Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 25 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Anhui iFlytek Healthcare Information Technology Co., Ltd. (“iFlytek Healthcare”) was established in the High-tech Development Zone, Hefei, Anhui in 2016. iFlytek Healthcare is a startup AI medical enterprise. The Fund invested RMB60 million (equivalent to US$8.60 million) in February 2020 for a 3% equity interest in iFlytek Healthcare. As of the end of 2020, the carrying value of the Fund’s interest in iFlytek Healthcare was US$14.59 million. The Fund’s unrealised gain attributable to its investment in iFlytek Healthcare for 2020 was US$5.10 million. In response to the need of combating the novel coronavirus pandemic and to capture the development trend in the industry, during 2020, iFlytek Healthcare joined hands with Iflytek, its parent company, to provide free services for “suspending classes without suspending learning” program through its AI online education and learning platform, to assist in the screening of patients at medical institutions at a grassroots level through the AI-aided medical diagnosis system of SmartDoctor Assistant at no cost, and to assist relevant departments in conducting work in relation to the prevention, control and screening of the pandemic through smart phone robots. CASREV FUND III-RMB L.P. (“CASREV Fund III”) was established in Shenzhen, Guangdong in February 2020, with an investment horizon of 8 to 10 years and with a total fund subscription amount of RMB6 billion (presently, the paid-in capital amounts to RMB4.5 billion). The major investment targets of CASREV Fund III include enterprises related to smart manufacturing, smart products and services, big data and cloud computing, AI, Internet of Things (IoT), blockchain, biological engineering, chips and sensors, operating system, kernel modules, communication networks, materials and other emerging technologies. The general partner and investment manager of CASREV Fund III is CAS Investment Management Co., Ltd., which is responsible for defining and executing the investment strategy for CASREV Fund III, as well as for managing their operations. The Fund holds a beneficial interest in CASREV Fund III via CASRF Fund L.P. The Fund has committed to subscribe to an aggregate of RMB50 million by installment, representing 1.11% of the paid-in capital of CASREV Fund III. The Fund completed capital contributions of RMB12.50 million (equivalent to US$1.85 million) and RMB12.50 million (equivalent to US$1.90 million) in September and November 2020, respectively, representing an aggregate of RMB25 million (equivalent to US$3.75 million) or 50% of the subscription amount committed by the Fund. As of the end of 2020, the carrying value of the Fund’s interest in CASREV Fund III was US$3.83 million. Through the end of December 2020, CASREV Fund III has made investments in thirty projects with a total approved investment amount of RMB1.706 billion. Among these thirty projects, one project has submitted IPO materials for listing on the Chinext in Mainland China, and five other projects are expected to submit their IPO materials in the first quarter of 2021. Flexiv Ltd. (“Flexiv”) was established in Silicon Valley, the United States, in June 2016, and is a technology company in China that focuses on the development and application of adaptive robots. It, based on Flexiv robotic systems, provides innovative turnkey solutions and services for its customers in a range of industries. In December 2020, the Fund invested US$5 million for a 1.67% equity interest in Flexiv. As of the end of 2020, the carrying value of the Fund’s interest in Flexiv was US$5 million. As of November 2020, there were already 100 adaptive robots produced in the South China Manufacturing Centre of Flexiv, and they have been gradually deployed in fields such as auto parts, 3C electronics and logistics, among others. The major product of Flexiv, Rizon Robot, has been awarded the China International Industry Fair (CIIF) Robot Award 2019, iF Design Award 2020 of Germany and German Innovation Awards 2020.