Unlocking Value

On 26 September 2024, we, Argyle Street Management, hosted numerous shareholders of China Merchants China Direct Investments (CMCDI, 133 HK) to exchange views on CMCDI.

Thank you all for coming, especially those who travelled from afar.

Too large discount, too much fees

The shareholders unanimously agree that CMCDI’s large discount to net asset value is completely unacceptable, and that the investment manager is charging too much fees.

We have already said much about what can be done to narrow the discount: share buyback offer and discount management program.

Annual renewal of the investment management agreement

A few shareholder suggested that the renewal of CMCDI’s investment management agreement (and thus the approval by shareholders) should be done every year, not every three years.

While three years is the longest duration permitted by the Listing Rules, nothing prevents more frequent renewal.

Many shareholders (including us) feel that three years is far too long, and will only result in complacency on the investment manager’s part.

Shareholders should have the right to hold the investment manager accountable annually.

Linking management fees to total shareholder return

There is much anger among shareholders that the investment manager’s fees are not linked to total shareholder return (i.e. share price performance plus dividends) – the only thing that shareholders care about.

To align interest properly, a few shareholders suggested that the manager’s fees should be directly linked to total shareholder return.

We think that is an excellent idea too.

If you are new to CMCDI, read our primer.

Chat with us on WeChat or WhatsApp:

💬 WeChat ID: ASM_Argyle

💬 WhatsApp ID: +852 6317 6371

🖥️ UnlockValueChinaMerchants.com

📧 ChinaMerchants@asmhk.com

Important: Shareholders shall exercise their independent judgments when they vote. Again, we have no current plans to act in concert with any one.

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2024年9月26日，我们Argyle Street Management邀请了众多招商局中国基金（133 HK，“中国基金”）的股东共同交流对中国基金的看法。

感谢大家的到来，特别是那些远道而来的股东。

折价过大，费用过高

股东们一致认为，中国基金股价相对于净资产价值的大幅折扣是完全不可接受的，投资经理收取的费用也过高。

我们已经多次提到可以采取哪些措施来缩小折扣：股份回购要约和折价管理计划。

投资管理协议年度续签

 一些股东建议，中国基金的投资管理协议（以及股东的批准）应每年续签一次，而不是每三年续签一次。

三年是上市规则允许的最长期限，并没有什么条款限制更频繁的续签。

许多股东（包括我们）认为三年时间太长，这只会导致投资经理的懈怠。

股东应有权每年对投资经理进行问责。

将管理费与股东总回报挂钩

许多股东对投资经理的费用与股东总回报（即股价表现加股息）不挂钩感到非常愤怒，而这是股东唯一关心的事情。

为了利益一致，一些股东建议将投资经理的费用直接与股东总回报挂钩。

我们也认为这是一个很好的主意。

如果您刚开始了解中国基金，请阅读我们的指南。

欢迎随时与我们联系：

💬 微信: ASM_Argyle

💬 WhatsApp: +852 6317 6371

🖥️ UnlockValueChinaMerchants.com

📧 ChinaMerchants@asmhk.com

声明：各股东在投票时应独立判断。再次声明，我们目前没有与任何人一致行动的计划。