Annual Report 2019

CHAIRMAN’S STATEMENT (CONTINUED) China Merchants China Direct Investments Limited Annual Report 2019 5 In 2019, the Investment Manager actively sought new investment opportunities, with intensive due diligence and the screening of many prospects, and consequently the Group completed the investment of one direct investment project, namely Shenzhen Arashi Vision Co., Ltd., in the amount of US$2.83 million. The Group also made a further investment of US$0.61 million in an existing project, namely Pony AI Inc., with an aim to maintain the shareholding of the Group in Pony AI as unchanged. In addition, on 31 December 2019, the Group made a capital contribution of US$8.60 million to acquire an equity interest in Anhui iFlytek Healthcare Information Technology Co., Ltd. This equity transfer was duly completed on 27 February 2020. The above investment projects involved a total amount of US$12.04 million, all related to the field of information technology. In 2019, the Group disposed of its entire holding of 7.21 million A shares of Besttone Holding Co., Ltd. (“ Besttone ”) for net proceeds of US$18.69 million, so as to increase its working capital. After disposal of such shares, the Group no longer holds any equity interest in Besttone and completely exited from this project. Looking ahead to 2020, there will be challenges as well as opportunities. The major global economies are facing a slowdown in growth. Meanwhile, the outbreak of novel coronavirus is expected to have a material impact on the global production and demand, and it is presently hard to anticipate the ultimate effect. In addition, in 2020, although the trade tensions have been de-escalated, economic activity in China is expected to be somewhat impacted by the outbreak of novel coronavirus. The year 2020 is also a year of harvest for both the building of a prosperous society in a well-rounded way and the “13th Five-Year” plan of China. China is posed to achieve its first centenary goal; however, the outbreak of novel coronavirus has brought uncertainties to the successful implementation of various goals in China to a certain extent. Although we expect that various asset price risks, arising from slowing growth in the global economy (including China) and volatility in the capital markets, will bring certain challenges to our investment portfolio, the Investment Manager, as always, will face the challenges ahead and strive to identify new investment opportunities, as well as to seek to optimise our mix of investments in a way that will increase shareholders’ return. Lastly, on behalf of the Board, I would like to offer my heartfelt gratitude to the members of the Audit Committee, Nomination Committee and Investment Committee, and to the entire staff of the Investment Manager, for their many contributions and dedicated effort, and to the shareholders for their support. As always, I will continue to give my best effort in leading the Group as we seek to create value for shareholders in the coming year. Mr. ZHANG Jian Chairman Hong Kong, 30 March 2020