Yangtze Telecom Corp.
TSX VENTURE : SMS

Yangtze Telecom Corp.

August 29, 2007 23:43 ET

Yangtze Telecom Announces 2nd Quarter 2007 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 29, 2007) - Yangtze Telecom Corp. (TSX VENTURE:SMS) today reported its financial results for the second quarter ended June 30, 2007. The Company operates through two subsidiaries in China - wholly-owned Wuhan Chengxi Information Technology Company Ltd. ("ChengXi") and 65%-owned China United Telecom Technology Company ("UTT"), and one subsidiary in Mongolia - NBC Co. Ltd. All amounts are in Canadian dollars unless otherwise noted.

Revenue for the quarter ended June 30, 2007 was $241,000, a 29% increase over $187,000 in the same quarter last year on a comparable basis for net revenue reporting in the education business. Current quarter revenue consists of $85,000 from UTT, $15,000 from NBC and $141,000 from ChengXi. Compared with the second quarter of 2006, ChengXi recorded an increase of 161% in Voice revenue from the introduction of new information services, while UTT sales decreased by 64%, reflecting a temporary slowdown in both the Education and Credit Management System business. During the quarter, the Company registered eleven companies in its Credit Information System compared with seventeen in 1Q of 2007. After launching the wireless digital TV service in March 2007, NBC recorded 287 new subscribers in the current quarter, compared with 68 in the last quarter. NBC sales revenue for the quarter, being earned over the subscription period varying from six to thirty-six months, was $15,000 vs. $1,000 in the 1st quarter.

Head office expenses in Vancouver were $155,000, compared with $203,000 in 2Q 2006 or $152,000 as the 2006 quarterly average. Wuhan Chengxi incurred a loss of $104,000 for the current quarter; NBC, a loss of $68,000 and UTT, a loss of $66,000. The Company recorded a loss of $342,000, net of minority interest, for the quarter compared with $354,000 in the same quarter 2006.

The cash balance of the Company as at June 30, 2007 was $307,000, a decrease of $343,000 from a balance of $650,000 as at March 31, 2007, almost all accounted for by the cash loss of $320,000 in the quarter. With unencumbered wireless TV assets of over $2,500,000 in Ulan Bator, the Company is negotiating with Mongolian banks for an operating line of credit to improve working capital regarding the startup of the wireless TV business in NBC. At the same time, the Company is in the final stage of negotiation for bridge financing to complete the acquisition of Beijing Haidian Cable Television Network Information Co. Ltd. (HDCTV) as announced in the press release of June 19, 2007.

"The subscription rate in our wireless digital TV service in Ulan Bator has been slower than expected in these early months. What is encouraging is that this steady growth is accomplished with virtually no advertising and promotion. We fully expect to overcome this immediate pressure on our working capital in Mongolia," said Emily Chen, President of Yangtze Telecom. "What is more important, however, is our continuing discussions and cooperation with the management and shareholders of HDCTV towards the completion of our intended acquisition in due course."

The Company is pleased to announce that the 2007 annual general meeting for the Company will be held on October 31, 2007.

Yangtze Telecom's second quarter 2007 financial reports and Management Discussion and Analysis are accessible on the Company's web site (www.yangtzetelecom.com) and on SEDAR (www.sedar.com).

About Yangtze Telecom Corp.

Yangtze Telecom Corp. is a provider of telecom value-added services and wireless digital TV services for consumers and businesses in China and Mongolia. The Company is focused on business applications utilizing a combination of satellite platforms, the internet, and wireless data communication technologies. Key applications to date are the Credit Management System, Wireless digital broadcasting and Distance Learning. For further information on Yangtze Telecom Corp., please visit the Company's web site at www.yangtzetelecom.com.

The TSX Venture Exchange has not reviewed, and does not accept responsibility for the adequacy or accuracy of, the contents of this press release.

Contact Information