SOURCE: China Media Group Corporation

January 18, 2007 06:51 ET

China Media Group Corporation Enters Sale and Purchase Agreement to Acquire 18% of Guangzhou Waho Culture & Media Co., Ltd.

SAN ANTONIO, TX -- (MARKET WIRE) -- January 18, 2007 -- China Media Group Corporation (OTCBB: CHMD) ("CMG") announces that on January 13, 2007, it entered into a Sale and Purchase Agreement with an independent third party to purchase 18% of the registered capital of Guangzhou Waho Culture & Media Co., Ltd ("GWCM"). Pursuant to the Agreement, CMG will pay US$243,000, which will be paid by US$53,000 in cash and US$190,000 in common stock of CMG where this stock will be restricted securities within the meaning of Rule 144 under the Securities Act.

GWCM was incorporated in the People's Republic of China in August 2006. Its mission is to become a leading new age "Online Advertising" and "Information Portal Website" for the Chinese Market. It focuses in 5 specific areas: "Online Directories," "Advanced Information Portals," "Online Advertising," "Print Media" and "Valued Added Services."

GWCM has recently executed a cooperative agreement with China TieTong Communications Co., Ltd. Guangdong Branch ("CTTG") to be the "exclusive" partner to rollout its Yellow Pages Directory business (both print and online) together with all the associated advertising for China's very lucrative Guangdong Province.

The contract is effective for 8 years from 2006 to 2014 and is renewable for another 5 years upon expiry. CTTG will make available use of their name and logo's together with their full customer contact details as potential customers.

CTTG is part of the China TieTong Communications Group ("CTT"), which is one of only 6 licensed telecom operators in the very lucrative but restricted China telecom market. CTT has total assets in excess of RMB54.4 billion and 70,000 employees nationwide.

Mr. Con Unerkov, Chairman of China Media Group, stated, "We are delighted to make this investment into GWCM. We believe GWCM could become one of China's most recognized information portal websites. The online directories and the associated online advertising revenue is a fast and growing business world wide. In China, according to www.iresearch.com.cn, the online advertising market in 2006 was expected to grow at a rate of 48% from the previous year and is forecasted to grow 42% and 37% in 2007 and 2008, respectively. It also indicates that 52% of the market is made up of small companies which show excellent potential for new / early entrants."

Mr. Unerkov also added, "This is our first investment into the online advertising and portal space. GWCM will work very closely with our pending acquisition of Beijing Ren Ren to provide us with some very lucrative portals. One such example will be the Health sector where Beijing Ren Ren is currently working with the Ministry of Health on the Great Wall of China program. The key in this market is to find some way of attracting people to your website and we believe we have the strategy that will allow us to carve out our slice of this growing market."

About China Media Group Corporation:

China Media Group Corporation (OTCBB: CHMD) is a "Next Generation" advertising / media company focusing on the very lucrative Chinese market. It has offices in China, Hong Kong and Texas, USA. The Company was incorporated in Texas on October 1, 2002. The Company is currently entering the fast growing advertising industry in China and plans to expand its offices in key cities such as Shanghai, Guangzhou and Shenzhen. The Company will also cooperate with strategic partners in other cities to serve our clients for nationwide advertising coverage.

Additional information concerning other areas and topics of China Media Group can be found on our web site at http://www.chinamediagroup.net

A number of statements contained in this Report are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Certain written statements in this press release constitute "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Words or phrases such as "should result," "are expected to," "we anticipate," "we estimate," "we project," "we intend," or similar expressions are intended to identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. These risks and uncertainties include demand for our services, product development, our ability to maintain acceptable margins and control costs, the impact of federal, state and local regulatory requirements on our business, the impact of competition and the uncertainty of economic conditions in general, including the timely development and market acceptance of products, competitive market conditions, successful integration of acquisitions, the ability to secure additional sources of financing, the ability to reduce operating expenses, and other factors. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made, and we undertake no obligation to publicly update these statements based on events that may occur after the date of this document.

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