Annual Report 2022

5 China Merchants China Direct Investments Limited Annual Report 2022 CHAIRMAN’S STATEMENT (CONTINUED) In 2022, the Investment Manager actively sought new investment opportunities, with intensive due diligence and the rigorous screening of many prospects. Consequently, the Group completed a direct investment in a new medical project in 2022, namely Immvira Bioscience Inc., with an investment amount of US$8 million. The Group also increased its investment in an existing information technology project, Beijing Huashun Xin’an Technology Co., Ltd., by US$1.02 million. The aggregate amount invested in the above projects was US$9.02 million. In 2022, the Group decided to exit from the project of Shenzhen Geesun Intelligent Technology Co., Ltd. (“ Geesun Intelligent ”) because the project’s operating conditions were less than expected, and an exit would allow the Group to realise a return on this investment and to increase working capital. Therefore, the Group transferred all of its equity interest in Geesun Intelligent to its founding shareholder for net proceeds of US$8.20 million. Looking ahead to 2023, there will be challenges as well as opportunities. During the three years of 2020 to 2022, the global economy experienced a series of major events: the impact on the economy by the coronavirus pandemic, stimulation from macro policies, economic recovery, the emergence of high inflation, monetary tightening, and slower economic growth. In 2023, downward pressure on global economic growth may persist. Global inflation remains high. The major developed economies are at risk of “stagflation.” And yet, despite various pressures such as weakening external demand and falling growth expectations, we continue to believe that the fundamentals of China’s economy remain unchanged, and are expected to be stable and sound in the long run. The basic characteristics of China’s economy, which remains full of potential, resilience, vitality, and adaptability, along with ample policy tools, should continue to support long-term growth and development. In 2023, China’s industrial production is expected to gradually return to normal due to a range of favourable factors, such as a relatively rapid implementation of investment projects in infrastructure and the manufacturing industry, ongoing structural improvements in production, a rebound in domestic demand, improvement in the real estate market, as well as low bases for comparison. Furthermore, it is expected that domestic consumption may rebound sharply in 2023 due to a number of favourable factors: as pandemic control measures are further relaxed, it may improve the consumption demand; as the economy stabilises, it may see improvements in employment and personal income, laying a sound foundation for future growth in consumption demand; the relaxation of pandemic control measures may also have a promotion effect on the rapid recovery of service industry, providing a solid support for the consumption rebound. Although we expect that various asset price risks, arising from slowing growth in the global economy (including China) in medium- to long-term, along with greater volatility in the capital markets, will pose 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 Mr. LIU Baojie for his valuable contributions to the Company during his tenure as a Director, as well as 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, with the Board, will continue to give our best effort in leading the Group as we seek to create value for shareholders in the coming year. Mr. ZHOU Xing Chairman Hong Kong, 28 March 2023