12 DECEMBER 2006 ON ?YONGNAM SEES ORDER BOOK TRIPLING NEXT YEAR"

The Board of Directors of Yongnam Holdings Limited (the ?Company?) refers to the Business

Times article dated 12 December 2006. In the article, various statements were made by the

Chief Executive Office, Mr. Seow Soon Yong (?Mr. Seow?). The Company wishes to clarify the

following queries raised by the Singapore Stock Exchange Securities Trading Limited in its email

of 12 December 2006 as follows:

SGX query 1 : ?Order book should triple next year due to several big infrastructure

projects in the city-state and the Middle East.?

Yongnam?s response : In the interview with Reuters, Mr. Seow stated that he expects to add

new orders of up to $250 million annually for the next three years.

However, this does not imply and should not be construed that the

order book should triple in size next year.

SGX query 2 : ?Yongnam?s intention to move into the Middle East.?

SGX query 5 : ?Expects Middle East to contribute about 25% in the Group?s revenue

in 2007 and more than 45% of the revenue by 2011.?

Yongnam?s response : As stated in Yongnam?s Half Year Statement Announcement made on

10 August 2006, the Group has commenced a new project valued at

$4 million in Dubai and was actively pursuing new business

opportunities in the Middle East. In the interview, Mr. Seow reaffirmed

the Group?s strategy and that the Group is currently pursuing various

projects in the Middle East. Based on current negotiations, Mr. Seow is

cautiously optimistic that the Middle East would contribute about 25%

of the Group?s revenue in 2007 and 45% by 2011.

SGX query 3 : ?Expects to add new orders of up to $250 million annually for the next

three years.?

SGX query 4 : ?Turnover would rise by 50% in 2006 and by about 20% annually in the

next 2 years.?

Yongnam?s response : In Yongnam?s commentary on paragraph 10 of the Half Year

Statement Announcement made on 10 August 2006,

Yongnam stated that ?the economic outlook for the Group looks

promising? and that ?the Group?s order book currently stands at a new

record high of $150 million?.

The Group?s turnover for Financial Year Ended 31 December 2005

was $81.4 million and for Half Year Ended 30 June 2006 was $72.8

million. Mr. Seow at the interview confirmed that turnover for Financial

Year Ending 2006 would rise by 50% or thereabout (i.e. $122.1

million). Based on the promising economic outlook, the order book and

current negotiations, Mr. Seow was also optimistic that turnover would

rise by 20% annually in the next 2 years.