09:38     HUALING<00382> - Announcement (1)                                   

    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.                                                             
                                                                              
    HUALING HOLDINGS LIMITED                                                  
    (Incorporated in Hong Kong with limited liability)                        
    (Stock Code: 382)                                                         
                                                                              
    CONTINUING CONNECTED TRANSACTIONS                                         
                                                                              
    The Company announces that the Group has, in the ordinary course          
    of its business, entered into transactions relating to the                
    manufacture of goods for and sale of goods to subsidiaries of             
    Midea Group Co., Ltd., the holding company of Midea International.        
    Immediately following the completion of the Sale and Purchase             
    Agreement on 11 November 2004, Midea International became a               
    substantial shareholder of the Company interested in 670,076,808          
    shares, representing approximately 42.2% of the entire issued             
    share capital of the Company as at the date of this announcement.         
    Accordingly, starting from 11 November 2004, the transactions             
    constitute continuing connected transactions of the Company               
    under the Listing Rules.                                                  
                                                                              
    Since the applicable percentage ratios and the total                      
    consideration involved in those transactions during the period            
    from 11 November 2004 to 31 December 2004 are (subject to audit)          
    within the de minimis thresholds under Rule 14A.34 of the Listing         
    Rules, the transactions are only subject to the reporting and             
    announcement requirements and are exempt from the Independent             
    Shareholders' approval requirements of Chapter 14A of the                 
    Listing Rules. Details of the transactions will be included in            
    the Company's next published annual report and accounts in                
    compliance with Rules 14A.45 and 14A.46 of the Listing Rules.             
                                                                              
    Similar Continuing Connected Transactions are expected to be              
    entered into from 1 January 2005 onwards. For a complete year             
    in 2005 or thereafter, the de minimis thresholds under Rule               
    14A.34 of the Listing Rules are expected to be exceeded. The              
    Company proposes to seek approval from the Independent                    
    Shareholders and that an independent financial adviser will be            
    appointed to advise the independent board committee for the               
    purpose of considering the Continuing Connected Transactions.             
                                                                              
                                                                              
    Reference is made to the announcement dated 11 November 2004              
    jointly made by the Company and Midea International in relation           
    to, among other things, completion of the Sale and Purchase               
    Agreement.                                                                
                                                                              
    1.      THE PROVISION OF OEM GOODS ARRANGEMENT                            
                                                                              
    The Group has, since around late 2002 and in the ordinary course          
    of its business, entered into transactions relating to the                
    manufacture of goods for, and sale of goods to, subsidiaries              
    of the Midea Group pursuant to the Provision of OEM Goods                 
    Arrangement. The goods involved are household electrical                  
    appliances, mainly refrigerators, with the arrangement also               
    involving the provision of their parts.                                   
                                                                              
    On or prior to 11 November 2004, the Midea Group has placed               
    certain purchase orders with the Group pursuant to the Provision          
    of OEM Goods Arrangement, with part of those orders (involving            
    a total sale price of approximately RMB8,500,000 (equivalent              
    to approximately HK$8,018,900)) not yet performed and/or                  
    completed by the Group as at 11