Medlive Technology Co., Ltd. — Interim / Quarterly Report 2013

Oct 29, 2013

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)

2013 THIRD QUARTERLY REPORT

This announcement is made by Hisense Kelon Electrical Holdings Company Limited (the “Company”) pursuant to Part XIVA of the Securities and Futures Ordinance (CAP.571) and Rules 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

I. IMPORTANT NOTICE

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 legal responsibility for the truthfulness, accuracy and completeness of the information contained herein.

2. Mr. Tang Ye Guo, the person in charge of the Company and Ms. Li Jun, the person in charge of the accounting function and Mr. Yan Zhi Yong, the person in charge of the accounting department, warrant the truthfulness, accuracy and completeness of the contents of the financial statements in this quarterly report.

3. All Directors attended the Board meeting for considering and approving the 2013 third quarterly report.

4. The financial statements of the Company for the third quarter of 2013 have not been audited by accountants.

5. The full text of the Company’s balance sheet, income statement and cash flow statement 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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II. MAJOR ACCOUNTING DATA AND FINANCIAL INDICATORS

Did the Company make retrospective adjustment to or restatement of the accounting data of prior years due to changes in accounting policies and correction of accounting errors?

□Yes √No

				Increase or decrease as	Increase or decrease as
	End of the reporting	End of the previous
Items				compared to the end of the
	period	financial year
				previous financialyear(%)
Total assets (RMB)	12,465,143,445.42	9,200,334,640.73		35.49
Net assets attributable to	2,688,735,535.87	1,512,042,166.49
shareholders of listed company				77.82
(RMB)
		Increase or			Increase or
		decrease as	The beginning of		decrease as
		compared to	the year to the end		compared to
Items	Reporting period
		corresponding	of the reporting		corresponding
		period last year	period		period last year
		(%)			(%)
Operatingrevenue (RMB)	6,677,077,075.99	26.44	19,669,947,100.47		28.99
Net profits attributable to	471,402,106.89		1,178,214,684.34
shareholders of listed company		119.13			98.02
(RMB)
Net profits attributable to
shareholders of listed company after
	357,913,452.42	83.96	1,034,677,081.88		81.78
deducting extraordinary profit and
loss (RMB)
Net cash flow from operating			119,102,850.69
	--	--			-69.08
activities (RMB)
Basic earnings per share	0.35		0.87
		118.75			97.73
(RMB/share)
Diluted earnings per share	0.35		0.87
		118.75			97.73
(RMB/share)
Weighted average rate of return on
	19.22	2.52	56.10		1.88
net assets (%)

Extraordinary profit and loss items and amounts

√Applicable □ Not applicable

Unit: RMB

	Amounts from the
Items	beginning of the year to the	Description
	end of the reporting period
Profits or losses from disposal of non-current assets (including the part
	19,991,223.46
written off forprovision for impairment on assets)
Government subsidy recorded in the profits or losses of the current
period (except government subsidy which is closely related to the
	55,498,660.33
Company’s business and is entitled for fixed amounts or fixed
percentage based on unified standardspromulgated bythegovernment)
Reversal of provision for impairment for receivables that had been
	81,653,135.60
subject to individual impairment assessment

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Non-operating income and expenses other than the aforementioned
	1,991,728.44
items
Less :Effect of income tax	13,151,008.52
Effect of minorityinterests (after tax)	2,446,136.85
Total	143,537,602.46	--

III. Table showing total number of shareholders and the shareholding of the top ten holders of shares at the end of the reporting period

Unit: shares

						Unit: shares	Unit: shares
Total number of shareholders at the end of the reporting period						29,342
The shareholdingof			the topten	holders of shares
			Percentage			Situation of pledged
			to the total			or frozen shares

								Unit: shares	Unit: shares	Unit: shares
Total number of shareholders at
								29,342
the end of the reporting period
	The shareholdingof the topten holders of shares
			Percentage					Situation of pledged
			to the total					or frozen shares
			issued				No. of shares
Name of Shareholder		Nature of	share		No. of shares		held subject
		Shareholder	capital of		held		to selling	Share
										Quantity
			the				restrictions	status
			Company
			(%)
Qingdao Hisense Air-conditioning CompanyLimited		State-owned legalperson	45.22		612,316,909		0
HKSCC Nominees LimitedNote		Foreign legal person	33.88		458,731,058		0
China Huarong Asset Management Corporation		State-owned legalperson	2.22		30,000,000		0
China Construction Bank － Yinhua Wealth Theme Stock Fund		Other	0. 88		11,848,690		0
Industrial and Commercial Bank of China－GF Strategy Selected Mixed Type Fund		Other	0.55		7,490,944		0
Industrial and Commercial Bank of China - CCB Principal Selected Growth Stock-Based Securities Investment Fund		Other	0.52		7,000,000		0
Zhang Shaowu		Domestic natural person	0.47		6,365,400		0
China Construction Bank - China AMC Dividend Mixed Open-End Securities Investment Fund		Other	0.40		5,396,877		0
Zhong Juan Wei		Domestic natural person	0.29		3,910,000		0
National Social Security Fund—Combination 118		Other	0.26		3,461,296		0
The shareholdingof the topten holders of shares not subject to sellingrestrictions
				Number of shares		Class
Name of Shareholder				held not subject to
						Class			Quantity
				sellingrestrictions

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Qingdao Hisense Air-conditioningCompanyLimited	612,316,909	RMB ordinaryshares	612,316,909
HKSCC Nominees LimitedNote	458,731,058	Overseas listed foreign
			458,731,058
		shares
China HuarongAsset Management Corporation	30,000,000	RMB ordinaryshares	30,000,000
China Construction Bank－Yinhua Wealth Theme Stock Fund	11,848,690	RMB ordinary shares
			11,848,690
Industrial and Commercial Bank of China－GF StrategySelected Mixed Type Fund	7,490,944	RMB ordinary shares
			7,490,944
Industrial and Commercial Bank of China - CCB Principal Selected Growth Stock-Based Securities Investment Fund	7,000,000	RMB ordinary shares
			7,000,000
ZhangShaowu	6,365,400	RMB ordinaryshares	6,365,400
China Construction Bank - China AMC Dividend Mixed Open-End Securities Investment Fund	5,396,877	RMB ordinary shares
			5,396,877
Zhong Juan Wei	3,910,000	RMB ordinaryshares	3,910,000
National Social Security Fund--Combination 118	3,461,296	RMB ordinary shares	3,461,296

Note: The shares held by HKSCC Nominees Limited are held on behalf of a number of its account participants, among which, Hisense (Hong Kong) Company Limited, a party acting in concert with the controlling shareholder of the Company, is the holder of 54 million H shares in total at the end of the reporting period, representing 3.99% of the total number of shares of the Company.

IV. SIGNIFICANT MATTERS

1. Details of and reasons for significant changes of the principal accounting items and financial indicators during the reporting period

Unit: RMB

		Amount at the beginning of the period	Increase or decrease (%)
	Amount at the end of the period
Balance sheet item				Reason for change
Financial assets held-for-trading	60,639,846.80	10,678,293.47	467.88	Mainly due to increase in the exchange rate for undue forward transactions during the Reporting Period
Notes receivable	3,041,044,374.14	1,558,766,192.61	95.09	Mainly due to increase in notes received by the Company for the sales peak season during the Reporting Period, and decrease in endorsement of notes receivable under promotion of electronic bill payment by the Company
Accounts receivable	2,120,183,306.01	1,455,882,205.49	45.63	Mainly due to increase in accounts receivable for the sales peak season during the Reporting Period
Others receivables	781,984,577.87	342,722,165.14	128.17	Mainly due to increase in national energy-savingsubsidyreceivable

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				during the Reporting Period
Construction in progress	456,070,593.58	68,344,253.58	567.31	Mainly due to increase in investment of a subsidiary, Hisense (Shandong) Refrigerator Company Limited
Short-term borrowings	89,108,484.51	30,309,453.94	194.00	Mainly due to increase in factoring financing for accounts receivable at the end of the Reporting Period
Accounts payable	3,631,733,629.36	2,335,425,936.47	55.51	Mainly due to increase in accounts payable under increased sales for the sales peak season at the end of the Reporting Period but the period-to-period increase and increase in amount were basically comparable
Taxes payable	-71,526,483.24	-48,994,818.36	N/A	Mainly due to increase in deductible input tax at the end of the Reporting Period
		Amount for the corresponding period lastyear	Increase or decrease (%)
Income statement item	Amount for the current period
				Reason for change
Financial expenses	-7,704,812.64	29,438,105.28	N/A	Mainly due to decrease in interest expenses for the Reporting period
Impairment losses on assets	-68,174,852.47	-1,821,713.11	N/A	Mainly due to the receipt of funds embezzled by the Greencool Companies during the Reporting Period and adjustment of bad debt provisions in the previous period
Gain from changes in fair value	50,125,784.55	-24,138,746.61	N/A	Mainly due to changes in undue forward contracts and draw down upon maturity for the Reporting Period
Investment income	251,971,813.76	182,601,213.56	37.99	Mainly due to increase in net profit of a joint venture company, Qingdao Hisense Hitachi Air-Conditioning Systems Co., Ltd.
Income tax expenses	49,200,181.94	8,470,215.71	480.86	Mainly due to increase in the aggregated sum of profit of all companies
		Amount for the corresponding period lastyear	Increase or
Cash flows statement item	Amount for the current period
			decrease	Reason for change
			(%)
Cash received from sales of goods and rendering of services	9,353,601,448.37	6,405,592,568.84	46.02	Mainly due to increase in payment collected under increased sales
Other cash received concerning operating activities	813,769,756.69	308,308,415.08	163.95	Mainly due to increase in energy-saving subsidy received and receipt of funds embezzled by the Greencool Companies
Cash paid for	6,372,399,004.20	3,651,215,862.69	74.53	Mainly due to increase in

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purchases of commodities and receipt of services				payments for goods for increased procurement under increased sales
Cash paid to and for employees	1,563,555,126.47	1,160,198,554.38	34.77	Mainly due to corresponding increase in labour costs under increased sales
Cash paid for taxes and surcharges	762,342,266.55	546,533,073.37	39.49	Mainly due to increase in tax paid under increased sales
Cash received from returns on investments	73,500,000.00	49,000,000.00	50.00	Mainly due to increase in dividends from a joint venture company, Qingdao Hisense Hitachi Air-Conditioning Systems Co., Ltd.
Net cash received from disposals of subsidiaries and other operation units	-	60,534,178.70	-100.00	Mainly due to proceeds from disposal of subsidiary for the corresponding period, and nil for the Reporting Period
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets	389,727,341.45	124,756,974.66	212.39	Mainly due to increase in investment of a subsidiary, Hisense (Shandong) Refrigerator Company Limited
Cash received from borrowings	234,525,551.11	1,685,164,702.07	-86.08	Mainly due to decrease in financing activities for the Reporting Period
Cash paid for repayment of borrowings	175,706,432.48	1,849,033,191.17	-90.50	Mainly due to decrease in financing activities for the Reporting Period
Cash paid for distribution of dividends, profit or interest expenses	13,394,086.66	28,923,953.61	-53.69	Mainly due to corresponding decrease in interest expenses under decreased financing activities for the Reporting Period

2. Development of significant matters and analysis of their impacts and solutions

On 27 August 2013, the Company and the relevant subsidiaries, received the payment to them from the Intermediate People’s Court of Foshan City, Guangdong Province in the total sum of RMB310.6754 million from execution of the cases involving the Greencool Companies. For details, please refer to the announcement on development of significant litigation issued by the Company on the website of the Stock Exchange (http://www.hkex.com.hk) on 29 August 2013.

3. Undertakings made by the Company or shareholders with shareholding of more than 5% in the reporting period or in previous periods but which have continued in the reporting period

	Undertaking		Time of	Time limit of	Status of
Undertakings		Subject matter of undertakings
	party(ies)		undertakings	undertakings	performance
Undertakings made in report on acquisition or	Hisense	1.After the acquisition of subject shares
			12 October
	Company	by Hisense Air-conditioning, the		—	Ongoing
			2005
	(“Hisense	undertaking partieswould dealwith

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report on changes in shareholding	Group”),	possible connected transactions with the
	Qingdao Hisense	Company in strict compliance with the
	Air-conditioning	relevant laws and regulations, and the
	Company	relevant requirements of China Securities
	Limited	Regulatory Commission, the Stock
	(“Hisense	Exchange, the Shenzhen Stock Exchange
	Air-conditioning	and the Articles of Association of the
	”)	Company based on the market principles
		of justice, fairness, openness and
		reasonableness, without prejudicing the
		interests of the Company and other
		shareholders.
		2.The undertaking parties will not
		exploit its position and controlling
		influence as the largest shareholder of
		the Company to induce the Company to
		provide it with rights which are more
		favourable than those offered to third
		parties in respect of business cooperation
		and other aspects;
		3.The undertaking parties will not exploit
		its position and controlling influence as
		the largest shareholder of the Company
		to seek priority rights in concluding
		transactions with the Company;
		4.The undertaking parties will not
		conduct transactions with the Company
		on terms which are less favourable than
		market prices and will not engage in any
		acts detrimental to the interests of the
		Company through such transactions.
Undertakings made during asset restructuring		Undertakings on avoidance of business
		competition:
		1.Upon the completion of this
		transaction, all white goods-related
		assets and businesses of Hisense
		Air-conditioning, Hisense Group and
		their controlled corporations have been
		injected into the Company. There is no
		business competition between the other
	Hisense Group	assets and businesses retained by
	, Hisense	Hisense Air-conditioning, Hisense Group	9 June 2010	—	Ongoing
		and their controlled corporations and
	Air-conditioning
		those of the Company and its controlled
		corporations.
		2.For future development, where Hisense
		Air-Conditioning, Hisense Group and
		their controlled corporations obtain any
		business development opportunities
		which are suitable for the Company and
		its controlled corporations, the Company
		and its controlled corporations may

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		pursue such development based on their
		needs and Hisense Air-Conditioning,
		Hisense Group and their controlled
		corporations will provide the necessary
		support and assistance to the Company
		and its controlled corporations.
		3. So long as Hisense Air-Conditioning
		is the controlling shareholder of the
		Company and Hisense Group is the
		beneficial controller of Company,
		Hisense Air-Conditioning, Hisense
		Group and their controlled corporations
		will not develop any businesses or
		projects of a nature identical or similar to
		businesses of the Company and its
		controlled corporations in China or
		overseas; and will cease to directly or
		indirectly engage in businesses
		competing with the Company and its
		controlled corporations through setting
		up joint venture, cooperation, joint
		operation or by way of operating leases,
		subcontract and entrusted management
		with any third parties.
		4. Hisense Air-Conditioning and Hisense
		Group will not exploit its direct or
		indirect advantageous shareholding
		position in the Company to engage in
		any acts detrimental to the interests of
		the Company and other shareholders, in
		particular the medium and small
		shareholders.
		5. Where Hisense Air-Conditioning and
		Hisense Group breach the above
		undertakings and guarantees, they will
		immediately terminate businesses
		competing with the Company and its
		controlled corporations and adopt the
		necessary rectification and remedial
		measures; at the same time, they will be
		jointly and severally liable to
		compensate the Company and its
		controlled corporations for all losses and
		consequences resulted from breach of the
		above undertakings and guarantees.
		Undertakings on regulation and
	Hisense Group,
		minimization of connected transactions:
	Hisense		9 June 2010	—	Ongoing
	Air-conditioning	1.Upon the completion of this
		transaction,Hisense Air-conditioning

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		and Hisense Group would continue to
		exercise the rights of shareholders or
		directors and perform the obligations of
		shareholders or directors in strict
		compliance with the laws and regulations
		such as the Company Law, and the
		relevant requirements of the Articles of
		Association of the Company, and abstain
		from voting on resolutions in relation to
		connected transactions between related
		companies and the Company at general
		meetings and board meetings.
		2. Upon completion of this transaction,
		connected companies will minimise
		connected transactions with the
		Company. In the course of conducting
		any necessary and unavoidable
		connected transactions, the Company
		will ensure that they are conducted fairly
		on the basis of market principle and fair
		pricing, and the Company will adopt the
		decision making procedures and perform
		obligation in relation to information
		disclosure in accordance with the
		relevant requirements of the laws and
		regulations, regulatory documents and
		the Articles of Association of the
		Company.
		3. In case Hisense Air-Conditioning and
		Hisense Group breach the undertakings
		and guarantees, they will be liable for the
		default in accordance with the laws and
		will be jointly and severally liable to
		compensate the Company and its
		shareholders (other than Hisense
		Air-Conditioning) for the losses caused
		therefrom.
Whether the undertakings are
		Yes
timely performed
Specific reasons for failure in
performance and the plan going		Not Applicable
forward

4. Prediction of operating results for 2013

Warnings and explanations of any estimated 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

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□Applicable √ Not applicable

5. Shareholdings in other listed companies by the Company

√Applicable □ Not applicable

			Carrying amount at the end of the period (RMB ten thousand)
				Profit and loss for the reporting period (RMB ten thousand)
	Initial investment cost (RMB ten thousand)	Shareholding percentage in the company（%）			Changes in equity interests for the reporting period (RMB ten thousand)
Stock abbreviation
Huayi Compressor	2,417.14	3.74	7,449.43	512.34	511.27

6. Derivatives investment

Unit: RMB (in ten thousand)

Name of	Connection	Whether	Type of	Initial	Effective	Expiry Date	Investment at	Amount	Investment	Proportio	Actual
operators of		or not a	derivatives	investment	Date		the beginning	of	at the end	n of	amount of
derivatives		connected	investment	amount of			of the Period	provision	of the	investme	profit and
investment		transactio		derivatives				for	Period	nt to the	loss during
		n		investment				impairme		net asset	the
								nt (if any)		of the	reporting
										Company	period
										at the end
										of the
										reporting
										period
										(%)
			Forward
						30
			foreign	1998164	1 Januar		1998164		294941.
Bank	No	No	exchange	,. 6	y 2013	September	,. 6	0	, 96	109.70	6,000.39
			contracts			2013
Source of derivatives investment				Export trade payment
funding
Litigation involved (if applicable)				Not applicable
Date of the announcement disclosing				29 March 2013
the approval of derivatives
investment bythe Board (if any)
Date of the announcement disclosing				27 June 2013
the approval of derivatives
investment during shareholders’
meeting(if any)
Risk analysis of positions in derivatives during the reporting period and explanations of risk control measures (including but not limited to market risk, liquidity risk, credit risk, operation risk, legal risk etc.)				The derivatives business of the Company mainly represents the forward foreign exchange contracts 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 purpose. The Company has formulated the “Management Measures for the Foreign Exchange Capital Business” and “the Internal Control System for Forward Foreign Exchange Capital Transactions”. The measures specifically regulate the basicprinciples,operation rules,risk control measures and internal controls that

The derivatives business of the Company mainly represents the forward foreign Risk analysis of positions in exchange contracts used to avoid the risk of foreign exchange fluctuations related derivatives during the reporting to the overseas sales receivables. The Company determines a reasonable range of period and explanations of risk foreign exchange rates to achieve the hedging purpose. control measures (including but not limited to market risk, liquidity risk, The Company has formulated the “Management Measures for the Foreign credit risk, operation risk, legal risk Exchange Capital Business” and “the Internal Control System for Forward etc.) Foreign Exchange Capital Transactions”. The measures specifically regulate the basic principles, operation rules, risk control measures and internal controls that

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==> picture [164 x 51] intentionally omitted <==

shall be followed when engaging in the business of foreign exchange derivatives. In respect of actual business management, the Company manages the derivatives business before, during and after the operation based on the management measures for the derivatives business.

The assessment of the fair value of the derivatives carried out by the Company Changes in market price or product mainly represents the outstanding foreign exchange forward contracts entered fair value of invested derivatives into by the Company and banks, which are recognized as transactional financial during the reporting period, where assets or liabilities based on the difference between the quotation of the specific methods and relevant outstanding foreign exchange forward contracts and the forward exchange rate as assumptions and parameters used at the end of the period. During the reporting period, the Company recognized a shall be disclosed in the analysis of gain on change in fair value of the derivatives of RMB 50,125,800. Investment derivatives’ fair value gain amounted to RMB 9,878,100, resulting in a total profits or losses of RMB60,003,900.

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

Opinion of independent directors: Commencement of foreign exchange derivatives business by the Company was beneficial to the Company in the Specific opinions of independent prevention of exchange rate fluctuation risks. The Company has devised the Directors on the derivatives Internal Control System for Forward Foreign Exchange Capital Transactions to investment and risk control of the strengthen internal control and enhance the management of foreign exchange Company risks by the Company, and the targeted risk control measures adopted were practicable.

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

			Type of		Major topics discussed
Time of	Place of	Mode of
			subjects of	Subjects of reception	and information
reception	reception	reception
			reception		provided
					Major topics discussed
				DACHENG FUND MANAGEMENT	included:
	Conference			CO.,LTD,	Current operation and
26 July	room of the	Site visit	Institutions	Fuh Hwa SITE Asset Management (Hong	future development
2013				Kong)Limited,
	Company				plan of the Company.
				GUOTAI JUNAN SECURITIES(HONG
				KONG)LIMITED	Information provided:
					Nil

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.

By order of the Board of

Hisense Kelon Electrical Holdings Company Limited Tang Ye Guo Chairman

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As at the date of this announcement, the Company’s directors are Mr. Tang Ye Guo, Mr. Ren Li Ren, Ms. Yu Shu Min, Mr. Lin Lan, Mr. Xiao Jian Lin and Mr. Gan Yong He; and the Company’s independent non-executive directors are Mr. Xu Xiang Yi, Mr. Wang Xin Yu and Mr. Wang Ai Guo.

Foshan City, Guangdong, the PRC, 29 October 2013

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