Medlive Technology Co., Ltd. — Capital/Financing Update 2006

Nov 13, 2006

GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED 廣東科龍電器股份有限公司

(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 0921)

Guangdong Kelon Electrical Holdings Company Limited Announcement on Disposal of Assets

This announcement is made in accordance with Rule 13.09(2) of the Rules Governing the Listing of Securities (“Listing Rules”) on the Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

I. DESCRIPTION OF THE TRANSACTION

Guangdong Kelon Electrical Holdings Company Limited (the “Company”) intends to publicly invite interested transferees to bid for the land use rights of seven parcels of land with a total area of 203,057.65 square metres located at the Ronggui Street Office, Shunde District, Foshan City, and qualified interested transferees will bid in a public auction with the aggregate bottom price set at RMB179,471,000. The land will not be sold to the connected parties of the Company, therefore the intended land transfer transaction does not constitute a connected transaction. If the proposed land disposal is required to obtain shareholders’ approval under the relevant rules and regulations, the board of director of the Company will submit the same to its shareholder’s general meeting for approval and promptly comply with its disclosure obligations in accordance with the relevant regulations.

The intended land transfer transaction was considered at the meeting of the sixth board of directors of the Company and was approved with 9 affirmative votes, 0 dissenting votes and 0 abstaining votes. The independent non-executive directors of the Company have unanimously voted in favour of the intended land transfer transaction. The intended land disposal is subject to the consent of mortgagees of the land use rights.

II. THE OTHER PARTY TO THE TRANSACTION

The transferees to the intended land transfer transaction has not been determined. The Company will publicly invite interested transferees to bid for the land use rights, and qualified interested transferees will bid in a public auction. The transferee must be a legal person, natural person or body corporate with civil rights and corresponding civil conduct ability.

III. DETAILS OF THE PROPERTIES

(1) Particulars of the properties

The assets to be disposed of are the land use rights of seven parcels of land with a total area of 203,057.65 square metres located at the Ronggui Street Office, Shunde District, Foshan City, details of which are as follows:

					Appraised	Net		Residual
Number		Location	Title Document Number	Area	Value	Book Value	Use	Term of Use
				(m2)	(RMB)	(RMB)		(years)
Property	1	22 & 24	Yue Fang Di Chan Zheng Zi No. C1570584	19,234.1	22,322,000	4,949,400.49	Industrial	38 years
		Rongxin Road ,
		Zhenhua Residents’ Committee,
		Ronggui Street Office,
		Shunde District, Foshan City
Property	2	71 Zhenhua Road,	Yue Fang Di Chan Zheng Zi No. C1150996	25,760	20,999,000	12,471,415.12	Industrial	38 years
		Zhenhua Residents’ Committee,
		Ronggui District, Shunde City
Property	3	120 Ronggui Road North,	Yue Fang Di Chan Zheng Zi No. C1485751	11,419.1	23,727,000	3,239,404.85	Industrial	38 years
		Weihong Residents’ Committee,
		Ronggui Street Office,
		Shunde District, Foshan City
Property	4	1&2 Huanxin Road,	Yue Fang Di Chan Zheng Zi No. C1113583	5,021.1	7,525,000	1,509,927.21	Industrial	38 years
		Chaoyang Residents’ Committee,
		Ronggui District, Shunde City

1

Property 5 129 Ronggui Road North, Yue Fang Di Chan Zheng Zi No. C1159414 Weihong Residents’ Committee, Ronggui Street Office, Shunde District, Foshan City Property 6 6 Huanxin Road, Yue Fang Di Chan Zheng Zi No. C1485750 Weihong Residents’ Committee, Ronggui Street Office, Shunde District, Foshan City Property 7 East of Waihuan Road, Shun Fu Guo Yong (2004) No. 1001950 Ronggui Gaoli Community Residents’ Committee, Shunde District, Foshan City Total	5,575.6 2,713.7 133,334.05	8,721,000 5,507,000 9,0670,000	2,169,612.92 Industrial 38 years 2,047,949.42 Industrial 38 years 81,259,825.3 Residential 66 years and 3 months 107,647,535.31
	203,057.65	179,471,000

(2) Purchase dates and methods of the assets to be disposed of

Properties 1 to 6 were purchased by the Company in 1996 while Property 7 was purchased by the Company in 2002.

(3) Operational situation of the properties

Properties 1 to 6 are currently used as factories while Property 7 has always been left vacant.

(4) Title defects of the properties

All seven parcels of land to be disposed of have been mortgaged, and the mortgagees of Property 1, Property 2, Property 3, Property 5 and Property 7 are Bank of China Foshan Branch and Bank of China Foshan Shunde Ronggui Sub-branch, while the mortgagee of Property 4 and Property 6 is Shunde Ronggui Rural Credit Cooperative. The intended disposal of these seven parcels of land is subject to the consent from mortgagees of these land use rights.

(5) Appraisal of the properties

The six parcels of land (Property 1 to Property 6) were appraised by Zhong Yi Land and Real Estate Appraisal Co., Ltd of Shunde District, Foshan City on 3 August 2006 (the valuation date) with an aggregate value of RMB88,801,000. As at 31 July 2006, their aggregate original book value was RMB89,045,127.36 and its aggregate net book value was RMB26,387,710.01. The replacement cost approach was adopted in appraising the properties. Property 7 was appraised by Guangdong Xin De Real Estate and Land Assets Appraisal Co., Ltd on 27 September 2006 (the valuation date) with a value of RMB90,670,000. As at 31 July 2006, the total book value was RMB89,744,151.79 and the net book value was RMB81,259,825.3. The base land premium adjustment approach and the residual approach were adopted in appraising the property.

IV. DETAILS OF CONTRACT AND PRICING

1. Details of contract: No contract has been executed in respect of the transaction as the intended disposal of assets has not been carried out. Upon completion of the transaction, the Company will further fulfill its disclosure obligations in compliance with the relevant requirements.

2. Pricing: The intended disposal of assets will be carried out by the Company by way of public auction, on the basis that each of the seven properties will not be sold at a price lower than their respective appraised market values and on the principle that it will be sold to the highest bidder. The total appraised value of the seven parcels of land to be disposed of is RMB179,471,000.

V. OTHER ARRANGEMENTS BY THE COMPANY IN RESPECT OF THE DISPOSAL OF THE ASSETS

The proceeds from the disposal of assets will mainly be used for the repayment of part of the Company’s bank loans, and part of the proceeds will be used as working capital for the Company’s production operations.

VI. REASON FOR DISPOSAL AND ITS EFFECT ON THE COMPANY

The intended disposal of the seven parcels of land by the Company is an initiative to dispose of its non-core assets and enhance its asset structure, which will facilitate the optimal utilization of the Company’s assets. The proceeds from the disposal will help to lower the Company’s gearing ratio and further improve the Company’s operating conditions.

2

VII. DOCUMENTS AVAILABLE FOR INSPECTION

1. Property valuation report (Shun Zhong Ping Bao Zi (2006) No. D08009) issued by Zhong Yi Land and Real Estate Appraisal Co., Ltd of Shunde District, Foshan City.

2. Property valuation report (Shun Zhong Ping Bao Zi (2006) No. D08010) issued by Zhong Yi Land and Real Estate Appraisal Co., Ltd of Shunde District, Foshan City.

3. Property valuation report (Shun Zhong Ping Bao Zi (2006) No. D08011) issued by Zhong Yi Land and Real Estate Appraisal Co., Ltd of Shunde District, Foshan City.

4. Property valuation report (Shun Zhong Ping Bao Zi (2006) No. D08012) issued by Zhong Yi Land and Real Estate Appraisal Co., Ltd of Shunde District, Foshan City.

5. Property valuation report (Shun Zhong Ping Bao Zi (2006) No. D08013) was issued by Zhong Yi Land and Real Estate Appraisal Co., Ltd of Shunde District, Foshan City.

6. Property valuation report (Shun Zhong Ping Bao Zi (2006) No. D08014) issued by Zhong Yi Land and Real Estate Appraisal Co., Ltd of Shunde District, Foshan City.

7. Guangdong Xin De Real Estate and Land Assets Appraisal Co., Ltd’s document ((Shunde) Xin Ping (2006) (Gu) Zi No. 011561)

8. Board resolutions of Guangdong Kelon Electrical Holdings Company Limited.

SUSPENSION OF TRADING OF H SHARES

At the request of the Company, trading in the H shares of the Company was suspended with effect from 10:00 a.m. on 16 June 2005 pending the release of an announcement in relation to price sensitive information. Subject to further announcements in relation to, amongst others, the financial, production and trading position of the Company, and the Stock Exchange’s satisfaction with the stability of the Company’s internal control measures, trading in the H shares of the Company will remain suspended until further notice.

By order of the Board of Guangdong Kelon Electrical Holdings Company Limited Tang Ye Guo Chairman

As at the date of this announcement, the Company’s executive directors are Mr. Tang Ye Guo, Ms. Yu Shu Min, Mr. Su Yu Tao, Mr. Xiao Jian Lin, Mr. Lin Lan and Mr. Zhang Ming; and the Company’s independent non-executive directors are Mr. Zhang Sheng Ping, Mr. Lu Qing and Mr. Cheung Yui Kai,Warren.

Foshan City, Guangdong, the PRC, 10 November 2006

“Please also refer to the published version of this announcement in China Daily”

3