193
24,000 Tonen General Sekiyu K.K. 181,122
48,400 Toyota Motor Corp. 1,319,314
10,000 Yamanouchi Pharmaceutical Co., Ltd. 275,701
--------------
11,463,208
-------------------------------------------------------------------------------------
Korea 25.7%
5,550 Cheil Jedang Corp. 239,318
24,890 Daishin Securities Co. 449,118
6,200 Hite Brewery Co., Ltd. 347,359
28,500 Hyundai Motor Co., Ltd. 1,057,146
64,500 Hyundai Securities Co.(a) 465,040
41,200 Kookmin Bank 1,875,260
24,500 Koram Bank(a) 232,874
16,200 KT Corp. (ADR) 366,930
15,000 KT Freetel(a) 447,433
510 Kumgang Korea Chemical Co., Ltd. 57,540
1,100 NCsoft Corp. 191,260
2,050 Pacific Corp. 236,834
9,000 Samsung Electronics Co., Ltd. 2,656,775
17,750 Samsung Fire & Marine Insurance Co., Ltd. 1,200,205
8,500 Samsung SDI Co., Ltd. 738,959
26,000 Samsung Securities Co., Ltd.(a) 874,000
1,900 Shinsegae Co., Ltd. 314,942
5,113 SK Telecom Co., Ltd. 993,717
1 SK Telecom Co., Ltd. (ADR) 21
--------------
12,744,731
-------------------------------------------------------------------------------------
Malaysia 5.5%
86,000 AMMB Holdings Berhad 135,788
75,000 Berjaya Sports Toto Berhad 181,577
10 See Notes to Financial Statements
Prudential Pacific Growth Fund, Inc.
Portfolio of Investments as of April 30, 2002 (Unaudited) Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
108,000 Genting Berhad $ 443,364
100,000 IOI Corp. Berhad 168,419
320,000 Magnum Corp. Berhad 250,103
122,000 Malayan Banking Berhad 295,365
92,000 Perusahaan Otomobil Nasional Berhad 273,576
242,000 Public Bank Berhad 249,639
95,000 Resorts World Berhad 262,497
25,000 Tanjong PLC 70,394
445,000 Technology Resources Industries Berhad(a) 312,668
32,000 UMW Holdings Berhad 75,789
--------------
2,719,179
-------------------------------------------------------------------------------------
Singapore 3.5%
74,000 Oversea-Chinese Banking Corp., Ltd. 530,991
73,000 United Overseas Bank, Ltd. 580,226
68,000 Venture Manufacturing, Ltd. 638,072
--------------
1,749,289
-------------------------------------------------------------------------------------
Taiwan 15.9%
140,000 Advanced Semiconductor Engineering, Inc.(a) 133,080
49,756 Ambit Microsystems Corp. 225,017
212,000 Asustek Computer, Inc. 766,391
172,000 Benq Corp. 393,882
145,000 Chinatrust Commercial Bank 128,226
180,000 CMC Magnetics Corp. 146,215
220,000 Compeq Manufacturing Co., Ltd.(a) 386,566
125,000 Formosa Plastic Corp. 146,186
167,000 Fubon Financial Holding Co., Ltd.(a) 170,290
65,000 Gigabyte Technology Co., Ltd. 172,255
256,000 Hon Hai Precision Industry Co., Ltd. 1,120,867
16,000 MediaTek, Inc. 300,957
650,000 National Securities Corp. 305,191
82,000 Quanta Computer, Inc. 276,357
29,000 Realtek Semiconductor Corp. 136,162
125,000 Ritek Corp. 130,343
118,000 Sunplus Technology Co., Ltd. 407,881
232,000 Taipei Bank 161,724
See Notes to Financial Statements 11
Prudential Pacific Growth Fund, Inc.
Portfolio of Investments as of April 30, 2002 (Unaudited) Cont'd.
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
560,000 Taiwan Semiconductor Manufacturing Co., Ltd.(a) $ 1,411,454
645,000 United Microelectronics Corp.(a) 984,705
--------------
7,903,749
-------------------------------------------------------------------------------------
Thailand 0.7%
500,000 PTT Public Co., Ltd. 343,891
--------------
Total long-term investments (cost $42,987,944) 47,647,330
--------------
SHORT-TERM INVESTMENTS 0.1%
Principal
Amount
(000)
-------------------------------------------------------------------------------------
Repurchase Agreement
$ 46 Joint Repurchase Agreement Account,
1.93%, 5/1/02 (cost $46,000; Note 5) 46,000
--------------
Total Investments 96.2%
(cost $43,033,944; Note 6) 47,693,330
Other assets in excess of liabilities 3.8% 1,904,728
--------------
Net Assets 100% $ 49,598,058
--------------
--------------
------------------------------
(a) Non-income producing security.
ADR--American Depositary Receipt.
GDR--Gross Depositary Receipt.
PLC--Public Limited Company.
12 See Notes to Financial Statements
Prudential Pacific Growth Fund, Inc.
Portfolio of Investments as of April 30, 2002 (Unaudited) Cont'd.
The industry classification of portfolio holdings and other assets shown as a
percentage of net assets as of April 30, 2002 was as follows:
Electronic Components............................................. 22.3%
Banks............................................................. 13.6
Financial Services................................................ 9.8
Automotive........................................................ 9.2
Electronics....................................................... 6.5
Mining............................................................ 4.0
Electrical Utilities.............................................. 3.4
Insurance......................................................... 3.4
Leisure & Tourism................................................. 3.4
Drugs & Healthcare................................................ 3.1
Apparel & Textiles................................................ 2.7
Telecommunication Services........................................ 2.3
Computer Networks................................................. 2.0
Gas Utilities..................................................... 1.9
Hotels, Restaurants & Leisure..................................... 1.9
Oil & Gas Exploration/Production.................................. 1.8
Food & Beverage................................................... 1.2
Diversified Operations............................................ 0.7
Energy Equipment & Services....................................... 0.7
Retail............................................................ 0.6
Cosmetics & Toiletries............................................ 0.5
Chemicals......................................................... 0.4
Software.......................................................... 0.4
Merchandising..................................................... 0.3
Other............................................................. 0.1
-----
96.2
Other assets in excess of liabilities............................. 3.8
-----
100.0%
-----
-----
See Notes to Financial Statements 13
Prudential Pacific Growth Fund, Inc.
Statement of Assets and Liabilities (Unaudited)
April 30, 2002
----------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $43,033,944) $ 47,693,330
Foreign currency, at value (cost $484,014) 487,023
Cash 43,840
Receivable for Fund shares sold 2,816,528
Dividends and interest receivable 168,874
Receivable for investments sold 119,620
Other assets 6,768
--------------
Total assets 51,335,983
--------------
LIABILITIES
Payable for Fund shares reacquired 1,273,890
Accrued expenses 340,440
Payable for investments purchased 58,909
Management fee payable 30,890
Distribution fee payable 20,658
Withholding taxes payable 13,138
--------------
Total liabilities 1,737,925
--------------
NET ASSETS $ 49,598,058
--------------
--------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 6,695
Paid-in capital in excess of par 89,238,039
--------------
89,244,734
Net investment loss (257,394)
Accumulated net realized loss on investments and foreign
currency transactions (44,053,006)
Net unrealized appreciation on investments and foreign
currencies 4,663,724
--------------
Net assets, April 30, 2002 $ 49,598,058
--------------
--------------
14 See Notes to Financial Statements
Prudential Pacific Growth Fund, Inc.
Statement of Assets and Liabilities (Unaudited) Cont'd.
April 30, 2002
----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share
($30,743,524 / 4,062,950 shares of common stock issued and
outstanding) $7.57
Maximum sales charge (5% of offering price) .40
--------------
Maximum offering price to public $7.97
--------------
--------------
Class B:
Net asset value, offering price and redemption price per share
($14,834,127 / 2,081,429 shares of common stock issued and
outstanding) $7.13
--------------
--------------
Class C:
Net asset value and redemption price per share
($2,660,030 / 371,162 shares of common stock issued and
outstanding) $7.17
Sales charge (1% of offering price) .07
--------------
Offering price to public $7.24
--------------
--------------
Class Z:
Net asset value, offering price and redemption price per share
($1,360,377 / 179,518 shares of common stock issued and
outstanding) $7.58
--------------
--------------
See Notes to Financial Statements 15
Prudential Pacific Growth Fund, Inc.
Statement of Operations (Unaudited)
Six Months
Ended
April 30, 2002
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME/LOSS
Income
Dividends (net of foreign withholding taxes of $20,710) $ 420,414
Interest 33,097
--------------
Total income 453,511
--------------
Expenses
Management fee 184,697
Distribution fee--Class A 37,673
Distribution fee--Class B 78,010
Distribution fee--Class C 11,690
Custodian's fees and expenses 132,000
Transfer agent's fees and expenses 129,000
Reports to shareholders 120,000
Registration fees 35,000
Legal fees and expenses 25,000
Audit fee 20,000
Directors' fees 5,000
Miscellaneous 1,169
--------------
Total operating expenses 779,239
Loan interest expense 1,867
--------------
Total expenses 781,106
--------------
Net investment loss (327,595)
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized loss on:
Investment transactions (2,778,829)
Foreign currency transactions (308,724)
--------------
(3,087,553)
--------------
Net change in unrealized appreciation/depreciation on:
Investments 8,799,948
Foreign currencies 250,344
--------------
9,050,292
--------------
Net gain on investments and foreign currencies 5,962,739
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,635,144
--------------
--------------
16 See Notes to Financial Statements
Prudential Pacific Growth Fund, Inc.
Statement of Changes in Net Assets (Unaudited)
Six Months Year
Ended Ended
April 30, 2002 October 31, 2001
-------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss $ (327,595) $ (1,015,868)
Net realized loss on investments and foreign
currency transactions (3,087,553) (33,132,395)
Net change in unrealized
appreciation/depreciation on investments
and foreign currencies 9,050,292 12,783,183
-------------- ----------------
Net increase (decrease) in net assets
resulting from operations 5,635,144 (21,365,080)
-------------- ----------------
Fund share transactions (net of share
conversions)
(Note 7)
Net proceeds from shares sold 39,545,736 164,362,944
Cost of shares reacquired (43,834,916) (205,697,807)
-------------- ----------------
Net decrease in net assets from Fund share
transactions (4,289,180) (41,334,863)
-------------- ----------------
Total increase (decrease) 1,345,964 (62,699,943)
NET ASSETS
Beginning of period 48,252,094 110,952,037
-------------- ----------------
End of period(a) $ 49,598,058 $ 48,252,094
-------------- ----------------
-------------- ----------------
------------------------------
(a) Includes undistributed net investment income
of: $ -- $ 70,201
-------------- ----------------
-------------- ----------------
See Notes to Financial Statements 17
Prudential Pacific Growth Fund, Inc.
Notes to Financial Statements (Unaudited)
Prudential Pacific Growth Fund, Inc. (the 'Fund') is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund was incorporated in Maryland on August 14, 1991 and commenced
investment operations on July 24, 1992. The investment objective of the Fund is
to seek long-term capital growth by investing primarily in common stocks, common
stock equivalents and other securities of companies doing business in or
domiciled in the Pacific Basin region.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation: Securities traded on an exchange and NASDAQ
National Market System are valued at the last reported sale price on such
exchange system or, if there was no sale on such day, at the mean between the
last reported bid and asked prices, or at the last bid price on such day in the
absence of an asked price. Securities traded in the over-the-counter market
(including securities listed on exchanges whose primary market is believed to be
over-the-counter) are valued by an independent pricing agent or principal market
maker. Securities for which reliable market quotations are not readily available
are valued by the Valuation Committee or Board of Directors in consultation with
the manager or subadviser.
Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost.
Repurchase Agreements: In connection with transactions in repurchase
agreements with United States financial institutions, it is the Fund's policy
that its custodian or designated subcustodians under triparty repurchase
agreements, as the case may be, take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. If
the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(i) market value of investment securities, other assets and
liabilities--at the closing daily rates of exchange;
18
Prudential Pacific Growth Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the fiscal period. Similarly, the
Fund does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio securities
sold during the fiscal period. Accordingly, realized foreign currency gains
(losses) are included in the reported net realized gain on investment
transactions.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from forward currency contracts, disposition of
foreign currencies, currency gains (losses) realized between the trade and
settlement dates on security transactions, and the difference between the
amounts of interest, dividends and foreign taxes recorded on the Fund's books
and the U.S. dollar equivalent amounts actually received or paid. Net currency
gains (losses) from valuing foreign currency denominated assets and liabilities
at period-end exchange rates are reflected as a component of unrealized
appreciation (depreciation) on investments and foreign currencies.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the possibility of political and economic
instability or the level of governmental supervision and regulation of foreign
securities markets.
Forward Currency Contracts: A forward currency contract is a commitment
to purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current forward exchange rates and
any unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments. Gain (loss) is realized on the settlement date of
the contract equal to the difference between the settlement value of the
original and renegotiated forward contracts. This gain (loss), if any, is
included in net realized gain (loss) on foreign currency transactions. Risks may
arise upon entering into these contracts from the potential inability of the
counterparties to meet the terms of their contracts.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains (losses) on sales of
securities are
19
Prudential Pacific Growth Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
calculated on the identified cost basis. Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual basis. The Fund
amortizes premiums and discounts on purchases of debt securities as adjustments
to interest income. Expenses are recorded on the accrual basis which may require
the use of certain estimates by management. Such estimates may differ from
actuals.
Net investment income (loss) (other than distribution fees) and unrealized
and realized gains (losses) are allocated daily to each class of shares based
upon the relative proportion of net assets of each class at the beginning of the
day.
Dividends and Distributions: The Fund expects to pay dividends of net
investment income and distributions of net realized capital and currency gains,
if any, annually. Dividends and distributions are recorded on the ex-dividend
date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Taxes: It is the Fund's policy to continue to meet the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable net income and capital gains, if any, to
shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends, interest and capital gains have
been provided for in accordance with the Fund's understanding of the applicable
country's tax rules and rates.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments LLC ('PI'),
formerly known as Prudential Investments Fund Management LLC. Pursuant to this
agreement, PI has responsibility for all investment advisory services and
supervises the subadviser's performance of such services. PI has entered into a
subadvisory agreement with Jardine Fleming International Management, Inc.
('JF'). The subadvisory agreement provides that JF furnishes investment advisory
services in connection with the management of the Fund. In connection therewith,
JF is obligated to keep certain books and records of the Fund. PI paid for the
services of JF, the compensation of officers of the Fund, occupancy and certain
clerical and bookkeeping costs of the Fund. The Fund bears all other costs and
expenses.
The management fee paid to PI is computed daily and payable monthly at an
annual rate of .75 of 1% of the average daily net assets of the Fund.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS'), which acts as the distributor of the Class A,
Class B, Class C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and
20
Prudential Pacific Growth Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
servicing the Fund's Class A, Class B and Class C shares, pursuant to plans of
distribution, (the 'Class A, Class B and Class C Plans'), regardless of expenses
actually incurred by them. The distribution fees are accrued daily and payable
monthly. No distribution or service fees are paid to PIMS as distributor of the
Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A, B and C shares, respectively.
Such expenses under the Class A, Class B and Class C Plans were .25%, 1% and 1%,
respectively, of the average daily net assets of the Class A, Class B and Class
C shares for the six months ended April 30, 2002.
PIMS has advised the Fund that it received approximately $3,200 and $200
in front-end sales charges resulting from sales of Class A and Class C shares,
respectively, during the six months ended April 30, 2002. From these fees, PIMS
paid such sales charges to dealers, which in turn paid commissions to
salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the six months ended April 30, 2002, it
received approximately $28,900 and $500 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PIMS and PI are indirect, wholly-owned subsidiaries of Prudential
Financial, Inc. ('Prudential').
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PI and an
indirect, wholly-owned subsidiary of Prudential, serves as the Fund's transfer
agent. During the six months ended April 30, 2002, the Fund incurred fees of
approximately $101,400 for the services of PMFS. As of April 30, 2002
approximately $16,400 of such fees were due to PMFS. Transfer agent fees and
expenses in the statement of operations include certain out-of-pocket expenses
paid to nonaffiliates.
Effective November 1, 2001, the Fund pays networking fees to Prudential
Securities, Inc. (PSI), an affiliate of PI and an indirect, wholly-owned
subsidiary of Prudential. These networking fees are payments made to
broker/dealers that clear mutual fund transactions through a national mutual
fund clearing system. The total amount paid to PSI during the six months ended
April 30, 2002 was approximately $17,000 and is included in transfer agent's
fees and expenses in the statement of operations.
21
Prudential Pacific Growth Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term
investments,for the six months ended April 30, 2002 were $34,776,747 and
$41,262,216, respectively.
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash into a single joint account, the daily aggregate balance of
which is invested in one or more repurchase agreements collateralized by U.S.
Treasury or federal agency obligations. As of April 30, 2002, the Fund had a
..01% undivided interest in the repurchase agreements in the joint account. The
undivided interest for the Fund represents $46,000 in principal amount. As of
such date, each repurchase agreements in the joint account and the collateral
therefor were as follows:
Banc of America Securities LLC, 1.93%, in the principal amount of
$208,580,000, repurchase price $208,591,182, due 5/01/02. The value of the
collateral including accrued interest was $212,751,600.
Goldman, Sachs & Co., 1.93% in the principal amount of $208,000,000,
repurchase price $208,011,151 due 5/01/02. The value of the collateral including
accrued interest was $212,160,000.
JP Morgan, 1.93%, in the principal amount of $208,000,000, repurchase
price $208,011,151, due 5/01/02. The value of the collateral including accrued
interest was $212,160,879.
UBS Warburg, 1.93%, in the principal amount of $208,000,000, repurchase
price $208,011,151, due 5/01/02. The value of the collateral including accrued
interest was $212,164,883.
Note 6. Tax Information
For federal income tax purposes, the Fund had a capital loss carryforward as of
October 31, 2001 of approximately $40,447,000 of which $6,178,000 expires in
2006 and $34,269,000 expires in 2009. Accordingly, no capital gains
distributions are expected to be paid to shareholders until net gains have been
realized in excess of such carryforward.
22
Prudential Pacific Growth Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
The United States federal income tax basis of the Fund's investments and
the net unrealized appreciation as of April 30, 2002 were as follows:
Total Net
Unrealized
Tax Basis Appreciation Depreciation Appreciation
---------------- ---------------- ---------------- ----------------
$43,312,487 $6,219,094 $1,838,251 $4,380,843
The difference between book basis and tax basis was attributable to
deferred losses on wash sales.
Note 7. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with an initial sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending upon
the period of time the shares are held. Class C shares are sold with a front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. A special exchange
privilege is also available for shareholders who qualify to purchase Class A
shares at net asset value. Class Z shares are not subject to any sales or
redemption charge and are offered exclusively for sale to a limited group of
investors.
The Fund has authorized 2 billion shares of common stock at $.001 par
value per share divided into four classes, designated Class A, Class B, Class C
and Class Z common stock each consisting of 500 million authorized shares.
Transactions in shares of common stock were as follows:
Class A Shares Amount
---------------------------------------------------------- ----------- -------------
Six months ended April 30, 2002:
Shares sold 2,559,202 $ 18,491,577
Shares reacquired (2,910,389) (21,338,790)
----------- -------------
Net increase (decrease) in shares outstanding before
conversion (351,187) (2,847,213)
Shares issued upon conversion from Class B 221,718 1,638,603
----------- -------------
Net increase (decrease) in shares outstanding (129,469) $ (1,208,610)
----------- -------------
----------- -------------
23
Prudential Pacific Growth Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Class A Shares Amount
---------------------------------------------------------- ----------- -------------
Year ended October 31, 2001:
Shares sold 11,654,875 $ 97,997,818
Shares reacquired (14,423,772) (124,923,380)
----------- -------------
Net increase (decrease) in shares outstanding before
conversion (2,768,897) (26,925,562)
Shares issued upon conversion from Class B 1,792,668 15,404,950
----------- -------------
Net increase (decrease) in shares outstanding (976,229) $ (11,520,612)
----------- -------------
----------- -------------
Class B
----------------------------------------------------------
Six months ended April 30, 2002:
Shares sold 861,891 $ 5,929,716
Shares reacquired (1,073,448) (7,445,838)
----------- -------------
Net increase (decrease) in shares outstanding before
conversion (211,557) (1,516,122)
Shares reacquired upon conversion into Class A (235,063) (1,638,603)
----------- -------------
Net increase (decrease) in shares outstanding (446,620) $ (3,154,725)
----------- -------------
----------- -------------
Year ended October 31, 2001:
Shares sold 2,543,492 $ 20,766,403
Shares reacquired (3,609,714) (29,821,278)
----------- -------------
Net increase (decrease) in shares outstanding before
conversion (1,066,222) (9,054,875)
Shares reacquired upon conversion into Class A (1,887,063) (15,404,950)
----------- -------------
Net increase (decrease) in shares outstanding (2,953,285) $ (24,459,825)
----------- -------------
----------- -------------
Class C
----------------------------------------------------------
Six months ended April 30, 2002:
Shares sold 464,473 $ 3,208,059
Shares reacquired (428,737) (2,990,508)
----------- -------------
Net increase (decrease) in shares outstanding 35,736 $ 217,551
----------- -------------
----------- -------------
Year ended October 31, 2001:
Shares sold 2,255,670 $ 18,222,589
Shares reacquired (2,569,425) (21,177,108)
----------- -------------
Net increase (decrease) in shares outstanding (313,755) $ (2,954,519)
----------- -------------
----------- -------------
Class Z
----------------------------------------------------------
Six months ended April 30, 2002:
Shares sold 1,623,252 $ 11,916,384
Shares reacquired (1,611,304) (12,059,780)
----------- -------------
Net increase (decrease) in shares outstanding 11,948 $ (143,396)
----------- -------------
----------- -------------
Year ended October 31, 2001:
Shares sold 3,351,409 $ 27,376,134
Shares reacquired (3,570,222) (29,776,041)
----------- -------------
Net increase (decrease) in shares outstanding (218,813) $ (2,399,907)
----------- -------------
----------- -------------
24
Prudential Pacific Growth Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Note 8. Borrowings
The Fund, along with other affiliated registered investment companies (the
'Funds'), is a party to a syndicated credit agreement ('SCA') with a group of
banks. For the six months ended April 30, 2002, the amounts of the commitment
were as follows: $930 million from November 1, 2001 through December 31, 2001
and $500 million from January 1, 2002 through May 2, 2002. On May 3, 2002, the
Funds renewed and amended the SCA, which effectively increased the banks'
commitment to $800 million and allows the Funds to increase the commitment to $1
billion if necessary. Interest on any borrowings under the SCA will be incurred
at market rates. The Funds pay a commitment fee of .08 of 1% of the unused
portion of the SCA. The commitment fee is accrued and paid quarterly on a pro
rata basis by the Funds. The purpose of the SCA is to serve as an alternative
source of funding for capital share redemptions. The expiration date of the SCA
is May 2, 2003.
The Fund utilized the line of credit during the six months ended April 30,
2002. The average daily balance the Fund had outstanding during the six months
was approximately $136,289 at a weighted average interest rate of approximately
2.76%.
25
Prudential Pacific Growth Fund, Inc.
Financial Highlights (Unaudited)
Class A(a)
----------------
Six Months Ended
April 30, 2002
----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 6.83
--------
Income from investment operations
Net investment income (loss) (.04)
Net realized and unrealized gain (loss) on investment and
foreign currency transactions .78
--------
Total from investment operations .74
--------
Less distributions
Dividends from net investment income --
Distributions in excess of net investment income --
Distributions from net realized gains --
--------
Total distributions --
--------
Net asset value, end of period $ 7.57
--------
--------
TOTAL RETURN(b) 10.83%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 30,744
Average net assets (000) $ 30,388
Ratios to average net assets:
Total expenses(c) 2.90%(d)
Operating expenses, including distribution and service
(12b-1) fees(c) 2.90%(d)
Operating expenses, excluding distribution and service
(12b-1) fees 2.65%(d)
Net investment income (loss) (1.05)%(d)
For Class A, B, C and Z shares:
Portfolio turnover rate(e) 73%
------------------------------
(a) Calculations are made based on average month-end shares outstanding during
the period.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for less than one year are not annualized.
(c) The Distributor of the Fund agreed to limit its distribution fees to .25 of
1% of the average daily net assets of the Class A shares.
(d) Annualized.
(e) Not annualized for periods of less than one full year.
26 See Notes to Financial Statements
Prudential Pacific Growth Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
Class A(a)
----------------------------------------------------------------------------------------------------------
Year Ended October 31,
----------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
----------------------------------------------------------------------------------------------------------
$ 9.70 $ 14.01 $ 9.14 $ 12.22 $ 15.86
-------- -------- -------- -------- --------
(.09) (.09) (.04) .06 .02
(2.78) (4.01) 4.99 (1.88) (3.31)
-------- -------- -------- -------- --------
(2.87) (4.10) 4.95 (1.82) (3.29)
-------- -------- -------- -------- --------
-- (.16) (.08) -- --
-- (.05) -- (.40) --
-- -- -- (.86) (.35)
-------- -------- -------- -------- --------
-- (.21) (.08) (1.26) (.35)
-------- -------- -------- -------- --------
$ 6.83 $ 9.70 $ 14.01 $ 9.14 $ 12.22
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
(29.59)% (29.82)% 55.11% (15.53)% (21.32)%
$ 28,615 $ 50,141 $ 49,338 $ 22,624 $ 35,860
$ 34,919 $ 53,389 $ 31,281 $ 26,845 $ 73,942
2.60% 1.60% 1.72% 1.70% 1.48%
2.58% 1.57% 1.72% 1.70% 1.42%
2.33% 1.32% 1.47% 1.45% 1.17%
(1.12)% (.70)% (.34)% .63% .14%
158% 93% 104% 94% 81%
See Notes to Financial Statements 27
Prudential Pacific Growth Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
Class B(a)
----------------
Six Months Ended
April 30, 2002
----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 6.45
--------
Income from investment operations
Net investment loss (.06)
Net realized and unrealized gain (loss) on investment and
foreign currency transactions .74
--------
Total from investment operations .68
--------
Less distributions
Distributions from net investment income --
Distributions in excess of net investment income --
Distributions from net realized gains --
--------
Total distributions --
--------
Net asset value, end of period $ 7.13
--------
--------
TOTAL RETURN(b) 10.54%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 14,834
Average net assets (000) $ 15,731
Ratios to average net assets:
Total expenses 3.65%(c)
Operating expenses, including distribution and service
(12b-1) fees 3.65%(c)
Operating expenses, excluding distribution and service
(12b-1) fees 2.65%(c)
Net investment loss (1.85)%(c)
------------------------------
(a) Calculations are made based on average month-end shares outstanding during
the period.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for less than one year are not annualized.
(c) Annualized.
28 See Notes to Financial Statements
Prudential Pacific Growth Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
Class B(a)
----------------------------------------------------------------------------------------------------------
Year Ended October 31,
----------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
----------------------------------------------------------------------------------------------------------
$ 9.30 $ 13.50 $ 8.79 $ 11.77 $ 15.40
-------- ---------------- ---------------- -------- ----------------
(.15) (.19) (.12) (.01) (.09)
(2.70) (3.87) 4.84 (1.82) (3.19)
-------- ---------------- ---------------- -------- ----------------
(2.85) (4.06) 4.72 (1.83) (3.28)
-------- ---------------- ---------------- -------- ----------------
-- (.09) (.01) -- --
-- (.05) -- (.29) --
-- -- -- (.86) (.35)
-------- ---------------- ---------------- -------- ----------------
-- (.14) (.01) (1.15) (.35)
-------- ---------------- ---------------- -------- ----------------
$ 6.45 $ 9.30 $ 13.50 $ 8.79 $ 11.77
-------- ---------------- ---------------- -------- ----------------
-------- ---------------- ---------------- -------- ----------------
(30.72)% (30.40)% 54.28% (16.32)% (21.84)%
$ 16,314 $ 51,004 $107,769 $ 74,457 $128,694
$ 28,834 $ 96,019 $ 85,193 $ 91,983 $244,462
3.35% 2.35% 2.47% 2.45% 2.23%
3.33% 2.32% 2.47% 2.45% 2.17%
2.33% 1.32% 1.47% 1.45% 1.17%
(1.90)% (1.43)% (1.09)% (.12)% (.61)%
See Notes to Financial Statements 29
Prudential Pacific Growth Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
Class C(a)
----------------
Six Months Ended
April 30, 2002
----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 6.49
-------
Income from investment operations
Net investment loss (.06)
Net realized and unrealized gain (loss) on investment and
foreign currency transactions .74
-------
Total from investment operations .68
-------
Less distributions
Distributions from net investment income --
Distributions in excess of net investment income --
Distributions from net realized gains --
-------
Total distributions --
-------
Net asset value, end of period $ 7.17
-------
-------
TOTAL RETURN(b) 10.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $2,660
Average net assets (000) $2,358
Ratios to average net assets:
Total expenses 3.65%(c)
Operating expenses, including distribution and service
(12b-1) fees 3.65%(c)
Operating expenses, excluding distribution and service
(12b-1) fees 2.65%(c)
Net investment loss (1.80)%(c)
------------------------------
(a) Calculations are made based on average month-end shares outstanding during
the period.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for less than one year are not annualized.
(c) Annualized.
30 See Notes to Financial Statements
Prudential Pacific Growth Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
Class C(a)
----------------------------------------------------------------------------------------------------------
Year Ended October 31,
----------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
----------------------------------------------------------------------------------------------------------
$ 9.30 $13.50 $ 8.79 $11.77 $15.40
------- ------- ------- ------- -------
(.15) (.19) (.12) (.01) (.09)
(2.66) (3.87) 4.84 (1.82) (3.19)
------- ------- ------- ------- -------
(2.81) (4.06) 4.72 (1.83) (3.28)
------- ------- ------- ------- -------
-- (.09) (.01) -- --
-- (.05) -- (.29) --
-- -- -- (.86) (.35)
------- ------- ------- ------- -------
-- (.14) (.01) (1.15) (.35)
------- ------- ------- ------- -------
$ 6.49 $ 9.30 $13.50 $ 8.79 $11.77
------- ------- ------- ------- -------
------- ------- ------- ------- -------
(30.29)% (30.40)% 54.28% (16.32)% (21.84)%
$2,176 $6,040 $7,073 $1,654 $2,932
$3,035 $7,376 $3,103 $2,276 $6,557
3.35% 2.35% 2.47% 2.45% 2.23%
3.33% 2.32% 2.47% 2.45% 2.17%
2.33% 1.32% 1.47% 1.45% 1.17%
(1.90)% (1.42)% (1.09)% (.12)% (.61)%
See Notes to Financial Statements 31
Prudential Pacific Growth Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
Class Z(a)
----------------
Six Months Ended
April 30, 2002
----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 6.85
-------
Income from investment operations
Net investment income (loss) (.03)
Net realized and unrealized gain (loss) on investment and
foreign currency transactions .76
-------
Total from investment operations .73
-------
Less distributions
Distributions from net investment income --
Distributions in excess of net investment income --
Distributions from net realized gains --
-------
Total distributions --
-------
Net asset value, end of period $ 7.58
-------
-------
TOTAL RETURN(b) 10.66%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $1,360
Average net assets (000) $1,184
Ratios to average net assets:
Total expenses 2.65%(c)
Operating expenses 2.65%(c)
Net investment income (loss) (.68)%(c)
------------------------------
(a) Calculations are made based on average month-end shares outstanding during
the period.
(b) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for less than one year are not
annualized.
(c) Annualized.
32 See Notes to Financial Statements
Prudential Pacific Growth Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
Class Z(a)
----------------------------------------------------------------------------------------------------------
Year Ended October 31,
----------------------------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
----------------------------------------------------------------------------------------------------------
$ 9.75 $ 14.12 $ 9.17 $ 12.28 $ 15.89
------- -------- -------- -------- --------
(.07) (.06) -- .08 .06
(2.83) (4.08) 5.06 (1.89) (3.32)
------- -------- -------- -------- --------
(2.90) (4.14) 5.06 (1.81) (3.26)
------- -------- -------- -------- --------
-- (.18) (.11) -- --
-- (.05) -- (.44) --
-- -- -- (.86) (.35)
------- -------- -------- -------- --------
-- (.23) (.11) (1.30) (.35)
------- -------- -------- -------- --------
$ 6.85 $ 9.75 $ 14.12 $ 9.17 $ 12.28
------- -------- -------- -------- --------
------- -------- -------- -------- --------
(29.89)% (29.75)% 56.05% (15.36)% (21.02)%
$1,147 $ 3,767 $ 43,311 $ 12,429 $ 19,520
$2,107 $ 33,479 $ 22,811 $ 15,099 $ 31,945
2.35% 1.35% 1.47% 1.45% 1.23%
2.33% 1.32% 1.47% 1.45% 1.17%
(.86)% (.40)% (.03)% .82% .39%
See Notes to Financial Statements 33
Prudential Pacific Growth Fund, Inc.
PRUDENTIAL MUTUAL FUNDS
Prudential offers a broad range of mutual funds
designed to meet your individual needs. For
information about these funds, contact your
financial professional or call us at (800) 225-1852.
Read the prospectus carefully before you invest or send money.
PRUDENTIAL MUTUAL FUNDS
-------------------------------------------------
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Special Money Market Fund, Inc.*
Money Market Series
STRATEGIC PARTNERS
MUTUAL FUNDS**
---------------------------------------------------
Strategic Partners Asset Allocation Funds
Strategic Partners Conservative Growth Fund
Strategic Partners Moderate Growth Fund
Strategic Partners High Growth Fund
Strategic Partners Style Specific Funds
Strategic Partners
Large Capitalization Growth Fund
Strategic Partners
Large Capitalization Value Fund
Strategic Partners
Small Capitalization Growth Fund
Strategic Partners
Small Capitalization Value Fund
Strategic Partners
International Equity Fund
Strategic Partners
Total Return Bond Fund
Strategic Partners Opportunity Funds
Strategic Partners Focused Growth Fund
Strategic Partners New Era Growth Fund
Strategic Partners Focused Value Fund
Strategic Partners Mid-Cap Value Fund
Special Money Market Fund, Inc.*
Money Market Series
* This Fund is not a direct purchase money fund
and is only an exchangeable money fund.
**Not exchangeable with the Prudential mutual funds.
Prudential Pacific Growth Fund, Inc.
Getting the Most from Your Prudential Mutual Fund
When you invest through Prudential Mutual
Funds, you receive financial advice from a
Prudential Securities Financial Advisor or
Pruco Securities registered representative.
Your financial professional can provide you
with the following services:
THERE'S NO REWARD WITHOUT RISK; BUT IS THIS RISK
WORTH IT?
Your financial professional can help you match
the reward you seek with the risk you can
tolerate. Risk can be difficult to gauge--
sometimes even the simplest investments bear
surprising risks. The educated investor knows
that markets seldom move in just one direction.
There are times when a market sector or asset
class will lose value or provide little in the
way of total return. Managing your own expectations
is easier with help from someone who understands
the markets, and who knows you!
KEEPING UP WITH THE JONESES
A financial professional can help you wade
through the numerous available mutual funds to
find the ones that fit your individual
investment profile and risk tolerance. While
the newspapers and popular magazines are full of
advice about investing, they are aimed at
generic groups of people or representative
individuals--not at you personally. Your financial
professional will review your investment objectives
with you. This means you can make financial decisions
based on the assets and liabilities in your
current portfolio and your risk tolerance--not
just based on the current investment fad.
BUY LOW, SELL HIGH
Buying at the top of a market cycle and selling
at the bottom are among the most common
investor mistakes. But sometimes it's difficult
to hold on to an investment when it's losing
value every month. Your financial professional
can answer questions when you're confused or
worried about your investment, and should
remind you that you're investing for the long
haul.
www.prudential.com (800) 225-1852
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Directors
Delayne Dedrick Gold
Robert F. Gunia
Robert E. La Blanc
David R. Odenath, Jr.
Judy A. Rice
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, Vice President
Judy A. Rice, Vice President
Grace C. Torres, Treasurer
Jonathan D. Shain, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Investments LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
JF International Management Inc.
47th Floor, Jardine House
1 Connaught Place, Central
Hong Kong
Distributor
Prudential Investment
Management Services LLC
Gateway Center Three, 14th Floor
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
PO Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004-2498
Fund Symbols Nasdaq CUSIP
Class A PRPAX 743941106
Class B PRPBX 743941205
Class C PRPCX 743941304
Class Z PPGZX 743941403
The views expressed in this report and
information about the Fund's portfolio holdings
are for the period covered by this report and
are subject to change thereafter.
The accompanying financial statements as of
April 30, 2002, were not audited and, accordingly,
no auditor's opinion is expressed on them.
(LOGO)
Fund Symbols Nasdaq CUSIP
Class A PRPAX 743941106
Class B PRPBX 743941205
Class C PRPCX 743941304
Class Z PPGZX 743941403
MF157E2 IFS-A071710
Mutual funds are not bank guaranteed or FDIC
insured, and may lose value.