China Digital Communication Group Issues Letter to Shareholders

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

Close High Properties (LSE:CHID)
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LOS ANGELES and SHENZHEN, China, Aug. 24 /PRNewswire-FirstCall/ -- China Digital Communication Group (OTC:CHID) (BULLETIN BOARD: CHID) , CEO Xu Zhongnan issued the following letter for shareholders. Dear Shareholders: This has been a difficult quarter. As you know, our battery shell and cap products have become a commodity business, attracting competitors who are much larger than E'Jenie. Being a smaller producer in a low technology industry that has limited barriers to entry, we have little bargaining power with which to increase our market share. We continue to lose orders to competitors that can offer greater efficiencies of scale. By now you have read our quarterly earnings that were filed on August 14. Sales revenue for the second quarter 2007 was $368,823, a decrease from $3,027,810 for the same quarter last year. Net loss for the quarter was $1,046,645 versus net income of $390,876 for the comparable quarter last year. A bright spot remains our total current assets, which increased to nearly $5 million, providing a foundation for management as we seek acquisition opportunities for the future. Before we can move forward with our plans for acquisitions or mergers, there is another important issue that we must address. Based on the recommendation of our independent auditors, China Digital will be restating previously-issued financial statements for fiscal years 2004, 2005 and 2006, as well as for the fiscal quarter ended March 31, 2007, to do purchase price allocation and assign value to intangible assets related to the acquisition of Billion Electronics Co., Ltd., the 100% owner of E'Jenie, in 2004. We have already filed our amended 10 KSB for the fiscal year 2004 and we expect to complete the rest of the restatements no later than two months from August 13, 2007. Please be assured that your management team is working hard to complete the restatements so that we may turn our attention to brighter prospects. We see several avenues to grow the company once we have addressed these current issues. Like you, we are disappointed in the results of the second quarter, but our focus remains on the long-term outlook. We are seeking to build shareholder value for China Digital and we thank you for your patience and trust in us through this difficult time. About China Digital Communication Group China Digital Communication Group owns Shenzhen E'Jenie Science and Technology Development Co. Ltd. E'Jenie manufactures and sells 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. 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: investors, Frank Hawkins or Ken AuYeung, both of Hawk Associates, Inc., +1-305-451-1888, , for China Digital Communication Group Web site: http://www.chinadigitalgroup.com/ http://www.hawkassociates.com/

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CHID Close High D