Annual Report 2022

4 China Merchants China Direct Investments Limited Annual Report 2022 CHAIRMAN’S STATEMENT The board of directors (the “ Board ”) announces that the audited consolidated net asset value of China Merchants China Direct Investments Limited (the “ Company ”) and its subsidiaries (together, the “ Group ”) as of 31 December 2022 amounted to US$571.57 million, representing a decrease of 29.06% compared to US$805.70 million in 2021. The net asset value per share was US$3.752, representing the same percentage decrease of 29.06% compared to US$5.289 in 2021. The Group’s audited consolidated loss for 2022 was US$153.17 million, while the audited consolidated profit after taxation for last year was US$24.21 million. The Board has recommended the payment of a final dividend of US$0.07 per share for the year 2022, the same as last year. As there were no special dividends nor interim dividends during 2022, total dividends payable for the year 2022 were also US$0.07 per share, compared to US$0.14 per share (including a special dividend of US$0.07 per share) last year, representing a decrease of 50%. In 2022, the global economy continued to recover gradually from the fight against the coronavirus pandemic. The World Bank estimated that, in 2022, the global economy grew by 2.9%, the US economy by 1.9%, the Eurozone economy by 3.3% and the Japanese economy by 1.2%. According to a preliminary report by the National Bureau of Statistics, in 2022, China’s gross domestic product (GDP) was RMB121 trillion, breaking the milestone of RMB120 trillion and representing an increase of 3.0%, calculated in constant prices, as compared to last year. Based on the annual average exchange rate, China’s total GDP was approximately US$18.0 trillion, ranking second in the world. Specifically, in 2022, China’s total consumption expenditures were over RMB60 trillion, which represents a proportion of over 50% of GDP and a contribution rate to economic growth of 32.8%, driving GDP growth by 1.0 percentage point. Gross capital formation had a contribution rate to economic growth of 50.1%, driving GDP growth by 1.5 percentage points. Net exports of goods and services had a contribution rate to economic growth of 17.1%, driving GDP growth by 0.5 percentage points. It is worth pointing out that in 2022, imports and exports of China’s foreign trade realised synchronising growth in scale, quality and efficiency, despite the impact of multiple unexpected factors. Gross imports and exports of goods broke the milestone of RMB40 trillion for the first time and reached RMB42.07 trillion, representing an increase of 7.7% as compared to 2021, which allowed China to preserve its status as the largest cargo trading country in the world for a consecutive 6 years. Furthermore, the Consumer Price Index of China for 2022 rose by 2.0%, representing an increase of 1.1 percentage points as compared to the growth rate last year, showing a trend of rise before fall. In 2022, the A shares market of China experienced significant volatility. The SSE Composite Index started to fall early in the year, and then rose again after falling to its lowest point of the year at 2864 points on 27 April. Subsequently, the SSE Composite Index fluctuated between approximately 2900 and 3400 points for the rest of the year before finally ending 2022 at 3089 points, representing a decrease of 15.13% as compared to the end of 2021. In 2022, the Hong Kong stock market experienced a rally early in the year, and then fluctuated and fell, before starting another rally late in the year. The Hang Seng Index started 2022 by rising briefly to reach its highest point of the year at 25051 points on 10 February, then fluctuated and fell to its lowest point of the year at 14597 points on 31 October, and then gradually rose to close at 19781 points at the end of 2022, representing a decrease of 15.46% as compared to the end of 2021. At the end of 2022, the Group’s total holdings in investment projects amounted to US$690.07 million (US$967.37 million at the end of 2021), accounting for 96.43% of the Group’s total asset value and representing a decrease of US$277.30 million. This was largely due to a significant net decrease in the fair value of investment projects, as well as a decrease in the Renminbi exchange rate. Meanwhile, cash and cash equivalents were US$25.49 million, accounting for 3.56% of the total asset value of the Group.