Annual Report 2024

China Merchants China Direct Investments Limited Annual Report 2024 15 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) China Credit Trust Co., Ltd. (“CCT”) was established in 1995, with its headquarters in Beijing. The principal activities of CCT are trust management, fund management, investments and loan financing. It is the first trust company with a full range of licenses for international business in the Chinese trust industry. As of 31 December 2024, the Fund held a 6.94% equity interest in CCT, with a total investment cost of US$50.49 million. As of the end of 2024, the carrying value of the Fund’s interest in CCT was US$144.36 million, representing a decrease of 2.68% from the value at the end of last year of US$148.34 million. The Fund’s unrealised gain attributable to its investment in CCT for 2024 was negative US$1.81 million, while the relevant amount for 2023 was US$10.27 million. For 2024, CCT recorded an unaudited net profit of RMB874 million, down 9.82% year-over-year. During the year, the company recorded an increase in income from handling fees and commissions, and a decrease in interest income, compared to last year. In addition, the sum of investment income and the gain on change in fair value saw an increase, while the loss due to credit impairment for the year increased significantly, compared to last year. In light of the various regulatory measures imposed on the trust industry by the regulatory authorities, CCT has sought to adjust and optimise its business mix, and further decrease the proportion of the real estate trust business. CCT has also formulated new development strategies by focusing on five strategic businesses, namely standardised trusts, wealth management, strategic services, inclusive (micro and small) finance, and special assets. Wealth management, in particular, is expected to become a key direction for developing innovative business in the future. To this end, CCT will actively seek cooperation with different types of financial institutions and continue to explore new cooperation models and resource sharing mechanisms, thus providing more premium and efficient wealth management services for its clients. In 2024, CCT further accelerated the development of its standardised trust business and gradually built business models covering cash management, bonds, fixed income plus (i.e. fixed income assets, supplemented by other investment vehicles and strategies to achieve higher returns while controlling risks), Fund of Funds (FOF) under an asset allocation strategy across different asset classes, and equity FOF, among others. The scale of its actively- managed product business continues to grow, and its product portfolio continues to be enriched. As of the end of 2024, CCT’s asset management scale reached RMB785.9 billion, with standardised trusts accounting for over RMB500 billion. Nevertheless, the revenue of traditional non-standardised financing businesses, including the real estate trust business, has been decreasing rapidly due to business transformation and to more stringent regulations, while the newer, more innovative businesses may require more time in order to become a source of revenue growth. Regardless, CCT will continue to strive to grow total income for the company. CCT was again recognised by many industry awards, securing a total of 17 awards in 2024. These included the “Excellent Bond Investment Trading Institution (Trust)” as recognised by the Shenzhen Stock Exchange, the “Excellent Trust Company of the Year” by the 15th Financial Golden Tripod Award from National Business Daily, and the “2024 Most Competitive Trust Company” by China Business Journal, among others.