Luen Thai Announces Another Record Revenue for 2008

Dear Luen Thai Team Members, Partners and Stakeholders,

I am pleased to report that based on our annual results announced last April 17, Luen Thai has posted another record revenue increase of 3.9% (approximately US$832,000,000) for the year ended 31 December 2008 compared to approximately US$800,877,000 recorded from the previous year.

The increase was a result of our value-enhancing acquisition which was in line with our expansion strategies and strong customer relationship.

Our enduring business model, along with our value-enhancing acquisitions and customer relationship, has enabled us to thrive even in this most challenging situation.

The company's profit before tax in 2008 was approximately US$21,960,000. The profit attributable to the equity holders of the company for the year ended was approximately US$11,829,000 representing an approximate 5.5% decrease over that recorded in 2007.

Geographically, we have been successful in our diversification efforts. Although the US market still remains our key export market, it has been reduced to 44.1% in 2008 compared to 74.3% when we first listed in 2004 on the Stock Exchange of Hong Kong. This is especially important in view of the weak US consumer market. Europe continued to be the second largest export market and fastest growing followed by the PRC. Thus, as we continuously reduce our over reliance on a single market, we will also continuously participate in the mainland China local sales market as well as focus on our expansion plans for the Japanese market in 2009.

On the production side, Luen Thai has also diversified its production bases and outsourcing platforms to reduce its over reliance on mainland China. The mainland China, the Philippines, Indonesia, India and Bangladesh are some of our major production bases/outsourcing platforms in 2008.

Another strategy which has proven to be an important growth driver is our commitment to strengthen our apparel manufacturing and supply chain capabilities by way of selective value-enhancing acquisitions and joint ventures.

In June 2008, Luen Thai acquired a 60% equity stake in Trinew Group (Desk Top Limited). Trinew Group formally became one of our subsidiaries in August 2008. As we all know, Trinew is a leader in the manufacturing of laptop bags, fashionable bags and general bags products. Our partnership with Trinew has further enhanced our product range and services to our valued customers.

Given the current market situation, Luen Thai is still making progress as an industry consolidator. With our strengths such as value-enhancing acquisitions, customer relationship, and strong financial base, we are well positioned to mitigate the uncertainties of our industry.

Our management also takes a conservative and cautious view in 2009. We will continue to evaluate acquisition opportunities but will be more selective given the situation.

Although the global financial turmoil continues to cloud our markets, I am optimistic in the long term and believe that Luen Thai will win.

I'm counting on you in working with me and our management team to make it happen.

Sincerely yours,

Henry Tan
CEO