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

Oct 18, 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)

ANNOUNCEMENT OF REVISED FINANCIAL FORECAST FOR THE THIRD QUARTER OF 2006 AND CLOSURE OF REGISTER OF MEMBERS FOR 2005 ANNUAL GENERAL MEETING

Section A of this announcement is made in accordance with Rule 13.09(1) of the Rules Governing the Listing of Securities (the “Listing Rules”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

SECTION A: REVISED FINANCIAL FORECAST

• I. Forecast on current financial results

  1. Financial period:

     • 1 January 2006 to 30 September 2006

  2. Revised financial forecast: Loss Estimate

It is expected that loss of approximately RMB48 million will be incurred for the period from 1 January 2006 to 30 September 2006, among which loss of approximately RMB12 million was incurred for the period from 1 July 2006 to 30 September 2006.

1. Whether the revised financial forecast has been prior audited by certified public accountant: No

II. Financial results for the corresponding period of last year

1. Net Profit: RMB-1,300,809,649.59

2. Earnings per share: RMB-1.3113

III. Deviation from forecast as disclosed in the financial results

1. The announcement disclosed containing financial forecast of the current period:

   • The 2006 Interim Report of the Company

Please refer to the announcement of the Company dated 28 August 2006 (details please refer to announcement published by the Company on 29 August 2006 in China Securities Journal, Securities Times, Hong Kong Commercial Daily and China Daily).

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1. The original financial forecast as disclosed:

Due to the continuing surge in raw material prices, and the liquidation of some dormant subsidiaries of the Company were still in the process , it is expected that the Company would record a loss for the period from 1 January 2006 to 30 September 2006. However, it was anticipated by the Company to make slight profits for the period from 1 July 2006 to 30 September 2006.

IV. Explanation on the revision of results

Explanation by the board of the directors (“Board”) in respect of material differences from the forecast as stated in the results announcement:

As a result of the decrease in sales volume due to changes in weather, the Company could not meet its expected sales target of its air-conditioner products. However, the Company still had to bear the corresponding fixed costs, resulting in losses for the Company in the third quarter of 2006, details of which will be disclosed in the third quarter report 2006 of the Company.

V. Others

The Board would like to remind all investors that if the Company continues to incur a loss in 2006, according to the relevant requirements of the Rules Governing Listing of Stocks on Shenzhen Stock Exchange, the listing of the A shares of the Company will be suspended as a result of incurring losses for three consecutive years. and the Company will face a risk of delisting. Hence, investors should exercise caution when dealing with shares of the Company.

SECTION B: CLOSURE OF REGISTER OF MEMBERS FOR 2005 ANNUAL GENERAL MEETING

Reference is made to the announcement regarding the notice of the 2005 annual general meeting of the Company dated 16 October 2006.

Notice of the holders of domestic shares and H shares of the Company whose names appear on the register of members of the Company as at or before the close of business on Friday, 3 November 2006 (including holders of H shares of the Company who have submitted verified transfer forms no later than 3 November 2006) will be entitled to attend the 2005 annual general meeting of the Company. The register of members of the Company will be closed from Saturday, 4 November 2006 to Tuesday, 5 December 2006, both days inclusive. During such period, no H share transfers will be registered.

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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, 17 October 2006

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

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