SOURCE: Chisen Electric Corporation

Chisen Electric Corporation

September 24, 2010 08:30 ET

Chisen Electric Moving Forward With Another Major Facilities Expansion

Will Invest More Than RMB 1.2 Billion (US$177MM) to Build "Chisen Circular Economy Industry Park" in the Jiangsu Xuyi Economic Development Zone

ZHEJIANG, CHINA--(Marketwire - September 24, 2010) - Chisen Electric Corporation (OTCBB: CIEC) (the "Company"), a leading lead-acid motive battery producer for the electric bicycle market in the People's Republic of China, announced today it has entered into an investment agreement with the Jiangsu Xuyi Economic Development Zone Administrative Committee (the "Committee") to invest approximately RMB 1.2 billion (US$176.50MM) in three stages to build the 1,000 hectare "Chisen Circular Economy Industry Park" in the Jiangsu Xuyi Economic Development Zone, where it will manufacture lead-acid and lithium ion batteries, and other related products.

Upon anticipated completion of first stage construction of the new industrial park in December, 2011, the Company's manufacturing capacity will grow from 15 million lead-acid motive batteries a year currently, to an estimated 25 million lead-acid and lithium ion batteries.

First Stages of Development To Be Completed By December 2011

The Company noted that it has commenced the first stage of construction on September 20, 2010, with funding for the project coming from its cash flow and project financing expected to be arranged with operating cash flow, local banks and investors. Chisen anticipates investing approximately RMB 422 million (US$62.08MM) in the first stage of development which it estimates will be completed by December 2011.

Sound Business And Environmental Sense

Mr. Xu Kecheng, Chairman and CEO, stated, "As one of China's leading battery companies, we have achieved significant growth and are preparing for continuing growth in the years ahead in our existing business, as well as with our planned development of lithium ion batteries. It is quite natural that we would choose to expand our environmentally enhancing business in an environmentally sound 'circular economy' business park. With the variety of significant incentives we will be receiving, we believe the result will be a development that makes strong business sense as well as sound environmental sense."

Major Tax Incentives

Among the incentives being provided to the Company for its investment in the project are 50% refunds on value-added taxes for the first five years, and 25% for the following five years. Additionally, the Company will be exempt from the local portion of enterprise income taxes for the first six years followed by a 50% reduction in this tax over the next four years. Full details on the transaction are available in an 8-K filed by the Company today with the U.S. Securities and Exchange Commission.

Company Description

Chisen Electric Corporation, incorporated in Nevada, USA, and headquartered in Zhejiang Province, the People's Republic of China, is a leading lead-acid motive battery producer for China's personal transportation device market. The Company's battery products are sold under its own brand names and are predominantly used in electric bicycles. Among all types of batteries for electric bicycles, the lead-acid motive battery is the preferred choice for electric bicycle manufacturers in China because of its cost efficiency. In the fiscal year ended March 31, 2010, the Company manufactured more than 14.48 million batteries and achieved a market share of approximately 11.84% for its Lead Acid Motive Batteries for electric bicycles in China. Recently, the Company announced plans to produce lithium ion batteries in a dedicated, new manufacturing facility. Visit our website at www.chisenelectric.com.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995:

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, statements concerning the Company's operations, financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety important factors, including, but not limited to, the impact of competitive conditions and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, financing and other factors as discussed in the Company's reports filed with the Securities and Exchange Commission from time to time, In addition, the Company disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date hereof. No securities regulatory authority has either approved or disapproved the contents of this new release. The Company filings with the US Securities and Exchange Commission, including the annual report for the fiscal year ended March 31, 2010 on Form 10-K, can be viewed on EDGAR Online or at www.sec.gov.

Contact Information