Medlive Technology Co., Ltd. — Capital/Financing Update 2011

Mar 17, 2011

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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HISENSE KELON ELECTRICAL HOLDINGS COMPANY LIMITED

海信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: 00921)

Announcement on External Guarantees

This announcement is made by Hisense Kelon Electrical Holdings Company Limited (the “Company”) in accordance with Rule 13.09(1) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

In addition to the guarantees for the year 2010-2011 as mentioned in the announcement of the Company dated 15 July 2009, based on the capital demand from the production and operation as well as the needs for the business develop pment of the Company and its subsidiaries, the Company proposed to provide guarantees amounting to RMB400 million for its subsidiary, Kelon International Incorporation, for the year 2011; and the subsidiaries of the Company proposed to provide mutual guarantees amounting to RMB70 million for the year 2011. In addition, the Company proposed to provide guarantees amounting to RMB42 million for certain distributors for 2011. The particulars of the guarantees are set forth as follows:

I. Particulars of the guarantees

(1) Guarantees to be provided by the Company for its subsidiaries

No.	Name of party for which guarantee will be provided	Percentage of shareholding (%)	Percentage of shareholding (%)	Amount of guarantee (RMB’0000)
		Direct	Indirect
1	Kelon International Incorporation	0	100	40,000

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The amount represented 57.05% of the audited absolute net asset value of the Company as at 31 December 2009, and there is no counter-guarantee in respect of the above-mentioned guarantee.

(2) Mutual guarantees to be provided among the subsidiaries of the Company

No.	Name of distributors for which guarantee will be provided	Amount of guarantee (RMB’0000)
1	Quanzhou Runhe Trading Company Limited （泉州潤禾貿易有限公司）	600
2	Xiamen Xinda Trading Company Limited （廈門昕達貿易有限公司）	500
3	Fujian Xingyuan Trading Company Limited （福建星源貿易有限公司）	500
4	Changsha Shuangyu Electrical Appliances Company Limited （長沙雙羽電器有限公司）	1000
5	Yueyang City Maoqiang Trading Company Limited（岳 陽市茂強商貿有限公司）	200
6	Xiangxiang City Biteng Trading Company Limited（湘鄉 市碧騰貿易有限公司）	200
7	Hengyang Chenghui Trading Company Limited （衡陽晟暉商貿有限公司）	200
8	Xuzhou Kehua Electrical Appliances Sales Company Limited （徐州科華電器銷售有限公司）	1000
合計		4,200

The amount represented 5.99% of the audited absolute net asset value of the Company as at

31 December 2009, the distributors to provide counter-guarantee for the Company.

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The above amount of guarantees can be used on a revolving basis during the year of 2011 (i.e., from 1 January 2011 to 31 December 2011) from the date of approval at the general meeting of the Company.

II.Particulars of the parties for which guarantee will be provided:

1.Kelon International Incorporation (“KII”) is a wholly-owned subsidiary of the Company. It was established on 11 September 1998 and its registered address is Room 3101-3105, Singga Commercial Centre, 148 Connaught Road West, Hong Kong. The registered capital is US$50,000, and its scope of business is general trading.

1. Quanzhou Runhe Trading Company Limited (“Runhe Trading”) is an agent of the Company and was established on 12 April 2007, its registered address is Rooms 407, 4th Floor, Hubin House,Huxin Commercial Street,FengZe District,Quanzhou (泉州市豐澤區湖 心商業街湖濱樓四層407號). The legal representative is Xie Zhongqin. The registered capital is RMB500,000 and it is owned as to 50% by Xie Zhongqin and 50% by Lei Meimou. Its principal business includes sale of home electrical appliances, communication products, construction materials and hardware. It currently focuses on the business of Ronshen refrigerators.

3 Xiamen Xinda Trading Company Limited (“Xinda Trading”) is an agent of the Company and was established on 6 August 2007 , its registered address is Room 1102, No. 370 Jiahe road, Huli district, Xiamen(廈門市湖裡區嘉禾路370號之1102室). The legal representative is He Xiaofan. The registered capital is RMB3.8 million and it is owned as to 10% by He Xiaofan and 90% by Chen Quansheng. Its principal business includes wholesale and retail of home electrical appliances, communication equipments, lightings, office equipments, computer software, household products and construction materials. It currently focuses on the business of Ronshen refrigerators.

1. Fujian Xingyuan Trading Company Limited (“Xingyuan Trading”) is an agent of the Company and was established on 22 March 2004 , its registered address is No.23

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Zhongshan Road, gulou district, Fuzhou City(福州市鼓樓區中山路23號). The legal representative is Liu Zhenhe. The registered capital is RMB5 million and it is owned as to 35% by Chen Qiuyun and 65% by Liu Zhenhe. Its principal business includes sale of hardware electric, home electrical appliances, photography apparatus, household products, textiles, leather products, apparel and accessories, construction materials and arts and crafts, as well as installation and maintenance of home electrical appliances. It currently focuses on the business of Ronshen refrigerators.

5、Changsha Shuangyu Electrical Appliances Company Limited (“Shuangyu Electrical”) is an agent of the Company and was established on 24 December 2003 , its registered address is Shops 6-7,1st Floor,Building 2,Appliance City,SanXiangNanHu Market,FuRong District,Changsha (長沙市芙蓉區三湘南湖大市場家電城2棟1樓6-7號門面). The legal representative is Wu Xiaoxi. The registered capital is RMB500,000 and it is owned as to 30% by Wu Xiaoyang, 30% by Zhang Xiaohui and 40% by Wu Xiaoxi. Its principal business includes retail and wholesale of home electrical appliances.

1. Yueyang City Maoqiang Trading Company Limited (“Maoqiang Trading”) is an agent of the Company and was established on 25 April 2005 , its registered address is No 2, Building 5,Bazimen Huaguoshan Fruit Market,Yueyang (岳陽市八字門花果山水果批發市場5棟2 號). The legal representative is Wu Xudong. The registered capital is RMB500,000 and it is owned as to 60% by Wu Xudong and 40% by Wu Dingxiang. Its principal business includes home appliances, office supplies, products permitted by Ministry of Energy, electronics, fire detection, control and alarm equipment, and reclamation of old home electrical appliances.

2. Xiangxiang City Biteng Trading Company Limited (“Biteng Trading”) is a distributor of the Company and was established on 31 January 2005 , its registered address is No.215 Mulberry road, Xiangxiang（湘鄉市桑梅路215號）. The legal representative is Liu Peng. The registered capital is RMB500,000 and it is owned as to 60% by Liu Peng and 40% by Yan Fazi. Its principal business includes wholesale and retail of home electrical appliances and household products.

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8、Hengyang Chenghui Trading Company Limited (“Chenghui Trading”) is a distributor of the Company and was established on 2 November 2009 , its registered address is No. 78 Huancheng North Road, Shigu District, Hengyang（衡陽市石鼓區環城北路78號）. The legal representative is Zu Qingying. The registered capital is RMB500,000 and is 100% owned by Zu Qingying. Its principal business includes construction materials, electrical engineering, chemical products, heating equipment, reclamation of recyclable resources, fire fighting equipment, hardware electric.

9、Xuzhou Kehua Electrical Appliances Sales Company Limited (“Kehua Electrical”) is a distributor of the Company and was established on 16 October 2008 , its registered address is Room 2614, Jin Kailong Building, Fuxing North Road, Xuzhou（徐州市復興北路金凱隆 大廈2614室）. The legal representative is Zu Zhangbo. The registered capital is RMB2 million and it is owned as to 52% by Zu Zhangbo and 48% by Ma He. Its principal business includes sale, installation and maintenance of electrical appliances, air-conditioners, freezers and accessories, hardware electric; sale and maintenance of communication equipment (excluding wireless emission equipment and ground satellite receiver).

The unaudited major financial information of the subsidiaries for which guarantee will be provided as at 31 December 2010 is set out as follows (Unit: HK$ ten thousand, the figures of income and profit are the data of the year 2010):

Name of company	Total assets	Total liabilities	Net assets	Income from principal activities	Gross profit	Net profit
KII	79,498.34	90,848.24	-11,349.90	348,500	2,784.55	2,784.55

The unaudited major financial information of the distributors for which guarantee will be provided as at 31 December 2010 is set out as follows (Unit: HK$ ten thousand, the figures

of income and profit are the data of the year 2010):

	Name of company	Total assets	Total liabilities	Net assets	Income from principal activities	Gross profit	Net profit

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Runhe Trading	2450	150	2300	15000	1300	880
Xin Da Trading	125	35	90	920	13.80	10.35
Star Yuan Trading	679.55	90.29	589.26	3145.29	42.38	31.78
Shuangyu Electric	3000	900	2100	10000	350	600
Mau Strong Trade	145.45	73.16	72.29	625.58	52.48	21.50
Free Trade	510	400	110	700	24	18
Sheng Hui Trade	200	50	150	500	40	25
Kehua Electrical	550	-	550	4570	185	70

III.Status of signing and performance of guarantee agreements

The above guarantee agreements have not been signed and their main contents are still subject to negotiations between the guarantor(s), being the Company or its subsidiaries, and the banks.

IV. Opinion of the board of directors on the above guarantees

Given the production and operation situation of the Company and its subsidiaries, the proposed guarantees stated above are for the benefit of the Company and its subsidiaries in obtaining the required working capital for the business development and positive growth, and are in the interests of the Company and its subsidiaries as a whole. The relevant distributors are not the connected persons of the Company. The provision of guarantees to the distributors is favourable to the business development of the Company, and is in the interest of the Company. Meanwhile, after assessing the profitability and solvency of the parties for which guarantees will be provided, it is considered that the operations of the parties for which guarantees will be provided are stable with a strong ability to perform contracts and agreements so that their ability of repayment of loans is assured. The board of directors of the Company is of the view that the risks relating to the provision of the

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guarantees are under control.

The resolutions in respect of the proposed provision of guarantees for the relevant subsidiaries and distributors of the Company were passed at the third 2011 extraordinary meeting of the Company’s seventh session of the board of directors. Out of the nine directors who should attend the meeting, nine directors attended. The convening of and the voting at the meeting were in compliance with the relevant requirements of the Company Law of the People’s Republic of China and the Articles of Association of the Company. The resolutions were passed with 9 affirmative votes, 0 against vote and 0 abstention vote after consideration. The guarantees are still subject to the consideration and approval by the shareholders at the general meeting.

V.Cumulative amounts of external guarantees and overdue guarantees

As at 31 December 2010, the aggregate amount of external guarantees of the Company and its subsidiaries was RMB405,060,400, representing 57.77% of the audited absolute net asset value of the Company as at 31 December 2009. There was no overdue guarantee or guarantee that was subject to litigation.

VI.Other explanation

The term “revolving use” mentioned in this announcement means the above-listed guarantees could be provided for at any time during the guarantee period by the guarantors for the parties whose liabilities are to be guaranteed, provided that the guarantees to be provided shall be equal to or less than the maximum amount of the guarantees specified above.

The Company will discharge the relevant disclosure obligations on a timely basis if there are changes on the guarantees proposed to be provided by the Company for its subsidiaries and certain distributors.

VII.Documents for inspection

The resolutions passed at the third 2011 extraordinary meeting of the Company’s seventh

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session of the board of directors.

By order of the Board of Hisense Kelon Electrical Holdings Company Limited

Tang Ye Guo

Chairman

Foshan City, Guangdong, the PRC, 17 March 2011

As at the date of this announcement, the Company’s directors are Mr. Tang Ye Guo, Mr. Zhou Xiao Tian, Ms. Yu Shu Min, Mr. Lin Lan, Mr. Xiao Jian Lin and Ms. Liu Chun Xin; and the Company’s independent non-executive directors are Mr. Zhang Sheng Ping, Mr. Cheung Yui Kai, Warren and Mr. Wang Ai Guo.

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