10:28     HUALING<00382> - Announcement & Resumption (8)                      

    the Company to support the Group's business and operation, and            
    the Rights Issue will allow all Qualifying Shareholders the               
    opportunity to maintain their respective pro-rata shareholding            
    interests in the Company.                                                 
                                                                              
    Except for the issuance of 6,000,000 Shares as a result of the            
    exercise of share options of the Company, the Company did not             
    carry out any rights issue, open offer or other issue of equity           
    securities for fund raising purpose or otherwise within the past          
    12 months prior to the date of this announcement.                         
                                                                              
    UNDERWRITING ARRANGEMENTS                                                 
                                                                              
    Underwriting Agreement                                                    
                                                                              
    Date    :       12 May 2005                                               
                                                                              
    Underwriter     :       Midea International, the controlling              
    Shareholder                                                               
                                                                              
    Number of Shares                                                          
      Underwritten  :       1,376,939,400 Rights Shares (Note)                
                                                                              
    Commission      :       2% of the total Subscription Price of the Rights  
    Shares underwritten by Midea International. The commission to             
    be received by Midea International will be approximately HK$2.8           
    million.                                                                  
                                                                              
    Note:   This figure excludes 1,005,115,212 Rights Shares to be            
    provisionally allotted to Midea International in respect of its           
    beneficial shareholding, which it has undertaken to subscribe             
    for in full (assuming that no outstanding share options granted           
    by the Company were exercised on or before the Record Date).              
    In the event that all of the outstanding share options are                
    exercised on or before the Record Date, the number of Rights              
    Shares underwritten by Midea International will be                        
    1,378,379,400.                                                            
                                                                              
    The entering into of the Underwriting Agreement by the Company            
    with Midea International constitutes a connected transaction              
    of the Company under the Listing Rules but is exempted from the           
    reporting, announcement and independent shareholders'                     
    requirements pursuant to Rule 14A.31(3)(c) of the Listing Rules.          
                                                                              
    Under the terms of the Underwriting Agreement, the Company and            
    Midea International agreed that if the conditions of the Rights           
    Issue are fulfilled on or before the Latest Acceptance Date (or           
    such later time and/or date as the Company and Midea                      
    International may determine) and the Underwriting Agreement               
    becomes unconditional and is not terminated in accordance with            
    the terms thereof, Midea International shall subscribe for those          
    Rights Shares which have not been taken up by other Qualifying            
    Shareholders on or before the Latest Acceptance Date by 4:00              
    p.m. on the second Business Day after the Latest Acceptance Date          
    and to pay the relevant Subscription Monies not later than 4:00           
    p.m. on the fourth Business Day after the Latest Acceptance Date.         
                                                                              
    Termination of the Underwriting Agreement                                 
                                                                              
    The Underwriting Agreement contains provisions granting Midea             
    International, by notice in writing, the ability to terminate             
    its obligations thereunder on the occurrence of certain events.           
    Midea International may terminate its commitment under the                
    Underwriting Agreement on or before the second Business Day after         
    the Latest Acceptance Date if:                                            
                                                                              
    (a)     the success of the Rights Issue would be materially and           
    adversely affected by: