Annual Report 2022

25 China Merchants China Direct Investments Limited Annual Report 2022 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) According to the business information released by China UnionPay in June 2022 and on the occasion of the 25th anniversary of Hong Kong Handover, it stated that the company’s growth in the Greater Bay Area has continued to accelerate. With an interconnected acceptance network and cross-border universal payment products, China UnionPay is actively pursuing the development of financial payment integration in the Greater Bay Area, while providing safe and convenient payment services for Hong Kong residents and supporting economic and trade cooperation as well as personnel exchanges between the Mainland China and Hong Kong. In Hong Kong, UnionPay cards have come to be accepted by almost all merchants and automated teller machines (ATMs), and more than 28 million cards have been issued locally. Including the Hong Kong and Macau version of Mobile QuickPass, more than 20 local wallets support UnionPay QR codes, for a total of more than 2.4 million cards using the services. In terms of population, one out of every three Hong Kong residents now uses UnionPay mobile payment services. UnionPay International, a subsidiary of China UnionPay, announced in December 2022 that it had issued more than 25 million new UnionPay cards overseas in 2022, and more than 200 million cards cumulatively to date. These UnionPay cards can be used conveniently in the global UnionPay acceptance network, which includes 38 million overseas merchants. CASREV FUND III-RMB L.P. (“CASREV Fund III”) was established in Shenzhen, Guangdong in February 2020, with an investment horizon of 8 to 10 years and with a total fund subscription amount of RMB6 billion (presently, the paid-in capital amounts to RMB4.5 billion). The major investment targets of CASREV Fund III include enterprises related to smart manufacturing, smart products and services, big data and cloud computing, AI, Internet of Things (IoT), blockchain, biological engineering, chips and sensors, operating system, kernel modules, communication networks, materials and other emerging technologies. The general partner and investment manager of CASREV Fund III is CAS Investment Management Co., Ltd., which is responsible for defining and executing the investment strategy for CASREV Fund III, as well as for managing their operations. The Fund holds a beneficial interest in CASREV Fund III via CASRF Fund L.P. The Fund has committed to subscribe to an aggregate of RMB50 million by installment, representing 1.11% of the paid-in capital of CASREV Fund III. The Fund completed capital contributions of RMB12.50 million (equivalent to US$1.85 million), RMB12.50 million (equivalent to US$1.90 million), RMB12.50 million (equivalent to US$1.93 million) and RMB12.50 million (equivalent to US$1.82 million) in September 2020, November 2020, August 2021 and July 2022, respectively, representing an aggregate of RMB50 million (equivalent to US$7.50 million) or 100% of the subscription amount committed by the Fund. In addition, through the end of December 2022, the Fund received cash distributions from CASREV Fund III in a cumulative amount of RMB2.08 million. As of the end of 2022, the carrying value of the Fund’s interest in CASREV Fund III was US$8.89 million, representing an increase of 83.68% over US$4.84 million at the end of last year. As of the end of 2022, the unaudited net asset value of CASREV Fund III was RMB6.797 billion, representing an increase of 47.92% compared to an audited net asset value as of the end of last year. Through the end of December 2022, the investment committee of CASREV Fund III has approved a total of 58 investment projects, for a total approved investment amount of RMB3.643 billion, of which RMB3.259 billion has been paid. At present, among the companies invested in by CASREV Fund III, five have been listed, and one has submitted IPO application materials to the SSE STAR Market.