Annual Report 2023

China Merchants China Direct Investments Limited Annual Report 2023 19 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Oriental Pearl Media Co., Ltd. (“Oriental Pearl”) is a new operating entity formed following a merger and reorganisation with BesTV New Media Co., Ltd. (“ BesTV ”), a listed company under Shanghai Media Group Ltd. (“ SMG ”), and Shanghai Oriental Pearl (Group) Co., Ltd., formerly also a listed company, along with the injection of relevant advertising, content production and new media assets by SMG, its largest shareholder, before being renamed to Oriental Pearl from BesTV. The restructuring was completed in June 2015. In May 2015, the Fund invested RMB120 million (equivalent to US$19.62 million), through a partnership entity, in Oriental Pearl for a beneficial ownership of 3.70 million A shares. Subsequently, the Fund beneficially owned a total of 4.81 million A shares of Oriental Pearl, as a result of the receipt of 1.11 million new shares via a capitalisation issue from Oriental Pearl in 2018. In October 2020, the partnership entity that held shares of Oriental Pearl for the Fund dissolved due to end of its business license, and the Fund becomes the direct holder of those shares. During the period of November to December 2020, the Fund sold a total of 3.27 million A shares of Oriental Pearl for net proceeds of RMB31.16 million (equivalent to US$4.74 million). In March 2021, the Fund further sold a total of 0.55 million A shares of Oriental Pearl for net proceeds of RMB5.30 million (equivalent to US$0.81 million). As of 31 December 2023, the Fund still held 0.995 million A shares of Oriental Pearl, accounting for 0.029% of the issued share capital of Oriental Pearl. The Fund will continue to sell the remaining shares at an appropriate time. In July 2023, the Fund received a cash dividend of RMB0.13 million from Oriental Pearl for 2022. As of the end of 2023, the carrying value of the Fund’s interest in Oriental Pearl was US$1.06 million, representing an increase of 11.58% over US$0.95 million at the end of last year. On 30 January 2024, Oriental Pearl pre-announced that its unaudited net profit for 2023 would be in a range of RMB555 million to RMB666 million, up 219% to 283% year-over-year (after retrospective adjustments). The significant increase in profit was mainly due to low bases for comparison because of the impact of market conditions in last year, along with the recovery of the company’s cultural and tourism business in 2023 for a better external business environment.