China Digital Media Corporation Reports Third Quarter 2006 Results

China Digital Media Corporation Reports Third Quarter 2006 Results

December 19, 2006

    HONG KONG, Nov. 27 /Xinhua-PRNewswire-FirstCall/ --
China Digital Media 
Corporation (OTC 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 [e-mail].

    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:   [phone]



SOURCE  China Digital Media Corporation