Annual Report 2025

INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) China Merchants China Direct Investments Limited Annual Report 2025 19 REVIEW OF INVESTMENTS (CONTINUED) As of the end of 2025, the carrying value of the Fund’s debt in Qinghai Lake Tourism was nil. The Fund will continue to retain the right to pursue interest payments from Qinghai Lake Tourism. Xi’an Jinpower Electrical Co., Ltd. (“Jinpower Electrical”) was established in Xi’an, Shaanxi in 2001 and is a high technology enterprise principally engaged in the research and development, and production, of intelligent online monitoring systems for transmission lines and substation equipment for the power grid. The Fund invested RMB20 million (equivalent to US$3.03 million) in January 2011 and held 2.89 million shares in Jinpower Electrical as of 31 December 2025, accounting for 4.825% of the issued share capital of Jinpower Electrical. As of the end of 2025, the carrying value of the Fund’s interest in Jinpower Electrical was US$0.44 million, representing an increase of 22.22% over US$0.36 million at the end of last year. In 2025, Jinpower Electrical experienced operational difficulties and continued to incur losses. For the year ended 2025, Jinpower Electrical recorded an unaudited net loss of RMB5.36 million, compared with a net loss of RMB9 million in the previous year. Anhui Iflytek Venture Capital LLP (“Iflytek IT”) is a new limited partnership of a non-fund nature, with a license period of 5 years. It was formerly Anhui Iflytek Venture Capital LLP (“ Iflytek Venture Capital ”), established in Hefei, Anhui in December 2015, with a fund size of RMB602 million. As the business license of Iflytek Venture Capital expired on 29 January 2025, Iflytek Venture Capital was subsequently restructured as Iflytek IT. Its major investment targets are industries related to the Internet and applications of artificial intelligence(AI) in China, primarily to areas including education, healthcare, tourism, motor vehicles, Internet of Things (IoT), smart hardware, information security, e-commerce, interactive entertainment, smart toys, robotics and Internet advertising. Presently, the general partner and investment manager of Iflytek IT is Hefei Iflytek Ruijin Enterprise Management LLP, which is responsible for defining and executing the investment strategy for Iflytek IT, as well as for managing their operations. The Fund has committed to subscribe to an aggregate amount of RMB90 million by installment, for a 14.95% interest in Iflytek Venture Capital. Since December 2016, the Fund had made successive capital contributions to Iflytek Venture Capital for an aggregate amount of RMB90 million (equivalent to US$13.28 million), representing 100% of the subscription amount committed by the Fund. In addition, through the end of December 2025, the Fund received cash distributions from Iflytek IT in a cumulative amount of RMB71.47 million. As of the end of 2025, the carrying value of the Fund’s interest in Iflytek IT was US$18.97 million, representing a decrease of 0.99% from the value at the end of last year of US$19.16 million. As of the end of 2025, the unaudited net asset value of Iflytek IT was RMB2,210 million, representing a decrease of 7.53%, compared to an audited net asset value of RMB2,390 million as of the end of last year.