Recent Achievements and Highlights

• Revenue increased 12.9% year-over-year to $71.8 million in the first quarter of fiscal 2012
• Gross profit was $14.0 million, up 40.4% from $10.0 million in the first quarter of fiscal 2011
• Gross margin significantly improved to 19.6% from 15.7% a year ago
• China BAK reported another quarter of positive cash flow of $5.6 million from operating activities

First Quarter Fiscal Year 2012 Financial Results

Net revenues for the first quarter were $71.8 million, up 16.5% from $61.6 million last quarter and up 12.9% from $63.5 million for the same period in fiscal 2011.

Revenues from prismatic products, including aluminum-case cells and battery packs, which are used in mobile phones and certain personal electronic devices, were $55.1 million, up 16.7% from $47.2 million in the previous quarter and up 16.0% from $47.5 million for the same period in fiscal 2011.

Revenues from cylindrical cells, used in notebook computers, certain electronic devices and electric vehicles, were $13.0 million, up 27.1% from $10.2 million in the previous quarter and up 23.9% from $10.5 million for the same period in fiscal 2011.

Revenues from lithium polymer cells, used in personal electronic devices such as PDAs, MP3 players and Bluetooth devices, were $2.6 million, down 12.7% from $3.0 million in the previous quarter and down 24.0% from $3.5 million in the same period in fiscal 2011.

Revenues from high-power lithium battery cells, used in electric bicycles, other electric vehicles, power tools, and uninterruptible power supplies, and other applications, were $1.1 million, down 9.8% from $1.2 million in the previous quarter and down 49.6% from the same period in fiscal 2011.

Gross profit for the first quarter of fiscal year 2012 was $14.0 million, up 69.8% from $8.3 million in the previous quarter and up 40.4% from $10.0 million in the same quarter of last year. Gross margin was 19.6%, significantly up from 13.4% in the previous quarter and 15.7% in the year ago period. The increase in gross profit was largely due to an increase in average selling prices of the Company's cylindrical batteries, which significantly increased the gross margin of the Company's cylindrical battery products. The Company also benefited from an increase in gross profit from sales of its prismatic battery products as a result of additional direct sales of battery packs to OEM cell phone manufacturers driven by strong customer demand.

Operating expenses totaled $11.7 million, or 16.3% of revenue, in the first quarter, down 13.2% from $13.5 million, or 21.9% of revenue, in the previous quarter, and down 0.8% from $11.8 million, or 18.6% of revenue, in the first quarter of fiscal 2011. Operating expenses in the first quarter of fiscal 2012 include an impairment charge of $2.7 million, compared with an impairment charge of $6.5 million in the previous quarter, and no impairment charge in the first quarter of fiscal 2011. Research and development expenses were $1.2 million, or 1.7% of revenue, down 33.5% from $1.9 million, or 3.0% of revenue in the previous quarter, and down 24.4% from $1.6 million, or 2.6% of revenue, in the same quarter of fiscal 2011. Sales and marketing expenses were $2.0 million, or 2.7% of revenue, down 3.4% from $2.0 million, or 3.3% of revenue, in the previous quarter, and down 13.9% from $2.3 million, or 3.6% of revenue, in the same quarter of fiscal 2011. General and administrative expenses were $5.8 million, or 8.1% of revenue, up 89.2% from $3.1 million, or 5.0% of revenue, in the previous quarter, and down 26.5% from $7.9 million, or 12.4% of revenue, in the same quarter of fiscal 2011.

Operating income for the first quarter was $2.3 million compared to operating loss of $5.2 million in the previous quarter and operating loss of $1.8 million in the same quarter of fiscal 2011.

Net loss was $1.8 million, or diluted loss per share of $0.03, in the first quarter of fiscal 2012 compared to net loss of $9.6 million, or diluted loss per share of $0.15, in the previous quarter and net loss of $3.7 million, or diluted loss per share of $0.06, in the same quarter of fiscal 2011.

Financial Condition

On December 31, 2011, China BAK had $5.9 million in cash and cash equivalents. For the first quarter of fiscal year 2012, Days Sales Outstanding (DSO) increased to 124 days from 116 days last quarter and Days Sales of Inventory decreased to 96 days from 123 days last quarter. Short-term bank loans and long-term bank loans totaled $159.0 million as compared to $178.2 million on September 30, 2011. Shareholders' equity totaled $135.5 million. China BAK had $45.6 million available for borrowing under its credit facilities. The Company generated $5.6 million from cash flow from operating activities in the first quarter of fiscal 2012.

Business Outlook

"In fiscal 2012, our growth strategy is focused on implementing aggressive sales and marketing efforts to expand our market share and increase our OEM customer base for prismatic battery packs and high-power lithium batteries. Over the next few quarters, we also expect to be certified by additional Tier 1 customers for polymer batteries for use in ultra-thin smartphones and tablet computers," commented Mr. Xiangqian Li, Chairman, President and CEO of China BAK.

"The market demand for our high-power lithium batteries and cylindrical batteries used in EVs, E-bikes, power tools, and UPS energy storage solutions continues to grow at a robust pace and we believe we are well-positioned to capitalize on such market opportunities. We expect such growth opportunities in the EV industry to contribute to our revenue growth in fiscal 2012," added Mr. Li.

"We continue to make progress with our turnaround strategy and in the first quarter of fiscal 2012, we experienced strong revenue growth and recovery in our gross margin level. We also continue to generate positive cash flow from operations. We continue our efforts to improve our profitability," commented Ke Marcus Cui, CFO of China BAK.

Conference Call

China BAK will host a conference call at 8:00 a.m. ET on Tuesday, February 7, 2012 to discuss results for the first quarter of fiscal year 2012 ended December 31, 2011. To participate in the conference call, please dial the following number approximately fifteen minutes prior to the scheduled conference call time: 877-847-0047 or 212-444-0113. International callers should dial 852-3006-8101. The pass code for the call is 667-319. If you are unable to participate in the call at this time, a replay will be available from 11:00 a.m. ET on Tuesday, February 7, 2012 through 11:00 a.m. ET, Tuesday, February 21, 2012. To access the replay, please dial 866-572-7808. International callers should dial (852) 3012-8000. The pass code for the replay is 667-319. The conference call will be broadcast live over the Internet and can be accessed by all interested parties on the China BAK website at http://www.bak.com.cn/webcast.aspx. To listen to the live webcast, please go to China BAK's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. For those unable to participate during the live broadcast, after the call a replay will be available on China BAK's website for a period of one year.

About China BAK Battery Inc.

China BAK Battery, Inc. (NASDAQ: CBAK) is a leading global manufacturer of lithium-based battery cells. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, smartphones, notebook computers, e-bikes, electric vehicles, power tools, uninterruptible power supplies, and portable consumer electronics such as portable media players, portable gaming devices, personal digital assistants, or PDAs, camcorders, digital cameras, and Bluetooth headsets. China BAK Battery, Inc.'s production facilities, located in Shenzhen and Tianjin, PRC, cover over three million square feet. For more information regarding China BAK Battery, Inc., please visit http://www.bak.com.cn.

Safe Harbor Statement

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, 2011, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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.

-Financial Tables Follow-

SOURCE China BAK Battery, Inc.

Recent Achievements and Highlights

• Gross margin improved to 13.4% in the fourth quarter of fiscal 2011 from gross margin of 7.6% in the previous quarter and of 9.5% in the same period in fiscal 2010
• Cash flow from operating activities in the fourth quarter 2011 and fiscal 2011 significantly improved year over year
• In September 2011 , the Company's Shenzhen facility entered into a strategic cooperation program for electric vehicle development with Hua-chuang Automobile Information Technical Center Co., Ltd. ("HAITEC"), a subsidiary of Yulon Group, Taiwan 's largest automaker
• In late September 2011 , China BAK launched the first single battery and first battery module for use in Electric Vehicles (EVs)
• In November 2011 , the Company was recognized as the "National-certified Enterprise Technology Center" at the China Hi-Tech Fair 2011

Fourth Quarter Fiscal Year 2011 Financial Results

Net revenues for the fourth quarter were $61.6 million , up 30.7% from $47.1 million last quarter and up 10.8% from $55.6 million for the same period in fiscal 2010.

Revenues from prismatic products, including aluminum-case cells and battery packs, which are used in mobile phones and certain personal electronic devices, were $47.2 million , up 83.1% from $25.8 million last quarter and up 9.5% from $43.1 million for the same period in fiscal 2010.

Revenues from cylindrical cells, used in notebook computers, certain electronic devices and electric vehicles, were $10.2 million , down 41.0% from $17.3 million sequentially and up 14.6% from $8.9 million for the same period in fiscal 2010. The decline in cylindrical cells was mainly attributable to the decline in average sales price as a result of the flat growth in market demand for traditional laptops.

Revenues from lithium polymer cells, used in personal electronic devices such as PDAs, MP3 players and Bluetooth devices, were $3.0 million , up 50.2% from $2.0 million in the last quarter and up 2.1% from $3.0 million in the same period in fiscal 2010.

Revenues from high-power lithium battery cells, used in electric bicycles, other electric vehicles, power tools, and uninterruptible power supplies, and other applications manufactured at the Company's Tianjin facility, were $1.2 million , down 42.9% from last quarter and up 86.4% from the same period in fiscal 2010.

Gross profit for the fourth quarter of fiscal year 2011 was $8.3 million , compared to gross profit of $3.6 million last quarter and gross profit of $5.3 million in the same quarter of last year. Gross margin for the fourth quarter of fiscal 2011 increased to 13.4% from 9.5% in the year ago period.

Operating expenses totaled $13.5 million , or 21.9% of revenue, in the fourth quarter compared to $8.9 million , or 18.9% of revenue, in the last quarter and $12.6 million , or 22.7% of revenue, in the fourth quarter of fiscal 2010. Operating expenses in the fourth quarter of fiscal 2011 include an impairment charge of $6.5 million , compared with an impairment charge of $2.0 million in the fourth quarter of 2010. Research and development expenses were $1.9 million , or 3.0% of revenue, as compared to $1.8 million , or 3.9% of revenue in the last quarter and $1.9 million , or 3.4% of revenue in the same quarter of fiscal 2010. Sales and marketing expenses were $2.0 million , or 3.3% of revenue compared to $2.0 million , or 4.3% of revenue in the last quarter and $2.5 million , or 4.6% of revenue in the same quarter of fiscal 2010. General and administrative expenses were $3.1 million , or 5.0% of revenue compared to $5.1 million , or 10.7% of revenue in the last quarter and $6.2 million or 11.2% of revenue in the same quarter of fiscal 2010.

Operating loss for the fourth quarter was $5.2 million compared to $5.3 million in the last quarter and $7.3 million in the same quarter of fiscal 2010.

Net loss was $9.6 million , or diluted loss per share of $0.15 , in the fourth quarter of fiscal 2011 compared to a net loss of $7.2 million , or diluted loss per share of $0.12 , in the last quarter and net loss of $8.6 million , or diluted loss per share of $0.14 , in the same quarter of fiscal 2010.

Fiscal Year 2011 Financial Results

For fiscal year 2011, net revenues were $219.0 million , up 1.9% from $214.8 million in fiscal 2010. Gross profit was $26.3 million or 12.0% of net revenues, up 16.1% from $22.7 million or 10.6% of net revenues for fiscal 2010. Operating loss was $14.2 million compared to $27.8 million in fiscal 2010. Net loss was $24.5 million , or diluted loss per share of $0.39 , compared to a net loss of $32.8 million , or diluted loss per share of $0.53 , in fiscal 2010.

Financial Condition

On September 30, 2011 China BAK had $24.9 million in cash and cash equivalents. For the fourth quarter of fiscal year 2011, Days Sales Outstanding (DSO) decreased to 116 days from 155 days last quarter and Days Sales of Inventory decreased to 123 days from 151 days last quarter. Short-term bank loans and long-term bank loans totaled $178.2 million , as compared to $176.1 million on June 30, 2011 . Shareholders' equity totaled $135.3 million . China BAK had $59.5 million available for borrowing under its credit facilities. The Company generated $35.3 million in cash flow from operating activities in fiscal year 2011.

Business Outlook

"We reported positive operating cash flow for fiscal 2011, reflecting continued progress in our turnaround plan. We are encouraged by the rapid growth in the EV market and plan to expand the application of our products in this area. We also continue to strive to implement cost control measures to improve our margins and achieve profitability," commented Mr. Ke Marcus Cui , CFO of China BAK.

"Over the past ten years, China BAK saw tangible results from its efforts to develop into a rising supplier to China 's EV battery cell industry while maintaining its position as a leading battery cell manufacturer for China 's cellular phone market. We are confident in our ability to achieve strong revenue growth from the introduction of new products and expansion into new applications," commented Mr. Xiangqian Li , CEO of China BAK.

Conference Call

China BAK will host a conference call at 8:00 a.m. ET on Wednesday, December 7, 2011 to discuss results for the fourth quarter and Fiscal Year 2011 ended September 30, 2011 . Joining Xiangqian Li , China BAK's Chairman, President and Chief Executive Officer on the call will be Ke Marcus Cui , Chief Financial Officer, and Huanyu Mao , Director and Chief Technology Officer. To participate in the conference call, please dial the following number approximately fifteen minutes prior to the scheduled conference call time: 877-847-0047 or 212-444-0113. International callers should dial 852-3006-8101. The pass code for the call is 659-295. If you are unable to participate in the call at this time, a replay will be available from 11:00 a.m. ET on Wednesday, December 7, 2011 through 11:00 a.m. ET , Wednesday, December 21, 2011 . To access the replay, please dial 866-572-7808. International callers should dial 852-3012-8000. The pass code for the replay is 659-295. The conference call will be broadcast live over the Internet and can be accessed by all interested parties on the China BAK website at http://www.bak.com.cn/. To listen to the live webcast, please go to China BAK's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. A replay of the conference call will also be available after the call on China BAK's website for a period of one year.

About China BAK Battery Inc.

China BAK Battery, Inc. (NASDAQ: CBAK - News) is a leading global manufacturer of lithium-based battery cells. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, smartphones, notebook computers, e-bikes, electric vehicles, power tools, uninterruptible power supplies, and portable consumer electronics such as portable media players, portable gaming devices, personal digital assistants, or PDAs, camcorders, digital cameras, and Bluetooth headsets. China BAK Battery, Inc.'s production facilities, located in Shenzhen and Tianjin , PRC, cover over three million square feet. For more information regarding China BAK Battery, Inc., please visit http://www.bak.com.cn.

Safe Harbor Statement

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, 2010 , as well as China BAK's Quarterly Reports on Form 10-Q that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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:

China BAK Battery, Inc.
Mr. Ke Marcus Cui
Chief Financial Officer
E-mail: ir@bak.com.cn

Ms. Tracy Li
Investor Relations Officer
Tel: 86-755-89770093
E-mail: ir@bak.com.cn

CCG Investor Relations
Mr. Roger Ellis
Partner & SVP for Market Intelligence
Tel: 310-954-1332
E-mail: roger.ellis@ccgir.com

As recently reported in the periodical Advanced Battery Weekly, there are nearly 300 lead-acid battery producers in Zhejiang Province, China, and more than a hundred people have unsafely high blood lead level in this area. Several leading lead-acid battery manufacturers in China have recently suspended production due to a government crackdown on heavy metal pollution. In addition, each of the Ministry of Public Security, the Ministry of Industry and Information Technology, State Administration for Industry & Commerce and the General Administration of Quality Supervision, Inspection and Quarantine is reportedly requiring local governments, police, regional industry and commerce offices to tighten management of e-bike manufacturing plants. Based on reports, e-bikes may weigh no more than 40 kg and may not exceed a top speed of 20 km (12.4 miles) per hour. In comparison with the traditional lead-acid battery, it has been documented that lithium-based battery cells provide a number of advantages, including lighter weight (the weight for each battery pack used in an e-bike is about 4 kg) without sacrificing capacity, or about 1/3 or 1/4 less weight than a comparable lead-based battery; longer cycle-life; and have less environmental impact due to zero use of lead. All products using China BAK battery packs can meet the above government requirements.

Concurrently with these industry developments, the Company has received an increase in the number of requests for China BAK's lithium-based battery cells from e-bike manufacturers. Similarly, the Company's major customers, XDS Shenzhen Xidesheng Bicycle Co., Ltd., Geoby Electric Vehicle Co., Ltd. and NOAHtek Electric Bicycles Company, have recently initiated discussions with the Company regarding future orders. As compared with orders received and expected to be received for the Company's quarter ended June 30, 2011, the Company's forecast quantity of orders for its quarter ended September 30, 2011 from e-bike manufacturers is expected to be approximately 88% higher, or 20,000 battery packs compared to expected sales of approximately 10,600 for the current quarter. China BAK also expects that the Company will see additional new customers from the traditional lead-acid-battery-powered bicycle manufacturers for the quarter ended September 30, 2011.

"Reuters reported that batteries for e-bikes accounted for about 20 percent of China's 3.7 million tonnes of refined lead consumption in 2010 with annual production of more than 17 million e-bikes. Due to the government's focus on heavy metal pollution, we believe even a 10% replacement in demand for the traditional lead-acid battery by lithium-ion battery to power e-bikes, would result in a substantial increase in demand for us," commented Mr. Ke Marcus Cui, Chief Financial Officer of China BAK. "The Chinese government provides strong support and encouragement to lithium-based battery development and we are well recognized for our high-quality, extensive production experience and technology in the e-bike market. We therefore expect to further increase our sales of lithium-based batteries to e-bike customers."

About China BAK Battery, Inc.

China BAK Battery, Inc. (NASDAQ:CBAK - News) is a leading global manufacturer of lithium-based battery cells. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, notebook computers and portable consumer electronics such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s production facilities, located in Shenzhen and Tianjin, PRC, cover over three million square feet and have been recently expanded to support the production of larger batteries for various types of vehicles. For more information regarding China BAK Battery, Inc., please visit http://www.bak.com.cn.

Safe Harbor Statement

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, 2010, as well as China BAK's Quarterly Reports on Form 10-Q that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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.

SHENZHEN, China, Jan. 28, 2011 /PRNewswire-Asia/ -- China BAK Battery, Inc. ("China BAK", the "Company", or "we") (Nasdaq: CBAK), a leading global manufacturer of lithium-based battery cells, today announced its financial results for the first quarter of fiscal year 2011 ended December 31, 2010 ("Q1 2011").

Recent Achievements and Highlights

• Revenue increased 26.5% year-over-year and 14.3% quarter on quarter (Q1 2011 compared to Q4 2010)
• Revenues from high-power batteries more than tripled sequentially in Q1 2011 due to robust demand for batteries used in Energy Storage Solutions
• Gross margin improved to 15.7% in the first quarter of fiscal 2011 from 9.5% in the previous quarter
• Reported another quarter of positive cash flow of $18.4 million from operating activities, reflecting continued progress in the Company's turnaround plan
• Days Sales Outstanding declined to 126 days from 134 days last quarter and Days Sales of Inventory declined to 110 days from 115 days in the previous quarter
• In November 2010, Chery Automobile Co., Ltd. officially launched its first Lithium-ion solution EV, Ruilin M1, powered by China BAK's lithium-ion phosphate batteries at the 25th World Electric Vehicle Symposium and Exposition
• BAK International (Tianjin) Limited ("BAK Tianjin"), the Company's wholly-owned subsidiary, received a subsidy of approximately $7.5 million for its automated high power lithium battery project in December 2010

During the quarter ended December 31, 2010, the Company recorded $3.6 million in non-cash expense items following a strategic review of its operations. The Company has presented non-GAAP gross profit, operating income (loss), net income (loss) and diluted loss per share excluding the impact of non-cash items on its financial results for the three months ended December 31, 2010, September 30, 2010, and December 31, 2009. A reconciliation of these non-GAAP measures to the corresponding GAAP measure is provided in Table 4 below. The Company uses the non-GAAP information in its internal performance measures to analyze performance between periods, develop internal projections and measure management performance. The Company believes the non-GAAP results provide investors with a measurement of operating results which are comparable with subsequent periods.

First Quarter Fiscal Year 2011 Financial Results

Net revenues for the first quarter were $63.5 million, up 14.3% from $55.6 million last quarter and up 26.5% from $50.2 million for the same period in fiscal 2010.

Revenues from prismatic products, including aluminum-case cells and battery packs, which are used in mobile phones and certain personal electronic devices, were $47.5 million, up 10.2% from $43.1 million last quarter and up 22.5% from $38.8 million for the same period in fiscal 2010.

Revenues from cylindrical cells used in notebook computers were $10.5 million, up 17.6% from $8.9 million last quarter and up 29.1% from $8.1 million for the same period in fiscal 2010.

Revenues from lithium polymer cells, used in personal electronic devices such as PDAs, MP3 players and Bluetooth devices, were $3.5 million, up 17.2% from last quarter and up 9.4% from the same period in fiscal 2010.

Revenues from high-power lithium battery cells, used in electric bicycles, power tools, uninterruptible power supplies, and other applications manufactured at the Company's Tianjin facility, were $2.1 million, up around two times the revenue from last quarter and up nearly 12 times the revenue from the same period in fiscal 2010.

Gross profit for the first quarter of fiscal year 2011 was $10.0 million, up 88.3% from $5.3 million last quarter and up 4.6% from $9.6 million in the same quarter of last year. Gross margin was 15.7% significantly up from 9.5% last quarter and slightly lower than 19.0% in the year ago period. The increase in gross profit was a result of increased direct sales of battery packs to OEM cell phone manufacturers driven by strong customer demand. The year-over-year decline in gross margin was a result of the Company's adoption of a competitive pricing strategy for its cylindrical cells to increase its market share in the OEM market.

Operating expenses totaled $11.8 million, or 18.6% of revenue, in the first quarter down 6.7% from $12.6 million, or 22.6% of revenue, in the last quarter and down 5.1% from $12.4 million, or 24.8% of revenue, in the first quarter of fiscal 2010. Research and development expenses were $1.6 million, or 2.6% of revenue, down 12.3% from $1.9 million, or 3.4% of revenue in the last quarter and down 7.0% from $1.8 million, or 3.5% of revenue in the same quarter of fiscal 2010. Sales and marketing expenses were $2.3 million, or 3.6% of revenue down 10.4% from $2.5 million, or 4.6% of revenue in the last quarter and up 12.1% from $2.0 million, or 4.0% of revenue in the same quarter of fiscal 2010. General and administrative expenses were $7.9 million, or 12.4% of revenue up 26.0% from $6.2 million, or 11.2% of revenue in the last quarter and down 8.8% from $8.6 million or 17.2% of revenue in the same quarter of fiscal 2010.

Operating loss for the first quarter was $1.8 million compared to operating loss of $7.3 million in the last quarter and operating loss of $2.9 million in the same quarter of fiscal 2010. Excluding the impact of non-cash items, including provisions for doubtful debts, obsolete inventories and impairment charges related to strategic review of business operations, non-GAAP operating income was $1.8 million in the first quarter of fiscal 2011 compared to non-GAAP operating loss of $3.3 million in the last quarter and non-GAAP operating income of $2.7 million in the same period a year ago.

Net loss was $3.7 million, or diluted loss per share of $0.06, in the first quarter of fiscal 2011 compared to net loss of $8.6 million, or diluted loss per share of $0.14, in the last quarter and net loss of $3.4 million, or diluted loss per share of $0.06, in the same quarter of fiscal 2010. Excluding the impact of non-cash items, including provisions for doubtful debts, obsolete inventories and impairment charges related to strategic review of business operations, non-GAAP net loss for the first quarter of fiscal 2011 was $0.1 million, or a loss of $0.00 per diluted share, compared to non-GAAP net loss of $4.6 million in the previous quarter, or a loss of $0.08 per diluted share, and non-GAAP net income of $2.2 million, or earnings of $0.04 per diluted share in the same period a year ago.

Financial Condition

On December 31, 2010 China BAK had $24.5 million in cash and cash equivalents. For the first quarter of fiscal year 2011, Days Sales Outstanding (DSO) decreased to 126 days from 134 days last quarter and Days Sales of Inventory decreased to 110 days from 115 days last quarter. Short-term bank loans and long-term bank loans totaled $177.6 million as compared to $179.3 million on September 30, 2010. Shareholders' equity totaled $149.4 million. China BAK had $66.9 million available for borrowing under its credit facilities. The Company generated $18.4 million from cash flow from operating activities in the first quarter of fiscal 2011.

Business Outlook

In fiscal 2011, China BAK expects to further penetrate into the rapidly growing EV market, strengthening its existing market position. The Company also intends to be certified by additional OEM customers in the prismatic battery packs segment.

"As a result of our cost-control measures and profitability focus, we continue to experience recovery in gross margin level and increased cash flow generation, reflecting continued progress of our turnaround strategy," commented Ke Marcus Cui, Interim CFO of China BAK.

"Our aggressive sales and marketing efforts in promoting our high-power lithium batteries used in EVs, E-bikes and UPS - energy storage solution, we continue to experience significant revenue growth from this segment. We believe, in the year ahead, due to the outstanding growth opportunities in the EV industry, BAK Tianjin will become a significant revenue contributor to the Company," commented Mr. Xiangqian Li, CEO of China BAK.

Conference Call

China BAK will host a conference call at 8:00 a.m. ET on Friday, January 28, 2011 to discuss results for the first quarter of fiscal year 2011 ended December 31, 2010. Joining Xiangqian Li, China BAK's President and Chief Executive Officer on the call will be Ke Marcus Cui, Interim Chief Financial Officer. To participate in the conference call, please dial the following number approximately fifteen minutes prior to the scheduled conference call time: 877-847-0047 or 212-444-0113. International callers should dial 852-3006-8101. The pass code for the call is 641-962. If you are unable to participate in the call at this time, a replay will be available from 11:00 a.m. ET on Friday, January 28, 2011 through 11:00 a.m. ET, Friday, February 11, 2011. To access the replay, please dial 866-572-7808. International callers should dial (852) 3012-8000. The pass code for the replay is 641-962. The conference call will be broadcast live over the Internet and can be accessed by all interested parties on the China BAK website at http://www.bak.com.cn/. To listen to the live webcast, please go to China BAK's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. For those unable to participate during the live broadcast, after the call a replay will be available on China BAK's website for a period of one year.

About China BAK Battery Inc.

China BAK Battery, Inc. (NASDAQ: CBAK) is a leading global manufacturer of lithium-based battery cells. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, notebook computers and portable consumer electronics such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s production facilities, located in Shenzhen and Tianjin, PRC, cover over three million square feet and have been recently expanded to support the production of larger batteries for various types of vehicles. For more information regarding China BAK Battery, Inc., please visit http://www.bak.com.cn.

Safe Harbor Statement

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, 2010, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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.

SOURCE China BAK Battery, Inc.

Source: PR Newswire (January 28, 2011 - 6:59 AM EST)

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As per the supply contract, China BAK will supply 1,000 units of lithium- ion high-power batteries, which will be used by Geoby Electric to manufacture electric bicycles. Management expects to receive additional orders from Geoby Electric following successful integration and performance testing.

About China BAK Battery Inc.

China BAK Battery, Inc. (NASDAQ:CBAK - News) is a leading global manufacturer of lithium-based battery cells. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, notebook computers and portable consumer electronics such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs.

    Recent Achievements and Highlights
    -- Increased revenues 31.0% year-over-year and 16.1% sequentially (Q3 2010
       compared to Q2 2010);
    -- Doubled revenues from high power batteries sequentially in Q3 2010 due
       to robust demand for batteries used in electric buses and electric
       vehicles;
    -- Reported positive operating cash flow of $8.2 million after two
       quarters of negative operating cash flows, reflecting progress in the
       Company's new turn-around plan;
    -- Reduced debt exposure with repayment of around $18 million of bank
       loans and implemented efficient capital expenditure controls expected
       to reduce expenditures by 20% for the whole year;
    -- Decreased Days Sales Outstanding to 125 days from 141 days last quarter
       and decreased Days Sales of Inventory to 106 days from 169 days in the
       previous quarter.
    -- On May 14, 2010, the US District Court for the Northern District of
       Texas issued an order dismissing the Company without prejudice from a
       federal patent infringement suit against A123Systems that had been
       filed in 2006.
    -- China BAK's Tianjin facility successfully completed ISO/TS16949
       certification in May 2010.

During the quarter ended June 30, 2010, the Company recorded $14.5 million in non-cash expenses following a strategic review of its operations. The Company has presented non-GAAP gross profit, operating income, net income and diluted earnings per share excluding the impact of non-cash expenses on its financial results for the three months ended June 30, 2010, March 31, 2010 and June 30, 2009. A reconciliation of these non-GAAP measures to the corresponding GAAP measure is provided in Table 4 below. The Company uses the non-GAAP information in its internal performance measures to analyze performance between periods, develop internal projections and measure management performance. The Company believes the non-GAAP results provide investors with a measurement of operating results, which are comparable with subsequent periods.

Third Quarter Fiscal Year 2010 Financial Results

Net revenues for the third quarter were $58.6 million, up 16.1% from $50.4 million last quarter and up 31.0% from $44.7 million for the same period in fiscal 2009.

Revenues from prismatic products, including aluminum-case cells and battery packs, which are used in mobile phones and certain personal electronic devices, were $42.8 million, up 22.4% from $35.0 million last quarter and up 51.7% from $28.2 million for the same period in fiscal 2009.

Revenues from cylindrical cells used in notebook computers were $12.8 million, down 4.6% from $13.4 million sequentially and up 0.6% from $12.7 million for the same period in fiscal 2009.

Revenues from lithium polymer cells, used in personal electronic devices such as PDAs, MP3 players and Bluetooth devices, were $2.3 million, up 32.4% from last quarter and down 32.1% from the same period in fiscal 2009.

Revenues from high-power lithium battery cells, used in electric bicycles, power tools, uninterruptible power supplies, and other applications manufactured at the Company's Tianjin facility, were $0.7 million, nearly doubled from last quarter and up more than seven times the revenue from the same period in fiscal 2009.

Gross loss for the third quarter of fiscal year 2010 was $1.2 million compared to gross profit of $5.0 million, or 11.3% of net revenues, for the same period in fiscal year 2009. The decline in gross profit was a result of the Company's adoption of a competitive pricing strategy for its cylindrical cells to gain increased market share in the OEM market and sales of slow-moving inventory at discount to increase operating cash flow. Furthermore, the Company recorded a provision for obsolete inventory of $5.6 million. Excluding the impact of this non-cash expense, non-GAAP gross profit for the third fiscal quarter was $4.4 million, down 20.2% from non-GAAP gross profit of $5.5 million in the same period a year ago.

Operating expenses totaled $17.2 million, or 29.4% of revenue, in the third quarter compared to $8.2 million, or 16.2% of revenue, in the last quarter and $8.6 million, or 19.3% of revenue, in the third quarter of fiscal 2009. Operating expenses in the third quarter of fiscal 2010 include an impairment charge of $5.1 million and a provision for doubtful debts of $3.4 million, compared with $0.9 million in the last quarter and $2.5 million in the third quarter of fiscal 2009. Research and development expenses were $2.1 million, or 3.6% of revenue, as compared to $1.6 million, or 3.2% of revenue in the last quarter and $1.5 million, or 3.3% of revenue in the same quarter of fiscal 2009. Sales and marketing expenses were $2.6 million, or 4.4% of revenue compared to $1.7 million, or 3.4% of revenue in the last quarter and $1.6 million, or 3.5% of revenue in the same quarter of fiscal 2009. General and administrative expenses were $7.4 million, or 12.7% of revenue compared to $4.8 million, or 9.6% of revenue in the last quarter and $5.5 million or 12.4% of revenue in the same quarter of fiscal 2009.

Operating loss for the third quarter was $18.4 million compared to operating income of $0.9 million in the last quarter and operating loss of $3.6 million in the same quarter of fiscal 2009. Excluding the impact of non-cash expenses, including provisions for doubtful debts, obsolete inventories and impairment charges related to strategic review of business operations, non-GAAP operating loss was $3.9 million in the third quarter of fiscal 2010 compared to non-GAAP operating income of $2.7 million in the last quarter and non-GAAP operating loss of $37,000 in the same period a year ago.

Net loss was $18.3 million, or diluted loss per share of $0.29, in the third quarter of fiscal 2010 compared to net loss of $2.6 million, or diluted loss per share of $0.04, in the last quarter and net loss of $5.2 million, or diluted loss per share of $0.09, in the same quarter of fiscal 2009. Excluding the impact of non-cash expenses, including provisions for doubtful debts, obsolete inventories and impairment charges related to strategic review of business operations, non-GAAP net loss for the third quarter of fiscal 2010 was $3.8 million, or a loss of $0.06 per diluted share, compared to non-GAAP net loss of $686,000 in the previous quarter, or a loss of $0.01 per diluted share, and non-GAAP net loss of $1.6 million, or a loss of $0.03 in the same period a year ago.

Financial Condition

On June 30, 2010 China BAK had $24.9 million in cash and cash equivalents. For the third quarter of fiscal year 2010, Days Sales Outstanding decreased to 125 days from 141 days last quarter and Days Sales of Inventory decreased to 106 days from 169 days last quarter. Short-term bank loans and long-term bank loans totaled $180.2 million as compared to $198.3 million on March 31, 2010. Shareholders' equity totaled $155.4 million. China BAK had $66.2 million available for borrowing under its credit facilities. The Company generated $8.2 million from cash flow from operating activities in the third quarter of fiscal 2010.

Business Outlook

"Over the past four years we have invested heavily in strengthening our manufacturing and R&D capacity. As a result, we now have the production lines necessary to support our future development in the electric vehicle (EV) battery market and in the consumer electronic battery market. Despite the impact of severe price competition in cylindrical battery cells for laptop computer batteries on our short-term profitability, we made good progress penetrating other high-gross margin markets, such as electric vehicle and power tool applications," commented Mr. Xiangqian Li, CEO of China BAK.

"We have already received orders from Taiwan's Yulon-motor along with increased order flow from domestic motor manufacturers and we anticipate sales of batteries used in electric buses and electric vehicles to accelerate in the next quarter. We are optimistic that we are starting to enter a growth phase and expect to see strong top line growth and improvements in bottom line in the next few quarters," Mr. Li concluded.

"We began implementing our turn around plan in late May 2010, and we have already made improvements in operating efficiency, cash flow and leverage. We continue to direct our efforts in these areas in order to return the Company to growth and profitability with lower leverage. We are confident that our gross margin will recover to a double-digit level with our cost control measures and reduced inventories," commented Jun Zou, CFO of China BAK.

Conference Call

China BAK will host a conference call at 9:30 p.m. ET on Wednesday, July 28, 2010 to discuss results for the third quarter of Fiscal Year 2010 ended June 30, 2010. Joining Xiangqian Li, China BAK's President and Chief Executive Officer on the call will be Jun Zou, Chief Financial Officer. To participate in the conference call, please dial the following number approximately fifteen minutes prior to the scheduled conference call time: 866-800-8648. International callers should dial (617) 614-2702. The pass code for the call is 158-23-930. If you are unable to participate in the call at this time, a replay will be available from 11:30 p.m. ET on Wednesday, July 28, 2010 through 11:30 p.m. ET, Wednesday, August 11, 2010. To access the replay, please dial 888-286-8010. International callers should dial (617) 801-6888. The pass code for the replay is 656-08-015. The conference call will be broadcast live over the Internet and can be accessed by all interested parties on the China BAK website at http://www.bak.com.cn/ . To listen to the live webcast, please go to China BAK's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. For those unable to participate during the live broadcast, after the call a replay will be available on China BAK's website for a period of one year.

About China BAK Battery Inc.

China BAK Battery, Inc. (NASDAQ:CBAK - News) is a leading global manufacturer of lithium-based battery cells. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, notebook computers and portable consumer electronics such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s production facilities, located in Shenzhen and Tianjin, PRC, cover over three million square feet and have been recently expanded to support the production of larger batteries for various types of vehicles. For more information regarding China BAK Battery, Inc., please visit http://www.bak.com.cn .

Safe Harbor Statement

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, 2009, as well as China BAK's Quarterly Reports on Form 10-Q that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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:

     Mr. Jun Zou
     China BAK Battery, Inc.
     Chief Financial Officer
     Email: ir@bak.com.cn

     Tracy Li
     China BAK Battery, Inc.
     Investor Relations Manager
     Phone: +86-755-8977-0093
     Email: ir@bak.com.cn

     Ms. Elaine Ketchmere,
     CCG Investor Relations
     VP of Financial Writing
     Phone: +1-310-954-1345
     Email: elaine.ketchmere@ccgir.com


                            - Financial Tables Follow -



                                      Table 1

                      China BAK Battery, Inc. and Subsidiaries
           Condensed Interim Consolidated Statements of Operations and
                                 Comprehensive Loss
    For the Three Months Ended June 30, 2010, March 31, 2010 and June 30, 2009
                    (Amounts in thousands, except per share data)

                                             Three Months Ended

                               June 30, 2010  March 31, 2010   June 30, 2009
                                  (Unaudited)     (Unaudited)     (Unaudited)


    Net Revenues                     $58,557         $50,424         $44,689
    Cost of revenues                 (59,764)        (41,421)        (39,641)
    Gross profit / (loss)             (1,207)          9,003           5,048

    Operating expenses:
      Research and development
       expenses                       (2,129)         (1,625)         (1,472)
      Sales and marketing
       expenses                       (2,587)         (1,706)         (1,581)
      General and administrative
       expenses                       (7,429)         (4,819)         (5,551)
    Impairment charge                 (5,058)             --              --
        Total operating expenses     (17,203)         (8,150)         (8,604)

    Operating (loss) / income        (18,410)            853          (3,556)

    Finance costs, net                (2,022)         (2,190)         (1,897)
    Government grant income               58              79             222
    Other income / (expense)             107            (145)           (353)
    Loss before income taxes         (20,267)         (1,403)         (5,584)

    Income tax benefit /
     (expense)                         2,004          (1,147)            413

    Net loss                        $(18,263)        $(2,550)        $(5,171)

    Other comprehensive income /
     (loss)
     - Foreign currency
       translation
       adjustment                      1,298            (164)           (141)

    Comprehensive loss              $(16,965)        $(2,714)        $(5,312)

    Net loss per share:
        Basic                         $(0.29)         $(0.04)         $(0.09)
        Diluted                       $(0.29)         $(0.04)         $(0.09)

    Weighted average shares
     outstanding:
        Basic                         62,888          62,882          56,967
        Diluted                       62,888          62,882          56,967



                                      Table 2

                      China BAK Battery, Inc. and Subsidiaries
                    Condensed Interim Consolidated Balance Sheets
                     As of June 30, 2010 and September 30, 2009
                               (Amounts in thousands)

                                                  June 30,     September 30,
                                                      2010              2009
                                                (Unaudited)         (Audited)
    Assets
    Current assets
      Cash and cash equivalents                    $24,875           $30,678
      Pledged deposits                               9,295            31,115
      Trade accounts receivable, net                79,629            83,292
      Inventories                                   64,799            65,535
      Prepayments and other receivables              5,600             4,632
      Deferred tax assets                            8,151             3,895
      Assets held for sale                             800               804
              Total current assets                 193,149           219,951

      Property, plant and equipment, net           224,012           219,685
      Lease prepayments, net                        31,606            32,166
      Intangible assets, net                           202               239
      Deferred tax assets                               54                43
      Total assets                                $449,023          $472,084

    Liabilities
    Current liabilities
      Short-term bank loans                       $138,944          $139,159
      Current maturities of long-term bank
       loans                                        11,797            16,114
      Accounts and bills payable                    80,258            92,572
      Accrued expenses and other payables           21,236            18,425
                Total current liabilities          252,235           266,270

      Long-term bank loans, less current
       maturities                                   29,493            39,553
      Deferred revenue                               7,314             7,442
      Other long-term payables                       3,382             1,940
      Deferred tax liabilities                       1,201               278
    Total liabilities                              293,625           315,483

    Commitments and contingencies

    Shareholders' equity:
      Ordinary shares US$ 0.001 par value;
       100,000,000 authorized; 57,737,481 and
       63,608,776 issued and outstanding as of
       September 30, 2009 and June 30, 2010,
       respectively                                     64                58
      Donation Shares                               14,102            14,102
      Additional paid-in-capital                   123,131           101,161
      Statutory reserves                             7,315             7,227
      Retained earnings                            (10,964)           13,328
      Accumulated other comprehensive income        25,817            24,791
        Less: Treasury shares                       (4,067)           (4,066)
              Total shareholders' equity           155,398           156,601
    Total liabilities and shareholders'
     equity                                       $449,023          $472,084



                                     Table 3

                     China BAK Battery, Inc. and Subsidiaries
             Condensed Interim Consolidated Statements of Cash Flows
    For the Three Months Ended June 30, 2010, March 31, 2010 and June 30, 2009
                               (Amounts in thousands)

                                              Three Months Ended
                                     June 30,       March 31,       June 30,
                                         2010            2010           2009
                                   (Unaudited)     (Unaudited)    (Unaudited)
    Cash flow from operating
     activities

    Net loss                         $(18,263)        $(2,550)       $(5,171)
    Adjustments to reconcile net
     loss to net cash (used in) /
     provided by operating activities:
      Depreciation and amortization     4,469           4,600          3,983
      Provision for doubtful debts      3,447             921          2,539
      Provision for obsolete
       inventories                      5,574             142            426
      Impairment charge                 5,058              --             --
      Share-based compensation            415             800            554
      Deferred income taxes            (2,004)            200           (713)
      Deferred revenue                    (58)            (58)           (58)
      Exchange loss / (gain)              558             416           (346)
    Changes in operating assets
     and liabilities:
        Trade accounts receivable       1,545         (10,399)         1,735
        Inventories                     5,843           3,475         (4,545)
        Prepayments and other
         receivables                    1,954           4,754          3,141
        Accounts and bills
         payable                        1,111          (7,593)         4,014
        Accrued expenses and
         other payables                (1,443)          3,774           (399)
    Net cash provided by / (used
     in) operating activities          $8,206         $(1,518)        $5,160

    Cash flow from investing
     activities
      Purchases of property, plant
       and equipment                  (12,530)         (3,804)        (1,766)
      Purchases of intangible
       assets                             (12)             --            (49)
      Net cash used in investing
       activities                    $(12,542)        $(3,804)       $(1,815)

    Cash flow from financing
     activities
      Proceeds from borrowings         47,073         100,894         38,457
      Repayment of borrowings         (66,303)        (74,555)       (19,802)
      Decrease / (increase) in
       pledged deposits                 8,795           1,018        (17,656)
    Net cash (used in) / provided
     by financing activities         $(10,435)        $27,357           $999

    Effect of exchange rate
     changes on cash and cash
     equivalents                            2            (694)           (80)
    Net (decrease) / increase in
     cash and cash equivalents        (14,769)         21,341          4,264
    Cash and cash equivalents at
     the beginning of the period       39,644          18,303         25,375
    Cash and cash equivalents at
     the end of the period            $24,875         $39,644        $29,639



                                      Table 4(i)

                    China BAK Battery, Inc. and subsidiaries
                   Reconciliation of non-GAAP to GAAP measures

                                          For the      For the      For the
                                          quarter      quarter      quarter
                                           ended        ended        ended

                                          June 30,    March 31,    June 30,
                                            2010         2010        2009

    Gross Profit as reported under GAAP  (1,207,145)   9,002,755   5,047,796
    Add: Provision for obsolete
     inventories                          5,573,979      142,130     425,929
    Non-GAAP Gross Profit                 4,366,834    9,144,885   5,473,725

    Operating Income (Loss) as reported
     under GAAP                         (18,410,448)     853,268  (3,556,284)
    Add: Provision for doubtful debts     3,447,312      921,213   2,538,670
    Add: Provision for obsolete
     inventories                          5,573,979      142,130     425,929
    Add: Share-based compensation costs     414,912      799,675     553,848
    Add: Impairment charge                5,057,745           --          --
    Non-GAAP Operating Income (Loss)     (3,916,500)   2,716,286     (37,837)

    Net Income (Loss) as reported
     under GAAP                         (18,262,965)  (2,549,811) (5,171,027)
    Add: Provision for doubtful debts     3,447,312      921,213   2,538,670
    Add: Provision for obsolete
     inventories                          5,573,979      142,130     425,929
    Add: Share-based compensation costs     414,912      799,675     553,848
    Add: Impairment charge                5,057,745           --          --
    Non-GAAP Net Income (Loss)           (3,769,017)    (686,793) (1,652,580)

    Diluted Earnings (Loss) Per Share
     reported under GAAP                     ($0.29)      ($0.04)     ($0.09)
    Add: Provision for doubtful debts         $0.05        $0.02       $0.04
    Add: Provision for obsolete
     inventories                              $0.09        $0.00       $0.01
    Add: Share-based compensation costs       $0.01        $0.01       $0.01
    Add: Impairment charge                    $0.08        $0.00       $0.00
    Non-GAAP Diluted (Loss) Earnings
     Per Share                               ($0.06)      ($0.01)     ($0.03)

    Diluted weighted average number of
     common stock outstanding            62,887,664   62,881,663  56,966,619

(i) Note: This earnings release includes financial information that excludes the impact of the specified non-cash expenses set forth above, a financial measure not permitted under US GAAP. For purposes of Regulation G, a non.GAAP financial measure is a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided the table above which includes a reconciliation of gross profit, operating income (loss), net income (loss), and diluted earnings (loss) per share excluding the impact of the non-cash expense items indicated in the above table, to the figures as reported under GAAP. The Company uses the non-GAAP information in its internal performance measures to analyze performance between periods, develop internal projections and measure management performance. The Company's management believes that the presentation of this non-GAAP financial information provides useful information regarding the Company's results of operations because it assists in measuring operating results, which are comparable with subsequent periods.

    Recent Achievements and Highlights
    -- Revenues in Q2 2010 increased 23.5% year-over-year and 0.4%
       sequentially;
    -- Revenues from cylindrical cells used in notebook computers surged 65.0%
       to $13.4 million sequentially and were up 45.1% from same quarter of
       last year. China BAK now supplies three out of the six largest notebook
       OEM makers in the world;
    -- Revenues from high power batteries doubled in Q2 2010, due to
       increasing market demand for Electric Bicycles and Electric Vehicles;
    -- EBITDA increased 318.9% year over year to $6.2 million; Achieved
       $0.9 million in operating income; and
    -- Hired new Chief Financial Officer with more than 16 years of financial
       management and capital market experience globally.

"We are pleased to have shown continued improvement in our operating results during the second fiscal quarter of 2010, including a modest operating profit and $6.2 million in EBITDA," said Xiangqian Li, CEO of China BAK. "With the addition of Mr. Jun Zou as our new Chief Financial Officer, China BAK is working as a team to enhance our business turnaround, through increased focus on improving capital allocation, increasing expense discipline and tying management incentives to enhancing profitability. We believe this hard work will deliver increasing value to our shareholders in the quarters and years to come."

EBITDA represents a non.GAAP (Generally Accepted Accounting Principles) financial measure. A table reconciling this measure to the appropriate GAAP measure is included in the notes to the condensed consolidated financial statements included in this release.

Second Quarter FY10 Financial Results

Net revenues for the second quarter of FY10 were $50.4 million, up 0.4% from $50.2 million from Q1 FY10 reflecting traditional seasonal slowdown during the Chinese New Year and up 23.5% from $40.8 million in the same quarter of last year. Overall average sales price increased almost 6% sequentially.

Revenues from cylindrical cells used in notebook computers were $13.4 million, up 65.0% from $8.1 million sequentially and up 45.1% from $9.2 million in the same quarter of last fiscal year.

Revenues from prismatic products, including aluminum-case cells, steel-case cells and battery packs, which are used in mobile phones and certain personal electronic devices, were $35.0 million, down 9.8% from $38.8 million last quarter due to seasonality, and up 18.2% from $29.6 million in the same quarter of last year.

Revenues from lithium polymer cells, used in personal electronic devices such as PDAs, MP3 players and Bluetooth devices, were $1.7 million in the second quarter of FY10, down 45.7% from last quarter, and down 16.8% from the same quarter of last year.

Gross profit for the second quarter of FY10 was $9.0 million, down 5.8% from $9.6 million last quarter and up 197.9% from $3.0 million in the same quarter of last year. The Company has adopted a pricing strategy on certain categories of its prismatic battery cells to maintain its share in the domestic market. As a result, gross margin declined slightly to 17.9% sequentially, but increased strongly from 7.4% in the same quarter of last year. Our sales of higher-margin products, including prismatic and cylindrical cells, during the second quarter of FY10 increased in proportion to our overall sales from their proportion of overall sales during the same quarter of last year, which resulted in this increase.

Operating expenses totaled $8.1 million or 16.2% of revenues in the second quarter of FY10, as compared to $12.4 million or 24.8% of revenues last quarter and $6.4 million or 15.7% of revenues in the same quarter of last year. Operating expenses included non-cash, share-based compensation costs of $0.8 million in Q2, $1.1 million in Q1 of FY10, and $0.7 million in Q2 of FY09. Research and development expenses were $1.6 million, or 3.2% of revenues, as compared to $1.8 million, or 3.5% of revenues, last quarter and $1.1 million, or 2.8% of revenues, in the same quarter of last year. Sales and marketing expenses were $1.7 million, or 3.4% of revenues, as compared to $2.0 million, or 4.0% of revenues last quarter, and $1.2 million, or 2.8% of revenues, in the second quarter of last year. General and administrative expenses were $4.8 million, or 9.6% of revenues, as compared to $8.6 million, or 17.2% of revenues, last quarter and $4.1 million, or 10.1% of revenues, in the same quarter of last year.

Operating income for the second quarter of FY10 was $0.9 million, a significant improvement as compared to an operating loss of $2.9 million last quarter and an operating loss of $3.4 million in the same quarter of last year.

Net loss was $2.5 million in the second quarter of FY10, as compared to net loss of $3.4 million last quarter and net loss of $5.7 million in the same quarter of last year. Diluted earnings per share were negative $0.04 compared with negative $0.06 per diluted share last quarter and negative $0.10 per diluted share in the same quarter of last year.

Financial Condition

On March 31, 2010 China BAK had $39.6 million in cash and cash equivalents and negative $37.9 million in working capital, reflecting a current ratio of 0.86:1. For the second quarter of FY10, Days Sales Outstanding ("DSO") increased to 141 from 139 last quarter, and Days Sales of Inventory increased to 169 from 162 last quarter. Short-term bank loans and long-term bank loans totaled $198.3 million as compared to $171.9 million on December 31, 2009. Shareholders' equity totaled $171.9 million. China BAK had $70.2 million available for borrowing under its credit facilities.

Business Outlook

"Reviewing the second quarter of fiscal 2010, we are very encouraged to see that the demand for high power cells for the E-Bike and EV market continues to grow, and we look forward to scaling our production levels in line with the development of this exciting market. We were able to achieve gradual improvement of our shipments to the OEM domestic market for branded mobile phone manufacturers through our in house pack line, which will further improve profitability of our traditional prismatic business. We are pleased with our initial relationships with major global notebook OEMs in the cylindrical segment and are focused on demonstrating that we can be a dependable, high volume, high quality partner to these companies over time," commented Mr. Xiangqian Li, CEO of China BAK.

"I am excited to join the China BAK team and aim to lead the Company's success in the quarters and years ahead through a deep commitment to both financial management and transparent communication with the investment community," commented Jun Zou, CFO of China BAK. "After careful scrutiny of our performance in first half of FY 2010 we found that the business recovery in certain segments is likely to be slower than we expected. As a result, we believe it is prudent to revise our revenue guidance to approximately $220 million for FY 2010. We expect to show positive operating income and EBITDA in the second half of the fiscal year."

Conference Call

China BAK will host a conference call at 8:00 p.m. ET on Monday, April 26, 2010 to discuss results for the second quarter of FY10 ended March 31, 2010. Joining Xiangqian Li, China BAK's President and Chief Executive Officer on the call will be Jun Zou, Chief Financial Officer. To participate in the conference call, please dial the following number approximately fifteen minutes prior to the scheduled conference call time: 888-419-5570. International callers should dial (617) 896-9871. The pass code for the call is 919-43-630. If you are unable to participate in the call at this time, a replay will be available from 8:00 p.m. ET on Tuesday, April 27, 2010 through 8:00 p.m. ET, Tuesday, May 11, 2010. To access the replay, please dial 888-286-8010. International callers should dial (617) 801-6888. The pass code for the replay is 583-79-447. The conference call will be broadcast live over the Internet and can be accessed by all interested parties on the China BAK website at http://www.bak.com.cn/ . To listen to the live webcast, please go to the China BAK's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. For those unable to participate during the live broadcast, after the call a replay will be made available on China BAK's website for one year.

About China BAK Battery Inc.

China BAK Battery, Inc. (Nasdaq:CBAK - News) is one of the world's largest manufacturers of lithium-based battery cells as measured by production output. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, notebook computers and portable consumer electronics such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s production facilities, located in Shenzhen and Tianjin, PRC, cover over three million square-feet and have been recently expanded to support the production of larger batteries for various types of vehicles. For more information regarding China BAK Battery, Inc., please visit http://www.bak.com.cn .

Safe Harbor Statement

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, 2009 for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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:

     Mr. Jun Zou
     China BAK Battery, Inc.
     Chief Financial Officer
     Tel:   +86-755-8423-9821
     Email: ir@bak.com.cn

     Tracy Li
     China BAK Battery, Inc.
     Investor Relations Manager
     Tel:   +86-755-8977-0093
     Email: ir@bak.com.cn

SHENZHEN, China, March 25 /PRNewswire-Asia-FirstCall/ -- China BAK Battery, Inc. ("China BAK" or the "Company") (Nasdaq:CBAK - News), one of the world's largest lithium-ion battery cell manufacturers, today announced that Mr. Jun Zou, vice president of strategy, has been appointed as the Company's new chief financial officer, treasurer and secretary, effective April 1, 2010. Mr. Tony Shen, who will step down as chief financial officer, treasurer and secretary, will remain as a consultant to the Company until April 25, 2010 to assist in the transition process.

"It is with great excitement that we welcome Jun Zou to the CFO position," said Mr. Xiangqian Li, China BAK's President and Chief Executive Officer. "Mr. Zou brings more than 16 years of financial expertise and international experience along with a reputation for adding value through creative strategic thinking in driving process, system and internal control improvements. The broad base of financial experience and global expertise he brings to China BAK will help us further cement and expand our established leadership position in lithium-ion mobile, network, consumer electronic and electric vehicle batteries in China."

Mr. Li continued, "We are grateful for Tony's contributions over the past three years and thank him for his efforts in helping to ensure China BAK's solid financial position. We wish him well as he pursues new opportunities."

Mr. Jun Zou has over 16 years of financial management and capital markets experience in the U.S., Europe,Mainland China and Hong Kong. Before joining China BAK, he previously served as chief financial officer at GCL Silicon in Hong Kong, helping the firm to establish its financial management system dealing with all U.S. IPO-related issues and pre-IPO fund raising activities. From 2006 to 2008, he was the chief financial officer for BU Global Technical Services and the head of global customer financing and treasury at Huawei Technologies, a US$30 billion high technology company in China. From 1999 to 2006, Mr. Zou worked at Ericsson U.S. andSweden with progressive managerial roles in customer financing, treasury, strategic planning, and eventually as global controller for the managed services business unit. Prior to 1999, he held positions at Citi Capital Markets, First Union Capital Markets, Bank of Tokyo-Mitsubishi. He once also served as a corporate finance and strategy advisor for businesses and investors in the alternative energy sector. Mr. Zou earned his Bachelor of Science in International Business and Economics at Shanghai International Studies University and his MBA at The University of Texas.

Mr. Zou commented on the appointment, "China BAK is a leading alternative energy company with an intense focus on achieving profitable and sustainable long-term growth. This is an ideal environment for me to utilize the skills and experiences I've acquired in my previous assignments. I look forward to making an immediate and notable impact on the company's success in the quarters and years ahead through a deep commitment to both prudent financial management and transparent communication with the investment community."

About China BAK Battery, Inc.

China BAK Battery, Inc. (Nasdaq:CBAK - News) is one of the world's largest manufacturers of lithium-based battery cells as measured by production output. The Company produces battery cells that are the principal component of rechargeable batteries commonly used in cellular phones, notebook computers and portable consumer electronics such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s production facilities, located in Shenzhen and Tianjin, PRC, cover over three million square-feet and have been recently expanded to support the production of larger batteries for various types of vehicles. For more information regarding China BAK Battery, Inc., please visithttp://www.bak.com.cn .

Safe Harbor Statement

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 Reports on Form 10-K for the fiscal years endedSeptember 30, 2009, as well as China BAK's Quarterly Reports on Form 10-Q that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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.

The dial-in numbers for the call are 888 419.5570 (US), 617 896.9871 (International), and the passcode is 819 291 86.

This call is being webcast by Thomson Reuters and can be accessed at China BAK Battery Inc.'s Web site at http://www.bak.com.cn/.

The webcast is also being distributed through the Thomson Reuters StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com, Thomson Reuters' individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson Reuters' password-protected event management site, StreetEvents (www.streetevents.com).

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices and personal digital assistants (or PDAs), and other applications, such as cordless power tools and minings lamp. China BAK's 3.0 million square feet of facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products. More information about China BAK (Nasdaq: CBAK) is available at http://www.bak.com.cn/.

"We are glad to see our Tianjin facility begin to execute its contract with Jilin Hi-tech Electric Vehicle Co., Ltd. This is our first order for batteries for electric buses. It represents customers' confidence in our products, and is a new and significant stage in China BAK's product development," commented Mr. Xiangqian Li, CEO of China BAK, "With significant government subsidies, we believe electric buses have the biggest potential in the foreseeable electric vehicle industry in China, and we are well prepared to grasp that opportunity."

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s 3.0-million-square-foot facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products.

Safe Harbor Statement

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 Reports on Form 10-K for the fiscal years ended September 30, 2009 for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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.

    Recent Achievements and Highlights
    -- We saw strong recovery from the downturn with sequential growth in
       revenue ($57.6M) and operating cash flow ($5.8M) in Q409 as compared to
       Q309;
    -- Profitability further improved with higher gross margin (14.1%,) and
       smaller loss ($1.4M) than Q309;
    -- We have successfully established ourselves as a major competitor in the
       cylindrical cell market; revenues from cylindrical cells in FY09
       increased to $55.3 million, up 30.0% from FY08;.
    -- Revenues from prismatic battery packs increased to $8.9 million or
       15.5% of revenues in Q409, becoming our third largest revenue source,
       in response to customer needs;
    -- In November 2009, BAK Tianjin signed Letters of Intent with Tianjin
       Qingyuan Electric Vehicle Co., Ltd., Dongfeng Electric Vehicle Co., Ltd.
       and Brilliance Auto Engineering Research Institute for providing
       high-power batteries for use in electric cars, and with Suzhou NOAHtek
       Electric Bicycles Co., Ltd. for providing high-power batteries for use
       in electric bicycles;
    -- We raised $20.6 million in a Registered Direct Offering in October 2009,
       which will further strengthen our financial position and improve the
       operating flexibility.

Fourth Quarter FY09 Financial Results

Net revenues for the fourth quarter of FY09 were $57.6 million, up 28.8% from $44.7 million last quarter and down 20.9% from $72.7 million in the same quarter of last year.

Revenues from cylindrical cells used in notebook computers were $15.0 million, up 18.6% from $12.7 million last quarter and down 23.4% from $19.7 million in the same quarter of last year.

Revenues from prismatic cells, including aluminum-case cells, steel-case cells and battery packs, which are used in mobile phones and certain personal electronic devices, were $37.5 million, up 31.4% from $28.6 million last quarter and down 16.6% from $45.0 million in the same quarter of last year. Revenues from aluminum-case cells were $28.6 million, up 27.1% from $22.5 million last quarter and down 20.6% from $36.0 million in the same quarter of last year. Revenues from battery packs were $8.9 million, up 55.3% from $5.7 million last quarter and up 64.4% from $5.4 million in the same quarter of last year. Revenues from steel-case cells were minimal as we ended production in January 2009.

Revenues from lithium polymer cells, used in personal electronic devices such as PDAs, MP3 players and Bluetooth devices, were $4.9 million in the fourth quarter of FY09, up 46.1% from last quarter, and down 39.2% from the same quarter of last year.

Gross profit for the fourth quarter of FY09 was $8.1 million, up 60.3% from $5.0 million last quarter and down 29.6% from $11.5 million in the same quarter of last year. Gross margin was 14.1%, compared to 11.3% last quarter and 15.8% in the same quarter of last year.

Operating expenses totaled $9.0 million or 15.7% of revenues in the fourth quarter of FY09, as compared to $8.6 million or 19.3% of revenues last quarter and $8.4 million or 11.6% of revenues in the same quarter of last year. Research and development expenses were $1.6 million or 2.8% of revenues, as compared to $1.5 million or 3.3% of revenues last quarter and $1.7 million or 2.3% of revenues in the same quarter of last year. Sales and marketing expenses were $1.8 million or 3.2% of revenues, as compared to $1.6 million, or 3.5% of revenues last quarter and $1.5 million or 2.2% of revenues in the fourth quarter of last year. General and administrative expenses were $5.6 million or 9.7% of revenues, as compared to $5.5 million or 12.4% of revenues last quarter and $5.2 million or 7.1% of revenues in the same quarter of last year.

Operating loss for the fourth quarter of FY09 was $0.9 million, as compared to operating loss of $3.6 million last quarter and operating income of $3.0 million in the same quarter of last year.

Net loss was $1.4 million in the fourth quarter of FY09, as compared to net loss of $5.2 million last quarter and net income of $1.5 million in the same quarter of last year. Diluted earnings per share were negative $0.02 compared with negative $0.09 per diluted share last quarter and $0.03 per diluted share in the same quarter of last year.

For the fourth quarter of FY09, Days Sales Outstanding ("DSO") decreased to 120 from 145 last quarter, and Days Sales of Inventory decreased to 116 from 136 last quarter.

FY09 Financial Results

For FY09, net revenues were $211.1 million, down 13.9% from $245.3 million in FY08, gross profit was $26.8 million or 12.7% of net revenues, down 13.4% from $30.9 million or 12.6% of net revenues for FY08, and net loss was $14.0 million as compared to net loss of $7.9 million for FY08.

Financial Condition

On September 30, 2009 China BAK had $30.7 million in cash and cash equivalents and negative $46.3 million in working capital, reflecting a current ratio of 0.83:1. Short-term bank loans and long-term bank loans totaled $194.8 million as compared to $191.4 million on June 30, 2009. Shareholders' equity totaled $156.6 million. China BAK had $49.6 million available for borrowing under its credit facilities.

Business Outlook

"In FY09, we have weathered the economic crisis relatively well and grown our business by starting shipments to a tier 1 OEM notebook computer customer. We've also made in-roads in the New Energy/Clean Tech sector by providing samples of power cells to auto manufacturers and received favorable comments. We believe we will continue to grow in FY10 and be one of the few winners in this industry," commented Mr. Xiangqian Li, CEO of China BAK.

"We are pleased to see steady increase in revenue, gross margin and operating cash flow since Q2FY09 amid economic recession. Operating measures such as DSO, inventory turns have also rebounded in Q4FY09 to near pre-downturn levels. We will continue to exercise prudence and drive for operating excellence," commented Tony Shen, CFO of China BAK.

China BAK expects that FY10 revenue will fall in the range of $270 million to $310 million, which, at the low point of the range, will represent a 28% growth from FY09, and that bottom line of FY10 will be break-even to slightly profitable.

Conference Call

China BAK will host a conference call at 8:00 a.m. ET on Wednesday, December 2, 2009 to discuss results for the fourth quarter of FY09 ended September 30, 2009. Joining Xiangqian Li, China BAK's President and Chief Executive Officer on the call will be Tony Shen, Chief Financial Officer. To participate in the conference call, please dial the following number approximately fifteen minutes prior to the scheduled conference call time: 800-688-0796. International callers should dial (617) 614-4070. The pass code for the call is 976-118-60. If you are unable to participate in the call at this time, a replay will be available from 10:00 a.m. ET on Wednesday, Dec. 2, 2009 through 10:00 a.m. ET, Wednesday, Dec. 16, 2009. To access the replay, please dial 888-286-8010. International callers should dial (617) 801-6888. The pass code for the replay is 699-49-859. The conference call will be broadcast live over the Internet and can be accessed by all interested parties on the China BAK website at http://www.bak.com.cn/ . To listen to the live webcast, please go to the China BAK's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. For those unable to participate during the live broadcast, shortly after the call a replay will be made available on China BAK's website for 90 days.

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s 3.0-million-square-foot facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products.

Safe Harbor Statement

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 Reports on Form 10-K for the fiscal years ended September 30, 2008, as well as China BAK's Quarterly Reports on Form 10-Q for FY09, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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.

-Financial Tables Follow- China BAK Battery, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income/(Loss) For the Three Months and Fiscal Years Ended September 30, 2009 and 2008 (Amounts in thousands, except per share data) Three Months Ended Years Ended September 30, September 30, 2009 2008 2009 2008 (Unaudited) (Unaudited) Net Revenues $57,551 $72,738 $211,144 $245,348 Cost of revenues (49,457) (61,257) (184,388) (214,442) Gross profit 8,094 11,481 26,756 30,906 Operating expenses: Research and development costs (1,629) (1,688) (5,643) (6,252) Sales and marketing expenses (1,842) (1,568) (6,176) (5,803) General and administrative expenses (5,563) (5,185) (21,990) (19,348) Total operating expenses (9,034) (8,441) (33,809) (31,403) Operating income / (loss) (940) 3,040 (7,053) (497) Finance costs, net (2,255) (3,643) (9,356) (11,021) Government grant income 244 397 637 1,775 Other income 717 683 528 757 Income / (loss) before income taxes (2,234) 477 (15,244) (8,986) Income tax benefit 874 995 1,253 1,045 Net (loss) / income $(1,360) $1,472 $(13,991) $(7,941) Other comprehensive income / (loss) - Foreign currency translation adjustment (112) 1,241 (355) 15,262 Comprehensive income / (loss) $(1,472) $2,713 $(14,346) $7,321 Net income / (loss) per share: -Basic $(0.02) $0.03 $(0.25) $(0.15) -Diluted $(0.02) $0.03 $(0.25) $(0.15) Weighted average shares outstanding: -Basic 56,971 54,511 56,964 52,314 -Diluted 56,971 54,971 56,964 52,314 China BAK Battery, Inc. and Subsidiaries Consolidated Balance Sheets As of September 30, 2009 and 2008 (Amounts in thousands) As of September 30, 2009 2008 Assets Current assets Cash and cash equivalents $30,678 $35,707 Pledged deposits 31,115 4,449 Trade accounts receivable, net 83,292 82,740 Inventories 65,535 67,583 Prepayments and other receivables 4,632 4,463 Deferred tax assets 3,895 1,720 Property, plant and equipment held for sale 804 -- Total current assets 219,951 196,662 Property, plant and equipment, net 219,685 195,435 Lease prepayments, net 32,166 31,782 Intangible assets, net 239 161 Deferred tax assets 43 7 Total assets $472,084 $424,047 Liabilities Current liabilities Short-term bank loans $139,159 $105,598 Current maturities of long-term bank loans 16,114 8,800 Accounts and bills payable 92,572 57,487 Accrued expenses and other payables 18,425 21,581 Total current liabilities 266,270 193,466 Long-term bank loans, less current maturities 39,553 55,732 Deferred revenue 7,442 7,685 Other long-term payables 1,940 -- Deferred tax liabilities 278 92 Total liabilities 315,483 256,975 Commitments and contingencies Shareholders' equity: Ordinary shares US$ 0.001 par value; 100,000,000 authorized; 57,676,481 and 57,737,481 issued and outstanding as of September 30, 2008 and September 30, 2009, respectively 58 58 Donation Shares 14,102 14,102 Additional paid-in-capital 101,161 97,286 Statutory reserves 7,227 6,918 Retained earnings 13,328 27,629 Accumulated other comprehensive income 24,791 25,146 Less: Treasury shares (4,066) (4,067) Total shareholders' equity 156,601 167,072 Total liabilities and shareholders' equity $472,084 $424,047 China BAK Battery, Inc. and Subsidiaries Consolidated Statements of Cash Flows For the Three Months and Fiscal Years Ended September 30, 2009 and 2008 (Amounts in thousands) Three Months Ended Years Ended September 30, September 30, 2009 2008 2009 2008 (Unaudited) (Unaudited) Cash flow from operating activities Net (loss) / income $(1,360) $1,472 $(13,991) $(7,941) Adjustments to reconcile net (loss) / income to net cash provided by operating activities: Depreciation and amortization 1,328 4,014 12,832 13,376 Provision for / (recovery of) doubtful debts 1,864 (244) 7,725 1,943 Provision for obsolete inventories 1,059 496 929 610 Share-based compensation 1,622 1,246 3,725 3,780 Deferred income taxes (1,020) (951) (2,024) (1,152) Deferred revenue (58) (282) (234) (282) Exchange loss / (gain) (458) (182) (48) 1,326 Loss on disposal of Property, plant and equipment 6 5 6 195 Changes in operating assets and liabilities: Trade accounts receivable (15,306) 2,502 (8,375) (14,600) Inventories (4,705) 376 1,043 (2,223) Prepayments and other receivables 5,509 3,823 394 (2,565) Accounts and bills payable 19,460 (1,805) 36,331 6,934 Accrued expenses and other payables (2,162) 1,518 78 3,430 Net cash provided by operating activities $5,779 $11,988 $38,391 $2,831 Cash flow from investing activities Purchases of property, plant and equipment (6,807) (16,672) (40,431) (47,575) Payment in lease prepayment -- (1,779) (1,077) (5,454) Purchases of intangible assets (13) (7) (140) (109) Proceeds from disposal of property, plant and equipment 10 465 10 786 Net cash used in investing activities $(6,810) $(17,993) $(41,638) $(52,352) Cash flow from financing activities Proceeds from borrowings 3,309 40,216 176,316 159,913 Repayment of borrowings (22) (46,026) (151,448) (122,577) Decrease / (increase) in pledged deposits (1,488) 1,829 (26,641) 588 Proceeds from issuance of capital stock, net 150 15,233 150 29,240 Net cash provided by / (used in) financing activities $1,949 $11,252 $(1,623) $67,164 Effect of exchange rate changes on cash and cash equivalents 121 216 (158) 3,867 Net increase / (decrease) in cash and cash equivalents 1,039 5,463 (5,028) 21,510 Cash and cash equivalents at the beginning of the period 29,639 30,244 35,706 14,197 Cash and cash equivalents at the end of the period $30,678 $35,707 $30,678 $35,707

The dial-in numbers for the call are 800 688 0796 (US), 617 614 4070 (International), and the passcode is 107 164 82.

This call is being webcast by Thomson Reuters and can be accessed at China BAK Battery Inc.'s Web site at http://www.bak.com.cn/.

The webcast is also being distributed through the Thomson Reuters StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com, Thomson Reuters' individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson Reuters' password-protected event management site, StreetEvents (www.streetevents.com).

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices and personal digital assistants (or PDAs), and other applications, such as cordless power tools and minings lamp. China BAK's 3.0 million square feet of facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products. More information about China BAK (Nasdaq: CBAK - News) is available at http://www.bak.com.cn/.

Contact Information:
Tracy Li
IR Manager
Tel: 86-755-89770093
Mail: IR@bak.com.cn

SHENZHEN, China, Oct. 28, 2009 (PRNewswire-Asia-FirstCall) -- China BAK Battery, Inc. ("China BAK" or the "Company") (Nasdaq: CBAK) today announced that it has closed a registered direct offering of 5,790,000 units, each unit consisting of a share of common stock and a warrant to purchase 0.25 of a share of common stock. The price of the securities sold was $3.55 per unit, for an aggregate purchase price of $20.6 million. Pursuant to subscription agreements between China BAK and the investors in this offering, the warrants may be exercised to purchase an aggregate of 1,447,500 shares of the Company's common stock at an exercise price of $3.90 per share. The warrants are exercisable for 24 months beginning on the date of the initial issuance of the warrants.

The Company expects to use the net proceeds from this offering of approximately $19.3 million to reduce its outstanding debt, to fund working capital and to fund capital expenditures.

Cowen and Company, LLC, a subsidiary of Cowen Group, Inc. (Nasdaq: COWN), acted as the exclusive placement agent for the transaction.

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s 3.0-million-square-foot facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products.

Safe Harbor Statement

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 our business and risks related to operating in China. Please refer to our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q for specific details on our 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.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any jurisdiction. The securities may be offered only by means of a prospectus. Copies of the final prospectus supplement and accompanying prospectus relating to this offering may be obtained from Cowen and Company, LLC c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attn: Prospectus Department (631) 254-7106, or from China BAK (BAK Industrial Park, No. 1 BAK Street, Kuichong Town, Longgang District, Shenzhen, 518119, People's Republic of China, fax +86-755-89770527).

    For more information, please contact:

Tracy Li
Tel:   +86-755-8977-0093
Email: IR@bak.com.cn

SOURCE China BAK Battery, Inc.

Source: PR Newswire (October 28, 2009 - 9:01 AM EDT)

The closing is subject to certain customary closing conditions and is expected to occur on October 27, 2009.

Proceeds from the offering will be used primarily for the repayment of short term debt, capital expenditures and general working capital.

Cowen and Company, LLC, a subsidiary of Cowen Group, Inc. (NASDAQ: COWN - News), acted as the exclusive placement agent for the transaction.

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s 3.0-million-square-foot facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products.

Safe Harbor Statement

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 our business and risks related to operating in China. Please refer to our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q for specific details on our 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.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any jurisdiction. The securities may be offered only by means of a prospectus. Copies of the final prospectus supplement and accompanying prospectus relating to this offering may be obtained from Cowen and Company, LLC c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attn: Prospectus Department (631) 254-7106, or from China BAK (BAK Industrial Park, No. 1 BAK Street, Kuichong Town, Longgang District, Shenzhen, 518119, People's Republic of China, fax +86-755-89770527).

The company will conduct a non-deal road show in San Francisco and Los Angeles on September 17 and 18.

On September 30, we will present at the upcoming Global Clean Technology Conference ("Conference") in London held by Jefferies & Company, Inc.

During October 12 to 14, we will present the 2009 ROTH China Conference at Fontainebleu Miami Beach, FL hosted by ROTH Capital Partners.

On November 19 and 20, we will present the 2009 China Growth Conference in New York hosted by Brean Murray, Carret & Co.

In these activities, the Company will present itself and update business development and highlights with investors.

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s 3.0-million-square-foot facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products.

The options were granted on June 22, 2009 with an exercise price of $2.81 per share. This exercise price is equal to the closing price per share of the Company's common stock as reported by the NASDAQ Stock Market on the date of grant. The 500,000 restricted shares were granted to our Chairman and Chief Executive Officer, Mr. Xiangqian Li. Vesting of the options and restricted shares is to occur quarterly over five years.

"This is a significant grant principally to retain and reward our key employees. Our enormous growth is the result of a huge effort by our employees; we would like them to have the opportunity to benefit from our longer-term success," commented Mr. Xiangqian Li.

"Historically, Mr. Li has received very modest compensation and only one option grant," said Charlie Zhang, Chairman of the Compensation Committee. "In these troubling times we want to make sure our leadership remains committed to the Company's future," he added.

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s 3.0-million-square-foot facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products.

Safe Harbor Statement

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 Reports on Form 10-K for the fiscal years ended September 30, 2008, as well as China BAK's Quarterly Reports on Form 10-Q for FY09, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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.

The Meeting of China BAK Battery, Inc., a Nevada corporation, was held on May 22, 2009 at 9:00 a.m. in BAK Industrial Park. Present at the Meeting were Xiangqian Li ("Mr. Li"), the Chairman of the Board, Chief Executive Officer, and President, Charlene Spoede Budd, Chunzhi Zhang, Richard B. Goodner, Huanyu Mao ("Dr. Mao"), other members of senior management, and some shareholders of the Company, which constituted a quorum for the Meeting.

Tony Shen ("Mr. Shen"), the Company's Chief Financial Officer, Treasurer, and Secretary, introduced two proposals to be decided by ballots on the meeting separately. There were no questions on the two proposals and these proposals were seconded by stockholders.

Mr. Li, Mr. Shen, Dr. Mao and other members of senior management replied all the questions raised by stockholders, especially on the Company's development, business strategy, and the status of high-power lithium-phosphate batteries in Tianjin facility. Dr. Mao presented an overview of recent progress and development on our Tianjin facility, and commented that BAK Tianjin is making progress as expected under "863 Program", and has signed letters of intent for cooperation with some automobile factories listed in "863 Program", and planed to submit samples to a Chinese electric vehicle manufacturer in the second half of FY09 based on a confidential contract entered into by and between BAK Tianjin and the said Chinese manufacturer. The stockholders were satisfied with the answers.

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s 3.0-million-square-foot facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products.

Safe Harbor Statement

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 Reports on Form 10-K for the fiscal years ended September 30, 2008, as well as China BAK's Quarterly Reports on Form 10-Q for FY09, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward- looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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.

    Recent Achievements and Highlights
    -- China BAK was accepted into the approved vendor list of an
       international first-tier OEM notebook computer manufacturer.
    -- China BAK continued to optimize its business operations and to
       implement measures to reduce its costs and operational expenses.
    -- We maintained positive operating cash flow during the second quarter,
       which has historically been a seasonally slow quarter.
    -- Our Tianjin facility received positive market feedback to samples of
       its lithium-phosphate cells, used in electric bicycles, power tools,
       uninterruptible power supplies, and other applications.

Second Quarter FY09 Financial Results

Our net revenues for the second quarter of FY09 were $40.8 million, down 40.1% from $68.1 million last quarter, and down 20.5% from $51.3 million in the same quarter of last year. The substantial decrease in net revenues over the net revenues generated in the same period of last year was generally due to the global financial crisis and recession, which weakened demand for many of the products that our customers sell.

Revenues from sales of our cylindrical cells, which are used in notebook computers and other applications, were $9.2 million in the second quarter of FY09, down 49.8% from $18.4 million last quarter and up 37.5% from $6.7 million in the same quarter of last year.

Revenues from lithium polymer cells, used in personal electronic devices such as PDAs, MP3 players and Bluetooth devices, were $2.0 million in the second quarter of FY09, down 49.8% from $3.9 million last quarter, and up 3.8% from $1.9 million in the same quarter of last year.

Revenues from prismatic cells, including aluminum-case cells, steel-case cells and battery packs, which are also used in certain personal electronic devices, were $29.6 million, down 35.4% from $45.8 million last quarter and down 30.7% from $42.7 million in the same quarter of last year. Revenues from aluminum-case cells were $23.3 million, down 37.5% from $37.3 million last quarter and down 23.0% from $30.3 million in the same quarter of last year. Revenues from battery packs were $4.8 million, down 11.1% from $5.4 million last quarter and down 26.8% from $6.6 million in the same quarter of last year. Revenues from steel-case cells were $1.5 million, down 52.6% from $3.1 million last quarter, and down 75.0% from $5.9 million in the same quarter of last year.

Gross profit for the second quarter of FY09 was $3.0 million, down 71.5% from $10.6 million last quarter and down 22.8% from $3.9 million in the same quarter of last year. Gross margin was 7.4%, compared to 15.6% last quarter and 7.6% in the same quarter of last year. The decrease in gross margin from the last quarter and the same period of last year was the result of lower average selling prices and higher average manufacturing costs, offset by lower average material costs.

Operating expenses totaled $6.4 million or 15.7% of revenues in the second quarter of FY09, as compared to $9.8 million or 14.4% of revenues last quarter and $7.6 million or 14.8% of revenues in the same quarter of last year. Research and development expenses were $1.1 million or 2.8% of revenues, as compared to $1.4 million or 2.1% of revenues last quarter and $1.4 million or 2.7% of revenues in the same quarter of last year. Sales and marketing expenses were $1.2 million or 2.8% of revenues, as compared to $1.6 million, or 2.3% of revenues last quarter and $1.4 million or 2.7% of revenues in the same quarter of last year. General and administrative expenses were $4.1 million or 10.1% of revenues, as compared to $6.8 million or 9.9% of revenues last quarter and $4.8 million or 9.4% of revenues in the same quarter of last year.

Operating loss for the second quarter of FY09 was $3.4 million, as compared to operating income of $0.8 million last quarter and operating loss of $3.7 million in the same quarter of last year.

Net loss was $5.7 million in the second quarter of FY09, as compared to net loss of $1.7 million last quarter and net loss of $6.2 million in the same quarter of last year. Diluted earnings per share were negative $0.10 compared with negative $0.03 per diluted share last quarter and negative $0.12 per diluted share in the same quarter of last year.

For the second quarter of FY09, Days Sales Outstanding increased to 171 as compared to 103 last quarter, and Days Sales of Inventory increased to 148 days from 99 days last quarter.

Financial Condition

On March 31, 2009, China BAK had $25.4 million in cash and cash equivalents and negative $38.0 million in working capital, reflecting a current ratio of 0.83:1. Short-term bank loans and long-term bank loans totaled $172.7 million as compared to $172.2 million on December 31, 2008. Shareholders' equity totaled $161.1 million. China BAK had $75.0 million available for borrowing under its credit facilities.

Cost and Expense Reduction on Track

In the second quarter of FY09, China BAK continued to implement its aggressive cost management program announced earlier this year. As a result, operating expenses decreased by $3.4 million from the first quarter of FY09, exceeding our $1.5 million costs reduction target. Moreover, our operating expenses were at their lowest level since fiscal year 2007.

Business Outlook

"Throughout FY09, prioritization of our products portfolio and aggressive cost and expense reduction will be our focus. We are delighted that a first-tier OEM notebook manufacturer determined that China BAK's cylindrical cells meet their stringent performance and reliability requirements. Also, we believe we will continue to gain market share in all products," commented Mr. Xiangqian Li, Chairman and CEO of China BAK.

"We will continue to take appropriate action to address the downturn in the global economy as well as the challenges related to weak customer demand. We have implemented aggressive measures to reduce costs and expenses which will definitely strengthen the Company's ability to ride out the recession," commented Mr. Tony Shen, CFO of China BAK.

Conference Call

China BAK will host a conference call at 8:00 p.m. ET on Tuesday, April 28, 2009 to discuss results for the second quarter of FY09 ended March 31, 2009. Xiangqian Li, China BAK's Chairman and Chief Executive Officer, and Tony Shen, Chief Financial Officer will host the call and answer questions. To participate in the conference call, please dial the following number approximately fifteen minutes prior to the scheduled conference call time: 888-419-5570. International callers should dial 617-896-9871. The pass code for the call is 883 906 90. If you are unable to participate in the call at this time, a replay will be available from 10:00 p.m. ET on Tuesday, April 28, 2009 through 10:00 p.m. ET, Wednesday, May 13, 2009. To access the replay, please dial 888-286-8010. International callers should dial 617-801-6888. The pass code for the replay is 624 59 645. The conference call will be broadcast live over the Internet and can be accessed by all interested parties on the China BAK website at http://www.bak.com.cn/ . To listen to the live webcast, please go to the China BAK's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. For those unable to participate during the live broadcast, shortly after the call a replay will be made available on China BAK's website for one year.

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 and portable consumer electronics, such as digital media devices, portable media players, portable audio players, portable gaming devices, and PDAs. China BAK Battery, Inc.'s 3.0-million-square-foot facilities are located in Shenzhen and Tianjin, PRC, and have been recently expanded to produce new products.

Safe Harbor Statement

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 Reports on Form 10-K for the fiscal years ended September 30, 2008, as well as China BAK's Quarterly Reports on Form 10-Q for FY09, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. China BAK's actual results could differ materially from those contained in the forward-looking statements. China BAK 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.

(b, c) On February 24, 2009, Mr. Kenneth G. Broom was appointed as the Chief Operating Officer of China BAK Battery, Inc. (the "Company"). Mr. Broom, age 53, has been serving as the Company's Vice President of International OEM Business since October 1, 2007, and will continue to serve in this position in addition to his position as Chief Operating Officer. From January 2007 to September 2007, he worked as Executive Vice President for BAK Battery Canada Ltd., an indirectly wholly-owned subsidiary of the Company. Prior to joining the Company, Mr. Broom served as executive vice president of E-One Moli Energy (Canada) Limited ("E-One"), the only high-volume manufacturer of cylindrical lithium-ion rechargeable cells in North America, from 2003 to 2007. He was also General Manager of Operations of E-One from 1992 to 2003. He is a member of the Association of Professional Engineers and Geoscientists of B.C. Mr. Broom received a bachelor's degree in chemical engineering from the University of Waterloo.

There are no arrangements or understandings between Mr. Broom and any other persons pursuant to which he was selected as Chief Operating Officer. There have been and are no transactions, relationships or arrangements in which Mr. Broom has or had an interest requiring disclosure under Item 404(a) of Regulation S-K. No family relationship exists between Mr. Broom and any other director or executive officer of the Company. No material plan, contract or arrangement, or material amendment thereto, was entered into in connection with this appointment. No grant or award or modification thereto occurred under any plan, contract or arrangement in connection with this appointment.

Also on February 24, 2009, in connection with the appointment of Mr. Broom, Dr. Huanyu Mao resigned as the Chief Operating Officer of the Company. Dr. Mao will continue to serve as the Company's Chief Technical Officer and Director. Dr. Mao's resignation is not in connection with any disagreement with the Company on any matter.