Unlocking Value

On 29 November 2024, the shareholders of China Merchants China Direct Investments (CMCDI, 133 HK) voted at an extraordinary general meeting:

• Shareholders voted AGAINST renewing the investment management agreement (IMA) with the incumbent manager.
• Shareholders voted FOR our resolution, that all future IMAs shall have a term limit of one year.

Shortly after the EGM, CMCDI announced that it is considering “all possible alternatives“, including proposing a new one-year IMA. CMCDI will try to “avoid any impact of having no [IMA] on the operations“.

Now what?

We, Argyle Street Management, support the continued management of CMCDI by the China Merchants Group.

The China Merchants team has made excellent investments for CMCDI. To name two recent achievements, there are Pony.ai (which has just gone IPO) and Insta360 (which may go IPO soon).

We are prepared to vote in favor of a new one-year IMA, if these conditions are met:

• CMCDI undertakes to buy back 20% of its outstanding shares through buyback offer(s) in 2025, at 20% discount to its net asset value. The buyback offers can be done in one go, or split into multiple offers during 2025.
• CMCDI announces a discount management program. Under the program, CMCDI uses its best endeavour to buy back shares, with a target of maintaining discount at 30% or less.
  • CMCDI shall prioritize narrowing discount over making new investments.
• The new manager shall be China Merchants Capital, or other entities fully owned by China Merchants Group (without Victor Chu’s involvement).
• Management fees shall be reduced by 45% from the current level (i.e. Victor Chu’s share will be cut)

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

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2024年11月29日，招商局中国基金（“招商基金”，133 HK）召开了两次特别股东大会：

• 股东投票反对与现任投资经理续签投资管理协议（IMA）。
• 股东投票支持我们的决议，即未来所有投资管理协议最多为一年。

特别股东大会结束后不久，招商基金公告表示它正在考虑“所有可行的替代方案”，包括将投资管理协议的拟定期限缩短至一年。中国基金将“尽力避免因无投资管理协议而对公司运营造成任何影响”。

现在怎么办？

我们Argyle Street Management支持招商局集团继续管理招商基金。

招商局团队为招商基金做出了卓越的投资。举两个最近的成绩，小马智行Pony.ai（刚刚上市）和影石科技Insta360（可能很快上市）。

如果新的一年期的投资管理协议满足以下条件，我们会投票支持：

• 招商基金承诺在2025年通过回购要约其20%已發行股份，要约价格为其每股净资产价值的80%。回购要约可以一次性完成，或在2025年分多次进行。
• 招商基金宣布一项折价管理计划（discount management program）。根据该计划，招商基金将尽最大努力回购股份，以保持股价相较于每股净资产的折价在30%或更低。
  • 招商基金应优先缩小折扣，而不是进行新的投资。
• 新的投资经理应为招商局资本（China Merchants Capital），或其他完全由招商局集团持有的实体（不含诸立力的参与）。
• 管理费用应在当前水平降低45%（即削减诸立力的份额）。

如果您刚开始了解中国基金，请阅读我们的指南。

欢迎随时跟我们联系：

💬 微信: ASM_Argyle

💬 WhatsApp: +852 6317 6371

🖥️ UnlockValueChinaMerchants.com

📧 ChinaMerchants@asmhk.com