CESV China Energy Savings Technology (MM)

China Energy Savings' Subsidiary Enters into $4.15 Million Contract with Leading Engineering Firm for Energy-Saving Technology Products Revenue from Sale to be Recognized by End of 2005; Strong Demand for Company's Products Driven by Power Shortages in China HONG KONG, Aug. 1 /Xinhua-PRNewswire/ -- China Energy Savings Technology, Inc. (NASDAQ:CESV), a leading provider of energy management products in China, announced today that its energy savings subsidiary has signed a $4.15 million contract with Fu Chun Time Mechanical Engineering Company, a leading mechanical engineering company in Hangzhou, a major city in the Zhejiang Province in China. The contract is expected to generate a 70% profit margin for China Energy. Under the contract, the Company will sell a total of 3,441 products in seven categories, ranging from light savers and sewing machine savers to mechanical energy savers. All have demonstrated the ability to reduce energy consumption from 25% to 31.7%, based upon recent test results. The installation of the equipment is expected to be completed by the end of December, 2005. China recently entered the summer, the peak season for power consumption, which has driven growing demand for the Company's energy management solutions. Not only has the number of substantial orders and contracts increased, like the Zhuhai street lights contract, announced earlier, which has safeguarded the revenue and profit for the next three to seven years, but also the number of orders and contracts of outright sales has increased tremendously. 'We continue to see strong demand for our energy saving technology from both the public and private sector,' said Sun Li, Chairman and CEO of China Energy Savings. 'We expect our fourth fiscal quarter, ending September 30, 2005, will generate record revenue and profits, culminating in our best year ever. With significant demand for our energy saving technology, driven by the growing need for cost-effective energy solutions in China, the Company's prospects for growth have never looked better.' About China Energy Savings Technology China Energy Savings Technology, Inc., through its ownership interest in 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. 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: +1-480-902-3110 Web: http:www.cesv-inc.com Email: Ed Lewis CEOcast, Inc. Tel: +1-212-732-4300 http://www.cesv-inc.com DATASOURCE: China Energy Savings Technology, Inc. CONTACT: John Roskelley of First Global Media, +1-480-902-3110, or for CESV; Ed Lewis of CEOcast, Inc.,+1-212-732-4300 Web site: http://www.dicjenhitech.com/

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