Chairman's Statement

Extracted from Annual Report 2006

Dear Stakeholders,

I am pleased to present the annual report of Jurong Technologies Industrial Corpn. Ltd ("Jurong Technologies") for the financial year ended 31 December 2006 ("FY2006"). Despite a challenging operating environment, we have achieved yet another year of increased profits as we continued to develop new avenues of growth.

Net profit attributable to equity holders rose 5.9% to S$70.3 million for FY2006 from S$66.4 million a year ago while revenue declined to S$1.3 billion from S$1.9 billion, respectively. The revenue decline was due to a change in revenue-recognition model from buy-sell to consignment basis for several key wireless programmes. This is a positive development for the Group as it has enabled us to improve profit margins, which rose to 5.5% in FY2006 from 3.5% in FY2005.

Basic Earnings Per Share rose to 15.77 cents in FY2006 from 14.65 cents in FY2005. Net Asset Value backing per share as at 31 December 2006 was 52.2 cents, up from 44.96 cents a year earlier.

In view of the company's continued growth, the Board of Directors has proposed a final dividend of 3 cents per ordinary share, bringing the total dividend declared for FY2006 to 5 cents. This represents a total dividend payout of 32.0% of FY2006 earnings.

Outlook

The Group is entering an exciting phase of development on the back of new customers and businesses in FY2007. The Group's customer base has been widened to include those from the automotive, consumer electronics, PC peripherals, and networking industries. We are able to enter these new markets because of our depth and length of experience in the provision of Electronics Manufacturing Services ("EMS"), as well as our alliances with key technology partners in Taiwan, Korea and China who complement our core competencies.

Whilst developing new markets, the Group continues to establish itself in its core wireless communications business by securing new customers for its wireless PCBA and box-build services whilst enlarging its product portfolio with the introduction of the new wireless accessories business. We have also recorded strong volumes for our Bluetooth modules and expect increasing volumes from new modular products in FY2007.

During the year, we have expanded our production capacity and increased vertical integration in most of our operations. This will enable us to meet the demands of expected higher orders and new businesses in FY2007.

The Group's continued growth could not have been possible without the significant efforts of the management team led by our President and Chief Executive Officer, Mr Lee Lok Fui, and the Group Executive Director, Ms Joyce Lin. It is to their credit that the Group has managed to react well to industry challenges and forged new revenue streams to deliver yet another year of growth.

In view of the continued growth of our core wireless business, larger product portfolio, and more diversified customer base, the Group is confident of achieving yet another positive performance in FY2007.

Acknowledgement

Once again, on behalf of the Board, please accept my sincere thanks and appreciation to all our dedicated management and staff, whose efforts have enabled us to post another year of growth. We will also like to express our gratitude to all shareholders, customers, suppliers, and business associates for their continued confidence and support.

Lee Ying Cheun
Chairman