Annual Report 2024

China Merchants China Direct Investments Limited Annual Report 2024 19 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) 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 2024, the Fund held 0.995 million A shares of Oriental Pearl, accounting for 0.030% of the issued share capital of Oriental Pearl, with a corresponding investment cost of RMB24.84 million (equivalent to US$4.06 million). Subsequent to the balance sheet date, in February 2025, the Fund sold its remaining 0.995 million A shares of Oriental Pearl for net proceeds of RMB8.20 million (equivalent to US$1.14 million). In July 2024, the Fund received a cash dividend of RMB0.18 million from Oriental Pearl for 2023. As of the end of 2024, the carrying value of the Fund’s interest in Oriental Pearl was US$1.07 million, representing an increase of 0.94% over US$1.06 million at the end of last year. On 31 October 2024, Oriental Pearl announced that its unaudited net profit for the first three quarters of 2024 was RMB719 million, down 8.58% year-over-year. Yunnan Jinlanmei International Travel Investment Development Co., Ltd. (“Jinlanmei Travel”) was established in Mengla County, Xishuangbanna Dai Autonomous Prefecture, Yunnan in 2016, with registered capital of RMB100 million. Based in Yunnan, Jinlanmei Travel will seek to establish a global presence and engage broadly in the operation of tourism and shipping within the territorial waters of the Lancang/Mekong River. Jinlanmei Travel was established jointly by the Fund and Shanghai-listed Yunnan Metropolitan Real Estate Development Co., Ltd. (“ YM Real Estate ”), among others, with stakes of 20% and 35%, respectively. In October 2016, the Fund completed the capital contribution of RMB10 million (equivalent to US$1.49 million) to Jinlanmei Travel. In July 2021, YM Real Estate, the single largest shareholder of Jinlanmei Travel, transferred its 35% stake in Jinlanmei Travel to its related party, Yunnan Kangqi Enterprise Management Co., Ltd. As of the end of 2024, the carrying value of the Fund’s interest in Jinlanmei Travel was US$0.39 million, representing a decrease of 2.50% from the value at the end of last year of US$0.40 million. The tourism industry in Xishuangbanna has been affected by the coronavirus pandemic for an extended period of time, which has had an adverse impact on the company’s operations. Presently, the company is unable to fund payroll due to a shortage of cash and has suspended operations. Its shareholders are actively discussing a restructuring plan and the company is also looking for external strategic investors who may be able to provide additional financial support.