SOURCE: China Broadband Inc.

November 24, 2008 14:37 ET

China Broadband Announces Third Quarter 2008 Financial Results

Business Acquisition Increases Gross Revenues by $720,000 to $1.88 Million

NEW YORK, NY--(Marketwire - November 24, 2008) - China Broadband Inc. (OTCBB: CBBD) announces that its Q3 2008 revenues were 80% higher than its previous quarter results, following the acquisition of Shandong Radio & Broadcasting Newspaper Group ("Shandong Group").

The increase in revenues in Q3 2008 was primarily attributed to revenues from the recently acquired (July of 2008) Shandong Group, which resulted in the addition of $720,000 (unaudited) to China Broadband Inc.'s Gross Income. Shandong Group is a China-based publisher of digital and analog television program guides, newspapers and entertainment magazines. It holds the exclusive license to publish television program guides in Shandong Province. The province has the second highest population (about 92 million inhabitants) and the second largest economic region in China in terms of GDP.

Revenue for the third quarter of 2008 was $1.88 million (unaudited) as compared to $1.05 million for the same period last year, an increase of 79%. The increase in aggregate revenue is attributed to both the inclusion of Shandong Group's revenues and the increase in the number of paying subscribers.

"In spite of the worldwide economic slowdown, we are pleased to see growth in our broadband business as we continue with our efforts to integrate and grow our most recent investment, Shandong Radio & Broadcasting Newspaper Group," stated Marc Urbach, President of China Broadband Inc. "The Shandong Group acquisition shows our strong commitment to executing our growth plan. We continue our evolution into what we hope will be one of the strongest media companies in China."

Gross profit for the third quarter of 2008 was $0.93 million (unaudited), as compared to $0.44 million for the same period last year, an increase of $0.49 million or 111%. Gross margin for the third quarter of 2008 was 49.5% (unaudited), as compared to 42.3% for the same period last year. Operating expenses for the third quarter of 2008 were $1.5 million, compared to $1.0 million for the same period last year. Net loss for the third quarter of 2008 was $0.5 million or a loss of $0.01 per share, based on 50.4 million diluted shares. The company experienced an unrealized loss of approximately $1.56 million (unaudited) in accumulated other comprehensive income (loss) as a component of shareholders' equity caused by the decline of the value of its shares "available for sale" marketable securities held by the Company.

The acquisition of Shandong Group and the Company's increased marketing efforts throughout the Jinan region are expected to significantly boost China Broadband Inc.'s yearly revenues. The Company expects its revenues to continue growing as it expands its business and serviced areas.

About China Broadband

China Broadband is a new player in China's growing cable broadband market and more recently, electronic programming guide publication business and print media markets. The Company's flagship operation is Jinan Jia He Broadband, also known as Jinan Broadband, the fifth largest broadband operator in China and the second largest broadband service provider in Shandong's capital city of Jinan. A spin-off of Jinan Jia He Digital TV Co. Ltd., Jinan Jia He Broadband has a close equity bond with Jinan Cable Network, the cable monopoly in Jinan with 1.3 million cable TV subscribers. The company, through its Shandong Group subsidiary, also publishes digital and analog television program guides, newspapers and entertainment magazines. It holds the exclusive license to publish television program guides in Shandong Province, which is one of the largest regional economies in China.

For more information, visit http://www.chinabroadband.tv.

Disclosure

This release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements by management, statements concerning internal operations, marketing, management's plans, objectives and strategies, management's assessment of market factors and conditions, and the value of its liquid or illiquid securities, constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements, including, without limitations, the volatility of domestic and international financial, bond and stock markets, market following and valuations of PRC based companies in general, intense competition, fluctuations in the value of marketable securities held by it, extensive governmental regulation, litigation, limited liquidity of its shares and fluctuations in the price level of its securities as well as other risks as detailed in the Company's filings with the Securities and Exchange Commission.

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