10:27     HUALING<00382> - Announcement & Resumption (7)                      

    (d)     the Executive granting Whitewash Waiver to Midea                  
    International and parties acting in concert with it (as defined           
    in the Takeovers Code) and the satisfaction of any condition              
    attached to the Whitewash Waiver granted;                                 
                                                                              
    (e)     the Listing Committee of the Stock Exchange granting or           
    agreeing to grant (subject to allotment) and not having withdrawn         
    or revoked listing of and permission to deal in all the Rights            
    Shares (in their nil-paid and fully-paid forms);                          
                                                                              
    (f)     the filing and registration of all documents relating to the      
    Rights Issue, which are required to be filed or registered with           
    the Registrar of Companies in Hong Kong in accordance with the            
    Companies Ordinance, Chapter 32 of the Laws of Hong Kong;                 
                                                                              
    (g)     the posting of the Rights Issue Documents to Qualifying           
    Shareholders; and                                                         
                                                                              
    (h)     compliance with and performance of all the undertakings and       
    obligations of the Company under the Underwriting Agreement.              
                                                                              
    If any of the conditions of the Rights Issue are not fulfilled            
    or waived on or before Wednesday, 13 July 2005 (or such later             
    time and/or date as the Company and Midea International may               
    determine), neither the Company nor Midea International shall             
    have any rights or be subject to any obligations arising from             
    the Underwriting Agreement and the Rights Issue will not proceed.         
                                                                              
    Reasons for the Rights Issue and the use of proceeds                      
                                                                              
    The Group is principally engaged in the manufacture and sale              
    of household electrical appliances, which include                         
    air-conditioners, refrigerators and mini-refrigerators. As                
    disclosed in the Company's 2004 annual results announcement               
    dated 22 April 2005, the Group recorded a consolidated net loss           
    of approximately HK$629 million for the year ended 31 December            
    2004, and as at 31 December 2004, the shareholders' deficit of            
    the Group amounted to approximately HK$202 million while the              
    Group has already utilized approximately HK$703 million of its            
    total available banking facilities of approximately HK$770                
    million.                                                                  
                                                                              
    In view of the recent financial conditions of the Group and the           
    usage of the banking facilities available to the Group as at              
    31 December 2004 (as disclosed above), the Directors consider             
    it difficult or costly for the Group to seek alternative way              
    of financing. In this connection, to improve the shareholders'            
    equity position of the Group and provide working capital for              
    the Group's operation, the Company proposes to raise                      
    approximately HK$238 million before expenses by issuing the               
    Rights Shares. Upon the full subscription of the Rights Shares,           
    the Company will receive approximately HK$233 million by way              
    of subscription proceeds net of underwriting commission,                  
    professional and other expenses incurred in connection with the           
    Rights Issue. Taking into account of the shareholders' deficit            
    of the Group of approximately HK$202 million as at 31 December            
    2004 and the sales scale of the Group (with the turnover of the           
    Group amounting to approximately HK$1,891 million for the year            
    ended 31 December 2004), the Directors intend to use the net              
    proceeds of the Rights Issue of approximately HK$233 million              
    as general working capital of the Group to allow the Group to             
    restore to a net asset position and to support working capital            
    needs for daily operation of the Group.                                   
                                                                              
    The Directors consider that it is in the best interest of the             
    Company and the Shareholders to raise further capital as general          
    working capital which will be used by