Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 18 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) NBA China, L.P. (“NBA China”) is a limited liability partnership incorporated in the Cayman Islands in 2007. NBA China conducts all of the NBA’s businesses in the Greater China Region, including television broadcasting rights, advertising, sponsorships, events, digital media, and merchandising, among other new businesses. The original investment by the Fund in 2008 was US$23 million, representing a 1% partnership interest in NBA China. The Fund subsequently received partial returns of capital from NBA China in 2013, 2016 and 2017, respectively, for a total amount of US$23 million, representing a full recovery of the capital invested in NBA China by the Fund. As of 31 December 2020, the Fund held a 1% partnership interest in NBA China. The Fund received total cash distributions from NBA China of US$1.83 million in January and February 2020, and of US$0.485 million in January 2021, respectively. As of the end of 2020, the carrying value of the Fund’s interest in NBA China was US$2.98 million, representing a decrease of 79.63% from the value at the end of last year of US$14.63 million. On 11 March 2020, due to the outbreak of novel coronavirus, NBA announced a temporary suspension of the NBA season, then completed the season between 30 July 2020 and October 2020, while postponing new NBA season to the end of December 2020. On 12 May 2020, the NBA announced that Mr. Michael Ma was appointed as the chief executive officer of NBA China as of 1 June 2020. Mr. Michael Ma is senior management with outstanding achievements in the sports and entertainment industry. He has extensive experience in the building and management of international media brands and previously worked with the NBA for over 10 years. In early October 2019, the general manager of the NBA Rockets posted a controversial tweet about Hong Kong on Twitter, which stirred wide debate in China and harmed the image of the NBA, at least temporarily. As a result of this incident, CCTV Sports Channel (CCTV5) of the China Media Group reached a decision to suspend immediately the broadcast of NBA games in China, a policy that lasted until early October 2020. However, the broadcasting resumed for the last two finals of NBA during 10-12 October. The online platform Tencent Sports also suspended the broadcast of NBA preseason games (China) in October 2019, and the broadcast of NBA games has now resumed. On 6 November 2020, NBA China and Jack & Jones (a leading brand of European casual menswear) announced that they had entered into a new partnership, and that Jack & Jones would become an official licensee of NBA China. It will launch a new line of co-branded products, including fashion apparel and accessories, such as T-shirts, jackets, hoodies, backpacks and hats, to be sold in over 2,000 stores—including Jack & Jones stores, the NBA Beijing flagship store, and the NBA Guangzhou flagship store, as well as through a range of e-commerce platforms in China.