Unlocking Value

China Merchants China Direct Investments (CMCDI, 133 HK) published its quarterly “breakdown of total assets” as at 30 September 2024.

CMCDI doesn’t comment on its portfolio, so here is our take:

• The net asset value on 30 September 2024 was US$ 4.187 per share (or US$638 million in total), which is +3.2% from three months ago.
• Discount to net asset value (NAV) is still unacceptably wide. CMCDI is now trading at price-to-NAV ratio of 0.45x, which among the lowest in the world (despite charging higher fees than peer China-focused closed-end funds).
• Cash balance is US$ 42 million. We urge CMCDI to prioritize buying back shares over new investments, as we proposed.
• China Merchants Bank (37% of total assets, up from 34% last quarter) continues to be the single largest asset.
• The carrying value of China Credit Trust (中誠信託 CCT, 20% of total assets), the second largest asset, increased marginally from US$ 159m to US$ 162m in the last quarter.
  • As we wrote earlier, we urge CMCDI to increases its transparency on how assets are valued.
  • CCT published its annual report on 30 April 2024. In 2023, it made net profit of RMB 969m, down 12% from a year ago. 79% of its RMB 2.8bn revenue were fee income. Its book value on 31 December 2023 was RMB 20.64bn
  • CMCDI owns 6.94% stake in CCT. That means CMCDI’s values CCT is valued at ~17x price-to-earnings ratio and 0.8x price-to-book ratio
• There is a surprising new investment: US$ 3m worth of Hong Kong-listed shares of China International Capital Corporation (CICC, 3908 HK). We urge CMCDI to prioritize the narrowing of discount over making new investments. We hope CMCDI has made money on the trade.
• The carrying value of NBA China, which is NBA’s franchise in China, went down from US$ 49m to US$ 38m in the last quarter, accounting for 4.7% of CMCDI’s total assets. We are not sure what drove the decline and urge for transparency on valuation methods.
• The carrying value of Moonshot AI (月之暗面) declined from US$ 21m to US$ 16m in the last quarter, accounting for 2% of total assets. We are not sure why either.

Here is a summary of CMCDI’s portfolio:

	Carrying value (US$m) 账面价值 （百万美金） as of 30 09 2024 截至2024年9月30日	CMCDI’s stake 中国基金持股量 as of 31 12 2023 截至2024年12月31日	% total assets 占总资产比例 as of 30 09 2024 截至2024年9月30日	Industry 行业	Remarks 备注
Liquid assets 较流动资产
China Merchants Bank (listed shares) 中国招商银行(上市股票)	296	0.2%	37.0%	Banking 银行	One of the biggest banks in China. Listed and very liquid. 中国最大的银行之一。流动性非常好。
iFLYTEK (listed shares) 科大讯飞(上市股票)	43	0.3%	5.4%	Artificial intelligence 人工智能	SparkDesk chatbot. Listed and very liquid. 星火大模型聊天机器人。非常流动。
Cash 现金	42	n/a	5.3%	–
CICC (listed shares) 中金股份 (上市股票)	3	<0.1%	0.5%	Investment bank 投资银行
Sub-total (liquid) 小计	384	–	48.2%
Less liquid assets 较低流动性资产
China Credit Trust 中诚信托	162	6.9%	20.3%	Trust management 信托管理	Major trust company. PICC is largest shareholder. Link to annual report. 中国大型信托公司。人民保险集团是最大股东。年度报告链接。
NBA China NBA 中国	38	1%	4.7%	Sports marketing 体育营销	NBA’s franchise in China. Pays dividend regularly. NBA中国特许经营者，定期支付股息
Xunfei Healthcare 讯飞医疗	41	3.4%	5.1%	AI medical 人工智能医疗	Spun off from iFlytek. Could IPO in HK. 从科大讯飞分拆出来。有可能在香港IPO
Arashi Vision (Insta360) 影石科技	35	1.6%	4.4%	AI cameras 人工智能相机	GoPro-like action cameras. 像GoPro的运动相机
Moonshot AI 月之暗面	16	1.3%	2.0%	Artificial intelligence 人工智能	Kimi chatbot. Alibaba owns 36%. KIMI智能聊天机器人，阿里巴巴持有其36%股权
Anhui Iflytek Venture Capital LLP 安徽科訊創業投資基金合夥企業	21	15.0%	2.6%	Information technology investment 資訊科技投資	Also invested in Xunfei Healthcare 也投资了讯飞医疗
China UnionPay 中国银联	16	0.05%	2.0%	Payment 金融支付	Exited 0.12% stake for US$39m in 2024 已经退出0.12%股权，退出金额为3900万美元左右
Pony.ai 小马智行	11	0.65%	1.4%	Autonomous driving 自动驾驶	Robotaxies are already running in big Chinese cities. Could IPO in the US. 自动驾驶出租车已经在中国的大城市中开始运营。有可能在美国上市（IPO）。
Others (18 items)* 其他（18 项）	74	–	9.3%		Each item is less than 2% total assets 各项占总资产比例小于2%
Sub-total (less liquid) 小计(较低流动性资产)	340	–	51.8%
Grand total 总计	798		100%

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

---

招商局中国基金（“招商基金”，133 HK）刚刚发布了其2024年第三季度“总资产明细”。

招商基金未对其投资组合发表评论，所以以下是我们的观点：

• 截至2024年9月30日，招商基金每股净资产价值为4.187美元（或总计638百万美元），相比上一季度上涨了3.2％。

• 较净资产价值的折让仍然过大。招商基金目前的市净率为 0.45倍，是全球最低的之一（但收费却远高于其他知名的封闭式基金）。

• 现金余额为 4,200 万美元。如我们所提议的，我们敦促招商基金优先回购股票，而不是进行新投资。

• 招商银行（占总资产的 37%，较上季度的 34% 上升）仍是最大的单一资产。

• 中诚信托（ 占总资产的 20%）的账面价值在上季度从 1.59 亿美元略微增加至 1.62 亿美元。
  • 正如我们之前所写，我们敦促招商基金提高资产估值的透明度。
  • 中诚信托于 2024 年 4 月 30 日发布了年度报告。2023 年，其净利润为 9.69 亿元人民币，同比下降 12%。其 28 亿元人民币的收入中，79% 为手续费收入。到 2023 年 12 月 31 日，其账面价值为 206.4 亿元人民币。
  • 招商基金持有中诚信托 6.94% 的股份。这意味着招商基金对中诚信托的估值相当于约 17 倍的市盈率和 0.8 倍的市净率。

• 还有一项令人惊讶的新投资：价值 300 万美元的中国国际金融股份有限公司（中金，3908 HK）的股票。我们敦促招商基金优先缩小折扣，而不是进行新投资。我们希望招商基金在此交易中获利。

• NBA 中国（NBA 在中国的特许经营）的账面价值在上季度从 4900 万美元下降至 3800 万美元，占招商基金总资产的 4.7%。我们不确定下降的原因，并敦促招商基金提高具体估值方法的透明度。

• 月之暗面（Moonshot AI）的账面价值在上季度从 2100 万美元下降至 1600 万美元，占总资产的 2%。我们同样不确定原因。

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