China Information Security Technology, Inc. Enters Into Non-Binding Letter of Intent to Acquire Huipu Electronic (Shenzhen) Co., Ltd.

SHENZHEN, China, Feb. 12 /PRNewswire-Asia-FirstCall/ -- China Information Security Technology, Inc., (NASDAQ: CPBY) ("CIST" or the "Company"), a leading application software developer, systems integrator and full-service Geographic Information Systems ("GIS") solutions provider to public security and civil-use markets in China, today announced that it has entered into a non-binding letter of intent to acquire Huipu Electronic (Shenzhen) Co., Ltd. ("Huipu"). The Company is conducting a due diligence investigation of Huipu, which if satisfactory to the Company, will lead to a definitive agreement between the Company and Huipu regarding the terms and conditions of the acquisition. The consideration for the acquisition is expected to be a combination of Company stock and cash.

Huipu is a leading developer and manufacturer of customized LCD/LED multi-screen display systems in China and is the holder of numerous technology patents, trademarks, certifications and licenses. Huipu's products are manufactured at its production facilities in China and are sold through a network of distributors nationwide. Its customers are represented in a wide variety of industries, including the public security, government, trade, media, transportation and tourism industries. CIST expects that the acquisition of Huipu will strengthen its distribution channels in regions where both CIST and Huipu have a presence. Upon completion of the acquisition, CIST will add an additional 5 cities to its distribution network, bringing the total number of cities in which it has a presence to 31.

CIST plans to add Huipu's LCD/LED multi-screen display systems and technology to the Company's current Digital Light Processing ("DLP") product line that is currently sold for use in various central command centers in China. The command centers are the heart of various central coordination efforts and are where high-level decisions are made. Each command center has a large display wall, using DLP and/or LCD/LED product lines, where all resources can be monitored in real-time.

In addition, CIST expects that the addition of Huipu's products and technology to its portfolio will enable the Company to provide more comprehensive and competitively priced solutions to accommodate a variety of city budgets in its PGIS market, as well as capture additional market opportunities presented by Phase II of China's Golden Shield Project ("the Project"). The Project's goal is to upgrade the level of police-use technology and enhance the quick response capabilities for public emergencies.

CIST also plans to leverage Huipu's technology to offer a more fully integrated digital hospital solution to customers. For example, the combination of Huipu's products and technology with the Company's digital hospital solutions will enable the Company to provide mission critical turn-key software development, systems integration and quality-assurance hardware to supply customers in the Digital Hospital markets.

"We are pleased with the prospect of acquiring Huipu," said Mr. Jiang Huai Lin, CIST's CEO. "We expect that the acquisition will enhance our competitiveness by enabling us to offer more integrated products and services at different price levels, increase our cross- and up-sell opportunities and extend our geographic reach. We also plan to take advantage of Huipu's domestic and international distribution network, solid reputation and strong client base, to enhance our presence in the GIS and Digital Hospital markets."

About China Information Security Technology, Inc.

Through its wholly-owned Chinese subsidiary, China Information Security Technology, Inc. headquartered in Shenzhen, China, is a leading application software developer, systems integrator and full-service Geographic Information Systems ("GIS") solutions provider to the public security and civil-use markets in China, aiming to use information technology to improve public safety and information management. Its main business lines range from digital information security, to Geographic Information Systems, and digital hospital information systems. The Company provides a broad portfolio of fully integrated solutions and services, including its First Responder Coordination Platform, Intelligent Border Control System, Residence Card Information Management System, Police- and Civil-use GIS products, and Digital Hospital Information System to serve the growing demand for digital hospital and electronic medical record systems in China. Its commitment to leading-edge technology and quality assurance has won the Company numerous government and enterprise contracts throughout China. To learn more about the Company, please visit the corporate website at http://www.chinacpby.com .

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of China Information Security Technology, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding the significance of the Company's potential acquisition of Huipu Electronic (Shenzhen) Co., Ltd., and the effect of the acquisition on the Company's ability to increase its market share, revenues and profitability in the GIS and Digital Hospital markets; the general ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

    For more information, please contact:

    Company Contact:
     Ms. Iris Yan
     Investor Relations Manager
     China Information Security Technology, Inc.
     Tel:   +86-135-1085-5460
     Email: irisyan@chinacpby.com
     Web:   http://www.chinacpby.com

    Investor Relations Contact:
     Mr. Crocker Coulson, President
     CCG Investor Relations
     Tel:   +1-646-213-1915 (NY office) or
     Mr. Gary Chin
     Tel:   +1-646-213-1909
     Email: crocker.coulson@ccgir.com
     Web:   http://www.ccgirasia.com

Web site: http://www.chinacpby.com/
http://www.ccgirasia.com/




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