China Digital Communication Group Reports 2006 Financial Results

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Close High D	LSE:CHID	London	Ordinary Share	GB00B0RTZ046	D SHS 1P

Industry Sector	Turnover	Profit	EPS - Basic	PE Ratio	Market Cap
	0	0		N/A	0

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LOS ANGELES and SHENZHEN, China, April 2 /PRNewswire-FirstCall/ -- China Digital Communication Group (OTC:CHID) (BULLETIN BOARD: CHID) , a manufacturer of battery components and distributor of 3G products in China, announced today that revenue for fiscal year 2006 totaled $12.2 million compared with $12.7 million in 2005. The company reported a comprehensive net loss of $617,000 or $0.01 per diluted share in 2006, which included a $3.8 million non-cash expense in the fourth quarter related to the impairment of goodwill associated with the acquisition of Galaxy View International. In the fourth quarter of 2006, the company reported revenues of $2.0 million, compared to $3.1 million in revenue in Q4 '05, and a comprehensive net loss of $3.1 million, or $0.05 earnings per diluted share, compared to net income in the year ago period of $449,000 or $0.01 in earnings per diluted share. Xu Zhongnan, CEO of China Digital Communication Group, said, "Our operating results in 2006 were adversely affected by lower demand for our products as a result of intense competition in the battery shell market. We also had a one-time, non-cash impairment of goodwill charge of $3.8 million. We had projected higher revenues for Galaxy at the time of acquisition but adjusted the associated goodwill after a restructuring in the purchase procedures of Galaxy's main customer. In addition, our bottom line was affected by an increase in interest expense from $33,000 in fiscal 2005 to $173,000 in fiscal 2006 due primarily to a loan obtained for the acquisition of Galaxy." Zhongnan said, "Our company is now actively looking for merger and acquisition candidates in several attractive industries. Our current business, though experiencing difficulties in the battery shell segment, produced about $10 million in revenue from operations in 2006. We believe this provides us with a stable base from which to find and acquire other promising companies. There are numerous opportunities in China today and we intend to capitalize on them." 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 http://www.chinadigitalgroup.com/ or contact Jacky Jiang of China Digital Communication Group at (626) 432-5427, e-mail: . An investment profile on China Digital Communication Group may be found at http://www.hawkassociates.com/chidprofile.aspx. 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 http://www.hawkassociates.com/ and http://www.americanmicrocaps.com/. To receive free e-mail notification of future press releases for this company, sign up at http://www.hawkassociates.com/email.aspx. 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. Investor Relations Contact: Hawk Associates, Inc. Frank Hawkins and Ken AuYeung Phone: (305) 451-1888 E-mail: http://www.hawkassociates.com/ DATASOURCE: China Digital Communication Group CONTACT: Investor Relations, Frank Hawkins or Ken AuYeung, both of Hawk Associates, Inc., +1-305-451-1888, Web site: http://www.chinadigitalgroup.com/

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CHID Close High D