Annual Report 2023

China Merchants China Direct Investments Limited Annual Report 2023 15 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) China Credit Trust Co., Ltd. (“CCT”) was established in 1995, with its headquarters in Beijing. The principal activities of CCT are trust management, fund management, investments and loan financing. It is the first trust company with a full range of licenses for international business in the Chinese trust industry. As of 31 December 2023, the Fund held a 6.94% equity interest in CCT, with a total investment cost of US$50.49 million. As of the end of 2023, the carrying value of the Fund’s interest in CCT was US$148.34 million, representing an increase of 5.61% over US$140.46 million at the end of last year. The Fund’s unrealised loss attributable to its investment in CCT for 2023 was US$10.27 million, while the relevant amount for 2022 was negative US$61.09 million. For 2023, CCT recorded an unaudited net profit of RMB968 million, down 0.59% year-over-year. During the year, the company recorded an increase in income from handling fees and commissions, and a decrease in interest income, compared to last year. In addition, the loss due to credit impairment for the year increased, while the sum of investment income and the gain on change in fair value saw a decrease, compared to last year. In 2023, CCT’s overall scale of trust management assets and its active management business both maintained good growth, and it is estimated that its growth rate exceeded that of its peers. In 2023, in light of the various regulatory measures imposed on the trust industry by the regulatory authorities, along with the downturn in China’s real estate market, CCT has sought to optimise its business mix. To this end, CCT’s real estate trust business and the proportion of such business has fallen sharply. While CCT’s standardised trust business experienced exponential growth in 2022, it still managed to record double-digit growth in 2023, and it has become the primary business of CCT. In addition, CCT has continued to proactively grow its more innovative lines of business. In particular, the small and micro trust business, along with the family and insurance trust business, both recorded significant increases in 2023. Meanwhile, CCT has continued to explore various asset service trusts, and has also continued to promote the development of the bankruptcy service trust and the special needs trust businesses. In 2023, CCT was again recognised by many industry awards. On 18 April, in the appraisal and selection of the 2022 “Gold Medal List of Chinese Financial Institutions ‧ Golden Dragon Awards,” CCT won the award for “Fastest Growing Trust Company of the Year,” marking the eighth consecutive year that CCT has won an important award at this event. Then on 6 December, at the award ceremony of the 14th China Financial Development Forum and Jinding Award (Finance), CCT was recognised as the “Outstanding Trust Company of the Year.” Lastly, on 22 December, CCT was recognised as the “Outstanding Innovative Transformation Trust Company” with the “Golden Wisdom Award 2023” by JRJ Navigation China, marking the sixth consecutive year in which CCT has received an award from JRJ Navigation China.