China Digital Wireless Has Entered Into an Agreement to Acquire 95% of Shanghai KENA Energy Saving Electric Co., Ltd
2 March 2006
China Digital Wireless, Inc. (OTC BB: CHDW)announced today that the company has entered into an agreement to acquire95% of the equity interests of Shanghai KENA Energy Saving Electric Co.,Ltd and related patent and patent rights to produce high-energy,high-efficiency transformers. The company's decision to enter into the KENAacquisition is driven by an effort to re-focus the company's strategy andcapitalize on the strategic opportunity this transaction presents.
The company's desire to acquire equity interests in KENA and the patent isdriven by several factors:
Strategy Re-focus
The company, which had launched an "out-of-home" digital televisionadvertising business in January 2005, has determined to expand itsoperations in light of the lack of demand for out-of-home digitaladvertising in China. Management believes that the lack of demand is causedby several factors, including the availability of other more traditionaladvertising outlets such as television, radio and newspapers, and thereduction of advertising fees due to the merger of media companies. Inaddition, there are an increasing number of competitors in the mediaindustry, resulting in intense market competition.
Strategic Opportunity
KENA was established in China on April 26, 2005. Its chief scientist Dr.Chang Kenan, an experienced Chinese-American scientist, is the inventor ofenergy saving street lighting system ballasts which are noted for energysavings, material savings, long-life, and being environmentally friendly.Since its establishment, KENA has undertaken four street lighting projectsand generated revenue of over RMB 5,000,000. There are approximately ninestreet lighting projects under negotiation.
Management believes that the KENA acquisition represents a strategicopportunity for the company in following ways:
1) The Chinese government has provided strong support of energy savingproducts. In the first quarter of 2006, KENA's energy saving lightingproducts will be included in the Chinese government purchasing lists.Official documents will be issued by the Chinese government to help promotethese products.
2) There is a large demand for energy saving streetlights. According to theChinese Construct Department, currently, there are 18,000,000 streetlightsin China with a 17%-18% yearly growth rate. The average replacement rate is10%. The worldwide demand is estimated at five times as much as the demandin China.
3) KENA's products present consumers with positive economic and socialeffects. According to a Report from National Centre of Supervision &Inspection on Electric Light Source Quality of Shanghai, KENA's energysaving lighting system ballasts result in a 20% energy saving, allowingconsumers to recover their costs in two years. Compared to other similarproducts, KENA's system ballasts use 15% less materials than other similarproducts and have a 20-year service life, which is 10 years longer thanother similar products.
About China Digital Wireless:
China Digital Wireless distributes various Nokia and Samsung mobile phonemodels in Shanghai, China; provides wireless users in China with the accessto financial information and various entertainment-related services viatheir mobile phones and pagers and provides out-of-home digital televisionadvertising in commercial locations throughout Shanghai, China region.
Safe Harbor Statement:
The information in this news release includes certain forward-lookingstatements that are based upon assumptions that in the future may prove notto have been accurate and are subject to significant risks anduncertainties, including statements to the future financial performance ofthe Company. The Company can give no assurance that such expectations orany of its forward-looking statements will prove to be correct. Factorsthat could cause results to differ include, but are not limited to,successful performance of internal plans, product development andacceptance, the impact of competitive services and pricing, or generaleconomic risks and uncertainties.
Contact:Ms. Liu MinChina Digital Wireless Inc.Tel: 862133054789-6217Email: Email Contact
SOURCE: China Digital Wireless, Inc
Source: marketwire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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