Annual Report 2021

China Merchants China Direct Investments Limited Annual Report 2021 13 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) China Merchants Bank Co., Ltd. (“CMB”) is China’s first joint-stock commercial bank, with its headquarters in Shenzhen, Guangdong and with its shares listed on the Shanghai Stock Exchange since 2002 and on the Hong Kong Stock Exchange since 2006. As of 31 December 2021, the Fund held 55.20 million A shares of CMB, accounting for 0.219% of the total issued share capital of CMB, with a corresponding investment cost of RMB154.61 million (equivalent to US$19.79 million). In July 2021, the Fund received a cash dividend of RMB69.16 million from CMB for 2020. As of the end of 2021, the carrying value of the Fund’s interest in CMB was US$422.16 million, representing an increase of 13.58% over US$371.70 million at the end of last year. The Fund’s unrealised gain attributable to its investment in CMB for 2021 was US$40.72 million, down 19.97% year-over-year. On 19 March 2022, CMB announced that its audited net profit for 2021 was RMB119.9 billion, up 23.20% year- over-year. On 20 May 2021, CMB announced that it had received approval from the European Central Bank for the establishment of China Merchants Bank (Europe) Co., Ltd. (“ CMB Europe ”), a wholly-owned subsidiary based in Luxembourg. The registered capital of CMB Europe is EUR50 million, and this newly established entity is expected to further promote the international reach of CMB in global markets. On 1 June 2021, CMB announced that the China Banking and Insurance Regulatory Commission (“ CBIRC ”) had approved the transfer of a total of 14.8559% shares of the Bank of Taizhou held by China Ping An Trust Co., Ltd. and Ping An Life Insurance Company of China, Ltd. to CMB. CMB had previously signed an equity transfer agreement and already paid consideration for the equity transfer. Upon completion of the transaction, CMB will cumulatively hold 24.8559% shares of the Bank of Taizhou, a leading bank in the small and micro finance business. CMB believes that its new stake in the Bank of Taizhou will enhance its capability to provide financial services to small and micro enterprises. On 25 June 2021, CMB’s capital plan targets for 2021-2023 were approved by the shareholders meeting of CMB as follows: within the planning period, the core tier-one capital adequacy ratio, tier-one capital adequacy ratio and total capital adequacy ratio shall reach and be maintained at levels greater than 10.0%, 11.0% and 13.0%, respectively.