Annual Report 2023

24 24 China Merchants China Direct Investments Limited Annual Report 2023 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Pony AI Inc. (“Pony AI”) was established in Silicon Valley, the United States, in December 2016 and is a research and development company in China that focuses on technology solutions for autonomous driving. In July 2018 and in April 2019, the Fund invested a total of US$8.61 million and then held a 0.889% equity interest in Pony AI. In January 2021, Pony AI completed a new round of equity financing, with a post-investment valuation of US$5.3 billion. The Fund’s equity interest in Pony AI was diluted to 0.670%, accordingly. In March 2022 and October 2023, Pony AI completed the first and second close of another new round of equity financing, respectively, with a post-investment valuation of US$8.8 billion. The Fund’s equity interest in Pony AI was diluted from 0.670% to 0.649%, accordingly. As of the end of 2023, the carrying value of the Fund’s interest in Pony AI was US$16.45 million, representing an increase of 222.55% over US$5.10 million at the end of last year. The Fund’s unrealised loss attributable to its investment in Pony AI for 2023 was US$11.35 million, while the relevant amount for 2022 was negative US$29.34 million. Through the end of December 2023, Pony AI has recorded a total accumulated autonomous driving distance of over 29 million kilometres. The number of registered users of the Robotaxi service has reached 100,000. The Robotruck business has 180 vehicles in operation so far. Pony AI has obtained public-facing and fully driverless driving licenses in Yizhuang of Beijing, Guangzhou and Shenzhen, and fully driverless test licenses in Shanghai. In addition, Pony AI started a connection test from Beijing Daxing Airport to Yizhuang of Beijing in September 2023. In Shenzhen, the Robotaxi service was approved to be offered to the public in the Bao’an District, Shenzhen. In Beijing and Guangzhou, its unmanned vehicle service is now allowed to charge fares. Arashi Vision Inc. (“Arashi Vision”) was established in Shenzhen, Guangdong in July 2015 and is striving to become a global leader engaged in the research, development and manufacture of 360-degree video products. The Fund invested RMB20 million (equivalent to US$2.83 million) and RMB10 million (equivalent to US$1.44 million) in September and November 2019, respectively, bringing the Fund’s total investment in Arashi Vision to RMB30 million (equivalent to US$4.27 million), for a 1.625% equity interest in the company. As of the end of 2023, the carrying value of the Fund’s interest in Arashi Vision was US$18.12 million, representing an increase of 201.50% over US$6.01 million at the end of last year. The Fund’s unrealised loss attributable to its investment in Arashi Vision was US$12.27 million, up 4,808.00% year-over-year. Arashi Vision submitted an application for listing on the SSE STAR Market on 23 October 2020, which was then reviewed and approved by the listing committee on 16 September 2021. The company is now at the stage of applying for registration with the China Securities Regulatory Commission.