Annual Report 2023

China Merchants China Direct Investments Limited Annual Report 2023 31 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Wuhan Rixin Technology Co., Ltd. (“Wuhan Rixin”) was established in Wuhan, Hubei in 2001 and is a state- accredited high technology enterprise engaged in the design, production and installation of solar modules and Building Integrated Photovoltaic (BIPV) products, as well as in the operation, maintenance and management of solar powered electric systems. The stock of Wuhan Rixin was listed for trading on the New Third Board in February 2016. The Fund invested RMB15 million (equivalent to US$2.20 million) in July 2009. As of 31 December 2023, the Fund held a total of 4.95 million shares in Wuhan Rixin, as a result of the receipt of 1.65 million new shares via a capitalisation issue from Wuhan Rixin in May 2019, accounting for 3.90% of the issued share capital of Wuhan Rixin. As of the end of 2023, the carrying value of the Fund’s interest in Wuhan Rixin was US$1.61 million, representing a decrease of 52.23% from the value at the end of last year of US$3.37 million. On 25 August 2023, Wuhan Rixin announced that its unaudited net loss for the first half of 2023 was RMB29.60 million, compared to a net loss of RMB14.70 million for the same period last year. The reason for greater loss was that a photovoltaic power plant project developed and constructed by the company has yet to be recognised as sales revenue during the period. Nanning Huiyou Xingyao Equity Investment Fund L.P. (“Huiyou Xingyao Fund”) was established in Nanning, Guangxi in September 2020, with an investment horizon of 5 to 7 years and with a total fund subscription amount of RMB113 million. Huiyou Xingyao Fund is a single-project equity investment fund, making equity investments solely in Wuhan YZY Biopharma Co., Ltd. (“ YZY Biopharma ”). YZY Biopharma is a pharmaceutical company with a bispecific antibody platform and related biopharmaceutical research and development capabilities. The fund manager of Huiyou Xingyao Fund is Tongde Qianyuan (Beijing) Investment Management Co., Ltd., which is responsible for providing consultation and advice on investment matters, as well as providing daily operations and investment management services. The Fund has committed to subscribe to an aggregate amount of RMB24 million by installment, representing 21.24% of the total fund subscription amount of Huiyou Xingyao Fund. The Fund made capital contributions to Huiyou Xingyao Fund in November 2020 and July 2021 for an aggregate amount of RMB24 million (equivalent to US$3.66 million), representing 100% of the subscription amount committed by the Fund. As of the end of 2023, the carrying value of the Fund’s interest in Huiyou Xingyao Fund was US$2.16 million, representing a decrease of 52.00% from the value at the end of last year of US$4.50 million. On 9 December 2022, YZY Biopharma made an application for listing on the Hong Kong Stock Exchange. On 25 September 2023, the H shares issued by YZY Biopharma were officially listed on the Hong Kong Stock Exchange. On 28 September 2023, YZY Biopharma announced that its unaudited net loss for the first half of 2023 was RMB86.57 million, compared to a net loss of RMB89.63 million for the same period last year. In addition, YZY Biopharma mentioned in its 2023 interim report that its core pipeline M701 is expected to initiate Phase III/pivotal trial in the first quarter of 2024, followed by a plan to submit the Biologics License Application in the first quarter of 2025.