Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 126 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2020 15. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Notes: (a) The listed equity securities represent the Group’s interest held in China Merchants Bank Co., Ltd., China Reinsurance (Group) Corporation, Iflytek Co., Ltd., and Oriental Pearl whose fair values are determined based on the quoted market bid prices available on the relevant stock exchanges. The listed equity securities within lock-up period represent the Group’s interest held in Cambricon Technologies Corporation Limited subject to trading moratorium and whose fair value is determined based on the quoted market bid price available on the Shanghai Stock Exchange STAR Market and adjusted for lack of marketability due to its non-circulation. For equity securities listed on the New Third Board, namely Wuhan Rixin Technology Co., Ltd. and Xi’an Jinpower Electrical Co., Ltd., their fair values were arrived at by reference to the basis of valuation carried out by an independent valuer not connected with the Group. Determination of fair value is based on the best information available in the circumstances and includes appropriate risk adjustments for lack of marketability. Factors considered in determining the fair value of these investments include multiples of comparable companies listed on stock exchanges. Please refer to note 5 to the consolidated financial statements for further details of the valuation techniques. (b) As at 31 December 2020, fair values of unlisted equities and debt investments amounting to US$128,337,860 (2019: US$63,351,819) were arrived at by reference to their recent transaction prices or discounted cash flows. For other unlisted investments, their fair values were arrived at on the basis of valuations (including net asset value) carried out by an independent valuer not connected with the Group. Determination of fair value is based on the best information available in the circumstances and includes appropriate risk adjustments for lack of marketability. Factors considered in determining the fair value of these investments include multiples of comparable companies listed on stock exchanges and/or latest available information about financial performance or financial position of investees. (c) As at 31 December 2020, included in unlisted equities investments amounting to US$692,731 (2019: US$7,929,819) was investment in an associate. The management considers that it is exempted from applying the equity method and is recognised as a financial asset at FVTPL.