CHID China Digital Communication Group to Expand R&D Operations in Shenzhen, China; Operating and Procurement Costs Lowered - Cost of Purchasing Raw Materials Decreased

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Date: March 4, 2005 03:30:23 PM

CHID China Digital Communication Group to Expand R&D Operations in Shenzhen, China; Operating and Procurement Costs Lowered - Cost of Purchasing Raw Materials Decreased

China Digital Communication Group to Expand R&D Operations in Shenzhen, China; Operating and Procurement Costs Lowered - Cost of Purchasing Raw Materials Decreased SHENZHEN, China & LOS ANGELES China Digital Communication Group Roy Teng, 310-461-1322 teng.roy@chinadigitalgroup.com or Investor Relations International Zack Noory, 818-382-9718 znoory@irintl.com China Digital Communication Group (OTCBB:CHID), one of the fastest growing battery production companies in China, today announced that it has expanded its research and development team to help develop and improve a new series of product lines. It also detailed steps taken recently to lower its operating and procurement costs. Shenzhen E'Jenie, China Digital's battery-shell manufacturing subsidiary, has set up a research and development team made up of technicians specializing in steel-shell, aluminum-shell and cap products. The new R&D team has already helped the Company cut its product defect rate significantly from the third quarter to the fourth quarter of 2004. "We are very pleased with the expansion of our R&D department and are excited to have onboard a team of highly qualified technicians," said Sun Yibo, China Digital's Chairman and CEO. "The demand for our products has been very strong and growing, and expanding our R&D department is just one of many steps we are taking to ensure that we remain on the cutting edge of technology and provide quality products to our growing customer base." Among the cost-cutting moves announced today was the November 2004 retention of Tian Yi (Hong Kong) Investment Management Co., Ltd., as a management consultant to help optimize China Digital's organization, operating and accounting procedures. The Company also reported that it has already cut the cost of raw materials purchasing by between 2% and 3% through a new bidding process initiated this year where at least five vendors will compete on the basis of price, product quality, technology, warrantee period, services and payment models. These moves are expected to enhance the Company's gross margins going forward. To be added to China Digital's investor e-mail list, please contact Zack Noory of Investor Relations International at znoory@irintl.com. About China Digital Communication Group China Digital Communication Group (OTCBB:CHID), through its wholly-owned E'Jenie subsidiary, is a rapidly growing manufacturer of battery shells and related technology for use in electronic products, primarily mobile phones. Since December 2003, the Company has adopted the approach of using licenses, joint ventures, mergers and acquisitions to bring battery and telecom equipment makers in China to markets overseas. The Company's battery products now power digital cameras, camera phones, PDAs and laptop computers in East Asia and beyond. China Digital is continuing its expansion across China while also seeking distribution partners in the United States. For more information on China Digital, go to its website at www.chinadigitalgroup.com. 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 loss and 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. Copyright © 2005 Business Wire. All reproduction, other than for an individual user`s reference, is prohibited without prior written permission. News Copyright © 2005 Interest!ALERT All rights reserved.

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