Annual Report 2023

32 32 China Merchants China Direct Investments Limited Annual Report 2023 INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) REVIEW OF INVESTMENTS (CONTINUED) Immvira Bioscience Inc. (“Immvira”) was established in Cayman Islands in May 2018 and is a biotech research and development company, principally engaged in clinical research and the development of vector technologies as potential cancer therapeutics. Leveraging intrinsic mechanisms of action and tumor microenvironment modifications, Immvira is focused on developing a new generation of novel anti-cancer drug vectors, including replicating and non- replicating herpes simplex virus vectors, drug delivery exosomes and tumor vaccines. The Fund invested US$8 million in October 2022 for a 1.67% equity interest in Immvira. As of the end of 2023, the carrying value of the Fund’s interest in Immvira was US$5.38 million, representing a decrease of 32.75% from the value at the end of last year of US$8 million. In March 2023, Immvira reached a strategic cooperation agreement with Cytiva, accelerating the development of new therapies such as oncolytic viruses and exosomes. In August 2023, Immvira announced the appointment of Dr. Howard L. KAUFMAN as Consulting Medical Advisor. Dr. KAUFMAN is a leading authority on oncolytic viruses and tumor immunotherapy. His expertise in scientific research and clinical development, particularly in the areas of oncolytic viruses and immunotherapy, is expected to significantly enhance Immvira’s research and development capabilities. PROSPECTS In 2023, due to factors such as monetary tightening and ongoing inflation stress in developed economies, the trends of a tightening global financial environment, weakening trade growth, and declining business and consumer confidence have become more notable. The World Economic Situation and Prospects 2024 issued by the United Nations indicates that persistently high interest rates, escalation of geopolitical conflicts, sluggish international trade, and increasing climate disasters pose severe challenges to the global economy, while at the same time, tighter credit conditions and elevated borrowing costs have made it more difficult to stimulate the economy. However, China’s 2023 macro data shows that the major expected goals of economic and social development have been successfully achieved. China’s economy continues to demonstrate a positive trend of recovery and improvement, with both macro indicators and micro perception of individuals consistently improving. The intensity, effectiveness, accuracy and precision of macro-regulatory policies have also steadily increased. And economic growth, structural optimisation, and quality and efficiency enhancements have been advancing by means of incrementally adding new elements while managing existing ones. An equal balance between quality enhancements and reasonable growth in quantity seems to have been achieved. As high-quality economic development has been steadily promoted, positive factors in favour of medium- and long-term development have thus been further strengthened. In 2024, given that China’s overall economic growth environment is expected to stabilise and to pursue progress, and that China’s economic restructuring is continuing under the “14th Five-Year” plan, it is expected that the operating results of the investment projects (mainly operating in China) held by the Fund may continue to improve.