Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 23 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Ningbo Meishan Free Trade Port Area Jiangmen Venture Capital LLP (the “Jiangmen Ventures Fund”) was established in Ningbo, Zhejiang in September 2016, with an investment horizon of 5 to 7 years and with a total fund subscription amount of RMB410 million (presently, the paid-in capital amounts to RMB262 million). Its major investment targets are chiefly early-stage business ventures related to machine intelligence, Internet of Things (IoT), natural user interface, and enterprise computing. The general partner and investment manager of the Jiangmen Ventures Fund is Jiangmen Capital Management (Beijing) Co., Ltd., which is responsible for defining and executing the investment strategy for the Jiangmen Ventures Fund, as well as for managing their operations. The Fund completed a capital contribution of RMB30 million (equivalent to US$4.74 million) in January 2018, representing 11.45% of the paid-in capital of the Jiangmen Ventures Fund as of 31 December 2020. In addition, through the end of December 2020, the Fund received cash distributions from the Jiangmen Ventures Fund in a cumulative amount of RMB7.30 million. As of the end of 2020, the carrying value of the Fund’s interest in the Jiangmen Ventures Fund was US$4.86 million, representing a decrease of 4.89% from the value at the end of last year of US$5.11 million. Through the end of December 2020, the Jiangmen Ventures Fund has made investments in nineteen projects for a total of RMB233 million. Of these, investments amounting to RMB14 million were completed in 2020, including the additional investments made in three projects. Another ten projects completed new rounds of financing, while another project was exited from during 2020 at a multiple of 2.08 times. Cambricon Technologies Corporation Limited (formerly CAS Cambricon Technology Co., Ltd., “Cambricon”) was established in 2016 in Beijing. The company grew out of a research and development project of the Smart Chips Research Group at the Institute of Computing Technology, Chinese Academy of Sciences, and is a high technology company that focuses on the research, development and design of AI chips. In June 2018, the Fund, via a partnership entity, invested approximately RMB38 million (equivalent to US$5.94 million), and beneficially held 0.823 million shares in Cambricon, accounting for 0.206% of its issued share capital upon Cambricon’s listing, as well as on 31 December 2020. The shares of Cambricon beneficially held by the Fund are subject to a lock-up period of one year, expiring in July 2021. As of the end of 2020, the carrying value of the Fund’s interest in Cambricon was US$16.73 million, representing an increase of 130.44% over US$7.26 million at the end of last year. On 23 June 2020, Cambricon received approval from the CSRC for its application regarding IPO registration on the SSE STAR Market. Then, on 14 July 2020, Cambricon announced the details of the issuance: the number of new shares issued was 40.10 million (accounting for 10.02% of the total share capital after the issuance), the issue price was RMB64.39 per share, and the gross proceeds raised was RMB2.58 billion. On 25 February 2021, Cambricon pre-announced that its unaudited net loss for 2020 was RMB440 million, representing a decrease in the loss of 63.04% as compared to last year. On 21 January 2021, Cambricon officially launched the SIYUAN 290 smart chip and accelerator card and the XUANSI 1000 intelligent booster. These new products will enrich the company’s cloud product portfolio and broaden the cloud-related market for the company, which is conducive to consolidating and enhancing the company’s core competitiveness and is expected to have positive effect on the future development of the company.