Cogo Expands Presence in Rapidly Growing China Automotive Market

- Second Quarter Progressing Better than Expected

Jun 03, 2010, 06:00 ET from Cogo Group, Inc.

SHENZHEN, China, June 3 /PRNewswire-FirstCall/ -- Cogo Group, Inc. (Nasdaq: COGO), a leading embedded solutions and software provider for the technology and industrial sectors in China, today announced its latest series of embedded solution design wins in the automotive sector.  The new design wins will broaden Cogo's presence in China's rapidly growing automotive sector beyond its current partnership with BYD, a leading domestic auto manufacturer.  

The customized, embedded solutions and software design wins announced today are targeted for a leading Chinese auto-maker, Geely, and include a number of key applications including GPS navigation, in-car PCs, and an automotive "Blackbox" similar to those found in airplanes.  Revenue from these new wins is expected in the fourth quarter of 2010.  Over time, Cogo expects to announce further wins with other leading auto vendors.  The Company believes that high-end automotive features will increasingly become part of the standard offerings for cars across all price points.  

Cogo is already in partnership with a leading global auto electronics semiconductor company to develop embedded solutions and software for BYD, and currently has design wins across BYD's conventional, hybrid and electrical models.  Cogo expects to expand its presence as new models with increased functionality are developed.  

China ranks number one in the world's production of automobiles as sales of passenger vehicles reached 1.11 million in April, up 34% from the prior year period.  Cogo expects these strong trends to continue not only in tier-one but also in tier-two and tier-three Chinese cities. BYD plans to ship an estimated 800,000 auto units in 2010, double its sales of about 440,000 in 2009, while Geely plans to ship an estimated 400,000 units in 2010, up 22% from 325,000 in 2009.

"I am very excited about our team's embedded solutions and software design work in the Auto Electronics sector.  We recorded our initial Auto revenue in the first quarter of 2010, and we expect this business to ramp well over the next several years," commented Jeffrey Kang, CEO of Cogo.  "These incremental design wins demonstrate our progress in penetrating China's Auto sector, which will be a key driver in helping to accelerate our Industrials business from 16.7% of total sales in the first quarter of 2010 to around 20% exiting 2010."

"We're especially pleased to see continued strong consumer and industrial trends in China. Although there are concerns over slowing growth in both China and Europe, we don't anticipate any change in our current momentum for the foreseeable future."

"In fact, our business in the second quarter of 2010 is progressing better than expected across all segments.  We continue to broaden our business opportunities beyond our core telecom and digital media segments to include the fastest growing Industrial businesses. We are excited about our growing order momentum and visibility in a number of new revenue streams, including the Smart Meter/Grid roll-outs, High Speed Railways, Auto Electronics, HDTV roll-out and improving fundamentals in the 3G Smartphone market," Mr. Kang remarked.  

About Cogo Group, Inc.:

Cogo Group, Inc. (Nasdaq: COGO) is a leading embedded solutions and software provider for the technology and industrial sectors in China. The Company believes it acts as a proxy to China's technology industry as it works with virtually all the major ODMs and OEMs in China. Cogo leverages these relationships and combines their IP to create designs that Cogo then sells to electronic manufacturers. These designs allow manufacturers to reduce their time to market for new products and ultimately increase sales. Cogo focuses on the telecommunications equipment, digital media and industrial applications end-markets for their customized design modules while also offering business and engineering services to their large telecommunications equipment vendor customers. Over the last fifteen years, Cogo has grown its customer list to include nearly 1,500 manufacturers across the telecommunications equipment, digital media and industrial applications markets, covering both multinational Chinese subsidiaries and Chinese domestic companies.

For further information:

Investor Relations

www.cogo.com.cn/investorinfo.html

communications@cogo.com.cn

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+852 2730 1518 

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+1 (646) 291 8998

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+86 755 2674 3522



Safe Harbor Statement:

This press release includes certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include statements about our proposed discussions related to our business or growth strategy such as growth in industrial applications, digital media and telecommunications businesses, such as business with BYD and Geely, which are subject to change. Such information is based upon expectations of our management that were reasonable when made, but may prove to be incorrect. All such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. For further descriptions of other risks and uncertainties, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at www.sec.gov.

SOURCE Cogo Group, Inc.



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