Yue Yuen Industrial (Holdings) Limited saw turnover for the fiscal first quarter ended 31st December, 2006 increase 9.4% to $960.3 million with net profit increasing 5.4% to $93.3 million.

The Group has recorded steady growth in the core footwear manufacturing business during the period under review with a 6.2% year-on-year increase in footwear production volume to 52.6 million pairs. Also, there was improvement in the revenue contribution from sole and component
operations. Turnover from wholesales and retail operations in the Greater China region increased
year-on-year by 26% to US$82 million. Including the Group’s subsidiaries and associate companies,
the Group had about 1,450 self-run and franchised stores/counters in mainland China at the end of

In the first two months of the second quarter of FY2007 (January and February of 2007), the Group
recorded aggregate revenue of $617.5 million, a rise of 11.6% year-on-year. The core footwear
manufacturing business recorded stable volume growth. However, there is constant pressure from
rising labor costs and Yuan appreciation.

“The core footwear manufacturing business has remained stable in the first five months of FY2007.
The Group will continue to invest in China retail operations by expanding the distribution network
and has invested in a couple of projects over the last quarter,” said Mr. Tsai Chi Neng, Chairman of
the Group.