Annual Report 2021

China Merchants China Direct Investments Limited Annual Report 2021 24 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Pony AI Inc. (“Pony AI”) was established in Silicon Valley, the United States, in December 2016 and is a research and development company in China that focuses on technology solutions for autonomous driving. In July 2018 and in April 2019, the Fund invested a total of US$8.61 million and then held a 0.889% equity interest in Pony AI. In January 2021, Pony AI completed a new round of equity financing led by a scientific innovation investment platform affiliated with the Ontario Teachers’ Pension Plan of Canada, with a post-investment valuation of US$5.3 billion. The Fund’s equity interest in Pony AI was diluted to 0.670%, accordingly. In March 2022, Pony AI completed the first close of another new round of equity financing, with a post-investment valuation of US$8.7 billion. The equity interest of Pony AI held by the Fund was further diluted from 0.670% to 0.655%. As of the end of 2021, the carrying value of the Fund’s interest in Pony AI was US$34.44 million, representing a decrease of 2.13% from the value at the end of last year of US$35.19 million. The Fund’s unrealised gain attributable to its investment in Pony AI for 2021 was negative of US$0.75 million, while the relevant amount for 2020 was US$26.57 million. Through the end of December 2021, Pony AI has recorded a total accumulated autonomous driving distance of over 6 million kilometres. MPI (i.e. the average mileage traveled between two interventions) in the first-tier cities of China was 10,000 miles, exceeding the average for human drivers in the first-tier cities of China. On 20 January 2022, Pony AI has introduced its 6th generation autonomous driving system, with leading-edge sensors, computing platform solutions and stylish design features for L4 automotive-grade mass production fleets. The first model equipped with this system, the Toyota S-AM (SIENNA Autono-MaaS, i.e. a hybrid electric platform based on SIENNA with 7 seats), is expected to start road testing in China in 2022 and will be put into Robotaxi (self-driving taxi services) daily operations in the first half of 2023. Arashi Vision Inc. (“Arashi Vision”) was established in Shenzhen, Guangdong in July 2015 and is striving to become a global leader engaged in the research, development and manufacture of 360-degree video products. The Fund invested RMB20 million (equivalent to US$2.83 million) and RMB10 million (equivalent to US$1.44 million) in September and November 2019, respectively, bringing the Fund’s total investment in Arashi Vision to RMB30 million (equivalent to US$4.27 million), for a 1.625% equity interest in the company. As of the end of 2021, the carrying value of the Fund’s interest in Arashi Vision was US$6.31 million, representing an increase of 91.79% over US$3.29 million at the end of last year. Arashi Vision submitted an application for listing on the SSE STAR Market on 23 October 2020, which was then reviewed and approved on 16 September 2021. The company is now at the stage of applying for registration with the CSRC. According to the listing document, the reviewed net profit of Arashi Vision for the first three quarters of 2021 was RMB208 million, up 129.47% year-over-year. And its audited net profit for the past three years ended 31 December 2020 were, in reverse chronological order, RMB120 million, RMB56.28 million and RMB18.29 million, respectively.