Annual Report 2021

China Merchants China Direct Investments Limited Annual Report 2021 23 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) On 19 July 2021, Iflytek completed its non-public issuance of 76,393,048 shares issued, of which 70,401,437 shares were issued to Mr. LIU Qingfeng, one of the de facto controlling shareholders of the company, while 5,991,611 shares were issued to the company of which Mr. LIU Qingfeng is the de facto controlling shareholder. The non- public issuance raised net funds of RMB2,537 million at the issue price of RMB33.58 per share. Total shares issued by Iflytek have increased from 2,224 million to 2,300 million. The proceeds from this placement shall be used in full to replenish the company’s working capital and to strengthen its capital base, in order to optimise its asset structure and enhance its risk-resistance capacity. On 14 December 2021, Iflytek announced that a share incentive plan had been implemented, under which 24,249,200 restricted shares were granted to 2,240 participants (including middle and senior management and core technical (business) personnel) at a price of RMB26.48 per share, to be listed on 15 December 2021, and the company’s issued share capital was then increased from 2,300 million shares to 2,325 million shares. On 27 October 2021, Iflytek announced that its unaudited net profit for the first three quarters of 2021 was RMB729 million, up 31.48% year-over-year. The primary reason for the increase in net profit was that the company saw greater momentum in its businesses driven by its AI core technologies, along with business expansion in education, consumer, etc., resulting in strong growth in sales. Ningbo Meishan Free Trade Port Area Jiangmen Venture Capital LLP (the “Jiangmen Ventures Fund”) was established in Ningbo, Zhejiang in September 2016, with an investment horizon of 5 to 7 years and with a total fund subscription amount of RMB410 million (the paid-in capital amounts to RMB262 million). Its major investment targets are chiefly early-stage business ventures related to machine intelligence, Internet of Things (IoT), natural user interface, and enterprise computing. The general partner and investment manager of the Jiangmen Ventures Fund is Jiangmen Capital Management (Beijing) Co., Ltd., which is responsible for defining and executing the investment strategy for the Jiangmen Ventures Fund, as well as for managing their operations. The Fund completed a capital contribution of RMB30 million (equivalent to US$4.74 million) in January 2018, representing 11.45% of the paid-in capital of the Jiangmen Ventures Fund as of 31 December 2021. In addition, through the end of December 2021, the Fund received cash distributions from the Jiangmen Ventures Fund in a cumulative amount of RMB7.63 million. As of the end of 2021, the carrying value of the Fund’s interest in the Jiangmen Ventures Fund was US$8.79 million, representing an increase of 80.86% over US$4.86 million at the end of last year. Through the end of December 2021, the Jiangmen Ventures Fund has made investments in nineteen projects for a total of RMB233 million. Currently, the Jiangmen Ventures Fund has entered into the investment exit period. Of these projects, ten projects have completed new rounds of financing while one project was partially exited from during 2021.