Annual Report 2019

INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) China Merchants China Direct Investments Limited Annual Report 2019 16 REVIEW OF INVESTMENTS (CONTINUED) China Media (Tianjin) Investment Management Co., Ltd. (“China Media Management”) was established in Tianjin, with registered capital of RMB60 million. The Fund invested RMB4.62 million (equivalent to US$0.68 million) in April 2010 for a 7.70% equity interest in China Media Management. As the general partner and investment manager of China Media Investment (see the section on China Media Investment below), China Media Management is responsible for defining and executing the investment strategy for China Media Investment, as well as for managing their operations. As of the end of 2019, the carrying value of the Fund’s interest in China Media Management was US$2.16 million, representing a decrease of 72.86% from the value at the end of last year of US$7.96 million. During the investment period, China Media Management helped China Media Investment to successfully invest in several benchmark projects, and to successfully dispose of the projects of OCJ ( 東方購物 ), Shanghai Jade East Propagation Co., Ltd. and Renren Inc. In addition, it helped IMAX China Holding, Inc. (“ IMAX China ”) to successfully list on the Hong Kong Stock Exchange, and to subsequently sell all of the IMAX China shares that were held. Presently, China Media Management is actively assisting with exit arrangements for several projects, including Star China. China Media Investment had sold its equity interest in Beijing Weiying Technology Co., Ltd. (“ Weiying ”) and had received the relevant consideration. However, the transaction lapsed because the registration of the change in equity interest was not filed with the relevant authorities within the required period, and as a result China Media Investment has refunded the consideration to the buyer. The Fund has issued a letter to China Media Management in regard to this matter, with a demand for China Media Management to follow up on this transaction and to pay close attention to the exit arrangements for this investment. China Media Creative Industry Private Equity (Shanghai) Centre (Limited Partnership) (“China Media Investment”) was established in Shanghai, and is the first fund in the culture and media sector approved for registration by the National Development and Reform Commission. Its total capitalisation is RMB2 billion. China Media Investment has an investment horizon of 10 years (Note: With the consent of all limited partners, the investment horizon has been extended two years in order to meet the exit requirements of the projects held). The scope of investment for China Media Investment includes major projects in broadcasting and media publishing, animation and creative media. China Media Management, in which the Fund has an interest, is the general partner and investment manager of China Media Investment. China Media Investment has entered into the investment exit period. In April 2010, the Fund agreed to make a capital investment of RMB200 million by installment in China Media Investment. From June 2010 through 31 December 2019, the Fund has made successive capital injections into China Media Investment for a cumulative actual investment of RMB158.66 million (equivalent to US$24.76 million), representing 79.33% of the total investment of RMB200 million committed by the Fund. Through the end of December 2019, the Fund has actually received a total cash distributions of RMB226 million from China Media Investment, representing approximately 143% of the cumulative actual amount invested by the Fund. As of the end of 2019, the carrying value of the Fund’s interest in China Media Investment was US$33.40 million, representing a decrease of 19.50% from the value at the end of last year of US$41.49 million.