China Digital Media Corporation Reports Third Quarter 2006 Results

China Digital Media Corporation Reports Third Quarter 2006 Results

HONG KONG, Nov. 27 /Xinhua-PRNewswire-FirstCall/ -- China Digital Media Corporation (BULLETIN BOARD: CDGT) , a leading provider of cable and digital television services, advertising services and content in China, announced quarterly revenue for the nine months ended September 30, 2006.

Financial Highlights for the Nine Months Ended September 30, 2006 Compared to the Nine Months Ended September 30, 2005:

-- Revenues increased 164%% to $12.7 million from $4.8 million
-- Gross profit increased 64% to $4.7 million from $3.2 million
-- Income from operation increased 2.3% to $2.6 million from $2.5 million
-- Net income before tax and minority interest decreased 43% to $2.6
million from $4.6 million

With the expansion of business in media advertising and channel management, the Company has broadened the revenue base as compared with the same period of last year. Thanks to the increased revenue, income from operation increased during the nine months ended September 30, 2006 as compared to the nine months ended September 30, 2005 although the increase in depreciation of the Company's digital set top boxes (attributable to the further installation of approximately 100,000 digital set top boxes during the nine months ended September 30, 2006 compared to the same period of 2005) has eliminated certain gross margin. As a result, the net income before tax (excluding a one time payment discount of $1.8 million from a set top box supplier obtained in 2005) maintained at the similar level of the same period of last year. As compared to the net income for the nine months ended September 30, 2005 which included the one time payment discount, net income after tax showed a reduction from last year of $4.6 million to $1.8 million.

"We are progressing as planned; our core operations in DTV operations and advertising agency business has generated substantial growth for the Company compared to the same period of last year," said Daniel Ng, Chairman and CEO of China Digital Media Corporation. "We are delighted we have just completed a new round of financing with the support of institutional and high net worth investors which we believe will allow the Company to develop further and faster. The Company's management could, in addition, focus on developing new business opportunities and believe that this will drive the Company to grow and expand.''

For more information on the Company, please visit the Company's 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, Programs Production and Advertising Sales. Arcotect (GZ) Limited, a wholly owned subsidiary of CDGT in China, is the sole contractor and operator of digital television services in Nanhai, a city with 410,000 cable TV subscribers. As of today, Nanhai's cable television operation provides 148 television channels which comprises of 48 basic channels and 100 pay channels. The pay channels are categorized into various value added packages.

Certain information contained in these materials is "forward-looking" information, such as projections, estimates, pro formas, or statements of intentions, expectations or plans. Forward-looking information in this release includes, without limitation, the future success of the Company's advertising business and of the Company's joint ventures, the Company's ability to grow and generate new sources of revenues from its IP STB in the future, its ability to keep its IP STB technologically current, and it ability to develop new business opportunities. 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: +852-2390-8600

Source: China Digital Media Corporation

CONTACT: China Digital Media Corporation, Investor Relations,
+852-2390-8600

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

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