Annual Report 2023

China Merchants China Direct Investments Limited Annual Report 2023 25 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) In 2023, Arashi Vision launched five new consumer products, namely Insta360 Flow, Insta360 GO 3, Insta360 X3 Demon Slayer Blade Co-branded Edition, Insta360 X3 Invisible Dive Kit and Insta360 Ace/Ace Pro (in order of launch date). Insta360 Flow is an AI mobile phone stabiliser, equipped with years of AI image technology developed by Arashi Vision, marking its first entry into the mobile phone photography market. Insta360 GO 3, an upgraded version of its existing consumer thumb camera GO series after a two-year interval, offers an easy way to capture first-person and various novel perspectives, taking lightweight recording to new heights. Insta360 X3 Demon Slayer Blade Co- branded Edition is a collaboration between its flagship panoramic sports camera X3 and a popular anime brand. Insta360 X3 Invisible Dive Kit is equipped with a new generation of invisible dive case, achieving for the first time 360-degree underwater filming with zero blockage of view and no bottom blind spot. This product redefines action filming and restarts Arashi Vision’s all-new underwater visual journey. As the first integrated, wide-angle action camera by Arashi Vision, Insta360 Ace/Ace Pro is not only equipped with a 1/1.3 inch sensor, Leica lens, 5nm AI chip, and 2.4 inch switching touch monitor, but also with a range of new creative modules such as AI highlight assistant and AI magician, which offer a comprehensive and powerful filming performance to sports enthusiasts with its extraordinary capabilities. The above five new products launched by Arashi Vision in 2023 encompass a new iteration of classic product line, a crossover of a flagship product, as well as the debut of an entirely new product line, as the company strives to continuously release leading-edge intelligent imaging products that empower people to better record and share the experiences of life. Xunfei Healthcare Technology Co., Ltd. (“Xunfei Healthcare”) was established in the High-tech Development Zone, Hefei, Anhui in 2016 and is a startup AI medical enterprise. The Fund invested RMB60 million (equivalent to US$8.60 million) in February 2020 and RMB50 million (equivalent to US$7.80 million) in November 2021, for an aggregate investment of RMB110 million (equivalent to US$16.40 million) in Xunfei Healthcare. In December 2023, Xunfei Healthcare completed a new round of equity financing, and the equity interest held by the Fund in Xunfei Healthcare was diluted from 3.514% to 3.426%, accordingly. As of the end of 2023, the carrying value of the Fund’s interest in Xunfei Healthcare was US$40.68 million, representing an increase of 548.80% over US$6.27 million at the end of last year. The Fund’s unrealised loss attributable to its investment in Xunfei Healthcare for 2023 was US$34.69 million, while the relevant amount for 2022 was negative US$32.16 million. Xunfei Healthcare officially changed its name from “Anhui iFlyHealth Co., Ltd.” to “Xunfei Healthcare Technology Co., Ltd.” on 13 February 2023.