On 8 January and 2 July 2024, we, Argyle Street Management (ASM), published proposals on how to unlock value from China Merchants China Direct Investments (CMCDI, 133 HK).

Since then, we have been engaging with CMCDI and numerous CMCDI shareholders actively.

We hosted a large group of shareholders on 26 September 2024.

Upon hearing feedbacks from shareholders, we have added two new items to our proposal:

  • Accountability: Going forward, CMCDI shall renew its investment management agreement with the manager once a year (not every three years)
  • Alignment of interest: the manager’s fees shall be linked to share price performance

This is our full proposal (PDF, 30 pages).

We also added a page, to highlight that CMCDI’s manager charges more fees than other closed-end funds, and yet trade a far larger discount.

The rest of our proposal stays the same, which are:

  • Buyback offer:  CMCDI shall make an offer to buy back 20% of CMCDI’s outstanding shares at 10% discount to net asset value
  • Discount management program:  CMCDI shall implement a multi-stage “discount management program”, to gradually narrow the discount to 30% and eventually 20%
  • Cutting fees by streamlining the manager:  the investment manager shall reduce fees by 45%.  Currently, Victor Chu owns 45% shares in CMCDI’s manager.  We propose that the manager shall be replaced by one fully owned by China Merchants Group.  The existing team (minus Victor Chu and Elizabeth Kan) shall migrate to the new manager
  • Improving investor relations:  regular roadshows, better and more frequent disclosure

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


2024年1月8日7月2日,我们,Argyle Street Management (ASM),公布了关于如何释放招商局中国基金有限公司(“中国基金”,股票代码133.HK)价值的提案。

自那时起,我们便与中国基金和众多中国基金的股东保持持续沟通。

在2024年9月26日,我们邀请了众多股东交流对中国基金的看法。

在听取了众多股东的反馈后,我们在提案增加了两点:

  • 问责机制:投资管理协议按年度续签( 而不是每三年续签一次)
  • 利益一致:将投资经理收取的费用与股价表现情况挂钩

此处是我们更新后提案的完整版

我们亦增加了一页,表示中国基金支付的管理费远远高于其他知名的封闭式基金,然而交易折价更大。

其他提案保持不变,具体如下:

  • 回购要约:  中国基金应该提出回购要约方案,以较净资产折让10%的价格回购中国基金已发行股份的20%。
  • 折价管理计划:中国基金应该实施多阶段的“折价管理计划”,逐步缩小折价至30%,最终缩小至20%。
  • 通过简化管理人员来降低费用:投资经理应该把收费下调45%。目前, 诸立力先生 拥有投资经理45%的股份。我们建议将管理人员替换为招商局集团全资拥有的公司,现有团队(除诸立力先生和简家宜女士外)应该迁移到新的管理公司。
  • 改善投资者关系:定期路演,更好、更频繁的信息披露。

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

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