Annual Report 2025

CHAIRMAN’S STATEMENT (CONTINUED) China Merchants China Direct Investments Limited Annual Report 2025 5 At the end of 2025, the Group’s total holdings in investment projects amounted to US$1,013.89 million (US$775.65 million at the end of 2024), accounting for 96.96% of the Group’s total asset value and representing an increase of US$238.24 million. This was largely due to a net increase in the fair value of investment projects. Meanwhile, cash and cash equivalents were US$30.19 million, accounting for 2.89% of the total asset value of the Group. In 2025, the Investment Manager actively sought new investment opportunities, with intensive due diligence and the rigorous screening of many prospects. Consequently, the Group invested in an information technology project in 2025, namely Jade Bird Display (Shanghai) Limited, with an investment amount of US$4.18 million, and a medical project, namely Neuracle Technology (Shanghai) Co., Ltd., with an investment amount of US$2.12 million. The total investment amount for the above two projects is US$6.30 million. The existing investment management agreement had its expiration date on 31 December 2025. In order to allow more time for the Company to consider and decide on and to ensure the continuity of its investment management operations, the Company entered into a new investment management agreement with the Investment Manager on 22 December 2025 that has a term of 6 months and takes effect from 1 January 2026. The terms of the new investment management agreement were arrived at after arm’s length negotiations between the Company and the Investment Manager, and the annual cap was determined with reference to the total amount of remuneration under the previous investment management agreement. Compared to the previous investment management agreement, the new investment management agreement offers a more competitive remuneration structure for the Investment Manager and better aligns with the interests of the Company and its shareholders. This is specifically reflected in: (i) The maximum amount of remuneration under the new investment management agreement is being set at HK$8 milion (or the equivalent amount in US dollars or RMB), (ii) the remuneration under the new investment management agreement comprises two components, namely, the management fee and the discretionary performance fee, and (iii) the cap on the Investment Manager’s discretionary performance fee is HK$1 million (or the equivalent amount in US dollars or RMB). The payment of the discretionary performance fee is subject to certain performance conditions, with the main payment condition linked to the exit amount of the Group’s existing investments during the management period. This will incentivize the investment manager to optimize the Group’s investment portfolio as of the date of the new investment management agreement, thereby further increasing the Company’s investable capital through organic means and enabling the Company to capture better investment opportunities in a timely manner. Looking ahead to 2026, there will be challenges as well as opportunities. In its Global Economic Prospects report released in January 2026, the World Bank points out that despite persistent trade tensions and policy uncertainties, the global economy has demonstrated stronger-than-expected resilience. Global economic growth is projected at 2.6% in 2026, a modest upward revision from previous forecasts. The growth rate, however, remains in a low- expansion phase. Growth in advanced economies is estimated at approximately 1.6%, while emerging markets and developing economies are expected to grow by 4.0%, representing an increase of 0.2 percentage points from the Bank’s forecast in June 2025. As for China’s economy in 2026, growth is supported by continued expansion of domestic demand, deeper supply-side structural reforms, and innovation-led technological advancement. In terms of consumption, with the rise in per capita GDP, China’s consumption structure is shifting from a goods-dominant model toward one led by services consumption. In 2025, the growth rate of services consumption dropped to 5.5%,