Medlive Technology Co., Ltd. — Interim / Quarterly Report 2017

Apr 13, 2017

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)

2017 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 Ms. Gao Yu Ling, the person in charge of the accounting function and Ms. Liang Hong Tao, 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 2017 first quarterly report.

4. The financial statements of the Company for the first quarter of 2017 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)	7,708,966,633.23	5,765,448,152.85	33.71
Netprofits attributable to shareholders of listed company (RMB)	256,258,113.99	146,360,992.25	75.09
Net profits after deducting non-recurring profit and loss
	245,995,510.99	138,018,516.72	78.23
attributable to shareholders of listed company (RMB)
Net cash flow from operatingactivities(RMB)	-283,670,463.69	-297,155,279.62	N/A
Basic earningsper share(RMB/share)	0.19	0.11	72.73
Diluted earningsper share(RMB/share)	0.19	0.11	72.73
Weighted average rate of return on net assets(%)	5.13	3.55	1.58
			Increase or decrease
		End of the
	End of the reporting		as compared to end
Item		previous financial
	period		of the previous
		year
			financialyear(%)
Total assets(RMB)	20,567,207,249.35	19,055,058,608.32	7.94
Net assets attributable to shareholders of listed company	5,118,903,411.82	4,867,466,177.17
			5.17
(RMB)

Extraordinary profit and loss items and amounts

√Applicable □ Not applicable

Unit: RMB

	Amount from the beginning
Item	of the year to the end of the	Description
	reporting period
Profits or losses from disposal of non-current assets (including the part written off
	-2,165,136.73
forprovision for impairment on assets)
Government grants recognized in the profits or losses of the current period
(excluding government grants closely related to the Company’s business and are
	12,750,511.16
received with fixed amounts or with fixed percentage based on unified standards
promulgated by government)
Other non-operatingincome and expenses other than the aforementioned items	2,700,506.13
Less:Effect of income tax	2,466,627.90
Effect of minorityinterests(after tax)	556,649.66
Total	10,262,603.00	--

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

Unit: shares

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Total number of shareholders of ordinary shares at the end of the 26,090 reporting period

The shareholding of the top ten holders of ordinary shares

Total number of shareholders of ordinary shares at the end of the reporting period	26,090	26,090	26,090	26,090	26,090	26,090	26,090	26,090	26,090	26,090
The shareholdingof the topten holders of ordinaryshares
				Percentage					Situation of
				to the total			No. of		pledged or frozen
							shares
				issued share					shares
		Nature of				No. of	held
Name of Shareholder				capital of
		Shareholder				shares held	subject to
				the					Share
							selling			Quantity
				Company			restrictions		status
				(%)
Qingdao Hisense Air-conditioning Company Limited		State-owned legalperson		40.04		545,632,170	0
HKSCC Nominees LimitedNote1		Foreign legal person		33.62		458,173,069	0
Cental Huijin Investment Ltd.		Domestic non-state-owned legalperson		1.95		26,588,700	0
Zhang Shao Wu		Domestic natural person		0.53		7,200,000	0
China Construction Bank (Asia) Corporation Limited – China Universal Consumer Industries Mixed Securities Investment Fund		Other		0.45		6,199,963	0
China Citic Bank Corporation Limited -- Bank Of Communications Schroder Strategic Return and Flexible Allocation Mixed Securities Investment Fund		Other		0.39		5,369,706	0
Vanguard Investments Australia Limited - Emerging Markets Stock Index Fund(Stock Exchange)		Foreign legal person		0.31		4,168,227	0
Bank of China Limited – Huatai- PineBridge Quantified Enhanced Mixed Type Securities Investment Fund			Other	0.30		4,123,895	0
Industrial and Commercial Bank of China Limited – E Fund Value Selection Mixed Securities Investment Fund			Other	0.29		4,000,000	0
Industrial and Commercial Bank of China Limited – China Universal Outward Growth Stock-Type Securities Investment Fund			Other	0.29		4,000,000	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			545,632,170		RMB ordinaryshares			545,632,170
HKSCC Nominees LimitedNote1			458,173,069		Overseas listed
								458,173,069
					foreign shares
Cental Huijin Investment Ltd.			26,588,700		RMB ordinaryshares			26,588,700
Zhang Shao Wu			7,200,000		RMB ordinaryshares			7,200,000

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China Construction Bank (Asia) Corporation Limited – China Universal Consumer Industries Mixed Securities Investment Fund	6,199,963
			6,199,963
		RMB ordinaryshares
China Citic Bank Corporation Limited -- Bank Of Communications Schroder Strategic Return and Flexible Allocation Mixed Securities Investment Fund	5,369,706
			5,369,706
		RMB ordinaryshares
Vanguard Investments Australia Limited - Emerging Markets Stock Index Fund(Stock Exchange)	4,168,227
			4,168,227
		RMB ordinaryshares
Bank of China Limited – Huatai- PineBridge Quantified Enhanced Mixed Type Securities Investment Fund	4,123,895
			4,123,895
		RMB ordinaryshares
Industrial and Commercial Bank of China Limited – E Fund Value Selection Mixed Securities Investment Fund	4,000,000
			4,000,000
		RMB ordinaryshares
Industrial and Commercial Bank of China Limited – China Universal Outward Growth Stock-Type Securities Investment Fund	4,000,000
			4,000,000
		RMB ordinaryshares

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 97.202 million H shares in total at the end of the Reporting Period, representing 7.13% 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

• √Applicable □ Not applicable Unit: RMB

Balance sheet items	Closing **balance **	Opening **balance **	Change (%)	Reason for the change
Cash at bank and on hand	3,272,006,189.45	2,227,421,330.74	46.90	mainly due to the increase in the receipt from bank wealth management products upon maturity during the Reporting Period, resulting in an increase in bank deposits at the end of the ReportingPeriod
Accounts receivable	3,749,563,698.33	2,725,129,183.33	37.59	mainly due to the increase in scale of sales, resulting in an increase in accounts receivable at the end of the ReportingPeriod accordingly
Prepayments	244,238,833.08	174,049,069.34	40.33	mainly due to the increase in prepayments for materials at the end of the ReportingPeriod
Other receivables	398,626,627.21	245,420,469.20	62.43	mainly due to the increase in export tax rebate receivable at the end of the ReportingPeriod
Other current assets	493,028,240.90	1,678,765,851.25	-70.63	mainly due to the increase in the receipt from bank wealth management products upon maturity during the Reporting Period, resulting in a decrease in receivable from bank wealth management products at the end of the ReportingPeriod
Construction in progress	95,909,283.38	72,942,458.27	31.49	mainly due to the increase in investment in technological transformation of fixed assets during the Reporting Period
Accounts payable	5,425,858,735.53	4,367,268,398.09	24.24	mainly due to the increase in production volume during the Reporting Period, resulting in an increase in purchase and accountspayable accordingly

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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
Operating revenue	7,708,966,633.23	5,765,448,152.85	33.71	mainly due to increased scale of sales for all kinds of products of the Companyduringthe ReportingPeriod
Operating costs	6,236,378,852.26	4,434,666,093.54	40.63	mainly due to increased scale of sales during the Reporting Period, resulting in an increase in operating costs accordingly
Taxes and surcharges	56,723,782.71	17,659,456.02	221.21	mainly because the fund for waste electronic products and other related taxes were included under taxes and surcharges during the Reporting Period, whereas these were included under expenses in the previous period, resultingin ayear-to-year increase
Investment income	154,151,506.95	60,933,991.33	152.98	mainly due to the increase in recognized investment income from the joint venture, Hisense Hitachi, during the ReportingPeriod
Non-operating income	30,344,393.77	14,744,756.50	105.80	mainly due to the increase in government grants received duringthe ReportingPeriod
Statement of cash flow 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
Cash received from sales of goods and rendering of services	5,488,284,731.73	3,620,635,956.46	51.58	mainly due to the increased scale of sales during the Reporting Period and the corresponding increase in receipt from sales
Tax rebates received	218,538,450.61	142,745,597.46	53.10	mainly due to the increase in export tax rebates received duringthe ReportingPeriod
Other cash received concerning operating activities	99,485,764.98	68,791,241.88	44.62	mainly due to the increase in government grants received during the Reporting Period
Cash paid for purchases of commodities and receipt of services	4,135,021,138.12	2,250,503,833.18	83.74	mainly due to the increased scale of sales during the Reporting Period and the corresponding increase in payments forpurchase of materials and etc.
Cash received relating to other investingactivities	2,100,000,000.00	200,000,000.00	950.00	due to the increase in the redeemed wealth management products duringthe ReportingPeriod.
Cash paid relating to other investingactivities	900,000,000.00		N/A	due to the increase in the purchase of wealth management products duringthe ReportingPeriod.
Cash received from borrowings		412,302,006.60	-100.00	due to no loans having been obtained during the ReportingPeriod
Cash paid for repayment of borrowings		263,068,803.48	-100.00	due to no loans having been obtained during the ReportingPeriod
Cash paid relating to other financingactivities	1,046,312,052.86		N/A	mainly due to the increase in the margin deposits during the ReportingPeriod

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

√Applicable □ Not applicable

The Company entered into a framework agreement with Ningbo Meishan Bonded Port Yingmei Investment Management Company Limited (寧波梅山保稅港區盈美投資管理有限公司) ( “Yingmei” ) on 11 January 2017, pursuant to which Yingmei agreed to purchase from the Company the entire equity interest in Foshan City Shunde District Baohong Property Management Company Limited (佛山市順德區寶弘物業管理有限公司) (a wholly-owned subsidiary of the Company) at the consideration of RMB892,560,000.

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3.Undertakings performed in the reporting period or not yet performed by the end of the reporting period by the Company, shareholder(s), beneficial controller(s), acquirer(s), director(s), supervisor(s), senior management or other connected party(ies)

√Applicable □ Not applicable

					Time
	Undertaki	Type of		Time of		Status of
Subject matter of					limit of
	ng	undertakin	Subject matter of undertakings	undertaki		performan
undertakings					undertaki
	party(ies)	gs		ngs		ce
					ngs
			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
	Hisense		Shenzhen Stock Exchange and the Articles of Association
	Company		of the Company based on the market principles of justice,
	Limited		fairness, openness and reasonableness, without
	(“Hisense		prejudicing the interests of the Company and other
	Group”),		shareholders.
Undertakings
	Qingdao		2.The undertaking parties will not exploit their positions
made in report on		Other		12
	Hisense		and controlling influence as the largest shareholders of
acquisition or		undertakin		October	—	Ongoing
	Air-conditi		the Company to induce the Company to provide them
report on changes	oning	gs	with rights which are more favourable than those offered	2005
in shareholding	Company		to third parties in respect of business cooperation and
	Limited		other aspects;
	(“Hisense		3.The undertaking parties will not exploit their positions
	Air-Condi		and controlling influence as the largest shareholders of
	tioning”)		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 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
		Undertaki	corporations have been injected into the Company. There
			is no business competition between the other assets and
		ngs on
	Hisense	business	businesses retained by Hisense Air-Conditioning, Hisense
Undertakings			Group and their controlled corporations and those of the
	Group	competitio
made during	, Hisense	n	Company and its controlled corporations.	9 June	—	Ongoing
asset	Air-Condit	, connected	2.For future development, where Hisense	2010
restructuring	ioning	transaction	Air-Conditioning, Hisense Group and their controlled
		s and use	corporations obtain any business development
		of capital	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 andits controlled

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corporations.

1. 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.

2. Hisense Air-Conditioning and Hisense Group will not exploit their 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.

3. 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 Undertaki Articles of Association of the Company, and abstain from ngs on voting on resolutions in relation to connected transactions Hisense business between related companies and the Company at general Group, competitio meetings and board meetings. 9 June Hisense n, 2. Upon completion of this transaction, connected 2010 — Ongoing Air-Condit connected companies will minimise connected transactions with the ioning transaction Company. In the course of conducting any necessary and s and use unavoidable connected transactions, the Company will of capital 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

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			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.
		Undertaki	Undertaking of maintaining the independence of the listed
		ngs on	company: Hisense Air-Conditioning and Hisense Group
	Hisense	business	undertake that after this material assets disposal, they will
	Group,	competitio	maintain separation with the Company in five aspects,
				9 June
	Hisense	n,	namely personnel, assets, finance, corporate structure and		—	Ongoing
				2010
	Air-Condit	connected	business to ensure the independence of personnel,
	ioning	transaction	independence of assets, independence of finance,
		s and use	independence of corporate structure and independence of
		of capital	business.
Whether the undertakings are timely performed				Yes
Specific reasons for failure inperformance and theplangoingforward				Not Applicable

4. Estimate of operating results for January to June 2017

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. Derivatives investment

Unit: RMB (in ten thousand)

Name	Conn	Whethe	Type of	Initial	Effective	Expiry	Investment			Amo	Investme	Proportio	Actual
of	ectio	r or not	derivatives	investment	Date	Date	at the			unt of	nt at the	n of	amount
opera	n	a	investment	of			beginning			provi	end of	investme	of profit
tors		connect		derivatives			of the	Amount	Amount	sion	the	nt to the	and loss
of		ed		investment			Reporting	of	of	for	Reportin	net asset	during
deriv		transact					Period	purchase	disposal	impai	g Period	of the	the
atives		ion						during	during	rment		Compan	Reportin
invest								the	the	(if		y at the	g Period
ment								Reportin	Reportin	any)		end of
								g Period	g Period			the
												Reportin
												g Period
												(%)
			Forward
Bank	No	No	foreign	56,601.75	1 January	31 March	56,601.75		4,881.44		51,720.31	10.10	351.44
			exchane		2017	2017
			g
			contracts
Total				56,601.75	--	--	56,601.75		4,881.44		51,720.31	10.10	351.44
Source of derivatives investment				Export trade payment
funding
Litigation involved (if				Not applicable
applicable)
Date of the announcement				30 March 2017

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disclosing the approval of derivatives investment by the Board (if any) Date of the announcement -- disclosing the approval of derivatives investment during shareholders’ meetings (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 Risk analysis of positions in Company determines a reasonable range of 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 Exchange Capital control measures (including but Business” and the “Internal Control System for Forward Foreign Exchange Capital Transactions”. not limited to market risk, The measures specifically regulate the basic principles, operation rules, risk control measures and liquidity risk, credit risk, internal controls that shall be followed when engaging in the business of foreign exchange operation risk, legal risk etc.) 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 represents product fair value of invested the outstanding foreign exchange forward contracts entered into by the Company and banks, which derivatives during the Reporting are recognized as transactional financial assets or liabilities based on the difference between the Period, where specific methods quotation of the outstanding foreign exchange forward contracts and the forward exchange rate as at and relevant assumptions and the end of the period. During the Reporting Period, the Company recognized a gain on change in parameters used shall be fair value of the derivatives of RMB0.2908 million. Investment gain amounted to RMB 3.2236 disclosed in the analysis of million, resulting in a total profits or losses of RMB 3.5144 million. derivatives’ fair value Explanations of any significant changes in the Company’s accounting policies and specific During the Reporting Period, there were no material changes in the accounting policies and specific accounting and auditing accounting and auditing principles for the Company’s derivatives business as compared to the last principles on derivatives reporting period. between the Reporting Period and the last reporting period

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

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

□Applicable √ Not applicable

7. Illegal external guarantees

□Applicable √ Not applicable

8. Non-operating use of the capital of the listed company by the controlling shareholder and

its connected parties

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□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

Foshan City, Guangdong, the PRC, 13 April 2017

As at the date of this announcement, the Company’s directors are Mr. Tang Ye Guo, Mr. Liu Hong Xin, Mr. Lin Lan, Mr. Dai Hui Zhong, Mr. Jia Shao Qian and Mr. Wang Yun Li; and the Company’s independent non-executive directors are Mr. Ma Jin Quan, Mr. Xu Xiang Yi and Mr. Wang Xin Yu.

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