China BAK Battery Provides Business Update

China BAK Battery Provides Business Update

November 28, 2007

    SHENZHEN, China, Nov. 28 /Xinhua-PRNewswire-FirstCall/
-- China BAK Battery, Inc. ("China BAK", or
"BAK") (Nasdaq: CBAK), one of the largest
lithium-ion battery cell manufacturers in the world, as
measured by production output, today provided a business
update regarding results for the fourth quarter and the
fiscal year ended September 30, 2007.  China BAK expects to
report its annual financial results with the Securities and
Exchange Commission on Form 10-K on December 14, 2007.  The
financial results presented herein are preliminary, and it
is possible that adjustments could be made before China BAK
files its Form 10-K.

    For the fourth quarter fiscal 2007 (FY07), BAK expects
to report net revenues of approximately $43.8 million, down
5.1% from $46.1 million for the fourth quarter of fiscal
2006 (FY06), but up 48.5% from $29.5 million for the third
quarter of FY07; gross profit of approximately $6.2
million, or 14.2% of revenues, down 47.5% from $11.8
million, or 25.6% of revenues, for the fourth quarter of
FY06, but up 22.5% from $5.1 million, or 17.2% of revenues,
for the third quarter of FY07; and net loss of approximately
$0.8 million, as compared to net income of $4.7 million for
the fourth quarter of FY06, and net loss of $2.7 million
for the third quarter of FY07. 

    The sequential, quarter to quarter improvements are
mostly attributed to higher revenues from aluminum case
cells, while the reduction in gross profit and net income
as compared to fourth quarter of FY06 is mostly due to a
significant increase in the purchase cost of raw materials,
especially lithium cobalt dioxide.

    For fiscal 2007, BAK expects to report net revenues of
approximately $145.9 million, up $2.1 million or 1.4% from
$143.8 million for fiscal 2006; gross profit of
approximately $25.6 million, or 17.6% of revenues, down
35.4% from $39.6 million for fiscal 2006; and net income of
approximately $0.5 million, as compared to $20.2 million for
fiscal 2006. 

    The year to year reduction in gross profit and net
income is due to a significant increase in the purchase
cost of raw materials, especially lithium cobalt dioxide,
and significantly increased depreciation charges with the
completion of two new production lines, which is a major
and necessary part of China BAK's continuous efforts in
transitioning from the Chinese secondary market to the
international OEM market.

    "While we saw modest overall revenue improvement,
margins continue to be impacted by high raw material,
depreciation and overhead costs.  We are continuing the
strategy of increasing the application of alternative raw
materials and raising selling prices in our new products. 
We have accumulatively made large capital investments in
our cylindrical battery cell production line and OEM
prismatic production line to attract new higher margin
projects while we're reducing production of some lower
margin products.  We also expect a higher yield in
cylindrical and polymer battery cell manufacturing in the
upcoming quarters after hiring several outstanding
manufacturing engineers and management staff.  We believe
the changes initiated in our operations over the last
several months have put us back on the right track, as
operating performance improved in the fourth quarter of
this year as compared to the third quarter," said
Xiangqian Li, China BAK's chief executive officer. 
"Management believes these changes are sustainable and
further improvement can be achieved in our operations as we
move into 2008."

    For more detailed management discussion of the results
for the fourth quarter and the fiscal year ended September
30, 2007, please attend China BAK's conference call to be
scheduled in early December 2007.  The conference call dial
in and webcast information and further information
concerning BAK's financial results shall be announced as
soon as practicable.

    About China BAK Battery Inc.

    China BAK Battery, Inc. is one of the largest
manufacturers of lithium-based battery cells in the world,
as measured by production output.  It produces battery
cells that are the principal component of rechargeable
batteries commonly used in cellular phones, notebook
computers, cordless power tools and portable consumer
electronics, such as digital media devices, portable media
players, portable audio players, portable gaming devices
and personal digital assistants (or PDAs).  China BAK's 1.9
million square feet facilities are located in Shenzhen, PRC,
and have been recently expanded to produce new products. 
China BAK is the largest manufacturer of lithium-ion
battery cells for China's cellular phone replacement
battery market.  More information about China BAK (Nasdaq:
CBAK) is available at http://www.bak.com.cn . 

    Safe Harbor Statements

    This press release contains forward-looking statements,
which are subject to change.  The forward-looking statements
are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.  All
"forward-looking statements" relating to the
business of China BAK Battery, Inc. and its subsidiary
companies, which can be identified by the use of
forward-looking terminology such as "believes,"
"expects" or similar expressions, involve known
and unknown risks and uncertainties which could cause
actual results to differ. These factors include but are not
limited to: risks related to China BAK's business and risks
related to operating in China. Please refer to China BAK's
Annual Report on Form 10-K for the fiscal year ended
September 30, 2006, as well as China BAK's Quarterly
Reports on Form 10-Q for FY07, for specific details on risk
factors.  Given these risks and uncertainties, you are
cautioned not to place undue reliance on forward-looking
statements.  The Company's actual results could differ
materially from those contained in the forward-looking
statements.  The company undertakes no obligation to revise
or update its forward-looking statements in order to reflect
events or circumstances that may arise after the date of
this release.




    For more information, please contact:

    Company Contact:
     Tracy Li
     Tel:   [phone]
     Email: [e-mail]