Yue Yuen Posts 35.8% Profit Increase for Q1

Yue Yuen Industrial Holdings Limited announced its unaudited consolidated results for the three months ended 31st December, 2003. Turnover and net profit increased year-on-year by 5.4% to US$644.7 million and
35.8% to US$93.9 million respectively.

The Group recorded steady growth in the core footwear manufacturing operations during the period
under review despite a high base of comparison in the corresponding period the pervious year. The
booking of US$23.4 million profit from the disposal of the Group’s entire share holdings of Pou
Chen Corporation in Taiwan contributed to the strong bottom line net profit growth.
Total shoe production during the period amounted to 42.1 million pairs, an increase of 8.7%
compared with the corresponding period the previous year.

Total Turnover by Product Category

For the three 
months ended:             2003          2002       y-o-y
31st December         US$ mm   %    US$ mm   %    % change
Athletic Shoes        409.1   63.4  421.5   68.9   (2.9)
Casual/Outdoor Shoes  111.6   17.3   97.0   15.9   15.1
Sports Sandals         13.3    2.1    --     --     --
Soles & Components     95.2   14.8   88.2   14.4    7.9
Retail Sales - 
Shoes & Apparel        12.6    1.9    4.8    0.8  161.8
Others                  2.9    0.5     --     --    --
Total Turnover        644.7  100.0  611.5  100.0    5.4

Total Turnover by Geographical Market
For the three 
months ended:      2003          2002       y-o-y
31st December   US$ mm   %    US$ mm    %    % change
U.S.A.          240.7   37.3   259.9   42.5   (7.4)
Canada           11.3    1.8    13.3    2.2  (14.6)
Europe          206.1   32.0   183.9   30.1   12.0
South America    13.0    2.0    12.4    2.0    4.6
Asia            156.0   24.2   128.4   21.0   21.5
Other Areas      17.6    2.7    13.6    2.2   29.1
Total Turnover  644.7  100.0   611.5  100.0    5.4

The Group will streamline its asset bases with the disposal of non-core assets and acquisition of
assets related to its core manufacturing operations.

Furthermore, the Group will continue to initiate
measures to capture the opportunity arising from broadening of product mix and exploring of new
market segments in the core footwear operations.

Meanwhile, the Group will push ahead its expansion strategy through mergers and acquisitions
mainly in the areas of upstream raw materials, apparel and China retail sales. The acquisition of a
30.88% interest in and subscription of convertible bonds issued by Eagle Nice (International)
Holdings Limited, an apparel manufacturer listed on the Stock Exchange of Hong Kong Limited, has
demonstrated its commitment in horizontal expansion into sports apparel.

The Group has a comprehensive expansion program and growing strategy in the future. “Leveraging
on its solid footwear manufacturing operations, we will continue to expand the product categories
and to improve productivity despite a fluctuation in raw material prices undermining the profit
margins,” said Mr. Tsai Chi Neng, Chairman of the Group.

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Yue Yuen Posts 35.8% Profit Increase for Q1

Yue Yuen Industrial Holdings Limited announced its unaudited consolidated results for the three months ended 31st December, 2003. Turnover and net profit increased year-on-year by 5.4% to US$644.7 million and
35.8% to US$93.9 million respectively.

The Group recorded steady growth in the core footwear manufacturing operations during the period
under review despite a high base of comparison in the corresponding period the pervious year. The
booking of US$23.4 million profit from the disposal of the Group’s entire share holdings of Pou
Chen Corporation in Taiwan contributed to the strong bottom line net profit growth.
Total shoe production during the period amounted to 42.1 million pairs, an increase of 8.7%
compared with the corresponding period the previous year.

Total Turnover by Product Category

For the three 
months ended:             2003          2002       y-o-y
31st December         US$ mm   %    US$ mm   %    % change
Athletic Shoes        409.1   63.4  421.5   68.9   (2.9)
Casual/Outdoor Shoes  111.6   17.3   97.0   15.9   15.1
Sports Sandals         13.3    2.1    --     --     --
Soles & Components     95.2   14.8   88.2   14.4    7.9
Retail Sales - 
Shoes & Apparel        12.6    1.9    4.8    0.8  161.8
Others                  2.9    0.5     --     --    --
Total Turnover        644.7  100.0  611.5  100.0    5.4

Total Turnover by Geographical Market
For the three 
months ended:      2003          2002       y-o-y
31st December   US$ mm   %    US$ mm    %    % change
U.S.A.          240.7   37.3   259.9   42.5   (7.4)
Canada           11.3    1.8    13.3    2.2  (14.6)
Europe          206.1   32.0   183.9   30.1   12.0
South America    13.0    2.0    12.4    2.0    4.6
Asia            156.0   24.2   128.4   21.0   21.5
Other Areas      17.6    2.7    13.6    2.2   29.1
Total Turnover  644.7  100.0   611.5  100.0    5.4

The Group will streamline its asset bases with the disposal of non-core assets and acquisition of
assets related to its core manufacturing operations.

Furthermore, the Group will continue to initiate
measures to capture the opportunity arising from broadening of product mix and exploring of new
market segments in the core footwear operations.

Meanwhile, the Group will push ahead its expansion strategy through mergers and acquisitions
mainly in the areas of upstream raw materials, apparel and China retail sales. The acquisition of a
30.88% interest in and subscription of convertible bonds issued by Eagle Nice (International)
Holdings Limited, an apparel manufacturer listed on the Stock Exchange of Hong Kong Limited, has
demonstrated its commitment in horizontal expansion into sports apparel.

The Group has a comprehensive expansion program and growing strategy in the future. “Leveraging
on its solid footwear manufacturing operations, we will continue to expand the product categories
and to improve productivity despite a fluctuation in raw material prices undermining the profit
margins,” said Mr. Tsai Chi Neng, Chairman of the Group.

About The Author

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