Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 CHAIRMAN’S STATEMENT 4 The board of directors (the “ Board ”) announces that the audited consolidated net asset value of China Merchants China Direct Investments Limited (the “ Company ”) and its subsidiaries (together, the “ Group ”) as of 31 December 2020 amounted to US$775.43 million, representing an increase of 19.47% compared to US$649.05 million in 2019. The net asset value per share was US$5.090, representing the same percentage increase of 19.47% compared to US$4.261 in 2019. The Group’s audited consolidated profit after taxation for 2020 was US$89.79 million, representing a decrease of 11.81% compared to an audited consolidated profit after taxation of US$101.81 million for last year. The Board has recommended the payment of a final dividend of US$0.07 per share for the year 2020, the same as last year. In addition, a special dividend of US$0.01 per share will be proposed, while no special dividend was distributed last year. As there were no interim dividends during 2020, total dividends payable for the year 2020 were US$0.08 per share, compared to US$0.07 per share last year, representing an increase of 14.29%. In 2020, amid the impact of the trade protectionism and the novel coronavirus (COVID-19) pandemic, the World Bank estimated that the US economy would drop by 3.6%, that the overall economy of the Eurozone countries would decrease by 7.4%, and that Japan’s economy would decline by 5.3%, while China became the only major economy in the world to record positive growth. China’s Gross Domestic Product (GDP) growth in 2020 was 2.3%, and the GDP growth rates were -6.8%, 3.2%, 4.9% and 6.5% for the first, second, third and fourth quarter, respectively, showing a signs of a continuing recovery in the economy. According to a preliminary report by the National Bureau of Statistics, China’s gross GDP for 2020 exceeded RMB100 trillion for the first time, reaching RMB101.6 trillion. Investment became the major driving force for economic growth and gross capital formation drove GDP to increase by 2.2 percentage points in 2020. In contrast to investment demand, consumption was more significantly affected by the pandemic, and total annual consumption expenditures led to a decrease in GDP of 0.5 percentage points, while the net export of goods and services boosted GDP by 0.7 percentage points. Furthermore, the Consumer Price Index of China for 2020 rose by 2.5%, representing a decrease of 0.4 percentage points as compared to the growth rate last year. In 2020, the A shares market of China recovered strongly, following a period of weakness early in the year. The SSE Composite Index declined in the beginning of the year and fell to 2647 points at its lowest level of the year on 19 March 2020, then staged a strong, but volatile, recovery. It finally closed at 3473 points at the end of 2020, representing an increase of 13.87% as compared to the end of 2019. In 2020, the Hong Kong stock market generally experienced a downward trend early in the year, followed by a period of volatility, then finally a rally late in the year. The Hang Seng Index dropped in the beginning of the year, and decreased to 21139 points at its lowest level of the year on 19 March 2020, and then fluctuated between 23000 and 26000 points for many months after that. It finally began to recover in November, and eventually closed at 27231 points at the end of 2020, representing a decrease of only 3.40% as compared to the end of 2019. At the end of 2020, the Group’s total holdings in investment projects amounted to US$909.27 million (US$713.97 million at the end of 2019), accounting for 93.58% of the Group’s total asset value and representing an increase of US$195.30 million. This was largely due to a net increase in the fair value of investment projects as well as an increase in the Renminbi exchange rate. Meanwhile, cash and cash equivalents were US$60.36 million, accounting for 6.21% of the total asset value of the Group.