Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 15 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) In July 2020, CCT won the “Innovation Leadership Award” and “Best Asset Securitisation Trust Product Award” at the 13th “Credit Trust” Awards hosted by the Shanghai Securities News. In December 2020, CCT was awarded “The Most Competitive Trust Company of the Year Award” by the Financial Times. JIC Leasing Co., Ltd. (“JIC Leasing”) was established in Beijing in 1989, and is a leading independent finance leasing firm in China, principally engaged in finance leasing for businesses in a wide range of industries, including information technology; high-end equipment manufacturing; and healthcare, environmental protection and new energy. The Fund invested RMB246 million (equivalent to US$38.78 million) in October 2015 for a 6.46% equity interest in JIC Leasing. In September 2020, following the completion of a capital increase of RMB1,489 million by its major shareholder, the equity interest of JIC Leasing held by the Fund was diluted to 4.98%. As of the end of 2020, the carrying value of the Fund’s interest in JIC Leasing was US$49.66 million, representing an increase of 68.91% over US$29.40 million at the end of last year. The Fund’s unrealised gain attributable to its investment in JIC Leasing for 2020 was US$17.24 million, up 705.61% year-over-year. In 2020, facing a complicated economic situation both at home and abroad, caused by the novel coronavirus pandemic, along with a highly competitive market environment, JIC Leasing maintained a strategic focus on its business, adopted various regulatory requirements, adhered to the necessities of risk management and, in the end, carried out its mission and met its objectives for the year. The unaudited net profit of JIC Leasing for 2020 decreased somewhat as compared to last year. JIC Leasing submitted the materials to apply for an initial public offering (IPO) with the China Securities Regulatory Commission (“ CSRC ”) in early May 2017. In 2020, JIC Leasing remained in communication with the CSRC and local finance bureau during the year, completed an update to its IPO application materials as scheduled, and eventually obtained a “Regulatory Opinion on Consent to Listing” from the Beijing Finance Bureau. As of 31 December 2020, it was sixth in the queue for review of its listing application for the Main Board of the Shanghai Stock Exchange. JIC Leasing received multiple recognitions during 2020, including “Finance Leasing Company of the Year in China for 2020”, “Leading Enterprise for Science and Technology Leasing” and “Beijing Integrity Building Enterprise.” China Reinsurance (Group) Corporation (“China Re”) originated from The People’s Insurance Company of China, founded in 1949 as the first insurance company to be established in New China, with its headquarters in Beijing. It was listed on the Hong Kong Stock Exchange in October 2015. As currently the largest local reinsurance group in China, the business of China Re spans reinsurance, insurance, asset management, insurance brokerage, and insurance media. During the periods of November to December 2015 and of February to April 2016, respectively, the Fund acquired 67.24 million H shares of China Re at an average price of HK$2.23 per share on the Hong Kong secondary stock market, for an aggregate invested amount of HK$150 million (equivalent to US$19.31 million). As of 31 December 2020, the Fund held 67.24 million H shares of China Re, accounting for 0.158% of the total issued share capital of China Re. In August 2020, the Fund received a cash dividend (net of tax) of HK$2.91 million from China Re for 2019. As of the end of 2020, the carrying value of the Fund’s interest in China Re was US$6.85 million, representing a decrease of 38.01% from the value at the end of last year of US$11.05 million.