China Digital Media Corporation Announces Acquisition of Assets of Leading Media and Advertising Group in China

China Digital Media Corporation Announces Acquisition of Assets of Leading Media and Advertising Group in China

HONG KONG, Feb. 7 /Xinhua-PRNewswire-FirstCall/ -- China Digital Media Corporation (the ''Company'') (BULLETIN BOARD: CDGT) announced today that the Company, through its affiliate Guangdong HuaGuang DigiMedia Culture Development Limited (''HuaGuang''), has entered into an agreement (the ''Agreement'') to purchase all media related businesses, assets, business contracts and management from Guiyang Classic & Fashion Advertising Co., Ltd., a television program production and advertising company in China.

Pursuant to the terms of the Agreement, the Company will pay approximately $2.2 million, via a combination of cash and the Company's common stock, subject to adjustment in the event that the acquired assets generate a profit less than approximately $2.5 million in the next 2 years.

''The acquisition of these assets creates powerful synergies,'' said Daniel Ng, Chairman and CEO of China Digital Media Corporation. ''The management team is dynamic, with great creative, energy and drive. We believe this acquisition will enhance our advertising sales, enable us to create greater content and give us the ability to provide innovative market-driven solutions to our clients. This enhanced capability will allow us to support greater television station management opportunities, which have already proven lucrative despite our recent entrance to the market.''

The management team has about 10-years business experience in the media industry in China. They have produced television programs for different television channels, including a ''true man show,'' as well as adventure, nature and tourism productions, for which they have obtained several of the national awards in the last few years.

For more information on us, please go to our website at http://www.chinadigimedia.com/ .

To be added to China Digital Media's investor e-mail list, please send e-mail to our Investors Relations at ir@chinadigimedia.com.

About China Digital Media Corporation

China Digital Media Corporation focuses its business in three main areas: Cable TV Operations, Advertising Sales and Programs Production. Arcotect (Guangzhou) Technology Limited, a wholly owned subsidiary of CDGT in China, is the sole contractor and operator of digital television services in Nanhai, a city with 400,000 cable TV subscribers. The service could offer more than 800 digital channels of pay TV programs and value added multimedia services. The Company entered into the strategic alliance with Guangdong HuaGuang Digimedia Culture Development Limited in June 2005.

Certain information contained in these materials is "forward-looking" information, such as projections, estimates, pro formas, or statements of intentions, expectations or plans. All forward-looking information is subject to known and unknown risks and uncertainties, many of which are outside of the control of the company. Consequently, actual results may, and probably will, differ materially from the results contemplated in such forward-looking information.

For more information, please contact:

China Digital Media Corporation
Investor Relations
Tel: +1-866-843-2775

Daniel Schustack
CEOcast, Inc.
Tel: +1-212-732-4300

Source: China Digital Media Corporation

CONTACT: China Digital Media Corporation, Investor Relations of China
Digital Media Corporation, +1-866-843-2775, or Daniel Schustack of CEOcast,
Inc., +1-212-732-4300, for CDGT

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

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