China Energy Savings Technology (CESV)

[RIGATONI]

WOW Todays Press Release...

China Energy Savings Enters Into $36 Million Letter of Intent to Provide Energy Savings Products to Wuhan City, China
Jun 14, 2005 9:00:00 AM
HONG KONG, June 14 /Xinhua-PRNewswire/ -- China Energy Savings Technology, Inc. (Nasdaq: CESV) announced today that Starway Management Limited's (''Starway'') wholly owned energy saving project company in China has signed a Letter of Intent in May for profit sharing with the New Development District Government of Wuhan City, located in the Hubei Province, China to provide energy saving products worth in excess of $36 million, at just the time when China is heading into summer, the peak energy season.

Under the Letter of Intent, the Company will supply its energy saving products to be used in the streetlights of the city, as well as to various other government departments within the new district. The agreement is subject to final documentation.

''We will carry out this contract according to our profit sharing model, which enables both China Energy Savings and our customer to benefit,'' said Mr. Sun Li, Chairman and CEO of China Energy Savings. ''The company's share will be 70% of the savings under this arrangement. The average savings in the Wuhan new district is expected to be around 25%, with our return on investment coming in approximately 11 months.''

Upon signing the definitive agreement, estimated net profit during the 7-year life of the contract, according to terms of the LOI, is expected to reach $2.88 million per month upon completion of installation of the equipment, and after recovering the cost of installation.

About China Energy Savings Technology

China Energy Savings Technology, Inc., through its subsidiary, Starway Management Limited, engages in the development, manufacture, sale, and distribution of energy-saving products for use in commercial and industrial settings in the People's Republic of China. 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, Inc.