Annual Report 2022

17 China Merchants China Direct Investments Limited Annual Report 2022 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) 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 twice for a total of four 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. In April 2010, the Fund agreed to make a capital investment of RMB200 million by installment in China Media Investment, representing 10% of the total capitalisation of China Media Investment. Since June 2010, the Fund had made successive capital injections into China Media Investment for an aggregate of RMB158.66 million (equivalent to US$24.76 million), representing 79.33% of the total investment of RMB200 million committed by the Fund. China Media Investment is currently in the late stages of its investment exit period, and the Fund has received confirmation that no further capital contribution shall be required. In addition, through the end of December 2022, the Fund actually received a total cash distributions of RMB237 million from China Media Investment, representing approximately 149% of the cumulative actual amount invested by the Fund. As of the end of 2022, the carrying value of the Fund’s interest in China Media Investment was US$23.17 million, representing a decrease of 16.08% from the value at the end of last year of US$27.61 million. As of the end of 2022, the unaudited net asset value of China Media Investment was RMB1,803 million, representing an increase of 3.76% compared to an audited net asset value as of the end of last year. Through the end of December 2022, China Media Investment has completed a full exit from four projects, while continuing to hold three projects, namely Star China, Oriental DreamWorks and Weiying. Of these, Shanghai Canxing Culture Media Co., Ltd., the domestic operating entity of Star China, applied for listing on the ChiNext of the Shenzhen Stock Exchange, but the application was unsuccessful. Subsequently, Star China reorganised internally and formed a new entity, Star CM Holdings Limited, as a listing vehicle, in order to apply for listing on the Hong Kong Stock Exchange. The firm submitted a prospectus in November 2021, and was at last successfully listed on the Hong Kong Stock Exchange on 29 December 2022. NBA China, L.P. (“NBA China”) is a limited liability partnership incorporated in the Cayman Islands in 2007. NBA China conducts all of the NBA’s businesses in the Greater China Region, including television broadcasting rights, advertising, sponsorships, events, digital media, and merchandising, among other new businesses. The original investment by the Fund in 2008 was US$23 million, representing a 1% partnership interest in NBA China. The Fund subsequently received returns of capital from NBA China for a cumulative amount of US$23 million in 2017, representing a full recovery of the capital invested in NBA China by the Fund. As of 31 December 2022, the Fund held a 1% partnership interest in NBA China. The Fund received a cash distribution from NBA China of US$1.39 million and US$2.05 million in 2022 and in the first quarter of 2023, respectively. As of the end of 2022, the carrying value of the Fund’s interest in NBA China was US$23.62 million, representing an increase of 90.33% over US$12.41 million at the end of last year. The Fund’s unrealised loss attributable to its investment in NBA China for 2022 was US$11.21 million, up 18.88% year-over-year.