Annual Report 2021

China Merchants China Direct Investments Limited Annual Report 2021 19 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) On 18 October 2021, NBA China and Kuaishou announced a multi-year strategic partnership, pursuant to which Kuaishou will become the first media partner of NBA China for content recreation, as well as NBA’s official short video platform and NBA video content creation community. Focusing on NBA games and the Kuaishou sports ecosystem, the two parties will carry out in-depth cooperation in content, brand commercialisation, live-streaming e-commerce and other areas. On 25 December 2021, the NBA Tianjin Flagship Store officially opened by NBA China and Topsports, a leading sportswear retailer and service provider in China. It is the third flagship store to open, after Beijing and Guangzhou. The store aims to bring consumers a new scene-based consumption experience and explore new possibilities of immersive scene IP. Oriental Pearl Media Co., Ltd. (“Oriental Pearl”) is a new operating entity formed following a merger and reorganisation with BesTV New Media Co., Ltd. (“ BesTV ”), a listed company under Shanghai Media Group Ltd. (“ SMG ”), and Shanghai Oriental Pearl (Group) Co., Ltd., formerly also a listed company, along with the injection of relevant advertising, content production and new media assets by SMG, its largest shareholder, before being renamed to Oriental Pearl from BesTV. The restructuring was completed in June 2015. In May 2015, the Fund invested RMB120 million (equivalent to US$19.62 million), through a partnership entity, in Oriental Pearl for a beneficial ownership of 3.70 million A shares. Subsequently, the Fund beneficially owned a total of 4.81 million A shares of Oriental Pearl, as a result of the receipt of 1.11 million new shares via a capitalisation issue from Oriental Pearl in 2018. In October 2020, the partnership entity that held shares of Oriental Pearl for the Fund dissolved due to end of its business license, and the Fund becomes the direct holder of those shares. During the period of November to December 2020, the Fund sold a total of 3.27 million A shares of Oriental Pearl for net proceeds of RMB31.16 million (equivalent to US$4.74 million). In March 2021, the Fund further sold a total of 0.55 million A shares of Oriental Pearl for net proceeds of RMB5.30 million (equivalent to US$0.81 million). As of 31 December 2021, the Fund still held 0.995 million A shares of Oriental Pearl, accounting for 0.029% of the issued share capital of Oriental Pearl. The Fund will continue to sell the remaining shares at an appropriate time. In June 2021, the Fund received a cash dividend of RMB0.27 million from Oriental Pearl for 2020. As of the end of 2021, the carrying value of the Fund’s interest in Oriental Pearl was US$1.48 million, representing a decrease of 29.86% from the value at the end of last year of US$2.11 million. On 16 September 2021, Oriental Pearl announced a proposed transfer of 50% of the equity of Shanghai Oriental Dragon New Media Co., Ltd. (“ Oriental Dragon ”), a wholly-owned subsidiary of Oriental Pearl, through a public tender offer on the Shanghai United Assets and Equity Exchange, with the intention of introducing strategic investors and providing new ideas and inspiration for Oriental Dragon’s future development, as well as facilitating the transformation and upgrade of streaming media strategy. On 29 December 2021, Oriental Pearl announced that it had introduced four new strategic investors and completed the relevant change of business registration. On 30 October 2021, Oriental Pearl announced that its unaudited net profit for the first three quarters of 2021 was RMB1 billion, down 23.44% year-over-year.