SOURCE: China Digital Communication Group

May 16, 2005 06:30 ET

China Digital Communication Group (OTC BB: CHID) Surpasses Its Previous Projections

LOS ANGELES, CA and SHENZHEN, CHINA -- (MARKET WIRE) -- May 16, 2005 -- Yi Bo Sun, Chairman and CEO of China Digital Communication Group (OTC BB: CHID), announced today that the Company surpassed its previous projections and prior quarter performance. China Digital announced that consolidated operations generated quarterly net income of $722,779, which is 26.64% of gross revenues of $2.9 million for the fiscal quarter ended March 31, 2005.

According to Chairman Yi Bo Sun, "China Digital's gross revenue and net income are both higher than the previously announced. Our recent quarterly results also are significantly higher than results for the prior quarter, ended December 31, 2004."

Chairman Yi Bo Sun explained, "In terms of historic performance, our consolidated net income for the quarter ended March 31, 2005 are more than six times last year's total net income: $722,779 for this recent quarter versus net income of $112,000 for last year, ended Dec. 31, 2004." [The Company effectively began operations in the quarter ended December 31, 2004.]

In addition, our revenue for the quarter ended March 31, 2005 is approximately 26% greater than the revenue for the prior quarter: $2.9 million for the quarter ended March 31, 2005 versus $2.3 million for the quarter ended Dec. 31, 2004, and up 275 % from pro forma revenue of $774,000 in the 1st quarter of 2004. Net income for the 1st quarter of 2005 was $722,779, or $0.01 per fully diluted share.

"China Digital Communication Group is on a growth trajectory, according to plan," Chairman Yi Bo Sun continued. "The Company made a very impressive performance in the 1st quarter of 2005. That mainly resulted from that the company expanded the products lines in the end of 2004 by adding two new products (Aluminum Lithium ion Battery Shells and Aluminum Lithium ion Battery Caps), as well as because of the company's new marketing strategy of increasing product sales by diversifying its customer base. The company has successfully increased the number of its customers. China Digital Communication Group is poised for sustained growth, as we advance our new marketing strategy. Shenzhen E'Jenie can and will increase production in response to additional demand in China, USA, and other growth markets. We're currently running at an annualized revenue stream of $10 to $12 million, and we anticipate that we will be able to attain our short-term and longer-term business objectives for increasing shareholder value."

About China Digital Communication Group

China Digital Communication Group (OTC BB: CHID), through its Shenzhen E'Jenie subsidiary, is a rapidly growing manufacturer of battery component products and related technology for use in electronic products, primarily mobile phones. Since December 2003, the Company has adopted the approach of using licenses, joint ventures, mergers and acquisitions to bring battery and telecom equipment makers in China to markets overseas. The Company's products now power digital cameras, camera phones, PDAs, and laptop computers in East Asia and beyond. China Digital is continuing its expansion across China while also seeking distribution partners in the United States.

For more information on China Digital, go to its website at www.chinadigitalgroup.com.

Forward-looking statement: Except for the historical information, the matters discussed in this news release may contain forward-looking statements, including, but not limited to, factors relating to future sales. These forward-looking statements may involve a number of risks and uncertainties. Actual results may differ materially based on a number of factors, including, but not limited to, uncertainties in product demand, risks related to doing business in China, the impact of competitive products and pricing, changing economic conditions around the world, release and sales of new products, and other risk factors detailed in the company's most recent annual report and other filings with the Securities and Exchange Commission.

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