09:44     MEDICAL CHI<08186> - Quarterly Results Announcement (2)             

                                                                              
    This financial information also complies with the applicable              
    disclosure requirements of the Rules Governing the Listing of             
    Securities of the Growth Enterprise Market (the "GEM") of                 
    The Stock Exchange of Hong Kong Limited (the "Stock Exchange")            
    (the "GEM Listing Rules").                                                
                                                                              
    The accounting policies and basis of preparation used in the              
    preparation of the unaudited consolidated results are consistent          
    with those used in the Company's annual financial statements              
    for the year ended 31 December 2004.                                      
                                                                              
    TURNOVER                                                                  
                                                                              
    Turnover represents service fees arising from the provision of            
    medical equipment services and related accessories, net of                
    respective taxes; the sale value of testing equipment, net of             
    value added tax, and service fees arising from the provision              
    of medical research and development services, net of business             
    tax.                                                                      
                                                                              
    Pursuant to various agreements with hospitals in the People's             
    Republic of China (the "PRC"), the Group agrees to provide                
    certain medical equipment at the relevant hospitals and in                
    return, share the medical service fees arising from the                   
    utilization of the medical equipment after deducting the                  
    related direct expenses.                                                  
                                                                              
    INCOME TAX                                                                
                                                                              
    No provision for Hong Kong Profits Tax has been made for the              
    three months ended 31 March 2005 (2004: nil) as the Group did             
    not have assessable profits subject to Hong Kong Profits Tax              
    during the period.                                                        
                                                                              
    The Company's subsidiary, Tat Lung Medical Treatment (Shenzhen)           
    Ltd. located in the Shenzhen Special Economic Zone in the                 
    PRC is subject to PRC income tax at a reduced rate of 15%                 
    (2004: 15%).                                                              
                                                                              
    No provision for income tax has been made in respect of the               
    Company's other PRC subsidiaries, China Best Drugs Research               
    (Nanjing) Ltd. , Sinnowa Medical Science &                                
    Technology Co., Ltd.  and China Best Pharmaceutical                       
    (Nanjing) Company Limited , as they did                                   
    not have assessable profits for the three months ended                    
    31 March 2005 determined in accordance with relevant income               
    tax rules and regulations in the PRC.                                     
                                                                              
    No provision has been made for deferred taxation as the Group             
    does not have any material deductible or taxable temporary                
    differences (2004: nil).                                                  
                                                                              
    (LOSS)/EARNINGS PER SHARE                                                 
                                                                              
    (a) Basic (loss) /earnings per share                                      
                                                                              
    The calculation of basic (loss)/earnings per share for the three          
    months ended 31 March 2005 is based on the loss attributable to           
    shareholders of HK$922,000 (2004: profit of HK$828,000) divided           
    by the weighted average number of 835,000,000 (2004: 835,000,000)         
    ordinary shares in issue during the relevant period.                      
                                                                              
    (b) Diluted (loss)/earnings per share                                     
                                                                              
    Diluted (loss)/earnings per share has not been presented as there         
    was no dilutive potential ordinary share in existence during the          
    periods.                                                                  
                                                                              
    DIVIDEND                                                                  
                                                                              
    The Board does not recommend the payment of an interim dividend           
    for the three months ended 31 March 2005 (2004: nil).