Annual Report 2023

Notes to the Consolidated Financial Statements For the year ended 31 December 2023 184 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 35. FINANCIAL RISK MANAGEMENT (CONTINUED) 35.3 Fair value estimation (continued) (i) Fair value of financial instruments that are measured at fair value on a recurring basis The following table presents the Group’s financial instruments that are measured at fair value at 31 December 2023 and 2022: Level 1 Level 2 Level 3 Total HK$’million HK$’million HK$’million HK$’million Financial assets At 31 December 2023 Financial assets at FVTPL 2,539 3,330 1 5,870 Equity instruments at FVTOCI — — 10 10 2,539 3,330 11 5,880 At 31 December 2022 Financial assets at FVTPL 2,493 1,461 3 3,957 Equity instruments at FVTOCI — — 30 30 2,493 1,461 33 3,987 Set out below is the information about how the fair values of the above financial instruments are determined, including the valuation techniques and inputs used: The fair value of the freely traded listed equity instruments that are accounted for as financial assets at FVTPL is valued based on the quoted prices in active markets for the identical assets directly. The fair value of the structured deposits that are accounted for as financial assets at FVTPL is valued based on the foreign exchange rate and gold price. As at 31 December 2023, if the foreign exchange rate was 5% (2022: 5%) higher/lower while all the other variables were held constant, the changes in fair value of the structured deposit would be insignificant (2022: insignificant). As at 31 December 2023, if the gold price was 5% (2022: 5%) higher/lower while all the other variables were held constant, the changes in fair value of the structured deposit would be insignificant (2022: insignificant). The fair value of other unlisted equity instruments that are accounted for as financial assets at FVTPL or equity instruments at FVTOCI is valued based on Guideline Publicly Traded Company method whereas the key inputs to the valuation models include the market multiples, share prices, volatilities and dividend yields of similar companies that are traded in a public market, discount of lack of marketability with reference to the share prices of listed enterprises in similar industries. As at 31 December 2023, if any of the significant unobservable inputs above was 5% (2022: 5%) higher/lower while all the other variables were held constant, the changes in fair value of these unlisted equity instruments would be insignificant (2022: insignificant). There were no significant changes in the business or economic circumstances that affect the fair value of the Group’s financial assets or any reclassification of financial assets in the year.