SHANGHAI, CHINA - 02/27/2006 — China Digital Wireless, Inc. (OTC BB: CHDW)
announced today that the company has entered into an agreement to acquire
95% of the equity interests of Shanghai KENA Energy Saving Electric Co., Ltd
and related patent and patent rights to produce high-energy, high-efficiency
transformers. The company’s decision to enter into the KENA acquisition is
driven by an effort to re-focus the company’s strategy and capitalize on the
strategic opportunity this transaction presents.
The company’s desire to acquire equity interests in KENA and the patent is
driven by several factors:

Strategy Re-focus

The company, which had launched an “out-of-home” digital television
advertising business in January 2005, has determined to expand its
operations in light of the lack of demand for out-of-home digital
advertising in China. Management believes that the lack of demand is caused
by several factors, including the availability of other more traditional
advertising outlets such as television, radio and newspapers, and the
reduction of advertising fees due to the merger of media companies. In
addition, there are an increasing number of competitors in the media
industry, resulting in intense market competition.

Strategic Opportunity

KENA was established in China on April 26, 2005. Its chief scientist Dr.
Chang Kenan, an experienced Chinese-American scientist, is the inventor of
energy saving street lighting system ballasts which are noted for energy
savings, material savings, long-life, and being environmentally friendly.
Since its establishment, KENA has undertaken four street lighting projects
and generated revenue of over RMB 5,000,000. There are approximately nine
street lighting projects under negotiation.

Management believes that the KENA acquisition represents a strategic
opportunity for the company in following ways:

1) The Chinese government has provided strong support of energy saving
products. In the first quarter of 2006, KENA’s energy saving lighting
products will be included in the Chinese government purchasing lists.
Official documents will be issued by the Chinese government to help promote
these products.

2) There is a large demand for energy saving streetlights. According to the
Chinese Construct Department, currently, there are 18,000,000 streetlights
in China with a 17%-18% yearly growth rate. The average replacement rate is
10%. The worldwide demand is estimated at five times as much as the demand
in China.

3) KENA’s products present consumers with positive economic and social
effects. According to a Report from National Centre of Supervision &
Inspection on Electric Light Source Quality of Shanghai, KENA’s energy
saving lighting system ballasts result in a 20% energy saving, allowing
consumers to recover their costs in two years. Compared to other similar
products, KENA’s system ballasts use 15% less materials than other similar
products and have a 20-year service life, which is 10 years longer than
other similar products.