MaSSSoftech

China Information Security Technology Enters Definitive Agreement to Acquire
Huipu

SHENZHEN, China, Aug. 31 /PRNewswire-Asia-FirstCall/ -- China Information
Security Technology, Inc., (Nasdaq: CPBY) ("China Information Security,"
"CIST" or the "Company"), a leading total solutions provider of digital
security, geographic information, and hospital information systems in China,
today announced that it has entered into a definitive agreement to acquire
Topwell Treasure Ltd., a Hong Kong limited company ("Topwell") and its
wholly-owned Chinese subsidiary, Huipu Electronics (Shenzhen) Co., Ltd.
("Huipu"). The transaction is expected to close on or about October 1, 2009.
Under the terms of the purchase agreement, the Company will pay up to
$16.0 million in cash and stock for 100% of the equity interests in Topwell.
The purchase price will be comprised of $8.0 million in cash, payable on or
before November 28, 2009, and 1,101,930 shares of the Company's common stock
(valued at approximately $4.0 million @ $3.63 per share) payable within 90
days of the closing of the transaction. The Company also agreed to issue and
deliver to the Topwell sellers another 1,101,930 shares of the Company's
common stock if Huipu achieves certain target after tax net income thresholds
in the years 2010 through 2012. Management expects that the make good
provision in the purchase agreement will incentivize Huipu's existing
management team to stay on and help Huipu to accomplish such income goals.
Huipu is a well-recognized brand within the industry and has a broad
customer base covering 27 provinces/regions. Currently, Huipu's customized
LCD & Plasma displays are integrated in systems deployed in all business
segments that CIST serves, and CIST and Huipu have closely collaborated as
separate entities to deliver integrated systems to common customers.
Subsequent to the completion of the acquisition, CIST plans to dispose of
Huipu's low-end business lines and focus on Huipu's high-end and innovative
products while integrating Huipu into its overall business. CIST expects to
leverage Huipu's wide distribution network and large client base to expand its
market share in the DIST, GIS and Digital Hospital markets. While the Company
anticipates moderate contribution from Huipu to its year 2009 financial
results, management believes that Huipu will make meaningful contributions to
its projected earnings in year 2010 and beyond.
Mr. Jiang Huai Lin, CIST's CEO, commented, "We are pleased with the
completion of our acquisition of Huipu. Our further due diligence firmly
validates our belief that Huipu will enhance our competitiveness and extend
our geographic reach. As Huipu had been our long time business partner for
systems integration projects, we anticipate a smooth and rapid integration of
our products, services, and operations. We plan to further expand Huipu's
strong LCD and Plasma display brand, as well as integrate our proprietary
software with Huipu's high-end interactive displays with in-set computers. We
believe that this combination of CIST's core software and Huipu's hardware
will enable us to offer turn-key solutions at various price levels, while
increasing our cross- and up-sell opportunities. We expect that Huipu's
client base will deepen our reach in the 28 provinces/regions in which we
already have a presence and will add an additional 4 provinces/regions to our
existing distribution network, bringing the total number of provinces/regions
in which we have a presence to 32."
About Huipu Electronics (Shenzhen) Co., Ltd.
Huipu is a leading developer and manufacturer of customized LCD & Plasma
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.
About China Information Security Technology, Inc.
Through its wholly-owned Chinese subsidiary, China Information Security
Technology, Inc. ("CIST" or the "Company") headquartered in Shenzhen, China
("PRC"), 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, and is dedicated to the use of
information technology to improve public safety and information management.
Its main business lines range from digital information security, to GIS, 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
geographic information, 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 its 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 Huipu acquisition on the Company's ability
to integrate Huipu's business and operations into the Company's business and
operations; the general ability of the Company to achieve its commercial
objectives, including the use of Huipu's wide distribution network and large
client base to enhance the Company's competitiveness and extend its geographic
reach; 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:
Iris Yan
China Information Security Technology, Inc.
Tel: +86-755-8370-4767
Email: ir@chinacpby.com
Web: http://www.chinacpby.com

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

SOURCE China Information Security Technology, Inc.

Company Contact- Iris Yan, China Information Security Technology, Inc. at
+86-755-8370-4767 or ir@chinacpby.com; Investor Relations Contact - Michael
Tieu, ICR at +86-10-6599-7960 or michael.tieu@icrinc.com