Edgar Filing: TEMPLETON DRAGON FUND INC

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-08874
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TEMPLETON DRAGON FUND, INC.
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(Exact name of registrant as specified in charter)

500 EAST BROWARD BLVD., SUITE 2100, FORT LAUDERDALE, FL 33394-3091
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(Address of principal executive offices) (Zip code)

MURRAY L. SIMPSON, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Name and address of agent for service)

Registrant's telephone number, including area code: (954) 527-7500
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Date of fiscal year end: 12/31
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Date of reporting period: 3/31/05
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ITEM 1. SCHEDULE OF INVESTMENTS.

Templeton Dragon Fund, Inc.

QUARTERLY STATEMENT OF INVESTMENTS
MARCH 31, 2005

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CONTENTS

Templeton Dragon Fund, Inc. ........................................... 3
Notes to Statement of Investments ..................................... 6

[LOGO OMITTED]
FRANKLIN TEMPLETON
INVESTMENTS
FRANKLIN o TEMPLETON o MUTUAL SERIES

Quarterly Statement of Investments | 1

This page intentionally left blank.

Templeton Dragon Fund, Inc.

STATEMENT OF INVESTMENTS, MARCH 31, 2005 (UNAUDITED)

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COUNTRY SHARES VALUE
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COMMON STOCKS 97.3%
AIR FREIGHT & LOGISTICS 0.0%C
Sinotrans Ltd. .......................... China 1,008,000 $ 290,790
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AIRLINES 0.4%
a Air China Ltd. .......................... China 7,486,000 2,711,467
a Air China Ltd., 144A .................... China 1,364,000 494,047
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3,205,514
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AUTO COMPONENTS 1.6%
Cheng Shin Rubber Industry Co. Ltd. ..... Taiwan 9,409,160 11,333,639
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AUTOMOBILES 0.2%
a Chongqing Changan Automobile ............ China 905,070 456,048
Kia Motors Corp. ........................ South Korea 98,810 1,359,548
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1,815,596
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CAPITAL MARKETS 1.2%
Yuanta Core Pacific Securities Co. ...... Taiwan 11,591,332 8,480,296
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COMMUNICATIONS EQUIPMENT 0.5%
D-Link Corp. ............................ Taiwan 2,979,309 3,706,878
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COMPUTERS & PERIPHERALS 5.9%
Acer Inc. ............................... Taiwan 12,232,022 19,218,088
Advantech Co. Ltd. ...................... Taiwan 2,929,282 6,694,226
Asustek Computer Inc. ................... Taiwan 2,883,512 7,962,469
Lenovo Group Ltd., H .................... China 6,024,000 2,046,760
Lite-On Technology Corp. ................ Taiwan 5,776,100 6,215,000
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42,136,543
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CONSTRUCTION MATERIALS 0.2%
Anhui Conch Cement Co. Ltd. ............. China 1,306,000 1,239,113
China Resources Cement .................. China 872,000 206,835
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1,445,948
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DISTRIBUTORS 2.9%
China Resources Enterprise Ltd. ......... China 12,628,000 17,324,247
Test-Rite International Co. Ltd. ........ Taiwan 5,126,125 3,563,199
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20,887,446
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DIVERSIFIED BANKS 6.5%
Chinatrust Financial Holding Co. Ltd. ... Taiwan 6,659,477 7,514,264
HSBC Holdings PLC ....................... United Kingdom 1,376,759 21,888,482
Mega Financial Holdings Co. Ltd. ........ Taiwan 27,217,000 17,536,504
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46,939,250
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DIVERSIFIED TELECOMMUNICATION SERVICES 0.5%
China Telecom Corp. Ltd., H ............. China 10,278,000 3,590,965
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ELECTRIC UTILITIES 8.4%
Cheung Kong Infrastructure Holdings Ltd. Hong Kong 11,060,000 31,764,291
Datang International Power Generation Co. Ltd. China 26,502,000 19,198,315
Guangdong Electric Power Development Co Ltd., B China 11,270,600 5,621,247

Quarterly Statement of Investments | 3

Templeton Dragon Fund, Inc.

STATEMENT OF INVESTMENTS, MARCH 31, 2005 (UNAUDITED) (CONTINUED)

COMMON STOCKS (CONT.)
ELECTRIC UTILITIES (CONT.)
Huadian Power International Corp. Ltd., H China 3,978,000 $ 1,083,826
Huaneng Power International Inc., H ..... China 3,388,000 2,476,021
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60,143,700
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ELECTRICAL EQUIPMENT 0.6%
Phoenixtec Power Co. Ltd. ............... Taiwan 3,632,945 4,012,775
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ELECTRONIC EQUIPMENT & INSTRUMENTS 2.7%
Delta Electronics Inc. .................. Taiwan 11,788,952 19,120,658
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FOOD & STAPLES RETAILING 15.2%
Dairy Farm International Holdings Ltd. .. Hong Kong 39,843,978 109,172,500
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FOOD PRODUCTS 1.0%
UNI-President Enterprises Corp. ......... Taiwan 16,069,030 7,446,449
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HOTELS RESTAURANTS & LEISURE 2.8%
Hong Kong & Shanghai Hotels Ltd. ........ Hong Kong 21,534,000 19,878,940
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HOUSEHOLD DURABLES 1.7%
TCL International Holdings Inc. ......... China 48,960,000 12,303,637
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INDUSTRIAL CONGLOMERATES 4.9%
Beijing Enterprises Holdings Ltd. ....... China 1,520,000 2,172,974
CITIC Pacific Ltd. ...................... China 7,081,000 20,745,162
a LG Corp. ................................ South Korea 76,000 1,822,506
Shanghai Industrial Holdings Ltd. ....... China 4,954,000 10,480,354
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35,220,996
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IT SERVICES 0.3%
Travelsky Technology Ltd., H ............ China 2,837,000 2,364,333
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LEISURE EQUIPMENT & PRODUCTS 0.2%
Premier Image Technology Corp. .......... Taiwan 1,495,000 1,694,011
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MACHINERY 3.4%
China International Marine Containers Co. Ltd., B China 7,253,786 21,707,090
Yung Tay Engineering Co. Ltd. ........... Taiwan 5,686,000 3,086,098
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24,793,188
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METALS & MINING 0.1%
Aluminum Corp. of China Ltd., H ......... China 1,028,000 593,119
China Oriental Group Co. Ltd. ........... China 422,000 90,898
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684,017
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OFFICE ELECTRONICS 0.1%
Kinpo Electronics Inc. .................. Taiwan 1,454,000 643,792
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OIL & GAS 9.2%
China Petroleum & Chemical Corp., H ..... China 103,150,000 41,659,668
PetroChina Co. Ltd., H .................. China 40,050,000 24,904,641
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66,564,309
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REAL ESTATE 10.3%
Cheung Kong Holdings Ltd. ............... Hong Kong 2,575,000 22,862,990
Hang Lung Group Ltd. .................... Hong Kong 18,177,042 31,812,067

4 | Quarterly Statement of Investments

Templeton Dragon Fund, Inc.

STATEMENT OF INVESTMENTS, MARCH 31, 2005 (UNAUDITED) (CONTINUED)

COMMON STOCKS (CONT.)
REAL ESTATE (CONT.)
Henderson China Holdings Ltd. ........... Hong Kong 6,956,500 $ 4,236,629
Henderson Investment Ltd. ............... Hong Kong 7,485,000 10,364,577
Hong Kong Land Holdings Ltd. ............ Hong Kong 1,904,000 5,121,760
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74,398,023
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SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 5.3%
Elan Microelectronics Corp. ............. Taiwan 3,517,396 1,948,155
Faraday Technology Corp. ................ Taiwan 432,259 836,914
Samsung Electronics Co. Ltd. ............ South Korea 10,780 5,318,486
Siliconware Precision Industries Co. Ltd. Taiwan 4,340,000 3,767,505
Sunplus Technology Co. Ltd. ............. Taiwan 6,264,390 9,404,737
Taiwan Semiconductor Manufacturing Co. .. Taiwan 10,139,000 16,573,303
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37,849,100
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TEXTILES APPAREL & LUXURY GOODS 0.9%
Tack Fat Group International Ltd. ....... Hong Kong 26,080,000 3,778,523
Tainan Enterprises Co. Ltd. ............. Taiwan 1,846,000 2,463,794
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6,242,317
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TRANSPORTATION INFRASTRUCTURE 3.0%
China Merchants Holdings (International) Co. Ltd. China 3,574,000 7,011,033
Cosco Pacific Ltd. ...................... Hong Kong 6,678,000 14,512,831
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21,523,864
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WIRELESS TELECOMMUNICATION SERVICES 7.3%
China Mobile (Hong Kong) Ltd., fgn. ..... China 13,876,000 45,367,045
Taiwan Cellular Corp. ................... Taiwan 7,047,764 7,158,270
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52,525,315
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TOTAL COMMON STOCKS (COST $446,704,900) . 700,414,789
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SHORT TERM INVESTMENTS (COST $12,735,596) 1.8%
MONEY FUND
b Franklin Institutional Fiduciary Trust
Money Market Portfolio ................. United States 12,735,596 12,735,596
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TOTAL INVESTMENTS (COST $459,440,496) 99.1% 713,150,385
OTHER ASSETS, LESS LIABILITIES 0.9% ..... 6,542,307
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NET ASSETS 100.0% ....................... $719,692,692
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a Non-income producing.
b The Franklin Institutional Fiduciary Trust Money Market Portfolio is managed
by an affiliate of the Fund's investment manager.
c Rounds to less than 0.05% of net assets.

Quarterly Statement of Investments | See Notes to Statement of Investments. | 5

Templeton Dragon Fund, Inc.

NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED)

Templeton Dragon Fund, Inc. (the Fund), is registered under the Investment
Company Act of 1940 as a closed-end, non-diversified investment company.

1. INCOME TAXES

At March 31, 2005 the net unrealized appreciation (depreciation) based on the
cost of investments for income tax purposes was as follows:

Cost of investments.................................... $460,729,033
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Unrealized appreciation................................ $258,193,848
Unrealized depreciation................................ (5,772,496)
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Net unrealized appreciation (depreciation)............. $252,421,352
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For information on the Fund's policy regarding valuation of investments and
other significant accounting policies, please refer to the Fund's most recent
semiannual or annual shareholder report.

6 | Quarterly Statement of Investments

ITEM 2. CONTROLS AND PROCEDURES.

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.

Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio
Holdings on Form N-Q, the Registrant had carried out an evaluation, under the
supervision and with the participation of the Registrant's management, including
the Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.

(b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes
in the Registrant's internal controls or in other factors that could
significantly affect the internal controls subsequent to the date of their
evaluation in connection with the preparation of this Quarterly Schedule of
Portfolio Holdings on Form N-Q.

ITEM 3. EXHIBITS.

(a) Certifications pursuant to Section 30a-2 of the Investment Company Act of
1940 of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration,
and Galen G. Vetter, Chief Financial Officer.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

TEMPLETON DRAGON FUND, INC.

By /s/JIMMY D. GAMBILL
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Jimmy D. Gambill
Chief Executive Officer -
Finance and Administration
Date May 20, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/JIMMY D. GAMBILL
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Jimmy D. Gambill
Chief Executive Officer -
Finance and Administration
Date May 20, 2005

By /s/GALEN G. VETTER
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Galen G. Vetter
Chief Financial Officer
Date May 20, 2005