Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 111 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2020 5. FINANCIAL INSTRUMENTS (CONTINUED) Fair value measurement of financial instruments (continued) Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis (continued) 31 December 31 December 2020 Increase(+)/ decrease(-) in fair value of assets if 10% increase/ 2019 Increase(+)/ decrease(-) in fair value of assets if 10% increase/ Significant 31 December 31 December Relationship of decrease of the decrease of the 31 December 31 December Fair value Valuation unobservable 2020 2019 unobservable inputs unobservable unobservable Financial assets 2020 2019 hierarchy techniques input(s) Range Range to fair value inputs (Note 2) inputs (Note 2) US$ US$ US$ US$ Unlisted equity (Note 1) 46,324,082 50,692,353 Level 3 Net asset value – Net asset value of the underlying N/A N/A The higher the net asset value, N/A N/A investments the higher the fair value Unlisted equity securities (Note 1) 100,775,752 14,425,470 Level 3 Recent transaction – Discount/premium 0% 0% The higher +10,077,575/ +1,442,547/ price with discount/ premium for events/ changes after transaction price the discount/premium, the lower/higher the fair value -10,077,575 -1,442,547 Unlisted equity securities (Notes 1 and 5) — 8,610,705 Level 3 Investment cost – Discount/premium N/A 0% The higher N/A +861,071/ with discount/premium the discount/premium, -861,071 the lower/higher the fair value Closing balance 909,272,978 728,881,441 Note 1: Financial assets at FVTPL represent those investments are measured at fair value with subsequent fair value gains or losses to be recognised in profit or loss. Note 2: Amount represents increase(+)/decrease(–) in fair value of the financial assets if the unobservable inputs were 10% increase/decrease while all the other variables were held constant. Note 3: The analysis of financial liabilities is set out in note 20. Note 4: Pursuant to the agreement, the loan, subject to the fulfillment of certain precedent conditions which are not under the control of the Group, could be converted into equity interest of Qinghai Provincial Qinghai Lake Tourism Group Co., Ltd. Given that the conditions are not under the control of the Group, the Directors consider that the conditions of conversion were not fulfilled as at 31 December 2020. Note 5: As at 31 December 2019, it was considered that the original investment cost remained the best estimate of fair value. In November 2020, Pony AI Inc. completed a new round of equity financing, and the financial asset was transferred and measured at recent transaction price.