10:30     HUALING<00382> - Announcement & Resumption (12)                     

    outstanding options granted under the 1993 Share Option Scheme.           
                                                                              
    WHITEWASH WAIVER                                                          
                                                                              
    Midea International and parties acting in concert with it are             
    beneficially interested in 670,076,808 Shares, representing               
    42.2% of the issued share capital of the Company as at the date           
    of this announcement. Midea International has undertaken to               
    subscribe for and take up all the Rights Shares pursuant to the           
    terms of the Underwriting Agreement. Therefore, in the event              
    that upon completion of the Rights Issue, no Qualifying                   
    Shareholders will take up any Rights Shares, Midea International,         
    as the underwriter of the Rights Issue, will be required to               
    subscribe for and take up all the Rights Shares that are not              
    subscribed for under the Rights Issue, which will result in Midea         
    International holding more than approximately 3,052 million               
    Shares, representing more than approximately 76% of the enlarged          
    issued share capital of the Company upon completion of the Rights         
    Issue. Accordingly, the underwriting by Midea International will          
    trigger an obligation for Midea International and parties acting          
    in concert with it to make a mandatory general offer under Rule           
    26 of the Takeovers Code for all the Shares not already held              
    by it and parties acting in concert with it.                              
                                                                              
    As at the date of this announcement, other than the 42.2% of              
    the issued share capital of the Company beneficially owned by             
    Midea International and parties acting in concert with it and             
    the Underwriting Agreement entered into by Midea International,           
    Midea International and parties acting in concert with it do              
    not hold any other shares, convertible securities, warrants or            
    options of the Company, or any outstanding derivative in respect          
    of securities in the Company. Midea International and parties             
    acting in concert with it have not acquired any voting rights             
    of the Company and have not dealt in any securities of the Company        
    in the six months prior to the date of this announcement.                 
                                                                              
    An application will be made by Midea International to the                 
    Executive for the Whitewash Waiver pursuant to Note 1 on                  
    dispensations from Rule 26 of the Takeovers Code. The Whitewash           
    Waiver, if granted by the Executive, would be subject to, among           
    other things, the approval of the Independent Shareholders at             
    the EGM by way of poll, which Midea International and parties             
    acting in concert with it will abstain from voting on the relevant        
    resolution. It is a condition precedent to the completion of              
    the Rights Issue that the Whitewash Waiver is granted by the              
    Executive. If the Whitewash Waiver is not granted by the                  
    Executive, the Rights Issue will not proceed.                             
                                                                              
    EXECUTIVE'S CONSENT                                                       
                                                                              
    Midea International became the controlling Shareholder of the             
    Company on 11 November 2004 by acquiring 670,076,808 Shares,              
    representing 42.2% of the issued share capital of the Company             
    as at the date of this announcement. Pursuant to Rule 26.1 of             
    the Takeovers Code, Midea International and parties acting in             
    concert with it had made General Offers for all the issued Shares         
    not already owned or agreed to be acquired by Midea International         
    and parties acting in concert with it and all the outstanding             
    share options on 17 November 2004. The General Offers did not             
    become unconditional and lapsed at 4:00 p.m. on 22 December 2004.         
                                                                              
    Rule 31.1(a) of the Takeovers Code provides that except with              
    the consent of the Executive, where a general offer has been              
    announced but has not become unconditional and has lapsed, the            
    offeror and parties acting in concert with it in the course of            
    the original general offer cannot