Asia Dekor Releases Annual Results

Singapore, May 23, 2007--Asia Dekor Holdings Limited, a vertically integrated producer and distributor of laminate wooden floor and one of the Asia's leading wood-panel producers, reported its annual results for the year ended 31 March, 2007.

The Group posted strong results for FY2007, which saw turnover rise by 30.5% to RMB749,246,000 (FY2006: RMB574,001,000) and profit attributable to shareholders increase by 36.5% to RMB144,142,000 (FY2006: RMB105,629,000).

Growth of the turnover and net profit during FY2007 was primarily attributed to sales of particleboards (new product) following the commencement of commercial operation of the Huizhou factory and the improvement in the overall operational efficiency in the year under review.

The Group's new product, particleboards, which only commenced mass production in August 2007, achieved remarkable results. During the year under review, approximately 123,000 cubic meters particleboards were sold,

contributing additional revenue of RMB127 million to the Group. Sales of fiberboards to external customers increased significantly by 71.2% from 59,000 cubic meters in FY2006 to 101,000 cubic meters during FY2007.

Sales of laminate wooden flooring products were adversely affected by the impact of the macro-economic controlling measures to cool down the real estate market in China, and as a result, sales volume of the Group's

laminate wooden flooring products decreased from 11.64 million m2 in FY2006 to 10.35 million m2 in FY2007.

During the year under review, gross profit increased significantly by 26.0% to RMB206,421,000 as compared to RMB163,805,000 in FY2006, while the overall gross profit margin decreased from 28.5% in FY2006 to 27.6% in FY2007 owing to a change in the product mix resulting from the introduction of particleboards which is an industrial, semi-finished product with lower margin.

Share Placement

On 3 April 2006, the Group successfully placed out 50,000,000 new ordinary shares of HK$0.15 each to the public at S$0.1425 per ordinary share. During the year, the net proceeds from the placement amounting to

approximately S$6,900,000 was applied to repay a long-term bank loan which was drawn down for financing the construction of the Heyuan factory.

Outlook

The Group expects that the outlook of the laminate wooden flooring business remains challenging. The Chinese government is likely to impose further controlling measures on real estate sector to maintain stability.

The Group will, however, continue to leverage on its strong branding of flooring products and the introduction of innovative products with better quality and design. In addition, the Group will work towards further increasing the export of laminate wooden flooring products. The management expect that the demand of the Group's wood-panel products, HDF and Particleboard, would continue to increase. The Group will undertake appropriate measures to mitigate margin pressure due to increasing wood material prices and chemical costs. The Group is continually seeking out new opportunities to widen its base in related businesses.

Company Background

Asia Dekor Holdings Limited was established in 1994 and listed on the Singapore Stock Exchange in November 1999. A leader in its industry, Asia Dekor is fully vertically integrated in the design, manufacture and sales

and distribution of laminate wooden flooring and related products. Asia Dekor is also well recognised as one of the Asia's leading wood-panel products.

With the completion of the new particleboard factory in March 2006, the Group now has three production facilities in China, located in Shenzhen, Heyuan and Huizhou, with an annual production capacity of 16 million m2 laminate wooden flooring products, 200,000 cubic meters fibreboards, and 200,000 cubic meters particleboards, respectively. Asia Dekor, through a joint venture, has a well- established distribution network with over 1,700 exclusive distribution outlets throughout China.

"Power Dekor", the flagship product of Asia Dekor, is the most recognized brand name in China's wooden flooring market.