Medlive Technology Co., Ltd. — Interim / Quarterly Report 2015

Apr 27, 2015

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)

2015 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 (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 Mr. Li Hua, 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 2015 first quarterly report.

4. The financial statements of the Company for the first quarter of 2015 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
		Corresponding	as compared to
Item	Reporting period
		period last year	corresponding
			period lastyear(%)
Operatingrevenue(RMB)	6,430,772,090.41	6,397,939,370.29	0.51
Net profits attributable to shareholders of listed	224,500,108.92	226,645,912.81
			-0.95
company (RMB)
Net profits after deducting non-recurring profit and
loss attributable to shareholders of listed company	90,810,688.39	217,344,190.21	-58.22
(RMB)
Net cash flow from operatingactivities(RMB)	-79,734,934.22	-3,830,889.42	N/A
Basic earningsper share(RMB/share)	0.17	0.17	0
Diluted earningsper share(RMB/share)	0.17	0.17	0
Weighted average rate of return on net assets(%)	5.72	7.92	-2.20
			Increase or decrease
	End of the reporting	End of the previous
Items			as compared to end
	period	financial year
			of lastyear(%)
Total assets(RMB)	15,518,410,060.49	13,266,793,963.74	16.97
Net assets attributable to shareholders of listed	3,653,906,704.56	3,458,363,028.38
			5.65
company (RMB)

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
	129,441,715.09
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
	2,976,874.01
Company’s business and is entitled for fixed amounts or fixed
percentage based on unified standardspromulgated bythegovernment)
Non-operating income and expenses other than the aforementioned
	483,755.73
items
Less: Effect of income tax	-678,614.98
Effect of minorityinterests(after tax)	-108,460.72
Total	133,689,420.53	--

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

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Unit: shares

								Unit: shares	Unit: shares	Unit: shares
Total number of shareholders of
ordinary shares at the end of the								34,306
reporting period
The shareholdingof the topten holders of ordinaryshares
			Percentage					Situation of pledged or
			to the total					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		459,118,768		0
China Huarong Asset Management Co., Ltd.		State-owned legalperson	2.05		27,832,139		0
Zhang Shaowu		Domestic natural person	0.48		6,500,000		0
Zhang YiNote2		Domestic natural person	0.19		2,514,443		0
Wang Yi ChaoNote2		Domestic natural person	0.14		1,950,178		0
Ping An Life Insurance Company of China, Ltd – Traditional – High Interest Rate Insurance ProductNote3		Other	0.12		1,655,600		0
Zhao BinNote 2		Domestic natural person	0.11		1,450,000		0
Yunnan International Trust Co,Ltd.–Ruijin– Huiyingtong No. 68 Single Fund Trust		Other	0.11		1,449,956		0
Ping An Life Insurance Company of China, Ltd - bonus - Personal Universal bonusNote3		Other	0.10		1,420,504		0
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-conditioning Company Limited				612,316,909
						RMB ordinary shares			612,316,909
HKSCC Nominees Limited				459,118,768		Overseas listed
									459,118,768
						foreign shares
China HuarongAsset Management Co.,Ltd.				27,832,139		RMB ordinaryshares			27,832,139
ZhangShaowu				6,500,000		RMB ordinaryshares			6,500,000

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ZhangYi	2,514,443	RMB ordinaryshares	2,514,443
WangYi Chao	1,950,178	RMB ordinaryshares	1,950,178
Ping An Life Insurance Company of China, Ltd – Traditional – High Interest Rate Insurance Product	1,655,600
		RMB ordinary shares	1,655,600
Zhao Bin	1,450,000	RMB ordinaryshares	1,450,000
Yunnan International Trust Co,Ltd.– Ruijin–Huiyingtong No. 68 Single Fund Trust	1,449,956
		RMB ordinary shares	1,449,956
Ping An Life Insurance Company of China, Ltd - bonus - Personal Universal bonus	1,420,504
			1,420,504
		RMB ordinaryshares

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 64,946,000 H shares in total at the end of the Reporting Period, representing 4.78% of the total number of shares of the Company.

2. The 2,514,443 shares of the Company held by Mr. Zhang Yi, a shareholder of the Company, were held through a guaranteed security account for customer credit trading of China Securities Company Limited. The 1,950,178 shares of the Company held by Mr. Wang Yi Chao, a shareholder of the Company, were held through a guaranteed security account for customer credit trading of Guosen Securities Co., Ltd.. The 1,450,000 shares of the Company held by Mr. Zhao Bin, a shareholder of the Company, were held through a guaranteed security account for customer credit trading of China Investment Securities Company Limited.

3. Ping An Life Insurance Company of China, Ltd is the manager of Ping An Life Insurance Company of China, Ltd – Traditional – High Interest Rate Insurance Product and Ping An Life Insurance Company of China, Ltd - bonus - Personal Universal bonus.

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	Closing balance	Opening balance	Change (%)	Reason for the change
Financial assets measured at fair value where changes in fair value are accounted for as gain or loss of theperiod	42,000,069.27	162,460.00	25,752.56	Mainly due to changes in exchange rates for undue forward exchange business at the end of the Reporting Period
Notes receivable	1,642,383,654.95	991,796,937.82	65.60	Mainly due to increase in notes repayment and decrease in endorsement of notes receivable at the end of the Reporting Period

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Accounts receivable	2,781,635,396.97	1,984,291,386.93	40.18	Mainly due to increase in accounts receivable as a result of increase in sales at the end of the ReportingPeriod
Notes payable	2,105,337,857.30	1,528,195,526.41	37.77	Mainly due to increase in notes issued and notes payment at the end of the Reporting Period
Accounts payable	4,931,107,343.59	3,465,854,583.60	42.28	Mainly due to increase in procurement as a result of increase in volume of production and product reserve during the ReportingPeriod
Other comprehensive income	10,899,936.03	39,990,884.45	-72.74	Mainly due to the disposal of shares of Huayi Compressor Company Limited (“Huayi Compressor”) during the Reporting Period which released corresponding other comprehensive income
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
Business taxes and surcharges	15,983,213.55	23,060,876.68	-30.69	Mainly due to corresponding decrease in taxes and surcharges as a result of year-to-year decrease in turnover tax payable duringthe ReportingPeriod
Gain from changes in fair value	49,228,745.93	-83,279,637.42	159.11	Mainly due to changes in undue forward transactions and changes in settlement of due transactions during the Reporting Period
Investment income	165,417,195.72	69,966,702.59	136.42	Mainly due to disposal of shares of Huayi Compressor during the Reporting period which led to an increase in recognized investment income
Income tax expenses	41,617,557.15	5,593,679.63	644.01	Mainly due to increase in the taxable income of the companies
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 taxes and surcharges	216,285,425.80	142,017,285.95	52.30	Mainly due to increase in turnover tax paid duringthe ReportingPeriod
Cash paid for other operatingactivities	793,009,940.65	600,251,028.77	32.11	Mainly due to corresponding increase in expenses as a result of increase in sales
Cash received from borrowings	465,450,933.72	352,783,830.82	31.94	Mainly due to increase in the accounts receivable factoring activities
Cash paid for repayment of borrowings	394,141,316.08	242,859,715.57	62.29	Mainly due to increase in the accounts receivable factoringactivities

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

√Applicable □ Not applicable

On 26 January 2015, the relevant subsidiaries of the Company received the execution judgments of

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(2009) Fo Zhong Fa Zhi Zi No. 236 and (2010) Fo Zhong Fa Zhi Zi No. 32 from the Intermediate People’s Court of Foshan City, Guangdong Province (the “Foshan Intermediate Court”). Pursuant to the execution judgments, the execution procedure of the 2 above mentioned cases have been concluded in accordance with the law. Save and except the execution judgments received in respect of the above mentioned cases, there is 1 case ((2009) Fo Zhong Fa Zhi Zi No. 852 of the Foshan Intermediate Court) which the Company has not yet received execution judgment.

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	Hisense Group,
		Undertakings on avoidance of business	9 June 2010	—	Ongoing
	Hisense

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asset restructuring	Air-conditioning	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 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 Companyand other shareholders,in

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	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 the Company at general
	meetings and board meetings.
	2. Upon completion of this transaction,
	connected companies will minimise
Hisense Group,
	connected transactions with the
Hisense		9 June 2010	—	Ongoing
	Company. In the course of conducting
Air-conditioning
	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

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==> picture [519 x 293] intentionally omitted <==

----- Start of picture text -----

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
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
----- End of picture text -----

4. Estimate of operating results for January to June 2015

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

√Applicable □ Not applicable

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	—	—	—	—	—

In order to better leverage on the shares of Huayi Compressor held by the Company, the Company reduced the shareholding of Huayi Compressor by disposing a total of 20,928,506 shares during the Reporting Period. The corresponding cost of long-term equity investment of RMB81,890,700 was released and an investment gain of RMB135,549,000 was recognised. After the present disposal, the Company no longer holds shares in Huayi Compressor.

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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	221,160.98	1 January	31	221,160.98	-	231,781.31	63.43	4,976.19
			exchane		2015	March 2015
			g
			contracts
Source of derivatives investment				Export trade payment
funding
Litigation involved(if applicable)				Not applicable
Date of the announcement disclosing				26 March 2015
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 49,228,700. Investment
derivatives’ fair value				gain amounted to RMB533,200, resulting in a total profits or losses of
				RMB49,761,900.
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

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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

□Applicable √ Not applicable

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. 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, 27 April 2015

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