Annual Report 2019

INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) China Merchants China Direct Investments Limited Annual Report 2019 18 REVIEW OF INVESTMENTS (CONTINUED) Unibank Media Group Inc. (“Unibank Media”) was established in Beijing in 2011 as an operating entity following a merger and reorganisation, and is principally engaged in commercial advertising through its video display network in banking service outlets across China. The Fund made a total investment of RMB75 million (equivalent to US$10.98 million) in one of its predecessors, Inbank Media (China) Co., Ltd. (“ Inbank Media ”), in June 2009 and February 2010, and held a 14.51% equity interest in Inbank Media. After the completion of the reorganisation as well as a capital increase by Inbank Media in 2011, the Fund held a 7.62% equity interest in Unibank Media. In September 2015, certain existing shareholders of Unibank Media increased their capital position in the company by cash of RMB75 million. The Fund’s equity interest in Unibank Media was diluted to 7.09%, accordingly. As of the end of 2019, the carrying value of the Fund’s interest in Unibank Media was US$0.03 million, representing a decrease of 96.63% from the value at the end of last year of US$0.89 million. No substantial improvement was recorded for the business of Unibank Media and despite efforts to reduce its costs and expenses in 2019, the company has not been able to turn around its loss making run for several years. 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. Oriental Pearl will push forward with the integration and development of traditional and emerging media and become the sole resource consolidation and listing platform for SMG, as well as an all-media and whole-industry chain platform company, spanning content production, cloud services and value-added advertising services. At the same time, Oriental Pearl will draw on its media business as a foundation for growth, adopt the Internet TV business as a strategic point of entry, convert its audiences to users, cash in on data traffic, build an Internet media-based ecosystem, business model and system structure, and strive to develop into a new type of media group with the highest market value, communication capability, credibility and influence. 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. As of 31 December 2019, 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, accounting for 0.141% of the issued share capital of Oriental Pearl. In August 2019, the Fund received a cash dividend of RMB1.30 million declared by Oriental Pearl for 2018. As of the end of 2019, the carrying value of the Fund’s interest in Oriental Pearl was US$6.27 million, representing a decrease of 9.26% from the value at the end of last year of US$6.91 million.