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China Energy Savings Enters Into $4.5 Contract to Provide Energy Savings Products to a Chinese City
Deal With the Government of Liaoyang City, Liaoning Province, China
Jun 7, 2005 9:00:00 AM
HONG KONG, June 7 /Xinhua-PRNewswire/ -- China Energy Savings Technology, Inc. (Nasdaq: CESV) announced today that the energy saving project company wholly owned by Starway Management Limited (''Starway'') in China, has signed an energy saving profit sharing contract with the Government of Liaoyang City, located in the Liaoning Province, China to provide energy saving products worth in excess of $4.5 million when China is heading into summer, the peak energy season.

The Company will supply its energy saving products to the streetlight infrastructure of the city. The contract is expected to result in savings of nearly 30% annually.

''This contract was structured under the available terms of our profit sharing model, which enables both the Company and our customers to benefit,'' stated Mr. Sun Li, CEO and Chairman of China Energy Savings. ''We will share 80% of the savings under this agreement.'' The return on investment is expected to be 12 months.

The estimated net profit of is expected to reach $0.36 million per month upon completion of the contract after recovering the cost of installation.

About China Energy Savings Technology

The company is a holding company that owns 100% of Starway Management Limited whose subsidiaries are engaged in the manufacturing and sales of advanced technology energy-saving products in the People's Republic of China (PRC). According to test reports by various PRC authorities including the National Center of Supervision & Inspection on Electric Light Source Quality (Shanghai) issued in September 2002, Shenzhen Academy of Metrology & Quality Inspection issued in December 2002 and approved by the State Quality Supervision Inspection Department, the energy saving products of Starway's subsidiaries may provide energy saving rates ranging from approximately 25% to 45%. The energy saving projects conducted by Starway's subsidiaries mostly relate to public or street lighting systems, government administration units, shopping malls, supermarkets, restaurants, factories and oil fields, etc. There are small and large-scaled projects: the small-scaled projects relate to restaurants, shops, small arcades, offices and households through the sale of equipment, and the large-scaled projects relate to large shopping malls, supermarkets, factories and public bodies through the provision and installation of equipment over a term usually extended for years. With the world's energy crisis as the backdrop, and global oil prices breaking record highs, China's own crisis is growing not only in size, but in concern as well. Coal prices and energy consumption in China are also at all-time highs. For these reasons, the company's products are widely used and highly recommended in China because of the huge energy market and the excellent prospect of energy savings.

Safe Harbor Statement

As a cautionary note to investors, certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; the Company's ability to execute its business model and strategic plans; and the risks described from time to time in the Company's SEC filings.

For more information, please contact:

John Roskelley, President,
First Global Media
Tel: [phone]

Web: http://www.cesv-inc.com
Email: [e-mail]
SOURCE China Energy Savings Technology