Annual Report 2021

China Merchants China Direct Investments Limited Annual Report 2021 18 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Through the end of December 2021, China Media Investment has completed a full exit from four projects, while continuing to hold three projects, namely Star China, Oriental DreamWorks and Weiying. Of these, Shanghai Canxing Culture Media Co., Ltd., the domestic operating entity of Star China, had applied for domestic listing, but the application was denied by the Listing Committee of the ChiNext of the Shenzhen Stock Exchange. Subsequently, Star China formed a new entity, Star CM Holdings Limited, which is actively preparing a plan for listing in Hong Kong and published its listing application information on the website of the Hong Kong Stock Exchange on 12 November 2021. NBA China, L.P. (“NBA China”) is a limited liability partnership incorporated in the Cayman Islands in 2007. NBA China conducts all of the NBA’s businesses in the Greater China Region, including television broadcasting rights, advertising, sponsorships, events, digital media, and merchandising, among other new businesses. The original investment by the Fund in 2008 was US$23 million, representing a 1% partnership interest in NBA China. The Fund subsequently received returns of capital from NBA China for a cumulative amount of US$23 million in 2017, representing a full recovery of the capital invested in NBA China by the Fund. As of 31 December 2021, the Fund held a 1% partnership interest in NBA China. The Fund received a cash distribution from NBA China of US$0.485 million and US$1.39 million in January 2021 and the first quarter of 2022, respectively. As of the end of 2021, the carrying value of the Fund’s interest in NBA China was US$12.41 million, representing an increase of 316.44% over US$2.98 million at the end of last year. The Fund’s unrealised gain attributable to its investment in NBA China for 2021 was US$9.43 million, while the relevant amount for 2020 was negative of US$11.65 million. On 8 April 2021, NBA basketball training centre at Mission Hills Tourism Industrial Park of Haikou was officially opened to the public. The centre has five professional indoor basketball courts that meet the standards of the International Basketball Federation, as well as supporting facilities such as gymnasiums, rehabilitation centres, training rooms, retail stores, indoor swimming pools, medical rooms, player apartments and player canteens. NBA- certified coaches will be responsible for basketball training and player development in the park, and for the design of professional basketball training programmes as well. On 22 June 2021, NBA China and Xiaopeng Motors jointly announced that Xiaopeng Motors had become an official marketing partner of NBA China. The partnership will extend for a term of three years. Xiaopeng Motors is the first smart car brand to enter into a cooperative marketing arrangement with NBA China. On 2 July 2021, NBA China and Tencent Music Entertainment Group (TME) jointly announced a formal strategic partnership, pursuant to which TME will become the official music partner of NBA China. Under the arrangement, the two parties hope to bring together the excitement from the “Sound X Basketball” combination and to provide fans with some rich and novel NBA-themed content through a series of measures, including jointly produced theme songs, cooperation with musicians for cheering during the NBA season, creation of a new NBA podcast ecosystem and the offering of joint memberships. On 19 July 2021, NBA China and Citibank (China) Co., Limited jointly announced a marketing partnership, pursuant to which the two parties will launch a series of joint promotional activities.