Annual Report 2022

26 China Merchants China Direct Investments Limited Annual Report 2022 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Flexiv Ltd. (“Flexiv”) was established in Silicon Valley, the United States, in June 2016 and is a technology company in China that focuses on the development and application of adaptive robots. It, based on Flexiv robotic systems, provides innovative turnkey solutions and services for its customers in a range of industries. In December 2020, the Fund invested US$5 million for a 1.67% equity interest in Flexiv. In May 2022, Flexiv completed a new round of equity financing, and the equity interest held by the Fund in Flexiv was diluted from 1.67% to 1.58%, accordingly. As of the end of 2022, the carrying value of the Fund’s interest in Flexiv was US$6.24 million, representing an increase of 13.45% over US$5.50 million at the end of last year. In 2022, Flexiv began to market and promote its Rizon 10 self-adjusting robot and successively released operating systems and development kits for its self-adjusting robots in order to fully empower innovative development. In addition, the company has completed the deployment, delivery and batch replication of the first self-adjusting production line using the Rizon Robot (Rizon 4), resulting in considerable business growth as compared to last year. In 2022, Flexiv also launched the first self-adjusting parallel robot, a revolutionary new force-controlled gripper with a universal end-of-arm socket and an all-new operating system—the NOEMA AI system. Furthermore, sales of the existing 7-axis series connection mechanical arm recorded considerable growth over last year. Beijing Huashun Xin’an Technology Co., Ltd. (“Huashun Xin’an”) was established in Beijing in 2018 and is a cyber security company with a search engine for cyberspace resources. It is focused on the fields of big data security and cyberspace resources for surveying and mapping, and is primarily engaged in the research and development of technologies and products in the field of cyber information security. The Fund completed capital contributions of RMB24 million (equivalent to US$3.67 million) and RMB6 million (equivalent to US$0.93 million) in April and July 2021, respectively, for an aggregate investment of RMB30 million (equivalent to US$4.60 million). In April 2022, in a new round of equity financing carried out by Huashun Xin’an, the Fund increased its investment in Huashun Xin’an by RMB6.50 million (equivalent to US$1.02 million) to avoid a dilution of its interest, for an aggregate investment of RMB36.50 million (equivalent to US$5.62 million), amounting to a 4.295% equity interest in Huashun Xin’an as of 31 December 2022. As of the end of 2022, the carrying value of the Fund’s interest in Huashun Xin’an was US$2.01 million, representing a decrease of 36.19% from the value at the end of last year of US$3.15 million. On 23 June 2022, Huashun Xin’an was recognised as one of the “2022 China Cybersecurity Industry Growth Stars” released by the China Cybersecurity Industry Alliance, in acknowledgment of its strong professional and technical capabilities, along with its excellent market performance. On 23 June 2022, the first “Digital 500 Golden Tiger List” was officially released around the world at the “SXRDC2022 Digital Conference.” After being recommended and reviewed by a number of industry renowned organisations such as the China Cloud System Alliance, a total of 100 academic experts and leading entrepreneurs with significant influence and outstanding contributions with respect to industry, academia as well as research in the field of information technology were selected as the “Digital People Golden Tiger List TOP100.” Mr. ZHAO Wu, founder and Chief Executive Officer of Huashun Xin’an, was selected for the Top 25 list for digital transformation and innovation under the “Digital People Golden Tiger List TOP100.”