Medlive Technology Co., Ltd. — Interim / Quarterly Report 2014

Oct 29, 2014

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)

2014 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 2014 third quarterly report.

4. The financial statements of the Company for the third quarter of 2014 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
				compared to
		End of the previous financial year		the end of the
	End of the
Items				previous
	reporting period			financial
				year(%)
				After
		Before adjustment	After adjustment
				adjustment
Total assets(RMB)	13,783,427,451.91	11,964,709,290.58	11,964,709,290.58	15.20
Net assets attributable to	3,498,119,229.83	2,748,731,080.83	2,748,731,080.83
shareholders of listed company				27.26
(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)	6,591,415,751.54	-1.28	21,988,953,514.02	11.79
Net profits attributable to	102,102,728.56		711,872,414.70
shareholders of listed company		-78.34		-38.36
(RMB)
Net profits attributable to
shareholders of listed company after
	91,341,242.77	-74.48	665,311,052.47	-35.70
deducting extraordinary profit and
loss(RMB)
Net cash flow from operating			564,856,854.37
	--	--		374.26
activities(RMB)
Basic earnings per share	0.08		0.53
		-77.14		-37.65
(RMB/share)
Diluted earnings per share	0.08		0.53
		-77.14		-37.65
(RMB/share)
Weighted average rate of return on
	2.96	-16.26	22.79	-32.19
net assets(%)

Extraordinary profit and loss items and amounts

√Applicable □ Not applicable

Unit: RMB	Unit: RMB	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
	-1,331,508.43
written off forprovision for impairment on assets)

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Government subsidy recorded in the profits or losses of the current
period (except government subsidy which is closely related to the
	38,059,268.03
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
	3,578,014.68
subject to individual impairment assessment
Non-operating income and expenses other than the aforementioned
	18,191,689.51
items
Less: Effect of income tax	10,605,981.09
Effect of minorityinterests(after tax)	1,330,120.47
Total	46,561,362.23	--

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

ordinary shares at the end	of the reporting	of the reporting	period	period
						Unit: shares
Total number of shareholders of
ordinary shares at the end of the						33,925
reporting period
The shareholdingof the			topten holders of ordinary		shares
			Percentage			Situation of pledged
			to the total			or frozen shares
			issued		No. of shares
		Nature of	share	No. of shares	held subject
Name of Shareholder
		Shareholder	capital of	held	to selling	Share
							Quantity
			the		restrictions	status
			Company
			(%)
Qingdao Hisense Air-conditioning CompanyLimited		State-owned legalperson	45.07	612,316,909	0
HKSCC Nominees LimitedNote1		Foreign legal person	33.80	459,109,768	0
China Huarong Asset Management Co., Ltd.		State-owned legalperson	2.21	30,000,000	0
Zhang Shaowu		Domestic natural person	0.48	6,500,000	0
National Social SecurityFund 411		Other	0.38	5,164,954	0
Dacheng Value-added Security Investment FundNote 2		Other	0.31	4,144,439	0
Bank of China – Dacheng Quality Shares Package Security Investment Fund(LOF) Note 2		Other	0.26	3,559,824	0
ICBC – Guangfa Strategic Quality Package Mixed Security Investment Fund		Other	0.26	3,544,334	0
New China Life Insurance Company Ltd.－Traditional － Ordinary Insurance Product -018L-CT001 Shen		Other	0.18	2,499,903	0
ZhangHongTao		Domesticnatural	0.14	1,958,216	0

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	person
The shareholdingof the topten holders of ordinaryshares not subject to sellingrestrictions
			Number of shares		Class
Name of Shareholder			held not subject to
					Class			Quantity
			sellingrestrictions
Qingdao Hisense Air-conditioningCompanyLimited			612,316,909		RMB ordinaryshares			612,316,909
HKSCC Nominees LimitedNote1			459,109,768		Overseas listed foreign
					shares			459,109,768
China HuarongAsset Management Co., Ltd.			30,000,000		RMB ordinaryshares			30,000,000
ZhangShaowu			6,500,000		RMB ordinaryshares			6,500,000
National Social SecurityFund 411			5,164,954		RMB ordinaryshares			5,164,954
DachengValue-added SecurityInvestment FundNote 2			4,144,439		RMB ordinaryshares			4,144,439
Bank of China – Dacheng Quality Shares Package SecurityInvestment Fund(LOF) Note 2			3,559,824
					RMB ordinaryshares			3,559,824
ICBC – Guangfa Strategic Quality Package Mixed SecurityInvestment Fund			3,544,334
					RMB ordinaryshares			3,544,334
New China Life Insurance Company Ltd.－Traditional －Ordinary Insurance Product -018L-CT001 Shen			2,499,903
					RMB ordinaryshares			2,499,903
ZhangHongTao			1,958,216		RMB ordinaryshares			1,958,216

Notes:

1.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 3.97% of the total number of shares of the Company.

2. Da Cheng Fund Management Co., Ltd is the fund manager of both Dacheng Value-added Security Investment Fund and Bank of China – Dacheng Quality Shares Package Security Investment Fund (LOF).

IV. SIGNIFICANT MATTERS

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

• √Applicable □ Not applicable

				Unit: RMB
Balance sheet items	Closingbalance	Openingbalance	Change(%)	Reason for the change
Financial assets held for trading	6,640,451.00	67,115,019.35	-90.11	Mainly due to the changes in exchange rate for undue forward contracts at the end of the reporting period
Accounts receivable	2,280,885,249.97	1,644,771,822.27	38.67	Mainly due to the reporting period being the peak season for sales which led to an increase in accounts receivable, but the extent of year-to-year increase is similar to the

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				increase in the scale of sales
Prepayments	553,418,762.14	352,903,571.02	56.82	Mainly due to an increase in the prepayment for equipment and infrastructure
Construction in progress	393,290,377.40	253,977,558.18	54.85	Mainly due to an increase in the investment in infrastructure
Taxes payable	-34,184,907.05	-156,766,531.00	N/A	Mainly due to increase in sales leading to an increase in taxes payable
Other current liabilities	841,815,908.07	574,037,292.42	46.65	Mainly due to increase in sales leading to an increase in the relevant payables
Income statement items	Balance from the beginning of the year to the end of the reporting period	Balance for the corresponding period last year	Change (%)	Reason for the change
Impairment loss of assets	45,518,201.47	-68,174,852.47	N/A	Mainly due to the adjustment of previous provision for bad debts as a result of the receipt of payment from Guangdong Greencool Enterprise Development Company Limited and other related parties in the corresponding period last year, and smaller amount was affected during the reporting period
Gains from changes in fair value ("-" indicates a loss)	-60,725,650.59	50,125,784.55	N/A	Mainly due to the changes in undue forward transactions and the changes in settlement of due transactions during the reporting period
Income tax expense	106,781,439.20	49,200,181.94	117.03	Mainly due to an increase in taxable income for all companies and a decrease in uncovered loss available for the year
Statement of cash flows items	Balance from the beginning of the year to the end of the reporting period	Balance for the corresponding period last year	Change (%)	Reason for change
Cash paid for the acquisition and construction of fixed assets, intangible assets and other long-term assets	639,693,128.05	389,727,341.45	64.14	Mainly due to an increase in the investment in infrastructure and equipment during the period
Cash received from borrowings	1,041,261,481.61	234,525,551.11	343.99	Mainly due to increase in sum of factoring financing for accounts receivable duringtheperiod
Cash paid for repayment of debts	1,002,670,002.78	175,706,432.49	470.65	Mainly due to increase in repayment of factoringfinancingfor accounts

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receivable during the period

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

□Applicable √ Not applicable

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

√Applicable □ Not applicable

	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 report on changes in shareholding		1.After the acquisition of subject shares
		by Hisense Air-conditioning, the
		undertaking parties would deal with
		possible connected transactions with the
		Company in strict compliance with the
		relevant laws and regulations, and the
		relevant requirements of China Securities
		Regulatory Commission, the Stock
		Exchange, the Shenzhen Stock Exchange
		and the Articles of Association of the
		Company based on the market principles
		of justice, fairness, openness and
		reasonableness, without prejudicing the
	Hisense
		interests of the Company and other
	Company	shareholders.
	Limited
		2.The undertaking parties will not
	(“Hisense
		exploit its position and controlling
	Group”),
	Qingdao Hisense	influence as the largest shareholder of	12 October
				—	Ongoing
	Air-conditioning	the Company to induce the Company to	2005
	Company	provide it with rights which are more
	Limited	favourable than those offered to third
	(“Hisense
		parties in respect of business cooperation
	Air-conditioning
		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	Hisense Group,	Undertakings on avoidance of business
	Hisense	competition:	9 June 2010	—	Ongoing
	Air-conditioning	1.Upon the completion of this

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restructuring		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
		assets and businesses retained by
		Hisense Air-conditioning, Hisense Group
		and their controlled corporations and
		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
		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 the 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.

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	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
	minimization of connected transactions:
	1.Upon the completion of this
	transaction, Hisense Air-conditioning
	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
Hisense Group,
	Company. In the course of conducting
Hisense		9 June 2010	—	Ongoing
	any necessary and unavoidable
Air-conditioning
	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

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		shareholders (other than Hisense
		Air-Conditioning) for the losses caused
		therefrom.
		Undertaking of maintaining the
		independence of the listed company:
		Hisense Air-Conditioning and Hisense
		Group undertake that after this material
		assets disposal, they will maintain
	Hisense Group,
		separation with the Company in five
	Hisense		9 June 2010	—	Ongoing
		aspects, namely personnel, assets,
	Air-conditioning
		finance, corporate structure and business
		to ensure the independence of personnel,
		independence of assets, independence of
		finance, independence of corporate
		structure and independence of business.
Whether the undertakings are
		Yes
timely performed
Specific reasons for failure in
performance and the plan going		Not Applicable
forward

4. Estimate of operating results for 2014

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

□Applicable √ Not applicable

5. Shareholdings in other listed companies by the Company

√Applicable □ Not applicable

Stock code	Stock abbreviation	Initial investment cost (RMB ten thousand)	Shareholding percentage in the company（%）	Carrying amount at the end of the period (RMB ten thousand)	Profit and loss from the beginning of the year to the reporting period (RMB ten thousand)	Changes in equity interests from the beginning of the year to the reporting period (RMB ten thousand)
000404	Huayi Compressor	2,417.14	3.74	8,078.82	602.04	532.22

6. Derivatives investment

Unit: RMB (in ten thousand)

Name	Con nect ion	Wh ethe r or	Type of	Initial	Effective	Expiry	Investment	Amo	Investment	Proportio	Actual
of			derivatives	investment	Date	Date	at the	unt of	at the end of	n of	amount of
opera			investment	amount of			beginningof	provi	theperiod	investme	profit and

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tors not derivatives the period sion nt to the loss during of a investment for net asset the deriv con impai of the reporting atives nect rment Compan period invest ed (if y at the ment tran any) end of sact the ion reporting period (%) Forward 30 foreign 1 January Bank No No exchange 278,543.31 2014 September 278,543.31 237,807.32 67.98 -1,669.15 2014 contracts Source of derivatives Export trade payment investment funding Litigation involved (if Not applicable applicable) Date of the announcement 28 March 2014 disclosing the approval of derivatives investment by the Board (if any) Date of the announcement 27 June 2014 disclosing the approval of derivatives investment during shareholders’ meeting (if any) 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 Risk analysis of positions in sales receivables. The Company determines a reasonable range of foreign exchange rates to derivatives during the achieve the hedging purpose. reporting period and explanations of risk control The Company has formulated the “Management Measures for the Foreign Exchange measures (including but not Capital Business” and “the Internal Control System for Forward Foreign Exchange Capital limited to market risk, Transactions”. The measures specifically regulate the basic principles, operation rules, risk liquidity risk, credit risk, control measures and internal controls that shall be followed when engaging in the business operation risk, legal risk etc.) 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. Changes in market price or The assessment of the fair value of the derivatives carried out by the Company mainly product fair value of invested represents the outstanding foreign exchange forward contracts entered into by the Company derivatives during the and banks, which are recognized as transactional financial assets or liabilities based on the reporting period, where difference between the quotation of the outstanding foreign exchange forward contracts and specific methods and the forward exchange rate as at the end of the period. From the beginning of the year to the relevant assumptions and end of the reporting period, the Company recognized a gain on change in fair value of the parameters used shall be derivatives of RMB -60,725,700. Investment gain amounted to RMB 44,034,200, resulting disclosed in the analysis of in a total profits or losses of RMB-16,691,500. derivatives’ fair value Explanations of any significant changes in the During the reporting period, there were no material changes in the accounting policy and Company’s accounting specific accounting and auditing principles for the Company’s derivatives business as policies and specific compared to last reporting period. accounting and auditing principles on derivatives

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between the reporting period and the last reporting period

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

□Applicable √ Not applicable

8. Impact of the Newly Promulgated or Revised Accounting Standards on the Company’s Consolidated Financial Statements

√Applicable □ Not applicable

(1) According to the requirements of the revised “Accounting Standards for Business Enterprises No. 2 — Long-term Equity Investment”, the Company did not have common control over or significant influence on the investees during the reporting period, and the “long-term equity investments” which were not quoted in the active market and the fair values of which could not be reliably measured having taken into account the “Accounting Standards for Business Enterprises - Recognition and Measurement of Financial Instrument”, the Company’s investment of RMB4,000,000 which was previously accounted for under the long-term equity investments had been transferred to be reported as financial assets available for sale, and the opening balances in the consolidated financial statements were adjusted accordingly, with details as follows:

The impact of changes in the accounting standards with respect to long-term equity investments on the

consolidated financial statements (1)

Unit：RMB

Investee	Basic transaction information	Equity attributable to shareholders of the parent company as at 1 January 2013 (+/-)	31 December 2013	31 December 2013
			Long-term equity investments (+/-)	Financial assets available for sale (+/-)	Equity attributable to shareholders of the parent company (+/-)
Xinjiang Hisense Kelon Electrical Appliances Co., Ltd.* (新 疆海信科龍 電器銷售有	The Company held 2% of the shares of the investee and had no common control over or significant influence on the investee. The investment was not		-100,000.00	+100,000.00

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限公司)	quoted in the active market and its fair value could not be reliablymeasured
Fujian Kelon Air Conditioning Co., Ltd.* (福 建科龍空調 銷售有限公 司)	The Company held 2% of the shares of the investee and had no common control over or significant influence on the investee. The investment was not quoted in an active market, and its fair value could not be reliablymeasured		-100,000.00	+100,000.00
Qingdao Hisense International Marketing Co., Ltd.* (青 島海信國際 營銷股份有 限公司)	The Company held 12.67% of the shares of the investee and had no common control over or significant influence on the investee. The investment was not quoted in an active market and its fair value could not be reliablymeasured		-3,800,000.00	+3,800,000.00
Total			-4,000,000.00	+4,000,000.00

(2) According to the requirements of the revised “Accounting Standards for Business Enterprises 2 - Long-term Equity Investment”, the revised standard provides for the accounting treatment with respect to the changes of other owners' equity other than the investee’s net profit or loss, other comprehensive income and profit distribution under the equity method. The consolidated financial statements of the Company for 2013 were retrospectively adjusted accordingly:

The impact of changes in the accounting standards with respect to long-term equity investment on the consolidated financial statements (2)

Unit: RMB

				Unit: RMB	Unit: RMB
Investee	Basic transaction information	1 January 2013		31 December 2013
		Other comprehensive income（+/-）	Retained earnings （+/-）	Other comprehensive income（+/-）	Retained earnings （+/-）
Huayi Compress or Co. Ltd. (“Huayi Compres sor”*) (華	The investee, Huayi Compressor, issued additional shares to specific investors by way of non-public offering in 2013 which resulted in a decrease in			+23,335,449.54	-23,335,449.54

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意壓縮機 股份有限 公司)	the shareholding of the Company in the investee, which led to diluted earnings
Total				+23,335,449.54	-23,335,449.54

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

As at the date of this announcement, the Company’s directors are Mr. Tang Ye Guo, Ms. Yu Shu Min, Mr. Lin Lan, Mr. Xiao Jian Lin, Mr. Huang Xiao Jian and Mr. Tian Ye; 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 2014

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