Trading Update

TRADING UPDATE

This announcement is made pursuant to Rule 13.09 of the Listing Rules. Johnson Electric Holdings Limited announces details of information which may be covered in discussions with investors and securities analysts prior to its annual results announcement for the financial year ended 31st March 2007.

Johnson Electric Holdings Limited ("Johnson Electric" or "the company") is scheduled to report its annual results for the financial year ending 31st March 2007 on 8th June 2007. Ahead of its annual results announcement (and prior to the finalisation and audit of the accounts for the said financial year), the company may hold discussions with shareholders, investors, and securities analysts in the normal course of its business that may cover aspects of Johnson Electric's performance for the year.

In order to provide greater disclosure to shareholders and potential investors and to ensure they all receive equal access to the same information at the same time, this performance update statement provides details of the information that may be covered in those discussions.

Sales Overview

Based on its performance to date, Johnson Electric expects total Group sales for the twelve months ending 31st March 2007 to increase by approximately 36% over the prior financial year. This increase is primarily due to the full year sales contributions of Saia-Burgess Electronics Holding AG and Parlex Corporation which were acquired in November 2005. Excluding the effects of acquisitions, most of the Group's business units have been recording flat to moderate year-on-year growth rates in a relatively challenging market environment.

Factors impacting Gross Margins

As detailed in Johnson Electric's half-year results announcement in December 2006, the profitability of the Group continues to be affected by high volatility in raw material prices – particularly copper and steel which together represent the largest portion of the Group's materials purchases.

Lower average steel prices compared to the prior year have had a positive effect on the business. Other factors that have had a beneficial impact on gross profitability are increased average selling prices for certain motor products, and the strength of the Euro currency against the US Dollar which has benefited the company's Automotive Products Group in particular. The company also continues to make progress in improving its production efficiency through a variety of operational initiatives including in-sourcing the production of selected components.

Offsetting the above positive factors, the company has been experiencing the negative effects of higher average copper prices compared to the prior year, as well as significant increases in PRC labour rates and the strengthening of the Renminbi currency.

The combination of the above factors, as well as others, is presently expected to result in a slight improvement in the company's gross margins compared to the prior year.

Impact of Business Restructuring and Recent Acquisitions on Net Earnings

The acquisitions of Saia-Burgess Electronics and Parlex have resulted in a number of restructuring initiatives designed to improve the long-term competitive position of these businesses and the expanded Johnson Electric Group. The integration of Saia-Burgess is progressing according to plan with particular attention being focused on improving the performance of its switches operations. On the other hand, Parlex, a flexible printed circuit board manufacturer, has not performed as well as expected, necessitating a strengthening of management processes and controls.

For the financial year ended 31st March 2007, the Group expects to report total restructuring charges and provisions associated with acquisitions, as well as certain other one-time restructuring charges and provisions related to its global manufacturing operations, of approximately US$13 million.

Based on performance trends and information available to date and the combined effects of a full year contribution from recently acquired businesses (including associated amortization and financing costs), one-time restructuring charges, and a slightly higher effective tax rate, it is anticipated that Johnson Electric's profit attributable to shareholders for the financial year ending 31st March 2007 will increase by between 8% and 18% compared to the preceding financial year.

Johnson Electric is scheduled to report its annual results for the financial year ending 31st March 2007 on 8th June 2007.

Forward-Looking Statements

This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities. It may contain certain forward-looking statements with respect to the business and financial performance of the company. These forward-looking statements represent the company's expectations or beliefs, as well as assumptions concerning future events and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.

As at the date of this announcement, the board of directors of the company comprises Patrick Shui-Chung Wang, Winnie Wing-Yee Wang, Richard Li-Chung Wang, being the Executive Directors, and Yik-Chun Koo Wang, Peter Kin-Chung Wang, being the Non-executive Directors, and Peter Stuart Allenby Edwards, Patrick Blackwell Paul, Michael John Enright, Laura May-Lung Cha and Oscar De Paula Bernardes Neto, being the Independent Non-executive Directors.

By Order of the Board
Johnson Electric Holdings Limited
Patrick Wang Shui Chung
Chairman and Chief Executive

29th March 2007