China Digital Media Corporation Reports Record Third Quarter Results

China Digital Media Corporation Reports Record Third Quarter Results

Third Quarter Revenue Increases 130% Leading to 6 Times Increase in Total Net Income before Tax with EBITDA of Nearly 2.5 times Higher

HONG KONG, Nov. 4 /Xinhua-PRNewswire-FirstCall/ -- China Digital Media Corporation (BULLETIN BOARD: CDGT) , a leading provider of cable and digital television services and contents in China, announced today record financial results for its third quarter ended September 30, 2005.

Financial Highlights for the Three Months Ended September 30, 2005 Compared to the Three Months Ended September 30, 2004:

* Revenues increased 130% to $2.49 million from $1.08 million * EBITDA improved 143% to $1.71 million from $0.70 million * Total Net Income before tax soared 498% to $3.45 million from $0.58 million

Financial Highlights for the Nine Months Ended September 30, 2005 Compared to the Nine Months Ended September 30, 2004:

* Revenues increased 87% to $4.79 million from $2.56 million; * EBITDA improved 106% to $3.40 million from $1.65 million * Total Net Income before tax soared 214% to $4.59 million from $1.46 million

The Company would have reported pro forma total net income before tax of $0.09 per diluted share and $0.12 per diluted share for three months and nine months ended September 30, 2005 respectively, assuming that the reduction in the conversion ratio that was announced on October 29, 2005 had occurred in the third quarter.

The strong revenue growth in the 2005 third quarter was primarily due to the increase in number of TV subscribers, sales of Pay-TV, revenue from commercial accounts of digitalization of television signals, and new sources of advertising revenue from the recent acquisition of Guangdong M-Rider Media Company ("M-Rider").

"Our third quarter results reflect the strong growth that we have been experiencing in adding new commercial and residential subscribers," said Mr. Daniel Ng, Chairman and CEO. "The increase in premium services subscriptions and commercial subscribers in our digital TV operations helped increase our margins substantially. The effect from our acquisition of M-Rider, which only began to contribute to our results late in the third quarter, should enhance our revenue dramatically in the coming years as we begin to increase advertising revenue significantly. We will continue to selectively target acquisition candidates that will enhance the services we provide our customers and drive earnings growth in the future."

Recently, the Company announced that more than 120,000 households have installed its digital television equipment, with over 20% subscribing to receive premium packages of television broadcasting and additional digital set-top-boxes ("STB"). The Company receives a portion of the subscription fees and various services fees from its 400,000 customers in Nanhai, a city near to Guangzhou City.

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 (BULLETIN BOARD: CDGT) focuses its business in three main areas: Cable Television 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 television subscribers. As of today, Nanhai's cable television operation provides 130 television channels which comprises of 38 basic channels and 92 pay channels. The pay channels are categorized into various value added packages. The digital broadcasting system could offer more than 800 digital channels of pay television programs and value added multimedia services. The Group is seeking to establish similar models elsewhere in China.

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.

Source: China Digital Media Corporation

CONTACT: Y. K. Ma, of China Digital Media Corporation, +852-2390-8686, ir@chinadigimedia.com; or Ed Lewis of CEOcast, Inc., +1-212-732-4300, for China Digital Media Corporation

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

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