09:58     HUALING<00382> - Announcement (5)                                   

    air-conditioners, refrigerators and mini-refrigerators. The               
    principal business carried on by the Midea Group is the                   
    manufacture and sale of household electrical appliances                   
    including refrigerators and washing machines and the materials            
    and spare parts for the manufacture of the household electrical           
    appliances while the principal business carried on by Midea               
    Electric Group is the manufacture and sale of air conditioners,           
    electric fans, rice cookers and microwave ovens and materials             
    and spare parts for the manufacture of the household electrical           
    appliances.                                                               
                                                                              
    The Continuing Connected Transactions will be conducted in the            
    ordinary and usual course of business of the Group and the                
    Directors believe that the Continuing Connected Transactions              
    can enhance the economy efficacy of the Group, the Midea Group            
    and the Midea Electric Group.                                             
                                                                              
    The Directors (including the independent non-executive                    
    Directors) consider that the terms of Master Agreement A were             
    negotiated between the Company and Midea Ltd. on an arm's length          
    basis and on normal commercial terms and the terms of Master              
    Agreement B were also negotiated between the Company and Midea            
    Electric on an arm's length basis and on normal commercial terms.         
    The Directors (including the independent non-executive                    
    Directors) consider that the terms and conditions of both Master          
    Agreement A and Master Agreement B are fair and reasonable and            
    the Continuing Connected Transactions are in the best interest            
    of the Company and its shareholders as a whole.                           
                                                                              
    DISCLOSURE REQUIREMENTS AND APPROVAL BY THE INDEPENDENT                   
    SHAREHOLDERS                                                              
                                                                              
    Midea Ltd. is the holding company of Midea International, which           
    is the controlling shareholder of the Company. Accordingly,               
    Midea Ltd. is a connected person of the Company and the                   
    transactions between members of the Group and members of the              
    Midea Group constitute connected transactions for the Company             
    under Chapter 14A of the Listing Rules.                                   
                                                                              
    The holding company of Midea Ltd., together with Midea Ltd.,              
    are directly and indirectly interested so as to control the               
    exercise of more than 30% of the voting power of Midea Electric           
    and accordingly, Midea Electric is a connected person of the              
    Company and the transactions between members of the Group and             
    members of the Midea Electric Group constitute connected                  
    transactions for the Company under Chapter 14A of the Listing             
    Rules.                                                                    
                                                                              
    Pursuant to Rules 14A.18 and 14A.35, the Continuing Connected             
    Transactions are subject to the reporting and announcement                
    requirements and the approval by the Independent Shareholders             
    at the EGM. Midea International and its associates will abstain           
    from voting in respect of the ordinary resolutions proposed to            
    approve the Continuing Connected Transactions at the EGM. An              
    independent board committee consisting of Mr. Chan Wai Dune,              
    Mr. Lam Ming Yung and Ms. Chen Chunhua who are the independent            
    non-executive Directors has been appointed to advise the                  
    Independent Shareholders as to whether the Continuing Connected           
    Transactions are in the interests of the Company and are fair             
    and reasonable so far as the Independent Shareholders are                 
    concerned. An independent financial adviser will be appointed             
    to advise the independent board committee on the terms of the             
    Continuing Connected Transactions.                                        
                                                                              
    A circular containing, among other things, information relating           
    to the Continuing Connected Transactions, a letter from the               
    independent financial adviser, the recommendation of the                  
    independent board committee, and a notice convening the EGM will          
    be despatched to the shareholders of the Company as soon as               
    practicable.