Annual Report 2025

257 2025 Annual Report Transport International Holdings Limited NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 33 Financial risk management and fair values of financial instruments (continued) (f) Fair values measurement (continued) (i) Financial instruments measured at fair value (continued) Fair value hierarchy (continued) 2025 2024 Fair value measurements categorised into Fair value measurements categorised into Fair value Level 1 Level 2 Level 3 Fair value Level 1 Level 2 Level 3 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Recurring fair value measurements Assets: Investments in financial assets measured at FVOCI (recycling) 499,766 488,909 – 10,857 407,468 407,468 – – Other financial assets measured at FVPL 3,404 3,404 – – 5,868 5,868 – – Unlisted equity securities 919,646 – – 919,646 998,075 – – 998,075 Derivative financial instruments – other forward foreign exchange contracts 18 – 18 – 54 – 54 – As at 31 December 2025, the fair value of investments in credit-impaired financial assets measured at FVOCI (recycling) was determined taking into account of various scenarios in which cash flows are expected to recover and the probabilities assigned to those scenarios. Accordingly, the fair value measurement was transferred from Level 1 to Level 3. The Group believes this valuation technique more suitably reflects the value of investments in credit -impaired financial assets measured at FVOCI (recycling) and provides more relevant information to the users of the financial statements. Except for the above mentioned financial assets, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3 during the years ended 31 December 2025 and 2024. The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur. (ii) Valuation techniques and inputs used in Level 2 fair value measurement The fair values of forward foreign exchange contracts as at 31 December 2025 and 2024 in Level 2 were marked to market using quoted market prices from financial institutions. (iii) Information about Level 3 fair value measurement Valuation technique Significant unobservable inputs Percentage Unlisted equity securities Market comparable companies Discount for lack of marketability 35% (2024: 35%) Investments in credit-impaired financial assets measured at FVOCI (recycling) Discounted cash flow Scenario probability of restructuring, straight sale and liquidation 5%-90% (2024: N/A) The fair value of unlisted equity securities is determined using the market approach of comparable companies adjusted for lack of marketability discount. The fair value measurement is negatively correlated to the discount for lack of marketability. As at 31 December 2025, it is estimated that with all other variables held constant, a decrease/ increase in the discount for lack of marketability by 5 percentage points would have increased/decreased the Group’s other comprehensive income by $70,742,000 (2024: $76,775,000).