Chairman's Statement

Dear Shareholders,

On behalf of the Board, I am pleased to present JEPHoldings Ltd.'s ("JEP", together with its subsidiaries, collectively the "Group") Annual Report for the financial year ended 31 December 2025 ("FY2025"). The Group delivered an improved earnings despite a challenging global environment and market uncertainties, with net attributable profit increasing by 7.2% to S$3.4 million on revenue of S$53.8 million.

Notwithstanding the marginal drop in revenue compared to FY2024, the Group grew its profitability through stronger contributions from the Precision Machining segment, together with disciplined cost management and enhanced operational efficiency. As a result, profit before tax leapt by 13.9% to S$4.2 million, reflecting the Group's continued focus on strengthening operational performance and maintaining financial discipline.

The Precision Machining segment remained the primary driver of the Group's performance in FY2025. Revenue from this segment grew by 14.2% to S$39.0 million, supported by the strong recovery in global semiconductor demand. Semiconductorrelated sales surged significantly during the year, while aerospace sales moderated slightly compared to the previous year. As a result, the segment recorded a substantial improvement in profitability, with profit rising by 71.0% to S$6.2 million in FY2025.

During the year, the Equipment Manufacturing segment recorded a loss as the Group undertook a strategic transition away from lower-margin activities. This included repositioning the segment to support front-end semiconductor manufacturing, including specialised plastic machining fabrication. While this transition affected short-term performance, it represents an important step in strengthening the Group's long-term capabilities and positioning the business to capture opportunities in higher-value industry sectors.

The Group's financial position remains robust. Net cash generated from operating activities increased significantly to S$15.5 million in FY2025. During the year, the Group invested more than S$20.0 million in property, plant and equipment to upgrade and expand its automation facilities in Singapore. These investments will boost the Group's technological capabilities and market share to support future growth.

Outlook and Strategies

Looking ahead, we are optimistic about the long-term prospects of the aerospace and semiconductor industries. Both sectors are expected to benefit from the rapid advancement of artificial intelligence ("AI") and other emerging technologies.

Against this backdrop, ongoing geopolitical tensions in the Middle East — including the military conflict involving Iran, the United States and Israel — continue to contribute to global uncertainty. The conflict has involved extensive military action and strategic repositioning across the region, with significant humanitarian and economic implications, and has negatively affected global energy and travel markets.

Nevertheless, demand fundamentals in the aerospace and semiconductor sectors remain resilient. According to the International Air Transport Association (IATA), the global airline industry is projected to rake in a record net profit of US$41 billion in 2026, higher than US$39.5 billion expected in 2025. In 2026, globally, the passenger load factor is pegged at a record 83.8% while the net profit margin is expected at 3.9% even as supply chain issues persist. The number of passengers is projected to touch 5.2 billion, around 4.4 % more than 2025. Air cargo volumes are set to rise to 71.6 million tonnes in 2026, buoyed in part by robust e-commerce and semiconductor shipments to support the boom in AI investments.¹

According to the Semiconductor Industry Association (SIA), global semiconductor sales in 2026 are projected to reach roughly US$1 trillion. Semiconductors are the foundation of nearly all modern technology, and emerging technologies like AI, IoT, 6G, autonomous driving, and others will continue to drive robust demand for chips.²

The global semiconductor industry as well as the aviation sector - driven by the diverse range of disruptive AI applications, are on the cusp of a gigacycle of growth.

These trends present significant opportunities for the Group. In the aerospace sector, we will continue to enhance our engineering and machining capabilities to support the growth in aircraft production and maintenance activities. In the semiconductor sector, we are expanding our capabilities to support the production of advanced components, including specialised plastic components used in advanced semiconductor packaging for next-generation AI chips.

The Group has recently established direct engagement with a new key customer for the production of specialised plastic components. Together with our upgraded facilities and strengthened engineering capabilities, this positions the Group to capture emerging opportunities within the global AI ecosystem. We expect the strong industry prospects to have a positive impact on our financial performance in the near future.

Moving forward, the Group will continue to maximize operational synergies with UMS Integration Limited ("UMS") to improve overall performance and seek new business opportunities. Sales to UMS increased in FY2025, reflecting the strengthening and expansion of our collaboration. Barring unforeseen circumstances, the Group is optimistic that its financial performance will remain strong in FY2026.

Appreciation

On behalf of the Board, I would like to express our sincere gratitude to our customers, shareholders, business partners, and suppliers for their continued trust and support throughout the year.

We also extend our heartfelt thanks to the management team and all employees for their dedication and commitment. Their professionalism, diligence, and collaborative spirit remain the driving force behind the Group's achievements and sustained progress.

With our enhanced capabilities, improved operational efficiency, and strong financial position, JEP is wellpositioned to capitalise on emerging opportunities in AI-driven growth and continue delivering long-term value to our shareholders.

Mr. Andy Luong
Executive Chairman and Chief Executive Officer
JEP Holdings Ltd

"The Group has achieved improved earnings, with net attributable profit increasing by 7.2% to S$3.4 million on revenue of S$53.8 million."