Medlive Technology Co., Ltd. — Major Shareholding Notification 2002

May 16, 2002

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

ANNOUNCEMENT

Summary

Further to the announcement made by the Company on 18 April 2002, the Board announces that the transfer by GKG to Shunde Economic of 68,666,667 Legal Person Shares was completed on 22 April 2002 .

The Board further announces that:

(a) GKG transferred 7,036,894 Legal Person Shares held by it, representing approximately 0.71% of the existing issued share capital of the Company, to Shunde Dong Heng on 26 April 2002 pursuant to a court judgement; and

(b) it has been informed by GKG that it entered into a sale and purchase agreement with Shunde Xin Hong on 30 April 2002 pursuant to which GKG agreed to sell to Shunde Xin Hong a total of 57,436,439 Legal Person Shares, representing approximately 5.79% of the existing issued share capital of the Company, for an aggregate consideration of RMB97,641,946.30.

COMPLETION OF THE SHARE TRANSFER BETWEEN GKG AND SHUNDE ECONOMIC

Reference is made to the announcement dated 18 April 2002. GKG and Shunde Economic entered into a sale and purchase agreement dated 15 April 2002, under which GKG sold to Shunde Economic 68,666,667 Legal Person Shares, representing approximately 6.92% of the existing issued share capital of the Company, for an aggregate consideration of RMB 206,000,001. The transfer procedures were completed on 22 April 2002 and immediately thereafter Shunde Economic holds 68,666,667 Legal Person Shares, representing approximately 6.92% of the existing issued share capital of the Company.

THE SHARE TRANSFER BETWEEN GKG AND SHUNDE DONG HENG

GKG transferred 7,036,894 Legal Person Shares held by it, representing approximately 0.71% of the existing issued share capital of the Company, to Shunde Dong Heng pursuant to a court judgement on 26 April 2002. Before such transfer, GKG held 64,473,333 Legal Person Shares. Immediately after the the transfer is completed, GKG held 57,436,439 Legal Person Shares, representing approximately 5.79% of the existing issued share capital of the Company.

THE SHARE TRANSFER BETWEEN GKG AND SHUNDE XIN HONG

The Company has been informed by GKG that it entered into a sale and purchase agreement with Shunde Xin Hong on 30 April 2002 pursuant to which GKG agreed to sell to Shunde Xin Hong a total of 57,436,439 Legal Person Shares, representing approximately 5.79% of the existing issued share capital of the Company, for a consideration of RMB1.70 per Legal Person Share and an aggregate consideration of RMB97,641,946.30. The consideration will be settled by Shunde Xin Hong assuming the debt owed by GKG to Rural Credit. Amongst the Sale Shares, 47,436,439 Legal Person Shares were subject to a freezing order (as previously announced on 13 March 2002) which was released on 17 April 2002 and 10,000,000 Legal Person Shares were subject to a freezing order (as previously announced on 13 March 2002) which was released on 30 April 2002.

The Company has also been informed by GKG that GKG, Shunde Xin Hong and Rural Credit entered into a debt transfer agreement on 30 April 2002 pursuant to which Shunde Xin Hong agreed to assume the debt owed by GKG to Rural Credit in the amount of RMB97,641,946.30 to set off the consideration for the transfer of the Sale Shares by GKG to Shunde Xin Hong.

SHAREHOLDINGS OF GKG AND SHUNDE XIN HONG AFTER COMPLETION

Completion of the above sale and purchase will take place once the parties have completed the relevant share transfer procedures in respect of the Sale Shares. Immediately following completion of the above sale and purchase, GKG will not hold any shares in the Company and Shunde Xin Hong will hold 57,436,439 Legal Person Shares, representing approximately 5.79% of the existing issued share capital of the Company. The total existing issued share capital of the Company remains unchanged.

INFORMATION ON SHUNDE XIN HONG

The Company has received the following information on Shunde Xin Hong:

Shunde Xin Hong was established on 18 March 1998. The company's registered capital is RMB3,000,000. The address of the company is順德市大良區清暉路華蓋市場四樓之五. Shunde Xin Hong's business involves information consultancy work, cleaning services, provision of commercial goods and materials businesses. The legal representative of Shunde Xin Hong is Mr. Su Jian Quan (蘇健權). The company has two shareholders, namely Mr. Su Jian Quan and Mr. Liang Wei Wen (梁偉文).

GKG is not connected with Shunde Xin Hong.

Both of Shunde Dong Heng and Shunde Xin Hong are independent of and not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries and their respective associates.

DEFINITIONS

In this announcement, unless the context requires otherwise, the following terms and expressions shall have the following respective meanings:

"Board" board of directors of the Company;

"Company" Guangdong Kelon Electrical Holdings Company Limited (廣東科龍電器股份有限公司), a company incorporated in the People's Republic of China with limited liability, whose H shares are listed on the Hong Kong Stock Exchange and A shares are listed on the Shenzhen Stock Exchange;

"GKG" Guangdong Kelon (Rongsheng) Group Company Limited (廣東科龍(容聲)集團有限公司);

"Legal Person Shares" legal person shares of RMB 1.00 each in the Company;

"RMB" Renminbi, the lawful currency of the People's Republic of China;

"Rural Credit" The Rural Credit Co-operatives of Ronggui, Shunde (順德市容桂農村信用合作社);

"Sale Shares" 57,436,439 Legal Person Shares;

"Shunde Dong Heng" Shunde Dong Heng Development Company Limited (順德市東恒發展有限公司), a company duly incorporated in accordance with the laws of the People's Republic of China;

"Shunde Economic" Shunde Economic Consultancy Company (順德市經濟咨詢公司); and

"Shunde Xin Hong" Shunde Xin Hong Enterprise Company Limited (順德市信宏實業有限公司), a company duly incorporated in accordance with the laws of the People's Republic of China;

By the order of the Board of

Guangdong Kelon Electrical

Holdings Company Limited

Liu Cong Meng

Vice Chairman

Shunde, Guangdong, the People's Republic of China, 15 May 2002

"Please also refer to the published version of this announcement in the Hong Kong i-mail"