China Architectural Engineering to Acquire Majority Stake in Shanghai ConnGame

ZHUHAI, China and NEW YORK, Dec. 14 /PRNewswire-Asia-FirstCall/ — China
Architectural Engineering, Inc. (“CAE” or the “Company”) (Nasdaq: CAEI), a
leader in the design, engineering, fabrication and installation of high-end
building envelope systems, today announced that it has signed a letter of
intent (“LOI”) to acquire 60% ownership in Shanghai ConnGame (“ConnGame”), a
MMORPG game developer and operator in exchange for 25 million shares of the
Company’s common stock. Completion of the transaction is subject to
negotiation of a definitive equity transfer agreement that will be subject to
a number of closing conditions, including shareholder and regulatory approvals.

ConnGame, founded and led by seasoned experts with extensive previous
success in China’s online game industry, develops and operates MMORPGs in
China. Leveraging its innovative game engines, scalable development platforms,
and accomplished production teams, ConnGame focuses on self-developed MMORPGs
game titles that are based on China’s iconic characters and nostalgic epochs.

“This is a very exciting development for our company and an important move
that we believe will ultimately benefit our shareholders,” commented Mr. Ken
Yi Luo, Chairman and Chief Executive Officer of China Architectural
Engineering. “While at first glance CAE and ConnGame may appear to share few
common grounds, we expect the acquisition of ConnGame will further expand
CAE’s core capabilities and accelerate our planned transformation into a high-
end architectural design consultant and service provider, as we intend to
leverage ConnGame’s robust design engines and virtual applications to broaden
our service capabilities and scope of architectural collaborations. We
envision utilizing ConnGame’s cutting-edge technology and innovative online
platform to provide technical consulting and advisory services to architects,
real estate developers and governments. We view CAE as prominent architectural
engineers of physical landmarks and ConnGame as innovative architects of
digital engines and creators of iconic virtual worlds. We believe our
acquisition of ConnGame will enable CAE to not only continue to take greater
advantage of our core architectural engineering and design market but also
China’s large and rapidly growing online game market.”

In anticipation of issuing 25 million new shares of CAE’s common stock
upon the closing of this acquisition, CAE has withdrawn its previously
announced common stock private placement of 17 million shares to certain
investors, as the Company has terminated its LOI to purchase land from
Zhejiang Nine Dragon Co. However, CAE continues to cooperate with Nine Dragon
on its future construction projects which include a marine theme park, movie
theatres, premium retail outlets, five-star hotels, and luxurious residential
apartments.

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ:CAEI) is a leader in the
design, engineering, fabrication and installation of high-end curtain wall
systems, roofing systems, steel construction systems, and eco-energy systems.
Founded in 1992, CAEI has maintained its market leadership by providing timely,
high-quality, reliable, fully integrated, and cost-effective solutions.
Collaborating with world-renowned architects and building engineers, the
Company has successfully completed nearly one hundred large, complex and
unique projects worldwide, including numerous award-winning landmarks across
Asia’s major cities.

For further information on China Architectural Engineering, Inc., please
visit http://www.caebuilding.com

Forward-Looking Statements

In addition to historical information, the statements set forth above may
include forward-looking statements that may involve risk and uncertainties
that could cause actual results to differ materially from those in the
forward-looking statements. Actual results could differ materially from the
expectations contained in forward-looking statements as a result of risks and
uncertainties, including, but not limited to, the execution of a definitive
acquisition agreement; satisfactory completion of due diligence; attaining
shareholder and regulatory approvals; difficulties related to integration and
management of the combined operations; reduction or reversal of the Company’s
recorded revenue or profits due to “percentage of completion” method of
accounting and expenses; resolving the dispute with the master contractor on
the Dubai Metro Rail Project; the Company’s ability to obtain a modification
for the Waiver agreement with the bondholders applicable to the proposed
acquisition of ConnGame; increasing provisions for bad debt related to the
Company’s accounts receivable; fluctuation and unpredictability of costs
related to our products and services; the Company’s plans to enter into real
estate development projects such as the Nine Dragons Project; adverse capital
and credit market conditions; fluctuation and unpredictability of costs
related to the Company’s products and services; expenses and costs associated
with its convertible bonds, regulatory approval requirements and competitive
conditions. These and other factors that may result in differences are
discussed in greater detail in the Company’s reports and other filings with
the Securities and Exchange Commission.

    For more information, please contact:

    Investor Contact:
     ICR:
     Michael Tieu
     Tel:   +86-10-6599-7960
     Email: michael.tieu@icrinc.com

     Bill Zima
     Tel:   +1-203-682-8200
     Email: bill.zima@icrinc.com

SOURCE China Architectural Engineering, Inc.