09:38     HUALING<00382> - Announcement (3)                                   

    In relation to the Continuing Connected Transactions during the           
    period after 11 November 2004 to 31 December 2004 (all of which           
    being orders placed on or before 11 November 2004 and not yet             
    performed and/or completed by the Group as at 11 November 2004),          
    since the applicable percentage ratios and the total                      
    consideration involved are (subject to audit) within the de               
    minimis thresholds under Rule 14A.34 of the Listing Rules, the            
    Continuing Connected 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 Continuing Connected                 
    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. By reference to the             
    volume of purchases made during 2004, the total purchases for             
    a complete year in 2005 or thereafter are expected to exceed              
    the de minimis thresholds under Rule 14A.34 of the Listing Rules.         
    Those future transactions are required to comply with                     
    requirements under Rule 14A.35 of the Listing Rules, such as              
    the requirement to enter into written agreement(s) and the                
    requirement to set a maximum aggregate annual value. The Company          
    proposes to seek approval from the Independent Shareholders in            
    respect of those future transactions, and an independent                  
    financial adviser is proposed to be appointed to advise the               
    independent board committee for the purpose of considering the            
    Continuing Connected Transactions. A further announcement will            
    be made in respect of those future transactions and the                   
    shareholders' approval to be sought.                                      
                                                                              
    4.      DEFINITIONS                                                       
                                                                              
    In this announcement, the following expressions have the                  
    meanings set out below unless the context requires otherwise.             
                                                                              
    "associate(s)"  has the meaning ascribed to it under the Listing          
    Rules                                                                     
                                                                              
    "Board" the board of Directors                                            
                                                                              
    "Continuing Connected   the continuing connected transactions             
    relating to the                                                           
      Transactions" manufacture of goods for, and sale of goods to,           
    subsidiaries of Midea Group Co., Ltd pursuant to the Provisions           
    of OEM Goods Arrangement                                                  
                                                                              
    "Company"       Hualing Holdings Limited, a company incorporated in       
    Hong Kong with limited liability, the shares of which are listed          
    on the main board of the Stock Exchange                                   
                                                                              
    "Directors"     the directors of the Company                              
                                                                              
    "Group" the Company and its subsidiaries                                  
                                                                              
    "HK$"   Hong Kong dollars, the lawful currency of Hong Kong               
                                                                              
    "Hong Kong"     Hong Kong Special Administrative Region of the PRC        
                                                                              
    "Independent Shareholders"      Shareholders other than Midea             
    International and its associates                                          
                                                                              
    "Listing Rules" the Rules Governing the Listing of Securities             
    on the Stock Exchange                                                     
                                                                              
    "Midea Group"   Midea Group Co., Ltd. and its subsidiaries