China 3C Group Raises Guidance for 2006 Following Its Acquisition of Hangzhou Sanhe

China 3C Group (OTC Bulletin Board: CHCG), the parent company of Zhejiang Yong Xin Digital Technology Co., Ltd. today announced that has completed its acquisition of Hangzhou Sanhe Electric Technology Ltd., a rapidly growing home electronics retail chain. As previously announced, China 3C is acquiring 100% of Hangzhou Sanhe in a cash and stock transaction valued at approximately $8.75 million.

China 3C Group has revised it guidance for full year 2006 to reflect its successful transition from a channel distributor to an independent retail chain operator. The Company expects revenues for the year of 2006 to be $135 million (including the revenues of Hangzhou Sanhe), compared to revenues of $48.58 million for 2005, an increase of 177%. The Company expects net income to be $9.8 million, compared to a net income of $2.7 million for 2005, an increase of 262%. Earnings per share are expected to be $0.20 for 2006. The Company's previous guidance had been for revenues of between $90 and $93 million, net income between $6 to $6.5 million.

Mr. Zhenggang Wang, Chief Executive Officer, stated, "We are very pleased to have completed our acquisition of Hangzhou Sanhe. We now have more than 600 retail stores with our business line increasing to home electronics. In order to expand our business to Southern China and the entire China market, we will continue to seek to acquire enterprises with strong core competencies that can provide us with a competitive advantage and increase our profitability."

About China 3C Group

China 3C Group is a leading retail chain operating over 600 independent stores in Eastern China. The Company specializes in selling 3C products (communication products, information technology products, and digital products) in China through its subsidiary Zhejiang Yong Xin Digital Technology Co., Ltd. Among China 3C's primary attributes is its efficient distribution network and rapid logistics system. The Company's goal is to become the number one retailer of 3C products in China.

About Hangzhou Sanhe Electronic Technology, Ltd.

Hangzhou Sanhe Electronic Technology, Ltd. is a home electronics retail chain in Eastern China. It has 200 retail stores in Shanghai City, Zhejiang Province and Jiangsu Province. The company specializes in the sell of home electronics, including DVD players, audio systems, speakers, televisions and air conditioners. For more information on the company, visit http://www.sanhee.cn.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.

This news release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including the recent economic slow down affecting technology companies, our ability to successfully develop products, rapid technological change in our markets, changes in demand for our future products, legislative, regulatory and competitive developments and general economic conditions. Our Annual Report on Form 10-KSB, recent and forthcoming Quarterly Reports on Form 10-QSB, recent Current Reports on Forms 8-K and 8-K/A, and other SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.