SOURCE: China Digital Communication Group

March 31, 2006 09:00 ET

China Digital Communication Group Reports Year-End Revenue Gain of 146% to $12.7M

2005 Net Income up 165% to $0.05 per Share on Stronger Battery Component Sales

LOS ANGELES, CA and SHENZHEN, CHINA -- (MARKET WIRE) -- March 31, 2006 -- China Digital Communication Group (OTC BB: CHID), one of the largest and fastest growing battery components manufacturers in China, today reported financial results for the year ended December 31, 2005.

Revenue for 2005 totaled $12,742,088, compared to $5,182,122 for 2004, an increase of $7,559,966, or approximately 146%. Cost of sales for 2005 totaled $8,971,859, or approximately 70.4% of net sales, compared to $3,629,238, or approximately 70% of net sales, for 2004.

The company reported 2005 net income of $2,624,279, or $0.05 per fully diluted share, up from $453,041, or $0.01 per fully diluted share, in 2004.

Chang Chun Zheng, CEO and chairman of China Digital Communication Group, said, "This was an important year for the development of our company. The strong increases in revenue and net income were attributable to the successful expansion of our product lines to meet the needs of existing and new customers. These results exceeded our guidance issued last April. Revenue was 11% greater than our previously announced revenue guidance of $11.4 million. This growth reflected the continued demand for our lithium-ion battery shell and cap products from the lithium-ion battery cells manufacturers, as well as expanded production capacity, which increased by more than 40%, resulting from the relocation of our wholly owned manufacturing subsidiary Shenzhen E'Jenie to a larger plant in the Xing Lian Industrial Zone. This resulted in increased manufacturing efficiencies and new customer orders. The corresponding increase in cost of sales as a percentage of revenue was attributable to increases in material costs due to the introduction of new product lines."

Zheng also said, "We are optimistic about the year ahead. As previously reported, we have two pending acquisitions that, if completed, we expect will place us strongly into the component market for new 3G telecommunications devices. In addition, our battery component business, currently our core business, is quite robust and we fully expect to realize continued good results from that business in 2006. We intend to update our 2006 forward guidance in the near future."

About China Digital Communication Group

China Digital Communication Group, through its wholly owned subsidiary, Shenzhen E'Jenie Science and Technology Co., Ltd. (E'Jenie), is one of China's leading manufacturers and developers of advanced telecommunications equipment. E'Jenie sells advanced high-quality lithium-ion battery shell and cap products to all major lithium-ion battery cell manufacturers in China. E'Jenie's products are used to power mobile phones, MP3 players, laptops, digital cameras, PDAs, camera recorders and other consumer electronic digital devices. China Digital Communication Group is continuing its expansion across East Asia, while also seeking distribution partners and acquisitions in new global markets, including the United States. For more information, visit http://www.chinadigitalgroup.com. To contact the company, call Roy Teng, China Digital Communication Group, (310) 461-1322, e-mail: info@chinadigitalgroup.com.

An investment profile on China Digital Communication Group may be found at http://www.hawkassociates.com/chinadigital/profile.htm.

For investor relations information regarding China Digital Communication Group, contact Frank Hawkins or Ken AuYeung, Hawk Associates, at (305) 451-1888, e-mail: info@hawkassociates.com. An online investor kit including press releases, current price quotes, stock charts and other valuable information for investors may be found at http://www.hawkassociates.com and http://www.americanmicrocaps.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.

Contact Information

  • Roy Teng
    China Digital Communication Group
    (310) 461-1322
    e-mail: Email Contact

    Frank Hawkins or Ken AuYeung
    Hawk Associates
    (305) 451-1888
    e-mail: Email Contact