China Digital Communication Group Issues Letter to Shareholders
25 August 2007 - 3:53AM
PR Newswire (US)
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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