SHENZHEN, China, May 29, 2007 -- Comtech Group, Inc. (NASDAQ:COGO) , a leading provider of customized design solutions for the technology manufacturing sector in China, has announced that its customized module design solution has been chosen by ZTE Corporation, one of the world's top providers of telecommunications and network solutions, to the new TD-SCDMA 3G handsets.

The newly developed handsets are dual module, meaning they will be able to support both new 3G TD-SCDMA networks and existing 2G networks in China. Comtech has provided critical enabling technology for the phones, which are expected to be shipped to market by ZTE Corporation during the second half of 2007.

The expected roll out of third generation networks in China this year, with the likely resulting increase in sales of 3G handsets - industry experts estimate there are more than 10 million 3G cell phones likely to be used in China on a trial basis ahead of the Olympic Games next year - means that Comtech is well positioned to capitalize on the growth in this sector. The deal also underlines Comtech's unique position within the mobile communications industry value chain.

Jeffrey Kang, President & Chief Executive Officer, Comtech Group, Inc., said, "Comtech's module technology solutions have long been accepted by companies in the 3G space overseas, such as Vodafone. The fact that the Chinese government plans to release 3G license in the near future, as well as having just accepted WCDMA and CDMA 2000 3G technology as standards in the country, is likely to support our sustainable growth over the coming years."

"We are delighted that we are in a position both to grow our business in the third general mobile sector and to play a role in the development of 3G infrastructure in China, which will ultimately support the growth of China's mobile industry as a whole. On the back of this, together with our success in other areas, we expect to perform strongly throughout the remainder of 2007," said Mr. Kang.

Recent studies indicate that the projected growth in the market for 3G handsets is expected to last for several years. A study carried out by the China Academy of Telecommunication Research (CATR), an advisory body linked to the Ministry of Information Industry, estimated that there will be 198-266 million new 3G subscribers in China by 2013.

Earlier this month, the company reported record quarterly revenue of USD 44.6 million, up 31.5% over last year's revenue of USD 33.9 million, with growth in all of the company's end markets - telecommunications equipment, mobile handset and digital media, which Comtech believes are among the fastest growing markets in China.

About Comtech Group, Inc.:
Comtech Group, Inc. (NASDAQ:COGO) is a leading provider of customized module and subsystem design solutions in China. The Company believes it acts as a proxy to China's technology industry as it works with virtually all the major ODMs and OEMs in China. Comtech leverages these relationships and combines their IP to create designs that Comtech then sells to electronic manufacturers. These designs allow manufacturers to reduce their time to market for new products and ultimately increase sales. Comtech Group focuses on the digital media, mobile handset and telecommunications equipment end- markets for its customized design modules while also offering business and engineering services to its large telecom equipment vendor customers. Over the last eleven years, Comtech has grown its customer list to include more than 200 of the largest and most well known manufacturers across the mobile handset, telecom equipment and consumer markets in China, covering both multinational Chinese subsidiaries and Chinese domestic companies.

About ZTE Corporation
Founded in 1985, with global headquarters in Shenzhen China, and operations in more than 100 countries, ZTE is a global provider of fixed line and mobile telecommunications equipment and network solutions. ZTE's product range is the most complete in the world - covering virtually every sector of the wireline, wireless and terminal markets. ZTE offers its customers a unique range of services. The company delivers innovative, custom-made products and services to major operators in the world, helping them to achieve continued revenue growth and to shape the future of the world's communications. ZTE commits around 10% of annual revenue to research and development and takes a leading role in a wide range of international bodies developing emerging telecoms standards. ZTE is the fastest growing telecoms equipment supplier in the world, and China's only listed telecoms manufacturer, with shares traded on both the Hong Kong and Shenzhen Stock Exchanges. ZTE was the only Chinese technology and telecoms manufacturer listed in BusinessWeek's 2005 Top 100 Information Technology Companies. For more information, visit http://www.zte.com.cn/.

For further information contact:
Comtech Investor Relations
www.comtech.com.cn/investorinfo.html
communications@comtech.com.cn
H.K.: +852 2730 1518
U.S.: +1 (646) 291 8998
Fax: +86 (755) 2674 3522

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