Annual Report 2024

China Merchants China Direct Investments Limited Annual Report 2024 21 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Xi’an Jinpower Electrical Co., Ltd. (“Jinpower Electrical”) was established in Xi’an, Shaanxi in 2001 and is a high technology enterprise principally engaged in the research and development, and production, of intelligent online monitoring systems for transmission lines and substation equipment for the power grid. The Fund invested RMB20 million (equivalent to US$3.03 million) in January 2011 and held 2.89 million shares in Jinpower Electrical as of 31 December 2024, accounting for 4.825% of the issued share capital of Jinpower Electrical. As of the end of 2024, the carrying value of the Fund’s interest in Jinpower Electrical was US$0.36 million, representing an inecrease of 2.86% over US$0.35 million at the end of last year. Despite proactive efforts to promote the application of its new products, Jinpower Electrical’s operational performance was lower than expected in 2024 and it continued to incur loss. Jinpower Electrical recorded an unaudited net loss of RMB9.00 million for 2024, compared to a net loss of RMB9.94 million for last year. The stock of Jinpower Electrical was listed for trading on the New Third Board in January 2016. Due to a number of factors, such as a higher cost for listing on the New Third Board and the inability of the company to finance on the New Third Board, Jinpower Electrical decided to submit a delisting application to the regulatory authorities. On 24 January 2024, Jinpower Electrical announced that its delisting application had been approved by the regulatory authorities and its shares ceased to trade on the New Third Board, effective 25 January 2024. Anhui Iflytek Venture Capital LLP (“Iflytek Venture Capital”) was established in Hefei, Anhui in December 2015, with an investment horizon of 7 to 9 years and with a fund size of RMB602 million. Its major investment targets are industries related to the Internet and applications of artificial intelligence (AI) in China, primarily to areas including education, healthcare, tourism, motor vehicles, Internet of Things (IoT), smart hardware, information security, e-commerce, interactive entertainment, smart toys, robotics and Internet advertising. The general partner and investment manager of Iflytek Venture Capital is Hefei Iflytek Ruijin Investment Management LLP (formerly, Wuhu Iflytek Investment Management LLP), which is responsible for defining and executing the investment strategy for Iflytek Venture Capital, as well as for managing their operations. The Fund has committed to subscribe to an aggregate amount of RMB90 million by installment, for a 14.95% interest in Iflytek Venture Capital. Since December 2016, the Fund had made successive capital contributions to Iflytek Venture Capital for an aggregate amount of RMB90 million (equivalent to US$13.28 million), representing 100% of the subscription amount committed by the Fund. In addition, through the end of December 2024, the Fund received cash distributions from Iflytek Venture Capital in a cumulative amount of RMB71.47 million. As of the end of 2024, the carrying value of the Fund’s interest in Iflytek Venture Capital was US$19.16 million, representing a decrease of 10.34% from the value at the end of last year of US$21.37 million. As of the end of 2024, the unaudited net asset value of Iflytek Venture Capital was RMB2,390 million, representing a decrease of 0.13%, compared to an audited net asset value of RMB2,393 million as of the end of last year. Through the end of December 2024, Iflytek Venture Capital has made investments in twenty-seven projects. Currently, Iflytek Venture Capital has entered into the investment exit period. Of these projects, eleven projects have been fully exited and two projects (including below mentioned Xunfei Healthcare) have been partially exited.