CESV China Energy Savings Technology (MM)

Revenue from Sale to be Recognized by End of 2005; Rising Costs of Energy in China Drive Growing Sales HONG KONG, Aug. 30 /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 contract with Zhejiang Zhenxing Group Limited, a leading investment conglomerate which owns factories and shopping malls and is based in Zhejiang Province, China, for the outright sale of $4.48 million worth of energy- savings products. The contract is expected to generate a 73% profit margin for China Energy. Under the contract, the Company will sell a total of 1,120 products in five 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 32%, based upon recent test results. The installation of the equipment is expected to be completed by the end of December 2005. The contract is the second significant outright sale of energy-saving products this month. Previously, China Energy Savings announced that the Company had 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, to provide energy-saving products. China recently entered the summer, the peak season for power consumption, which has driven growing demand for the Company's energy management solutions. In addition to outright equipment sales, the Company continues to enter into significant energy-sharing agreements with municipalities and leading companies throughout China. "The continued increase in energy costs has further increased the demand for our energy saving technology from both the public and private sector," said Sun Li, Chairman and CEO of China Energy Savings. "With energy costs reaching record levels, companies and municipalities are increasingly turning to us for solutions as the leader in the market for energy-saving products in the country. As a result, we expect that our current quarter, which represents the final quarter of our fiscal year, will be the strongest quarter in the Company's history." 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. Ed Lewis CEOcast, Inc. Tel: +1-212-732-4300 DATASOURCE: China Energy Savings Technology, Inc. CONTACT: Ed Lewis, CEOcast, Inc., +1-212-732-4300, for China Energy Savings Technology, Inc.

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