Yue Yuen Industrial (Holdings) Limited

PRESS RELEASE

Investor Relations Contacts:
Philip Huang	Viola Cheung
Yue Yuen Industrial (Holdings) Limited	Thomson Financial Investor Relations
Tel: (852) 2370-6438	Tel: (852) 2533 5592
Fax: (852) 2370-3547	Fax: (852) 2140 6423
Email: Philip_Huang@yueyuen.com	Email: viola.cheung@tfn.com.hk

Hong Kong, 20 June 2000 - Yue Yuen Industrial (Holdings) Limited ("the Group"; HKSE: 551) today announced its unaudited consolidated results for the six months ended 31st March, 2000. The unaudited profit attributable to shareholders of Yue Yuen for this period was approximately US$109.5 million, an increase of 14.5% compared to the same period in 1999. Basic earnings per share increased by 8.4% to US15.5 cents. The Board declared an interim dividend of HK40 cents per share.

Growth

The Group registered strong growth for the six months to 31st March, 2000. During this period, overall turnover rose by 15.0%, compared to the previous corresponding period. Growth was driven by several factors, primarily an increase in orders from existing customers and the addition of several casual shoe-brand customers. This was assisted by a rebound in the global branded athletic shoe wholesale market, which registered positive growth in 1999, and a 8.9% rise in the global casual/outdoor shoes wholesale market [figures supplied by Sporting Goods Intelligence (SGI)].

Vertical and Horizontal Expansion

The Group continues to pursue a multi-faceted growth strategy through a combination of vertical and horizontal expansion. Yue Yuen has furthered the vertical integration of its business to upstream footwear material production by teaming up with leading Taiwanese material manufacturers to establish production facilities in China and Vietnam. These facilities will secure a consistent and high quality supply of upstream shoe materials to meet the Group's production requirements. The Group's initial investment in these projects will be approximately US$50 million, to be financed by the proceeds of a private placement of new shares in October 1999.

These investments complement the Group's plans to expand its product base horizontally, most recently through a joint venture with a vulcanized shoe factory in Indonesia.

Looking Forward

"Building on the strong operating results of the first half, and riding on the continued buoyancy of the economic conditions of the major export markets, we are confident that the Group will record satisfactory results for the rest of the year, " said Mr Tsai Chi Neng, Yue Yuen Chairman.

Yue Yuen Industrial (Holdings) Limited (SEHK stock code: 551) is the largest branded footwear manufacturer in the world, with a 14% market share in all of branded athletic and casual footwear. The Group is an original equipment manufacturer / original design manufacturer ("OEM / ODM") for major international name brand companies such as Nike, Adidas, Reebok, Timberland and Rockport. Yue Yuen also produces footwear components for sale to other manufacturers.

In 1988 Yue Yuen was incorporated by the Tsai Family and has been listed on The Stock Exchange of Hong Kong Limited since 1992.

Unaudited Consolidated Results

The Directors hereby state that the Group's interim results for the six months ended 31st March, 2000 are announced in accordance with the requirement set out in the Listing Agreement with The Stock Exchange of Hong Kong Limited.

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