China Digital Communication Group Announces Financial Results for Q1 2007

LOS ANGELES and SHENZHEN, China, May 21  /PRNewswire-FirstCall/ -- China Digital Communication Group (OTC:CHID) (BULLETIN BOARD: CHID) , a manufacturer of battery components in China, announced today financial results for the first quarter of fiscal year 2007.

Revenue for the quarter was $1,639,000, a decrease from $3,184,000 for the same quarter last year. Net loss for the quarter was $1,012,510 or $0.02 per share versus net income of $737,000 or $0.01 per share for the comparable quarter last year.  The loss for the first quarter of 2007 included a non-cash expense of $1,296,000 associated with the impairment of goodwill. The decrease in sales for the quarter was attributable to a decrease of purchase orders from E'Jenie customers due to increased competition in the market.

Xu Zhongnan, CEO of China Digital Communications Group, said, "As anticipated, we experienced a decline in revenue this quarter compared to the same period last year. Though we recorded a net loss this quarter, it was primarily attributable to a non-cash impairment charge of approximately $1.3 million. Despite top-line weakness, we generated $382,000 in cash flow from operations for the quarter and ended the quarter with $1,071,000 in cash, giving us the flexibility to continue our previously announced strategic repositioning.

"We are continuing our search for promising acquisition candidates. We believe that our strong balance sheet allows us to pursue these opportunities aggressively and we will provide more details on our efforts as appropriate. At the same time, we are working diligently to stabilize sales at E'Jenie as we actively seek new customers.  We look forward to keeping our investors updated on our progress on both fronts over the coming months."

About China Digital Communication Group

China Digital Communication Group owns Shenzhen E'Jenie Science and Technology Development Co. Ltd. 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. China Digital Communication Group is continuing to seek 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 [phone], 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 [phone], 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: [phone]
  E-mail: 
  http://www.hawkassociates.com/

DATASOURCE: China Digital Communication Group



CONTACT: Frank Hawkins and Ken AuYeung, both of Hawk Associates, Inc.,

[phone], , for China Digital Communication

Group



Web site:  http://www.chinadigitalgroup.com/ 

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