Medlive Technology Co., Ltd. — Interim / Quarterly Report 2011

Apr 28, 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)

2011 FIRST QUARTERLY REPORT

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”).

§1 IMPORTANT NOTICE

1.1 The board of directors (the “Board”), the supervisory committee (the “Supervisory Committee”), the directors (the “Directors”), the supervisors (the “Supervisors”) and the senior management (the “Senior Management”) of the Company warrant that there are no false representation or misleading statements contained in, or material omissions from, this report; and jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the information contained herein.

1.2 No Directors, Supervisors or Senior Management have failed to warrant or expressed any disagreement on the truthfulness, accuracy and completeness of the contents of this 201 1 first quarterly report.

1.3 All Directors attended the meeting.

1.4 The financial report of the Company for the first quarter of 2011 has not been audited by accountants.

1.5 Mr. Tang Ye Guo, the chariman of the Company and Ms. Liu Chun Xin, the person in charge of the accounting function and the person in charge of the accounting department, warrant the accuracy and completeness of the contents of the financial report in the quarterly report .

1.6 The full text of the Company’s balance sheet, income statement and cash flow statements are published on the website as designated by the Shenzhen Stock Exchange for release of information: http://www.cninfo.com.cn.

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§2 BASIC INFORMATION OF THE COMPANY

2.1 Major Accounting Data and Financial Indicators

		Unit: RMB	Unit: RMB	Unit: RMB
				Changes (%)
		31 December 2010
Items	31 March 2011
Total Assets(RMB)	8,933,932,333.09	8,018,968,919.84		11.41%
Owner’s interests attributable to shareholders of listed company (RMB)	648,142,861.43	541,241,410.07		19.75%
Share capital(shares)	1,354,054,750.00	1,354,054,750.00		0.00%
Net asset value per share attributable to shareholders of listed company (RMB/ share)	0.48	0.40		19.75%
				Changes (%)
		January –March 2010
	January – March 2011
		Before adjustment		After adjustment
			After adjustment
Items
Total operatingincome(RMB)	4,630,501,996.45	2,815,866,334.26	3,720,974,944.40	24.44%
Net profit attributable to shareholders of the listed company (RMB)	106,331,643.67	45,298,818.84	98,758,962.50	7.67%
Net cash flow from operating activities(RMB)	-267,320,687.73	15,573,729.17	49,887,349.22	N/A
Net cash flow per share from operatingactivities(RMB/Share)	-0.20	0.02	0.04	N/A
Basic earnings per share (RMB/share)	0.0785	0.0457	0.0759	3.47%
Diluted earnings per share (RMB/share)	0.0785	0.0457	0.0759	3.47%
Weighted average rate of return on net assets(%)	17.88%	N/A	N/A	N/A
Weighted average rate of return on net assets after deducting extraordinary profit and loss (%)	13.22%	N/A	N/A	N/A

Note: In 2010, the issue of shares (A shares) to a specific target by the Company for the acquisition of assets and connected transactions were completed. In accordance with the relevant requirements under the Accounting Standards for Business Enterprises, retrospective adjustments were made to the figures for the corresponding period in the financial accounting statements.

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Unit: RMB	Unit: RMB
	Amounts for January to March
Extraordinary profit and loss items
	2011
Profit or loss from disposal of non-current assets	21,483,707.30
Government subsidy recorded in the profits or losses of the current period (except government subsidy which is closely related to the Company’s normal operation, in compliance with the State policies and continuouslyentitled for standard amount orquantities)	6,222,780.33
Net non-operating income and expenses other than those stated above	1,261,988.89
Total extraordinary profit or loss	28,968,476.52
Less: Effect of minority interests	327,126.28
Less: Effect of income tax	956,410.08
Total extraordinary profit or loss after deducting income tax and minorityinterests	27,684,940.16

2.2 Table showing total number of shareholders and the shareholding of the top ten holders of shares not subject to selling restrictions at the end of the reporting period

Unit: shares Total number of shareholders at the end of 34916 the reporting period The shareholding of the top ten holders of shares not subject to selling restrictions

	Unit: shares	Unit: shares	Unit: shares
Total number of shareholders at the end of the reporting period	34916
The shareholding of the top ten holders of shares not subject to selling restrictions
		Number of shares not
		subject to selling
Name of Shareholder			Class
		restrictions held at the
		end of the period
HKSCC Nominees Limited Note		457,535,208	Overseas listed foreign shares
China Huarong Asset Management Corporation		32,900,000	RMB ordinaryshares
China Construction Bank – Penghua Value Advanced Stock Fund		13,046,489	RMB ordinary shares
Construction Bank of China – Bosera Strategy Dynamic Asset Allocation Mixed Type EquityFund		6,999,733	RMB ordinary shares
Yuyang Securities Investment Fund		6,199,673	RMB ordinaryshares
Zhang Shaowu		6,080,000	RMB ordinary shares
Agricultural Bank of China – Bosera New Growth Stock Fund		4,982,521	RMB ordinary shares
The Industrial and Commercial Bank of China – Lion Flexible Allocation Stock Fund		3,780,227	RMB ordinary shares

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Xian Zhuoqun Investment Management Limited	3,000,000	RMB ordinaryshares
Construction Bank of China – Bosera Special Value Equity Fund	1,908,341	RMB ordinary shares

Note: The shares held by HKSCC Nominees Limited are held on behalf of a number of its account participants.

§3 SIGNIFICANT MATTERS

3.1 The details of and reasons for significant changes of the principal accounting items and financial indicators

√Applicable  □ Not applicable

Analysis on the changes of balance sheet items

Uint：RMB (in ten thousand)

	Amount as at the	Amount as at the
Items	end of the reporting Period	beginning of the reporting Period	Increase/decrease in amount	Percentage changes (%)
Accounts receivable	204,541.86	135,428.42	69,113.44	51.03%
Short-term borrowings	142,990.01	110,126.18	32,863.83	29.84%
Accounts payable	292,614.73	238,516.66	54,098.07	22.68%

During the reporting period, changes occurred in the Company’s balance sheet items at the end of the reporting period in different degrees in size and structure:

• 1） The accounts receivable at the end of the reporting period represented an increase from the amount at the beginning of the year, mainly due to the domestic and overseas sales growth of the Company during the reporting period;

• 2） The accounts payable at the end of the reporting period represented an increase from the amount at the beginning of the year, mainly due to preparation of stocks for the peak season.

• 3）The short-term borrowings at the end of the reporting period represented an increase from the amount at the beginning of the year, mainly due to the reserve of materials and inventory during the reporting period in preparation of sales in the peak season.

Analysis on the changes of income statement items

Uint:RMB (in ten thousand)

Items		Amount for the corresponding period of last year		Percentage changes (%)
	Amount for the reporting period		Increase/decrease in amount
Total operating income	463,050.20	372,097.49	90,952.71	24.44%
Administrative expenses	13,637.46	11,161.54	2,475.92	22.18%
Finance costs	1,035.58	1,925.35	-889.77	-46.21%
Non-operating income	9,049.32	3,773.36	5,275.96	139.82%

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During the reporting period, the sales scale of the Company continued to expand, and the corresponding expenses also increased when compared to the corresponding period last year; finance costs decreased when compared to the same period last year, mainly due to improvement in financing structures over the same period last year and the reduction in the corresponding interest expense; non-operating income increased when compared to the same period last year, mainly due to the increase in income received as a result of the subsidies.

Analysis on the changes of terms in the statement of cash flows

Uint：RMB (in ten thousand)

		Amount for the corresponding period of last year
	Amount for the reporting period		Increase/decrease in amount	Percentage changes (%)
Items
Cash flows from operating activities	-26,732.07	4,988.73	-31,720.80	-635.85%
Cash flows from investing activities	-6,818.28	-4,867.53	-1,950.75	40.08%
Cash flows from financing activities	32,288.43	15,618.88	16,669.55	106.73%

During the reporting period, the sales scale of the Company increased and the peak season for sales is approaching. Thus, raw materials and inventory reserves increased for the preparation of stocks for the peak season, and there was corresponding increase in funding needs.

3.2 Development of significant matters and analysis of their impacts and solutions

√ Applicable □Not applicable

3.2.1 EXPLANATION GIVEN BY THE BOARD OF THE COMPANY ON THE CHANGES AND TREATMENT OF THE MATTERS RELATING TO THE QUALIFIED OPINIONS IN THE 2010 FINANCIAL REPORT ：

BDO CHINA LI XIN DA HUA Certified Public Accountants CO., LTD issued an auditor’s report with qualified opinion for the 2010 financial report of the Company. The Board of the Company has given detailed explanation on the matters relating to the auditor’s opinion in the 2010 annual report, details of which can be found in the 2010 annual results announcement of the Company published on the website of the Stock Exchange (http://www.hkex.com.hk) on 30 March 2011. As at the date of this report, there was no real progress in relation to such matters.

3.2.2 Funds Embezzled For Non-operating Purposes and Their Settlement Progress

Details of Funds Embezzled For Non-operating Purposes and Their Settlement can be found in the 2010 annual results announcement of the Company published on the website of the Stock Exchange (http://www.hkex.com.hk) on 30 March 2011. The Company is proactively facilitating the

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execution of the judgments that have come into force by the relevant judiciary authorities. As at the date of this report, there was no real progress in relation to such matters.

3.2.3 Material litigations and arbitrations of the Company

There is one outstanding material litigation or arbitration of the Company and its subsidiaries with the amount in dispute exceeding RMB10,000,000 as at the date of this report, the basic information of which are as follows:

	Amount in dispute (RMB ten thousand)
Name of case		Particulars of the case	Status
Hisense Ronshen(Guangdong) Refrigerator Co Ltd. against Xi’an Kelon Cooling Co., Ltd. in relation to a sale and purchase contract	9998.41	Since February 2004, Ronshen Refrigerator has repeatedly provided Xi’an Kelon fundings and prepayments in an aggregate amount of RMB89,184,085.06 to support the latter’s production. The two parties later entered into a repayment agreement, but Xi’an Kelon has failed to perform such agreement. Therefore, Ronshen Refrigerator initiated the proceedings in the Foshan Intermediate Court, demanding Xi’an Kelon to refund the payment for goods and the related expenses.	In December 2008, the Foshan Intermediate Court dismissed the claim due to insufficiency of factual and legal evidence. Ronshen Refrigerator made an appeal. The Guangdong Province Higher Court has revoked the judgment of the Foshan Intermediate Court (Fo Zhong Fa Min Er Zi No. 88 (2007)) and the case was to be re-tried by the Foshan Intermediate Court. The case has been re-opened at the Foshan Intermediate Court for re-trial in February 2011. At present, this case is beingheard.

3.3 Performance of undertakings given by the Company, shareholders and controlling parties

√ Applicable □ Not Applicable

In 2010, the Company completed the significant assets reorganization, and Qingdao Hisense Air-Conditioning Company Limited, the controlling shareholder of the Company, has given undertakings in respect of avoidance of competition in the industry, regulation and minimization of connected transactions, maintenance of the independence of the listing company and the lock-up period for additional shares received under this reorganization. Details are available in the “Announcement on shareholder undertakings in relation to the non-public issue of shares” published by the Company on http://cninfo.com.cn on 9 June 2010. The above undertakings are currently being performed by Qingdao Hisense Air-Conditioning Company Limited.

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3.4 Warnings and explanations of any forecasted losses or significant changes to accumulated net profit from the beginning of the year to the end of next reporting period compared to the same period last year.

□Applicable √Not Applicable

3.5 Other material matters required to be disclosed

3.5.1 Information about securities investment √Applicable □Not Applicable

							Perce ntage to total
						Carrying		Profit or loss for the reporting period (RMB：in ten thousand)
					Shareholdin g at the end	amount at	securit
				Initial investment		the end of	ies
No.	Type of	Stock	Abbreviated	amount (RMB：in	of the	the period	invest
	securities	code	name	ten thousand)	period (share)	(RMB：in ten thousand)	ment at the end of the period (%)
	Stock	000404	Huayi Compressor Company Limited	4,776.13	23,979,569	5,381.74	100%	(39.07)
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In order to supplement the Company’s need for cash flow during the course of its normal production and operational activities, the Company disposed of part of the shares of Huayi Compressor held by it in a total of 3,051,063 shares during the reporting period. The corresponding cost of long-term equity investment of RMB6,074,600 was released and an investment gain of RMB21,295,000 was recognised.

3.5.2 Table setting out the reception activities in respect of research, communications and visits during the reporting period

√ Applicable □ Not Applicable

Time of reception	Place of reception	Way of reception	Subject of reception	Major topics discussed and information provided
13 January 2011	The Company	On-site visit	China International Capital Corporation (Hong Kong) Securities Limited, Race Investments, Greenwoods Asset Management Limited, CEPHEI Investments	Major topics discussed included: Production and operation of the Company;

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19 January 2011	The Company	On-site visit	Sinolink Securities Co.,LTD, Beijing Gao Hua Securities Company Limited	Future development of the Company; Conditions of the Company after the reorganization; Sales and network distribution of the Company. Information provided: Nil
21 January 2011	The Company	On-site visit	FIL Investment Manage ment (HongKong) LTD
22 February 2011	The Company	On-site visit	CITIC Securities Co., Ltd., Baoying Fund Management Co., Ltd., Guangfa Securities Co., Ltd., Hongyuan Securities Co., Ltd., Guangdong New Value Investment Co., Ltd.

3.5.3Other significant matters

□Applicable √Not applicable

(1) During the reporting period, there was no provision of fund to the controlling shareholder or its associates or external guarantees provided in violation of the required procedures;

(2) During the reporting period, there was no proposal or implementation of increases in shareholding by the major shareholder of the Company and its parties in concert;

(3) During the reporting period, there was no major contract in the ordinary course of operation that would be discloseable under the relevant requirements and guides of the stock exchanges.

3.6 Derivatives investment

√ Applicable □ Not Applicable

The derivatives business of the Company mainly represents the foreign exchange derivatives business used to avoid the risk of foreign exchange fluctuations related to the overseas sales receivables. The Company determines a reasonable range of foreign exchange rates to achieve the hedging Risk analysis of positions in derivatives during the purpose. reporting period and explanations of risk control measures (including but not limited to market risk, The Company has formulated the “Management liquidity risk, credit risk, operation risk, legal risk Measures for the Foreign Exchange Capital etc.) Business”. The measures specifically regulate the basic principles, operation rules, risk control measures and internal controls that shall be followed when engaging in the business of the foreign exchange derivatives. In respect of actual business management, the Company manages the derivatives business before, during and after the operation based

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on the management measures for the derivatives business.

The assessment of the fair value of the derivatives carried out by the Company mainly represents the outstanding foreign exchange forward contracts Changes in market price or product fair value of entered into by the Company and banks, which are invested derivatives during the reporting period, recognized as transactional financial assets or where specific methods and relevant assumptions liabilities based on the difference between the and parameters used shall be disclosed in the quotation of the outstanding foreign exchange analysis of derivatives’ fair value forward contracts and the forward exchange rate as at the end of the period. During the reporting period, the Company recognized a gain of fair value changes of the derivatives of RMB3.8921 million.

Explanations of any significant changes in the During the reporting period, there were no material Company’s accounting policies and specific changes in the accounting policy and specific accounting and auditing principles on derivatives accounting and auditing principles for the between the reporting period and the last reporting Company’s derivatives business as compared to last period reporting period.

The opinion of the independent directors: Starting the foreign exchange derivatives business by the Company enables the Company to avoid the risk of Specific opinions of independent Directors, foreign exchange fluctuations. The Company has sponsor or financial advisor on the derivatives formulated the “Management Measures for the investment and risk control of the Company Foreign Exchange Capital Business”, which have adopted targeted risk control measures that are practicable.

3.6.1 Positions in derivatives investment at the end of the reporting period

√ Applicable □ Not Applicable

Unit: RMB (in ten thousand)

			Gain or loss	Percentage of
			during the	contract amount at
	Contract amount at	Contract amount at	reporting period	the end of the period
Type of contract	the beginning of	the end of the		to net assets of the
	the period	period		Company at the end
				of the reporting
				period
Foreign exchange	138,989.87	270,785.08	389.21	417.79%
derivatives contracts
Total	138,989.87	270,785.08	389.21	417.79%

§ 4 Auditor’s Opinion: Unaudited

This quarterly report is prepared in Chinese and English respectively. In case of inconsistency, the Chinese text of this quarterly report shall prevail over its English text.

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By order of the Board of

Hisense Kelon Electrical Holdings Company Limited Tang Ye Guo Chairman

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, and Mr. Cheung Yui Kai, Warren and Mr. Wang Ai Guo.

Foshan City, Guangdong, the PRC, 28 April 2011

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