Annual Report 2025

INVESTMENT MANAGER’S DISCUSSION AND ANALYSIS (CONTINUED) 32 China Merchants China Direct Investments Limited Annual Report 2025 REVIEW OF INVESTMENTS (CONTINUED) On 21 November 2025, Wuhan Rixin issued an announcement stating that through inquiries, it learned that some company bank accounts had been frozen, and the company and Mr. Xu Jinming, its legal representative, had been restricted from high consumption. On 4 March 2026, Wuhan Rixin issued an announcement stating that the company has been placed on the List of Dishonest Persons Subject to Enforcement. This may have a certain adverse impact on the company’s reputation and daily operations. The Fund will closely monitor subsequent developments of the above events and the potential impact on the Fund and will take appropriate measures to protect the interests of the Fund when necessary. 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. In September 2025, all partners of Huiyou Xingyao Fund convened a partners’ meeting and resolved to place Huiyou Xingyao Fund into liquidation proceedings. As of the end of 2025, the carrying value of the Fund’s interest in Huiyou Xingyao Fund was US$2.23 million, representing a decrease of 3.46% over US$2.31 million at the end of last year. On 27 March 2026, YZY Biopharma announced that its audited net loss for 2025 was RMB84.732 million, compared to a net loss of RMB97.599 million for last year. In October 2025, the interim data of the phase II clinical study of M701, a bispecific antibody (BsAb) drug candidate dually targeting epithelial cell adhesion molecule (EpCAM) and cluster of differentiation 3 (CD3) independently developed by YZY Biopharma for the treatment of malignant pleural effusion caused by advanced non-small cell lung cancer (NSCLC) in China, were announced at the European Society for Medical Oncology (ESMO) in 2025 in the form of a conference poster. In December 2025, the drug’s development and clinical trial results for the treatment of malignant ascites caused by advanced epithelial tumors in China were published in Experimental Hematology & Oncology, an internationally renowned medical journal.