Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 27 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) As of the end of 2020, the carrying value of the Fund’s interest in Wuhan Rixin was US$2.44 million, representing an increase of 12.44% over US$2.17 million at the end of last year. On 21 August 2020, Wuhan Rixin announced that its unaudited net profit for the first half of 2020 was RMB26.13 million, up 309.68% year-over-year. The primary reasons for the increase in net profit were the completion of two photovoltaic power plant projects and recognised as sales, along with a reduction in both selling expenses and management expenses during the period. In 2020, as affected by the novel coronavirus pandemic, the schedules of certain projects and orders were significantly delayed. Presently, Wuhan Rixin has resumed normal operations. At the same time, it is striving to reduce expenses and to expedite progress on projects. Nanning Huiyou Xingyao Equity Investment Fund L.P. (“Huiyou Xingyao Fund”) was established in Nanning, Guangxi in September 2020, with an investment horizon of 5 to 7 years and with a total fund subscription amount of RMB113 million. Huiyou Xingyao Fund is a single-project equity investment fund, making equity investments solely in Wuhan YZY Biopharma Co., Ltd. (“ YZY Biopharma ”). YZY Biopharma is a pharmaceutical company with a bispecific antibody platform and related biopharmaceutical research and development capabilities. The fund manager of Huiyou Xingyao Fund is Tongde Qianyuan (Beijing) Investment Management Co., Ltd., which is responsible for providing consultation and advice on investment matters, as well as providing daily operations and investment management services. The Fund has committed to subscribe to an aggregate of RMB24 million by installment, representing 21.24% of the total fund subscription amount of Huiyou Xingyao Fund. The Fund completed the first capital contribution of RMB16.31 million (equivalent to US$2.47 million) in November 2020, representing 67.96% of the subscription amount committed by the Fund. As of the end of 2020, the carrying value of the Fund’s interest in Huiyou Xingyao Fund was US$2.50 million. Leveraging its advanced and matured bispecific antibody platform technology, YZY Biopharma has been deeply engaged in the bispecific antibody field for T-cell recruitment of target CD3, and has developed three CD3 bispecific antibody products (namely M802, M701 and Y150) which are at the clinical trial stage, as well as a number of other CD3 bispecific antibody products which are at various pre-clinical trial stages. Of these, the key product, M701, is a bispecific antibody medicine for malignant ascites. Unibank Media Group Inc. (“Unibank Media”) was established in Beijing in 2011 as an operating entity following a merger and reorganisation, and is principally engaged in commercial advertising through its video display network in banking service outlets across China. The Fund made a total investment of RMB75 million (equivalent to US$10.98 million) in one of its predecessors, Inbank Media (China) Co., Ltd. (“ Inbank Media ”), in June 2009 and February 2010, and held a 14.51% equity interest in Inbank Media. After the completion of the reorganisation as well as a capital increase by Inbank Media in 2011, the Fund held a 7.62% equity interest in Unibank Media. In September 2015, certain existing shareholders of Unibank Media increased their capital position in the company by cash of RMB75 million. The Fund’s equity interest in Unibank Media was diluted to 7.09%, accordingly. As of the end of 2020, the carrying value of the Fund’s interest in Unibank Media was nil, and the value at the end of last year was US$0.03 million. In 2020, as affected by the novel coronavirus pandemic, Unibank Media continued to operate at a loss due to the minimal advertisement income and various expenses incurred for its daily operations.