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

Apr 24, 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 FIRST 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 and Rules 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

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 first quarterly report.

4. The financial statements of the Company for the first 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
		Corresponding	compared to
Items	Reporting period
		period last year	corresponding
			period last year
			(%)
Operatingrevenue(RMB)	6,397,939,370.29	5,304,927,504.96	20.60
Net profits attributable to shareholders of listed company	226,645,912.81	231,881,797.14
			-2.26
(RMB)
Net profits after deducting non-recurring profit and loss
	217,344,190.21	200,529,622.09	8.39
attributable to shareholders of listed company (RMB)
Net cash flow from operatingactivities(RMB)	-3,830,889.42	-10,242,594.87	N/A
Basic earningsper share(RMB/share)	0.1674	0.1712	-2.22
Diluted earningsper share(RMB/share)	0.1674	0.1712	-2.22
Weighted average rate of return on net assets(%)	7.92	14.26	-6.34
			Increase or
			decrease as
	End of reporting	End of previous
Items			compared to
	period	financial year
			end of last year
			(%)
Total assets(RMB)	13,650,683,554.18	11,964,709,290.58	14.09
Net assets attributable to shareholders of listed company	2,975,618,855.66	2,748,731,080.83
			8.25
(RMB)

Non-recurring profit and loss items

• √Applicable □ Not applicable

Unit: RMB

	Amounts from the
	beginning of the year
Items		Description
	to the end of the
	reporting period
Profits or losses from disposal of non-current assets (including the part written
off forprovision for impairment on assets)	-855,619.62
Government grants recognized in the profits or losses (excluding government
grants closely related to the Company’s business and are received with fixed
amounts or with fixed percentage based on unified standards promulgated by
government)	3,684,062.81
Other non-operatingincome and expenses other than those stated above	7,931,974.56
Less: Effect of income tax	1,886,173.96
Effect of minorityinterests(after tax)	-427,478.81
Total	9,301,722.60	--

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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
								30,578
the end of the reporting period
	The shareholdingof the topten holders of shares
				Percentage				No. of pledged or
				to the total				frozen shares
							No of shares
		Nature of		issued	No. of shares		. held subject
Name of Shareholder				shares of
		Shareholder			held		to trading	Share
				the						Quantity
				Company			moratorium	status
				(%)
Qingdao Hisense Air-conditioning CompanyLimited		State-owned legalperson		45.22	612,316,909		0
HKSCC Nominees LimitedNote 1		Foreign legal person		33.91	459,139,768		0
China Huarong Asset Management Co., Ltd.		State-owned legalperson		2.22	30,000,000		0
China Construction Bank – Yinhua Wealth Theme EquityFund		Other		1.07	14,430,998		0
Zhang Shaowu		Domestic natural person		0.48	6,497,200		0
Bank of China –Harvest Service Value-added Industry Securities Investment Fund		Other		0.45	6,146,841		0
Chen Wei YuNote 2		Domestic natural person		0.24	3,250,409		0
Agricultural Bank of China – Rich Natural Bonus Flexible Configuration Hybrid Securities Investment Fund		Other		0.23	3,053,909		0
China Construction Bank Corporation Limited – Morgan Stanley Huaxin Quality Life Selected Stock Type Securities Investment Fund		Other		0.22	3,000,000		0
Yin Le Yu		Domestic natural person		0.21	2,870,452		0
The shareholdingof the topten holders of shares not subject to sellingrestrictions
			Number of shares not			Class
Name of Shareholder			subject to selling
						Class			Quantity
			restrictions held
Qingdao Hisense Air-conditioning Company Limited			612,316,909			RMB ordinary shares
									612,316,909
HKSCC Nominees LimitedNote 1			459,139,768			Overseas listed foreign
									459,139,768
						shares
China HuarongAsset Management Co., Ltd			30,000,000			RMB ordinaryshares			30,000,000
China Construction Bank – Yinhua Prosperity Theme EquityFund			14,430,998			RMB ordinary shares
									14,430,998

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ZhangShaowu	6,497,200	RMB ordinaryshares	6,497,200
Bank of China –Harvest Service Value-added IndustrySecurities Investment Fund	6,146,841	RMB ordinary shares
			6,146,841
Chen Wei YuNote 2	3,250,409	RMB ordinaryshares	3,250,409
Agricultural Bank of China – Rich Natural Bonus Flexible Configuration Hybrid Securities Investment Fund	3,053,909	RMB ordinary shares
			3,053,909
China Construction Bank Corporation Limited – Morgan Stanley Huaxin Quality Life Selected Stock Type Securities Investment Fund	3,000,000	RMB ordinary shares
			3,000,000
Yin Le Yu	2,870,452	RMB ordinaryshares	2,870,452

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, held 54 million H shares in total at the end of the period, representing 3.99% of the total number of shares of the Company.

2. 3,250,000 shares of the Company held by Mr. Chen Weiyu, a shareholder of the Company, were held through a client credit transaction guarantee securities account at GF Securities Company Limited.

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

Balance sheet items	Closing balance	Opening balance	Percentage increase/dec rease(%)	Reasons for change
Financial assets held-for-trading	2,598,380.00	67,115,019.35	-96.13	Mainly due to fluctuations in exchange rates leading to changes in undue forward transactions duringthe reporting period
Accounts receivable	2,560,252,123.02	1,644,771,822.27	55.66	Mainly due to increase in sales leading to increase in accounts receivable during the reporting period
Prepayments	521,312,569.30	352,903,571.02	47.72	Mainly due to increase in prepayments for materials and equipment
Dividends receivable	88,200,000.00	-	N/A	Mainly due to increase in distribution of dividends from a joint venture, Qingdao Hisense Hitachi Air-ConditioningSystems Co.,Ltd.
Deferred tax assets	49,778,627.85	36,616,861.02	35.94	Mainly due to the continued profitability of the respective subsidiaries and the changes in temporary differences in subsidiaries which are qualified for the provision for deferred tax assets duringthe reporting period
Short-term borrowings	304,043,988.82	191,681,513.02	58.62	Mainly due to increase in the accounts receivable factoringtransactions
Financial liabilities held-for-trading	18,776,933.07	4,645.00	404,139.68	Mainly due to fluctuations in exchange rates leading to changes in undue forward transactions duringthe reporting period

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Accounts payable	4,706,594,499.76	3,480,510,368.16	35.23	Mainly due to scale enhancement and product reserve reasons leading to increase in procurement duringthe reporting period
Income statement items	Amount for current period	Amount for corresponding period lastyear	Percentage increase/dec rease(%)	Reasons for change
Business taxes and surcharges	23,060,876.68	40,903,192.14	-43.62	Mainly due to decrease in turnover tax payable for the reporting period as compared to the corresponding period lastyear
Selling and distribution expenses	914,491,249.01	681,649,066.33	34.16	Mainly due to increase in the scale of sales and market investments duringthe reporting period
Gain from changes in fair value	-83,279,637.42	23,832,400.66	N/A	Mainly due to changes in undue forward transactions for the period and changes in the settlement of due transactions
Cash flow statement items	Amount for current period	Amount for corresponding period lastyear	Percentage increase/dec rease(%)	Reasons for change
Cash paid to and for employees	627,792,657.25	482,652,715.39	30.07	Mainly due to increase in sales leading to correspondingincreases in salaries
Cash paid for acquisition and construction of fixed assets, intangible assets and other long-term assets	150,903,907.04	86,087,392.25	75.29	Mainly due to increase in investment by a subsidiary, Hisense (Shandong) Refrigerator Company Limited
Cash received from borrowings	352,783,830.82	62,714,490.73	462.52	Mainly due to increase in the accounts receivable factoringtransactions
Cash paid for repayment of borrowings	242,859,715.57	92,993,735.33	161.16	Mainly due to increase in the accounts receivable factoringtransactions

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

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

				Time limit
					Status of
	Undertaking		Time of	of
Undertakings		Subject matter of undertakings			performa
	party(ies)		undertakings	undertakin
					nce
				gs
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
	Hisense	transactions with the Company in strict
	Company	compliance with the relevant laws and
	(“Hisense	regulations, and the relevant requirements of
	Group”),	China Securities Regulatory Commission, the
	Qingdao Hisense	Stock Exchange, the Shenzhen Stock
			12 October
	Air-conditioning	Exchange and the Articles of Association of		—	Ongoing
	Company	the Company based on the market principles	2005
	Limited	of justice, fairness, openness and
	(“Hisense	reasonableness, without prejudicing the
	Air-conditioning	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 Companyto induce

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		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 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
	Hisense Group,
		corporations the Company and its controlled
	Hisense	, corporations may pursue such development	9 June 2010	—	Ongoing
	Air-conditioning	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

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		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 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
	Hisense Group,
		the Company at general meetings and board
	Hisense	meetings.	9 June 2010	—	Ongoing
	Air-conditioning	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,

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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. 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 separation with Hisense Group, the Company in five aspects, namely Hisense 9 June 2010 — Ongoing personnel, assets, finance, corporate structure Air-conditioning 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 January to June 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 held by the Company

Stock code	Stock abbreviation	Initial investment cost (RMB ten thousand)	Shareholding percentage in the company （%）	Carrying amount h d	Profit and l f h	Changes in ownership interests for the reporting period (RMB ten thousand)
				at te en	oss or te
				of the id	reporting id
				pero (RMB ten thousand)	pero (RMB ten thousand)
000404	Huayi Compressor Company Limited (“Huayi Compressor”)	2,417.14	3.74	7,773.29	206.11	206.92

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6. Derivatives investment

Unit: RMB (in ten thousand)

Name of	Connection	Whether	Type of	Initial	Effective	Expiry Date	Investment at	Amoun	Investment at	Proportio	Actual
operators of		or not a	derivatives	investment	Date		the beginning	t of	the end of the	n of	amount of
derivatives		connected	investment	amount of			of the period	provisi	period	investme	profit and
investment		transactio		derivatives				on for		nt to the	loss during
		n		investment				impair		net asset	the
								ment (if		of the	reporting
								any)		Company	period
										at the end
										of the
										reporting
										period
										(%)
			Forward
Bank	No	No	foreign	278,543.31	1 January	31	278,543.31		277,835.38	93.37	-5,947.61
			exchane		2014	March 2014
			g
			contracts
Source of derivatives investment				Export trade payment
funding
Litigation involved(if applicable)				Not applicable
Date of the announcement disclosing				28 March 2014
the approval of derivatives
investment bythe Board(if any)
Date of the announcement 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 sales receivables. The Company determines a reasonable range of
Risk analysis of positions in				foreign exchange rates to achieve the hedging purpose.
derivatives during the reporting
period and explanations of risk				The Company has formulated the “Management Measures for the Foreign
control measures (including but not				Exchange Capital Business” and “the Internal Control System for Forward
limited to market risk, liquidity risk,				Foreign Exchange Capital Transactions”. The measures specifically regulate the
credit risk, operation risk, legal risk				basic principles, operation rules, risk control measures and internal controls that
etc.)				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 -83,279,600. Investment
derivatives’ fair value				gain amounted to RMB23,803,500, resulting in a total profits or losses of
				RMB-59,476,100.
Explanations of any significant
				During the reporting period, there were no material changes in the accounting
changes in the Company’s accounting
				policy and specific accounting and auditing principles for the Company’s
policies and specific accounting and
				derivatives business as compared to last reporting period.
auditing principles onderivatives

9

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

	Venue		Type of
		Type of			Major topics discussed
Time of	of		recepti
		recepti		Subject of reception	and information
reception	recepti		on
		on			provided
	on		subject
					Major topics discussed
				CIC International (Hong Kong) Co., Ltd.,	included: current
	Meetin
				Nomura International (Hong Kong) Limited,	operation situation and
	g room
18 February		On-site	Institut	Allianz, DIAM Asset Management (HK)	future strategies of
	of the
2014		study	ion	Limited, Manulife Asset Management,	operation and
	Compa
				BOCI-Prudential Asset Management Limited,	development of the
	ny
				Blackrock, and TPG-Axon Capital	Company. 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

As at the date of this announcement, the Company’s directors are Mr. Tang Ye Guo, Ms. Yu Shu Min, Mr. Lin Lan and Mr. Xiao Jian Lin; 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, 24 April 2014

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