SOURCE: China Digital Communication Group

November 28, 2006 16:15 ET

China Digital to Acquire Guoxi Holding Company in a Major Business Restructuring

LOS ANGELES, CA and SHENZHEN, CHINA -- (MARKET WIRE) -- November 28, 2006 -- China Digital Communication Group (OTCBB: CHID) announced today a major restructuring of its business activities that includes swapping its current battery shell and 3G business for two companies in the wood-carved art and furniture and auto accessories business. The transaction is valued at approximately $75 million.

China Digital said under the terms of the agreement, it will become the sole shareholder of Guoxi Holding Co. The selling company will get 100% ownership of China Digital's battery shell and 3G businesses and 150 million shares of restricted CHID common stock valued at $0.30 per share. The closing is expected to take place in early 2007.

Guoxi Holding has two primary businesses, Jiangxi Xi Chang, a premier woodcarving company, and Shenzhen Hongda Gongyi Limited Liability Corporation, an automobile accessories company. In 2005, Guoxi Holding reported combined revenue for the two companies of approximately $20.2 million and net income of approximately $7.4 million.

Jiangxi Xi Chang is China's leading company in the production of home shrines and artwork for the Buddhist religious market. Based in Yujiang, the company enjoys a market share of approximately 40% in the highly lucrative Japanese segment. Followers of the Buddhist religion in Japan are major customers of the elaborate wood-carved shrines made by the company. The company is the only one in China with a total process for the production of the shrines that starts with logs imported from Russia. The company has recently developed a new paint formulation that creates a highly desired high gloss lacquer finish. All of the products, which have a very high gross margin, are exported, mostly to Japan. The company is also developing new wood-carved furniture products, which will further establish a position in the multi-million dollar international woodcarving market.

Shenzhen Hongda Gongyi Limited Liability Corporation is one of the top three auto accessory and upholstery companies in China with a market share of approximately 25%. The company developed the leading pearl cotton fabric production technology and operates a complete production line in Shenzhen.

Ran Liang, CEO of China Digital Communication Group, said, "Because of the intense competition in the battery, battery accessories and 3G industries, we have decided to reorganize in order to continue growing the company. The global appetite for elaborate carved wood Buddhist shrines and furniture is large. We are also optimistic about the automobile accessories business, which is growing not only globally but also in China. Shenzhen Hongda has a strong market share in Australia and elsewhere. The automobile culture is still in its early stages in China and we expect the domestic market to become strong."

To access a pre-recorded questions and answers interview session about this transaction, visit

About China Digital Communication Group

China Digital Communication Group has two wholly owned subsidiaries, Shenzhen E'Jenie Science and Technology Development Co. Ltd. and Galaxy View International. E'Jenie manufactures and sells advanced high-quality lithium-ion battery shell and cap products to all major lithium-ion battery cell manufacturers in China and has recently begun manufacturing complete batteries. E'Jenie's products are used to power mobile phones, MP3 players, laptops, digital cameras, PDAs, camera recorders and other consumer electronic digital devices. Galaxy View, through its subsidiary Sono Digital, is a leading supplier of third-generation (3G) communications technology and equipment in China. China Digital Communication Group is continuing its expansion, while seeking distribution partners and acquisitions in new global markets, including the United States. For more information, visit

An investment profile on China Digital Communication Group may be found at

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

Forward-looking statement: This press release contains forward-looking statements and information that are based upon beliefs of, and information currently available to, the China Digital Communication Group's management as well as estimates and assumptions made by the company's management. When used in the filings the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan" or the negative of these terms and similar expressions as they relate to the company or company's management identify forward-looking statements. Such statements reflect the current view of the company with respect to future events and are subject to risks, uncertainties, assumptions and other factors relating to the company's industry, the company's operations and results of operations and any businesses that may be acquired by the company. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Although the company believes that the expectations reflected in the forward-looking statements are reasonable, the company cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Contact Information

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