Second Quarter 2010 Financial Highlights
    -- Revenues increased 30% YoY to $33.52 million
    -- Gross Margin expanded 250 basis points
    -- Operating Margin expanded 290 basis points
    -- Attributable Net Income increased 19.9% YoY to $9.35 million
    -- Non-GAAP Fully Diluted EPS was $0.19 vs. $0.17 a year ago
    -- Cash flow from operations reached $14.80 million
    -- New Record High Backlog of $52.27 million representing 50.7% YoY growth
    -- Reaffirms FY2010 Revenue and Adjusted Net Income Guidance

"We continued to effectively execute on our business strategy which resulted in another promising quarter," commented Mr. Jiang Huai Lin, Chairman and CEO. "New contracts signed in the second quarter reached $39.3 million, up 49% from a year ago and our backlog once again hit a new record high of $52.3 million, up 50.7% from a year ago."

"We believe that contract wins this quarter continue to demonstrate our ability to penetrate new markets nationally and expand in key cities outside Guangdong province. In Shanghai, we are helping the Public Security Bureau manage public security at the 41st World Expo which we believe positions us well to further expand into Eastern China. We are also winning new business by integrating different technologies in our portfolio to create innovative and sophisticated solutions. One specific example is our win of the intelligent traffic management system for the 16th Asian Games in Guangzhou, which delivers highly efficient solutions to improve the quality of our day-to-day lives. Meanwhile, we continue to collaborate with the State Grid Corporation of China on the smart grid project, which is currently in the planning stage."

"We believe that the future of our industry remains bright as the Chinese government continues to demonstrate a long-term commitment to investing in public security, public healthcare and the management of natural resources and disaster-relief."

Revenues

For the three months ended June 30, 2010, revenue was $33.52 million, compared to $25.79 million for the three months ended June 30, 2009, representing an increase of $7.73 million, or 30%. During the current quarter, Huipu, which was acquired in October 2009, contributed $4.26 million to total revenues. Excluding the impact from Huipu's revenues, organic revenue growth was 13.5% as the Company continued to focus on profitability and the reduction of lower-margin businesses primarily in product and system integration categories.

Software sales increased by 40.7% to $22.41 million for the three months ended June 30, 2010, from $15.92 million for the three months ended June 30, 2009. Software sales constituted 66.9% of the total revenue, which increased from 61.7% during the same period in the prior year, reflecting the Company's continued commitment to the core competency in software. Excluding the impact of Huipu's sales, software sales were 76.6% of organic revenues.

Product sales increased by $3.68 million, or 97.2% for the three months ended June 30, 2010, as compared to $3.79 million in the same period of 2009. Product sales constituted 22.3% of total revenue during the current period as compared with 14.7% during the same period in the prior year. Product sales excluding Huipu's product sales declined by 22.01% from the same period in the prior year to 10.1% of organic revenues. This reflects the Company's focus on higher value-added product sales with the Huipu acquisition.

Sales of system integration services decreased by 37.4% for the three months ended June 30, 2010, as compared to the same period of 2009. As a percentage of revenue, it declined from 21.6% during the three months ended June 30, 2009 to 10.4% during the current quarter. Excluding the impact of Huipu, system integration was 11.9% of organic revenues. The steady decline in weight of system integration business, which carries lower margin, reflects the Company's strategy of growing businesses with higher profitability.

Other revenue decreased by 69.6%, from $0.51 million in the three months ended June 30, 2009 to $0.15 million in the same period of 2010. Other revenue mainly derived from maintenance services in the three months ended June 30, 2009, while in the same period of 2010, in addition to maintenance services, the Company also generated $0.11 million royalty income from Huipu's licensing of its HPC trademark to other manufacturers. The Company believes this was an effective way to monetize Huipu's valuable intellectual property.

Regarding segment breakdown, for the three months ended June 30, 2010, approximately $15.68 million of revenues were generated by the GIS segment, $13.96 million by the DIST segment and $3.88 million by the DHIS segment. This compared with $7.97 million generated by the GIS segment, $15.22 million by the DIST segment and $2.59 million by the DHIS segment for the same period in 2009. The DIST segment decreased by 8.3% compared with the same period of 2009, while the year-over-year growth ratios for the GIS and DHIS segments were 96.6% and 49.7%, respectively.

GIS accounted for 46.8% of the total revenue while DIST and DHIS represented 41.6% and 11.6% respectively. Excluding the impact of Huipu, each of the GIS, DIST and DHIS segment represented 46.3%, 40.4% and 13.3% of total revenue, respectively, as compared to 30.9%, 59.0% and 10.1% of the total revenue, respectively, for the three months ended June 30, 2009. For the first time, the GIS segment exceeded that of the DIST segment and became the Company's largest business segment in the second quarter of 2010. As the Company's technologies continue to evolve, it will be able to integrate more and more DIST functions with those of GIS to create brand new capabilities for customers. Such new offerings contributed to the GIS segment, instead of to DIST, which explains the negative growth rate in the DIST segment. The shifts in segment weights also ultimately reflect the growth momentum in the GIS and DHIS segments outpacing that of the DIST as a result of the Company's focus in the last few years on targeting areas with the highest barriers-to-entry and developing sustainable competitive advantages in the GIS and DHIS segments, in anticipation of accelerating market growth in the coming years. The Company believes it will be well positioned to capture the growth opportunities as this expectation materializes.

Gross Profit and Gross Margin

Gross profit was $16.80 million in 2Q10, an increase of 36.9%, or $4.53 million, from 2Q09. Gross margin was 50.1% in 2Q10, an increase of 2.5%, from 47.6% in the same period of 2009. Huipu yielded a gross margin of 18.5%. Excluding the impact of Huipu's gross margin, the gross margin of the Company's organic business was 54.7%.

The improvement in gross margin resulted from several factors. During the quarter, the Company cut down on lower-margin product sales while benefiting from Huipu's higher-margin product contribution. As a result, the gross margin of products improved by 157 basis points. During the quarter, the Company continued to reduce the weight of the system integration business which typically carries a lower margin. The gross margin for this segment during the quarter was as high as 83.63% primarily due to the progress of certain projects. Meanwhile, the Company continued to increase the weight of its software business, which carries a higher gross margin. However, the gross margin of its software business declined to 54.22% from 62.36% a year ago primarily due to the Company's outsourcing of portions of its software projects commending in the first quarter of 2010. The Company believes that by outsourcing some of the non-essential and labor-intensive portions of software projects, it will be able to focus resources on the higher value-added components of the software business. This practice should enable more effective revenue growth and save operating expenses, which, overtime, will be accretive to long-term shareholder value.

Income from Operations

Income from operations increased $3.53 million, or 41.1%, to $12.13 million for the three months ended June 30, 2010, from $8.60 million in the corresponding period in 2009. Income from operations as a percentage of revenue increased to 36.2% during the three months ended June 30, 2010, from 33.3% in 2009.

Income Tax Expense

Income tax expense for the three months ended June 30, 2010 was $2.16 million, up from $1.09 million for the same period in 2009.

The Company's subsidiaries, ISS, Zhongtian and Huipu are all governed by the Income Tax Laws of the PRC and are subject to the PRC's enterprises income tax, or EIT, at a rate of 22% of assessable profits in 2010, compared to 20% for the same period in 2009, an increase of 2%.

Bocom, and the Company's VIE, iASPEC (inclusive of Geo), as High-Tech Enterprises, are subject to EIT at a rate of 15% of assessable profits. After offsetting accumulated losses from prior years, Geo had no assessable profit subject to EIT for the three months ended June 30, 2010. In addition, as a software company, IST was entitled to a two-year exemption from EIT followed by a 50% tax exemption for the next 3 years. Year 2010 is the fourth year that IST is entitled to the tax holiday and will be subject to a favorable tax rate of 11%.

Net Income Attributable to the Company

As a result of the factors described above, net income increased $1.55 million, or 19.9%, to $9.35 million during the three months ended June 30, 2010, from $7.79 million for the same period in 2009.

Cash and Cash Equivalents

As of June 30, 2010, the Company had $23.54 million in cash and restricted cash, as compared to $19.34 million in the same period one year ago.

During the three months ended June 30, 2010, net cash provided by operating activities improved significantly to $14.80 million, as compared with $5.48 million in the same period a year ago. During the current quarter, accounts receivable balance increased by $0.50 million, as compared with an increase of $11.39 million during the second quarter of 2009.

    Recent Developments
    -- May 18, 2010 - China Information Security Technology PGIS System Plays
       Critical Role in Public Security Management at the Shanghai World Expo
    -- June 14, 2010 - China Information Security Technology Wins Intelligent
       Traffic Management Contract for the 16th Asian Games in Guangzhou,
       China

2010 Outlook

For fiscal year 2010, the Company reaffirms its guidance with projected revenue to $141-146 million and adjusted net income to $35.5-39.5 million, excluding any non-cash expenses as a result of employee stock awards, amortization of intangible assets associated with acquisitions, and changes in fair value of contingent considerations.

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures for earnings that exclude non-cash charges. China Information Security believes that these non- GAAP financial measures are useful to investors because they exclude non-cash charges that China Information Security's management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential operating activities of China Information Security. Accordingly, management excludes the expense arising from certain non-cash charges when making operational decisions. China Information Security believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand China Information Security's financial performance in comparison to historical periods. In addition, it allows investors to evaluate China Information Security's performance using the same methodology and information as that used by China Information Security's management. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the non-GAAP financial measure. However, China Information Security's management compensates for these limitations by providing the relevant disclosure of the items excluded.

The following table provides the non-GAAP financial measure and the related GAAP measure and provides a reconciliation of the non-GAAP measure to the equivalent GAAP measure.

             Q2 2010 Reconciliation of Operating, Net Income and EPS
         to Exclude SBC, Amortization of Intangible Assets and Contingent
                                  Consideration

                                 3 Mos.      3 Mos.      6 Mos.      6 Mos.
                                 Ended       Ended       Ended       Ended
                               30-Jun-10   30-Jun-09   30-Jun-10   30-Jun-09

    Operating income           12,126,944   8,597,615  18,690,373  12,766,965
    Stock based compensation
     (SBC)                             --          --          --     183,600
    Amortization                  427,391     437,704     927,048     865,710

    Operating income (without
     SBC and amortization)     12,554,335   9,035,319  19,617,421  13,816,275

    Net income Attributable to
     the Company                9,352,069   7,797,830  15,633,177  11,554,823
    Stock based compensation
     (SBC)                             --          --          --     183,600
    Amortization                  427,391     437,704     927,048     865,710
    Change in fair value of
     contingent consideration*     94,829          --    (700,268)         --

    Net income (without SBC,
     amortization and
     contingent consideration)  9,874,289   8,235,534  15,859,957  12,604,133

    Weighted Average Number of
     Shares Outstanding
    Basic                      51,450,623  47,536,883  51,332,698  47,528,503
    Diluted                    51,450,623  47,536,883  51,332,698  47,528,503

    Earnings per hare (without
     SBC, amortization and
     contingent consideration)      $0.19       $0.17       $0.31       $0.27
    Basic                           $0.19       $0.17       $0.31       $0.27

    * Represents a gain from the change of fair value of the contingent
      consideration for the acquisition of Huipu as at 06/30/2010, according
      to FASB ASC 805 - Business Combinations

Conference Call

China Information Security will host a corresponding conference call and live webcast at 8:00 am Eastern Daylight Time (8:00 pm, Beijing time) on Thursday, August 5, 2010.

    The dial-in details for the live conference call are as follows:

    -- U.S. Toll Free Number:           1-866-519-4004
    -- International Dial-in Number:    +65-6723-9381
    -- Mainland China Toll Free Number: 10-800-819-0121
    -- Hong Kong Toll Free Number:      80-093-0346
          Conference ID: 90844727

A live and archived webcast of the conference call will be available on the Investor Relations section of China Information Security's website athttp://www.chinacpby.com .

A telephone replay of the call will be available from August 5, 2010 through August 12, 2010.

    The dial-in details for the replay are as follows:

    -- U.S. Toll Free Number            1-866-214-5335
    -- International Dial-in Number     +61-2-8235-5000
          Conference ID: 90844727

About China Information Security Technology, Inc.

China Information Security Technology, Inc., together with its subsidiaries, specializes in Geographic Information Systems (GIS), digital public security and hospital information systems, with the goal of being the largest GIS software provider in the People's Republic of China. Headquartered in Shenzhen, China, the Company's total solutions include specialized software, hardware, systems integration, and related services organized into three business segments - Geographic Information Systems, Digital Information Security Technology (DIST), and Digital Hospital Information Systems (DHIS). 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 Company's new contract wins during the quarter; the ability of the Company to continue to strengthen its position in the industry by winning and successfully performing under national contracts; the ability of the Company to secure future opportunities in the market by leveraging its R&D capabilities and reputation; the continued support of the Chinese government for domestic GIS products; the general ability of the Company to achieve its commercial objectives, including the Company's plan to sustain the growth while creating shareholder value; 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 further information, please contact:

    China Information Security Technology, Inc.
     Iris Yan
     Tel:   +86-755-8370-4767
     Email: ir@chinacpby.com
     Web:   http://www.chinacpby.com

    Christensen
     Kathy Li
     Tel:   +1-480-614-3036
     Email: kli@christensenir.com

     Roger Hu
     Tel:   +86-158-1049-5326
     Email: rhu@christensenir.com



                 CHINA INFORMATION SECURITY TECHNOLOGY, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                  AS OF JUNE 30, 2010 AND DECEMBER 31, 2009
                          Expressed in U.S. dollars
                   (Except for share and per share amounts)

                                                 June 30         December 31
                                                   2010              2009
    ASSETS                                      (Unaudited)

    CURRENT ASSETS
    Cash and cash equivalents                   $17,745,272      $ 13,478,633
    Restricted cash                               5,795,203         5,859,910
    Accounts receivable:
    Billed, net of allowance for doubtful
     accounts of $2,944,000 and
     $3,123,000, respectively                    24,114,664        23,907,035
    Unbilled                                     58,149,465        47,851,638
    Bills receivable                                218,622                --
    Advances to suppliers                         4,084,692         6,924,035
    Amount due from related parties, net
     of allowance for doubtful accounts
     of $0 and $73,000, respectively                158,467           129,937
    Inventories, net of provision of
     $183,000 and $184,000, respectively         20,985,556        10,936,004
    Other receivables and prepaid
     expenses                                    14,751,936        15,405,089
    Deferred tax assets                           1,622,613         1,719,327
    TOTAL CURRENT ASSETS                        147,626,490       126,211,608

    Deposit for software purchase                 4,797,561         1,426,452
    Deposit for purchase of land use
     rights                                         925,912                --
    Long-term investments                         2,873,722         2,862,016
    Property, plant and equipment, net           62,612,136        53,586,514
    Land use rights, net                          2,123,702         1,907,611
    Intangible assets, net                       13,138,669        13,556,141
    Goodwill                                     50,067,871        50,609,866
    Deferred tax assets                             428,336           668,730
    TOTAL ASSETS                               $284,594,399     $ 250,828,938

    LIABILITIES AND EQUITY

    CURRENT LIABILITIES
    Short-term bank loans                       $22,121,740      $ 15,927,780
    Accounts payable                             17,115,384        20,159,317
    Bills payable                                10,605,305        12,658,029
    Advances from customers                       3,266,171         3,950,744
    Amount due to related parties,
     current portion                                667,138           583,736
    Accrued payroll and benefits                  1,609,966         3,142,240
    Other payables and accrued expenses          14,969,739        14,252,918
    Contingent consideration, current
     portion                                      1,568,437         1,857,994
    Income tax payable                            3,875,563         3,290,245
    TOTAL CURRENT LIABILITIES                    75,799,443        75,823,003

    Long-term bank loans                          4,036,020         1,907,100
    Amount due to related parties, long-
     term portion                                 5,015,528                --
    Contingent consideration, net of
     current portion                              2,224,685         2,635,397
    Deferred tax liabilities                      1,896,337         2,564,604
    TOTAL LIABILITIES                            88,972,013        82,930,104

    COMMITMENTS AND CONTINGENCIES                        --                --



                 CHINA INFORMATION SECURITY TECHNOLOGY, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
            AS OF JUNE 30, 2010 AND DECEMBER 31, 2009 (CONTINUED)
                          Expressed in U.S. dollars
                   (Except for share and per share amounts)

    EQUITY
    Common stock, par $0.01; authorized
     capital 200,000,000 shares; shares
     issued and outstanding 2010:
     51,811,787: 2009: 49,905,141 shares    $      252,615          $233,548
    Treasury stock, 6,000 shares, at cost          (11,468)          (11,468)
    Additional paid-in capital                  89,128,945        78,495,062
    Reserve                                      8,345,371         8,345,371
    Retained earnings                           76,095,452        60,462,275
    Accumulated other comprehensive income       6,020,572         5,016,575
    Total equity of the Company                179,831,487       152,541,363
    Non-controlling interest                    15,790,899        15,357,471
    Total equity                               195,622,386       167,898,834

    TOTAL LIABILITIES AND EQUITY               284,594,399       250,828,938



                 CHINA INFORMATION SECURITY TECHNOLOGY, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009  (Unaudited)
                          Expressed in U.S. dollars
                   (Except for share and per share amounts)

                               Three Months Ended        Six Months Ended
                              June 30,    June 30,    June 30,     June 30,
                                2010        2009        2010         2009

    Revenue - Products       $7,471,511 $ 3,789,288  $13,819,481   $6,610,416
    Revenue - Software       22,406,236  15,921,487   37,584,868   24,932,952
    Revenue - System
     integration              3,485,523   5,571,619    6,269,406    8,527,076
    Revenue - Others            153,618     505,525    1,148,240      697,659
    TOTAL REVENUE            33,516,888  25,787,919   58,821,995   40,768,103

    Cost - Products sold      5,813,701   3,007,849   11,054,123    5,620,640
    Cost - Software sold     10,257,690   5,993,637   16,659,101    8,694,577
    Cost - System
     integration                570,721   4,395,011    3,046,531    6,540,763
    Cost - Others                76,470     124,671      146,481      162,108
    TOTAL COST               16,718,582  13,521,168   30,906,236   21,018,088

    GROSS PROFIT             16,798,306  12,266,751   27,915,759   19,750,015

    Administrative expenses  (2,621,501) (2,304,376)  (5,391,532)  (4,520,723)
    Research and development
     expenses                  (560,649)   (720,411)  (1,130,080)  (1,224,263)
    Selling expenses         (1,489,212)   (644,349)  (2,703,774)  (1,238,064)
    INCOME FROM OPERATIONS   12,126,944   8,597,615   18,690,373   12,766,965

    Subsidy income              268,898     318,071      431,680      515,860
    Other (loss)/income, net   (324,700)    (16,845)     642,099      164,521
    Interest income              10,403     120,627       29,294      197,544
    Interest expense           (263,756)    (56,443)    (412,647)    (116,653)
    INCOME BEFORE INCOME
     TAXES                   11,817,789   8,963,025   19,380,799   13,528,237

    Income tax expense       (2,163,609) (1,091,800)  (3,334,692)  (1,680,196)
    NET INCOME                9,654,180   7,871,225   16,046,107   11,848,041

    Less: Net income
     attributable to the
     non-controlling
     interest                  (302,111)    (73,395)    (412,930)    (293,218)


    NET INCOME ATTRIBUTABLE
     TO THE COMPANY
                             $9,352,069  $7,797,830  $15,633,177  $11,554,823

    Weighted average number
     of shares
    Basic                    51,450,623  47,536,883   51,332,698   47,528,503
    Diluted                  51,450,623  47,536,883   51,332,698   47,528,503

    Earnings per share -
     Basic and Diluted
    Basic - Net income
     attributable to the
     Company's common
     stockholders                 $0.18       $0.16        $0.30        $0.24

    Diluted - Net income
     attributable to the
     Company's common
     stockholders                 $0.18       $0.16        $0.30        $0.24



                 CHINA INFORMATION SECURITY TECHNOLOGY, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009  (Unaudited)
                          Expressed in U.S. dollars
                   (Except for share and per share amounts)

                                Three Months Ended        Six Months Ended
                               June 30,    June 30,     June 30,     June 30,
                                 2010        2009         2010        2009

    Net income                 $9,654,180  $7,871,225  16,046,107  $11,848,041
    Other comprehensive
     income:
    Foreign currency
     translation gain             787,465     (16,365)  1,024,495      435,377

    Comprehensive income       10,441,645   7,854,860  17,070,602   12,283,418
    Comprehensive income
     attributable to the non-
     controlling interest
                                 (322,572)    (73,310)   (433,428)    (293,133)
    Comprehensive income
     attributable to the
     Company                  $10,119,073  $7,781,550  16,637,174  $11,990,285



                 CHINA INFORMATION SECURITY TECHNOLOGY, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009  (Unaudited)
                          Expressed in U.S. dollars
                   (Except for share and per share amounts)

                                                      Six Months Ended
                                              June 30, 2010     June 30, 2009
    OPERATING ACTIVITIES
    Net income                                 $16,046,107       $11,848,041
    Adjustments to reconcile net income
     to net cash provided by operating
     activities:
    Depreciation                                 3,441,071         1,852,357
    Amortization of intangible assets              927,048           865,710
    Stock-based compensation                            --           183,600
    Loss on disposal of property and
     equipment                                     320,957            31,764
    Change in allowance for accounts
     receivable                                    267,716           573,881
    Reversal of write-down of inventories           (1,362)               --
    Change in deferred income tax                  215,192           (29,517)
    Change in fair value of contingent
     consideration                                (700,268)               --
    Changes in operating assets and
     liabilities, net of effects of
     business acquisitions:
    Decrease in restricted cash                    457,202                --
    Increase in accounts receivable            (10,656,507)      (14,665,591)
    Decrease / (increase) in advances to
     suppliers                                   2,091,453        (3,028,042)
    Decrease / (increase) in other
     receivables and prepaid expenses              313,302        (1,540,531)
    Increase in inventories                    (10,164,333)       (1,657,773)
    (Decrease) / increase in accounts
     payable                                    (5,209,216)        4,643,442
    (Decrease) / increase in advances
     from customers                               (695,808)        4,469,480
    Increase in amount due to related
     parties                                     5,311,077           177,621
    Increase / (decrease) in other
     payables and accrued expenses                 921,098          (432,401)
    Increase in income tax payable                 569,611           695,912
    Net cash provided by operating
     activities                                  3,454,340         3,987,953


    INVESTING ACTIVITIES
    Increase in restricted cash related
     to bank borrowings                           (368,895)              --
    Proceeds from sales of property and
     equipment                                      44,007           100,225
    Proceeds from sale of short-term
     investments                                        --         5,862,800
    Refund of investment in former Joint
     Venture                                            --         4,397,100
    Purchase of land-use-rights                   (230,970)               --
    Purchases of property and equipment        (11,038,575)         (630,478)
    Capitalized and purchased software
     development costs                            (432,547)         (308,484)
    Deposit for software purchase               (4,777,693)       (4,781,846)
    Deposit for purchase of land-use-
     rights                                       (165,093)               --
    Net cash (used in) / provided by
     investing activities                      (16,969,766)        4,639,317


    FINANCING ACTIVITIES
    Borrowing of short-term loans               21,003,299         1,898,082
    Borrowing of long-term loans                 4,019,306                --
    Repayment of short-term loans              (14,887,816)         (732,850)
    Repayment of long-term loans                (1,906,970)               --
    Issued common stock                          9,383,440                --
    Repurchase of common stock                          --           (11,468)
    Net cash provided by financing
     activities                                 17,611,259         1,153,764



                 CHINA INFORMATION SECURITY TECHNOLOGY, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
   FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009 (CONTINUED) (Unaudited)
                          Expressed in U.S. dollars
                   (Except for share and per share amounts)

                                                       Six Months Ended
                                                  June 30,            June 30,
                                                    2010                2009
    Effect of exchange rate changes on
     cash and cash equivalents                     170,806              30,757

    NET INCREASE IN CASH AND CASH EQUIVALENTS    4,266,639           9,811,791
    CASH AND CASH EQUIVALENTS, BEGINNING        13,478,633           9,565,252
    CASH AND CASH EQUIVALENTS, ENDING          $17,745,272         $19,377,043

    Supplemental disclosure of cash
     flow information:
                                                       Six Months Ended
                                                  June 30,           June 30,
                                                   2010                2009
    Cash paid during the period
         Income taxes                           $2,547,020          $1,013,801
         Interest paid                            $449,494            $117,327

    Supplemental disclosure
     of significant non-cash
     transactions:

On January 12, 2010, the Company granted eligible employees a total of 213,363 shares of the Company's common stock as compensation under the China Information Security Technology, Inc. 2007 Equity Incentive Plan ("The Plan"). The fair value of these shares of approximately $1.3 million, based on the quoted market price, was accrued as of December 31, 2009 as the compensation was for services provided in 2009.

On February 2, 2009, the Company granted eligible employees a total of 60,000 shares of the Company's common stock as compensation under the Plan. The fair value of these shares of $183,600 based on quoted market price was recognized as stock-based compensation for the six months ended June 30, 2009.

Selected information by segment is presented in the following tables for the three and six months ended June 2010 and 2009.

                               Three months ended        Six months ended
                                    June 30                  June 30
                                2010        2009         2010        2009
                             (Unaudited) (Unaudited)  (Unaudited)  (Unaudited)


    Revenues(1)
         GIS Segment         $15,677,977  $7,974,312  $26,315,057  $13,833,978
         DIST Segment         13,957,662  15,221,482   26,055,086   22,741,939
         DHIS Segment          3,881,249   2,592,125    6,451,852    4,192,186
                             $33,516,888 $25,787,919  $58,821,995  $40,768,103

    (1) Revenues by operating segments exclude intercompany transactions.

    Percentage to Revenue
         GIS Segment               46.8%       30.9%        44.7%        33.9%
         DIST Segment              41.6%       59.0%        44.3%        55.8%
         DHIS Segment              11.6%       10.1%        11.0%        10.3%

During the second quarter of 2010, the Company won contracts from clients in 16 provinces and provincial cities in China. Some important contracts secured in the second quarter included:

    -- $5.0 million contract for a GIS/Intelligent Traffic Management System
       for the 16th Asian Games in Guangzhou, China
    -- $6.0 million contract for Police-use GIS (PGIS) in Shanghai, Shenzhen,
       Zhuhai, Jiangxi, Hunan and Guangxi under China's National PGIS
       Standardization Program
    -- $1.3 million contract for a PGIS large-screen display system for the
       Fujian Department of Public Security
    -- $0.8 million contract for a GIS surveying and mapping project for Jiayu
       City, Hubei Province
    -- $0.6 million contract for a Digital Hospital Information System for the
       Guangxi Department of Health

Mr. Jiang Huai Lin, Chairman and CEO of the Company, commented, "We believe that our expanding portfolio of capabilities, combined with the excellent reputation of our product solutions in the PRC market, contributes to our continued contract wins from both new and existing clients. The contracts won in the second quarter of 2010, in particular, demonstrate our success in integrating DIST capabilities with GIS solutions to create more sophisticated and powerful tools, such as intelligent management systems, for our customers. Furthermore, these contract wins prove our ability to penetrate new markets nationally. We expect that our growth trend will continue as we address a huge market in China with very high barriers-to-entry."

About China Information Security Technology, Inc.

China Information Security Technology, Inc., together with its subsidiaries, specializes in Geographic Information Systems (GIS), digital public security and hospital information systems, with the goal of being the largest GIS software provider in the People's Republic of China. Headquartered in Shenzhen, China, the Company's total solutions include specialized software, hardware, systems integration, and related services organized into three business segments - Geographic Information Systems, Digital Information Security Technology (DIST), and Digital Hospital Information Systems (DHIS). 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 second quarter 2010 contract wins to the Company's business and the Company's ability to successfully fulfill its obligations under the contracts; the expectation that public infrastructure spending in China will continue the Company's growth trend; the ability of the Company to expand its portfolio capabilities, continue expansion to new markets beyond the Guangdong region, continue winning contracts from both new and existing clients, and to otherwise 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 further information, please contact:

    China Information Security Technology, Inc.
     Iris Yan
     Tel:   +86-755-8370-4767
     Email: ir@chinacpby.com
     Web:   http://www.chinacpby.com

    Christensen
     Kathy Li
     Tel:   +1-480-614-3036
     Email: kli@christensenir.com

     Roger Hu
     Tel:   +86-158-1049-5326
     Email: rhu@christensenir.com

SHENZHEN, China, March 19 /PRNewswire-Asia-FirstCall/ -- China Information Security Technology, Inc. (Nasdaq:CPBY - News) ("CIST" or the "Company"), a leading total solutions provider of digital security, GIS and digital hospital information systems in China, today announced that the Company's Chairman and Chief Executive Officer, Mr. Jianghuai Lin, was elected as deputy chairman of the China Overseas Listed Corporations Association (COLCA).

COLCA is a non-profit organization whose members are Chinese corporations that are listed or intend to list on overseas exchanges, such as NASDAQ, AMEX, NYSE, HKE, AIM, and others. COLCA is committed to: Promoting business co- operation between members, exchanging ideas with relevant institutions and organizations, reducing financing costs and expenses for listed companies, enhancing investor confidence in member companies, providing special service programs to members, voicing member suggestions to government authorities, protecting legal interests on overseas stock markets, raising awareness of Chinese corporations listed overseas, contributing to the overseas investment activities of Chinese corporations, and complying with laws and regulations of the People's Republic of China and laws and regulations of the listing countries and regions,

During the conference, which was held in Beijing and was jointly sponsored by more than 40 Chinese corporations, members granted unanimous approval to the Articles of Association of COLCA and elected the first 19-member council. Mr. Xianzhang Wang was elected as the chairman of COLCA during the council's first 3-year session. Mr. Wang is the dean of the Insurance Academy of China Central University of Finance and Economics, the former chairman of China Insurance association, and the former Chairman and CEO of China Life Insurance Company Limited.

Mr. Lin commented, "We are pleased to join this association. We all share a common interest in promoting our companies in overseas markets, and we look forward to potentially working much more closely with each other in the future."

GeoGlobe 3.0 is a new generation of GIS platform software. Among many of its advantages, the most outstanding one is its ability to allow alternative operating platforms to interoperate. This break-through can enable cross-platform integration of user functions and realize broad commercialization of GIS applications. Another key break-through is that GeoGlobe 3.0 enables end users to access server-end data updates on a real-time basis.

The Recommended Software award aims to select excellent software products nationwide and cultivate well-known domestic software brands in China. Winning products will receive priority treatment in being procured by the government for large-scale purchases, information engineering projects and as candidates for software exports. The CSIA is a nationwide organization overseen by the PRC's Ministry of Industry and Information, with the goal of promoting the development of China's software industry and providing a hub for such products in overseas markets.

Mr. Jiang Huai Lin, Chairman and CEO of CIST, commented, "We are honored to receive the Recommended Software award from the China Software Industry Association. We believe this award is a recognition of the innovative and advanced features of our GeoGlobe software, which is a highly scalable and compatible software featuring multi-sourced, multi-structured spatial information sharing and inter-operation capabilities. It is also a validation of our persistent efforts to technologically innovate the domestic GIS industry. GeoGlobe has been proven successful in various fields such as electricity generation, emergency response, public transportation, and land resource and city planning. We expect that, in light of the Chinese government's current support of the domestic GIS product market, and its aim to construct a national public service GIS platform, we will be able to leverage this award to capture more market opportunities as they arise."

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, 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 the statements regarding: the significance of the "Recommended Software" award granted to the Company, the expectation that the Chinese government will continue to support the domestic GIS product market, or construct the national public service GIS platform; 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:
     Iris Yan
     China Information Security Technology, Inc.
     Tel:   +86-755-8370-4767
     Email: ir@chinacpby.com
     Web:   http://www.chinacpby.com

The Conference is being held on Wednesday, January 27, 2010, at the Mandarin Oriental Hotel in Hong Kong and on Thursday, January 28, 2010, at the Fullerton Hotel in Singapore. Jackie You Kazmerzak, the Company's Chief Financial Officer, will be representing the Company and meeting one-on-one with institutional investors.

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, 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 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:
     Iris Yan
     China Information Security Technology, Inc.
     Tel:   +86-755-8370-4767
     Email: ir@chinacpby.com
     Web:   http://www.chinacpby.com

During the fourth quarter of 2009, the Company won contracts from clients in 19 provinces and provincial cities in China out of its current market presence in 32. Some important contracts secured in the fourth quarter included:

    -- $10 million contract for Phase III of the Shenzhen Residence Card
       Information Management System;
    -- $2.3 million contract for the GIS Display System for Shanghai Zhiying
       Electronics Co., Ltd.;
    -- $1.8 million contract for the Police-use GIS for Hainan Province Public
       Security Department;
    -- $1.3 million contract for the Haikou City Medical Emergency Rescue
       Center Consolidated Command System;
    -- $0.5 million contract for the Geographic Information Public Service
       Platform for the Shanxi Province Geographic Information Center;
    -- $0.6 million contract for the Shenzhen Maternal and Child Health
       Hospital Data Sharing and Exchange Service Platform.

Of this quarter's contracts, excluding those of Huipu, 56% were for the Company's Digital Information Security Technology ("DIST") products, 39% were for its Geographic Information Systems ("GIS") products and 5% related to its Digital Hospital Information Systems ("DHIS") products. Management expects that the majority of these contracts will be recognized as revenue in 2010.

Mr. Jiang Huai Lin, Chairman and CEO of the Company, commented, "We are very excited about our record high contract wins in the fourth quarter. The momentum we have been gaining this year from the increased bidding and spending activities of our local governmental customers has repeatedly pushed our contract wins to new record highs each quarter. We believe that this constant growth reflects further customer recognition of the quality of our industry-leading solutions in our core business segments: DIST, GIS and DHIS, all of which have experienced strong growth this quarter. We are particularly pleased with the large contract win from the Shenzhen Municipal Government, who has awarded us with contracts for all three phases of the Shenzhen Residence Card Information Management System project, which we believe reflects the degree of satisfaction and trust they have in us and the work that we have done for them. We expect that these contract wins and the level of our past performance will provide us with a competitive edge as we continue to grow our business throughout China."

The Company has also provided an update on Huipu Electronics (Shenzhen) Co., Ltd. ("Huipu"), which CIST recently acquired. Huipu manufactures four key products: All-In-One PC & TVs, All-In-One Computers, LCD Monitors with SmartTouch, and LCD Multiple Screen Combination Wall Panels. Huipu's OEM and Huipu-branded LCD monitors have been disposed of as the Company continues to integrate Huipu into its business and operations.

Mr. Jiang Huai Lin added, "We continue to feel optimistic about the growth prospects for Huipu Electronics. We believe that its high-end hardware capabilities and respectable market share will enhance the growth of our software business. As a result of our record high contract wins and the addition of this new acquisition, we remain very confident in our ability to achieve our financial goals for 2009 and 2010."

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, 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 the impact of the fourth quarter 2009 contract wins and the Company's acquisition of Huipu on the Company's business and operations; 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:
    China Information Security Technology, Inc.
     Iris Yan
     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

Rodman & Renshaw, LLC, a wholly owned subsidiary of Rodman & Renshaw Capital Group, Inc. (Nasdaq: RODM), acted as the Company's exclusive placement agent in connection with the offering and FT Global Capital, Inc. served as advisor to the Company.

The shares and warrants in this offering were issued under a shelf registration statement declared effective by the Securities and Exchange Commission (the "SEC") on November 23, 2009. A prospectus supplement related to the public offering was filed with the SEC on January 8, 2010. Copies of the final prospectus supplement and accompanying prospectus relating to the offering may be obtained from Rodman & Renshaw, LLC, 1251 Avenue of the Americas, 20th Floor, New York, NY 10020 or by calling (212) 356-0502. An electronic copy of the prospectus is also available on the SEC's website at http://www.sec.gov .

For more detailed information on this financing, please refer to the Company's Current Report on Form 8-K and related exhibits filed with the SEC on January 8, 2010.

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 state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About China Information Security Technology, Inc.

Through its wholly-owned Chinese subsidiary, China Information Security Technology, Inc. (the "Company") 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, 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 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 SEC 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

The Fast 500 Asia Pacific program ranks leading technology companies in a broad range of industries across the Asia Pacific region based on their fiscal year revenue growth rates over the last three years. Companies are considered technology companies if they own proprietary intellectual property or proprietary technology that contributes to a significant portion of the company's operating revenues. Mr. Zhi Qiang Zhao, CIST's Chief Operating Officer, received the award on behalf of the Company at the Deloitte award ceremony, which took place at the Intercontinental Hotel in Hong Kong on Thursday, December 10, 2009.

"We would like to thank Deloitte for this great honor, which follows on the heels of our award from the "Deloitte Technology Fast 50 China 2009 Award" program in November," said Mr. Jiang Huai Lin, CIST's CEO. "It is especially rewarding to be ranked for the second consecutive year, and having increased our rank over the period. We believe that this award reflects our sustained growth over the past two years, relative to our peers, even in the face of the challenges posed by the global financial crisis, and validates our long-term business model. We continue to be confident in our outlook and credit the efforts and dedication of our employees and the confidence of our shareholders for our performance to date."

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, 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 awards granted to the Company; the general ability of the Company to achieve its commercial objectives, including the ability of the Company to sustain growth in the coming years relative to its peers; 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

Following positive feedback, CIST was given the Phase II project contract to expand the Residence Card System to support 5 million residence cards. The Phase III project contract requires CIST to further expand the Residence Card System to fully support Shenzhen's entire migrant population of approximately 10.5 million.

Mr. Jiang Huai Lin, Chairman and CEO of CIST, commented, "We are greatly pleased and honored to have been awarded the contract for the third phase of this ambitious project by the Shenzhen Municipal Government, which we believe is an indication of the degree of satisfaction and trust that they have in our solid industry experience and successful execution record. We expect that our successful performance of this contract will competitively position us to gain a substantial market share of future project contracts in connection with the further expansion and implementation of the Residence Card System in other cities throughout Guangdong and China."

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, 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 Deloitte Technology Fast 50 China program ranks leading technology companies across China from a broad range of industries based on their average revenue growth rates over the last three years. Companies are considered technology companies if they either develop proprietary technology that contributes to a significant portion of their operating revenues, manufacture technology-related products or devote a high percentage of revenue to technological R&D. Companies selected in the Deloitte Technology Fast 50 China program will automatically qualify for participation in the Deloitte Technology Fast 500 Asia Pacific 2009 program, which annually recognizes the 500 fastest growing technology companies in the Asia Pacific region. Jackie You Kazmerzak, Chief Financial Officer of the CIST, received the award on behalf of the Company at the Deloitte awards ceremony, which took place on Friday, November 20, 2009 at the Peninsula Hotel in Beijing.

"It is a great honor to have been recognized by such a respected institution and such an important program," said Mr. Jiang Huai Lin, CEO of China Information Security. "It is especially rewarding to be ranked for the second consecutive year, having even increased our rank since 2008. We feel this reflects strongly on our sustained growth over the past several years relative to our peers, and validates our long-term business model and current momentum. We are grateful to our employees and staff for their hard work and to our shareholders for their confidence in our business, which we hope to reward."

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, 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 Company's being ranked as Deloitte Technology Fast 50 China; 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:
     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

China Information Security Technology, Inc., (Nasdaq: CPBY - News; "China Information Security," or the "Company"), a leading total solutions provider of digital security, geographic information, and hospital information systems in China, today reported its financial results for the third quarter ending September 30, 2009.

Third quarter 2009

Third quarter 2009 revenue increased 32.7% to $28.7 million, from $21.6 million in third quarter of 2008. Software sales grew by $8.7 million, or 75.4% year-over-year, to $20.2 million, driven by the Company's continuing efforts in promoting software sales in 2009. Reflecting the shifting of sales activities toward software and reduced hardware sales to non-government customers, revenues from hardware products and system integration services in the third quarter of 2009 decreased by 22.5% year-over-year and 1.9% year- over-year, respectively.

Beginning in the first quarter of 2009, the Company consolidated revenue into three reporting segments: 1) Digital Information Security Technology ("DIST"), 2) Geographic Information Systems ("GIS") and 3) Digital Hospital Information Systems ("DHIS"), to better reflect its operating structure. DIST, GIS, and DHIS revenues were $15.1 million, $9.8 million, and $3.8 million, respectively, for the third quarter of 2009. During the quarter, the Company signed new contracts totaling $30.1 million from customers in 14 provinces and provincial cities. Of these contracts, 55% were won in the DIST sector, 30% in the GIS sector, and 15% in the DHIS sector. At the end of third quarter 2009, the total value of the Company's backlog increased by $1.4 million sequentially to $36.1 million, from $34.7 million in the previous quarter.

Gross profit increased $4.0 million to $15.1 million, from $11.2 million for the same period last year. Third quarter 2009 gross margin of 52.7% expanded 110 basis points year-over-year from 51.6%, benefiting from a product mix change in favor of software.

Administrative expenses of $2.5 million in the third quarter of 2009 increased 10.5%, from $2.2 million during the same period of last year. As a percentage of revenue, administrative expenses were 8.6% for the third quarter of 2009, a reduction from 10.3% from the same period a year ago, as the Company continued to gain leverage on operating costs. Research and development expenses decreased to $0.69 million, compared with $0.75 million in the prior year's third quarter. Selling expenses of $0.7 million increased 26.6% from the corresponding period in 2008. As a percentage of revenue, selling expenses decreased to 2.5% for the third quarter, from 2.6% in the same period of 2008.

Income from operations increased to $11.3 million, up 47.9% from $7.6 million a year ago. Accordingly, operating margins increased 400 basis points to 39.2%, up from 35.2% for the same period in 2008, driven largely by an improved product mix and gained leverage on operating expenses. Income tax expense was $1.8 million, for an effective tax rate of approximately 16%.

Net income contributable to the Company increased $1.7 million, or 21.1%, to $9.7 million for the three months ended September 30, 2009, from $8.0 million for the same period in 2008. Income from continuing operations increased $2.0 million, or 26.6%, to $9.5 million, from $7.5 million for the same period in 2008. As a percentage of revenues, net income contributable to the Company decreased 330 basis points to 33.9%, from 37.2% for the same period in 2008, primarily due to increased effective tax rate. Consequently, earnings per diluted share in third quarter 2009 increased to $0.20, from $0.17 in the third quarter of 2008. Excluding discontinued operations, earnings per diluted share in the third quarter of 2008 was $0.16.

The Company's cash position at the end of September 30, 2009 decreased to $14.5 million, compared to $19.4 million at the end of June 30, 2009. During the quarter, accounts receivable increased by $7.1 million over the prior quarter's level to $64.2 million. Meanwhile, during the first nine months of 2009, cash provided by operating activities was $8.3 million, more than doubling cash provided by operating activities during the same period in 2008. Working capital decreased by $1.9 million to $67.8 million, from $69.7 million in the previous quarter. The Company has zero long-term debt.

Mr. Jiang Huai Lin, Chairman and CEO of the China Information Security, commented, "We are very pleased with our strong financial performance during the third quarter which we believe demonstrates the resiliency of our market position and the strength of our brand and execution capabilities. Over the past three months, we have seen accelerated momentum in our business pipeline, culminating in our win of a record high value of new contracts this quarter and resulting in record revenues and expanded backlog during the period. Furthermore, we continued to enjoy strong repeat business, with 80% of revenue coming from existing customers. Our national expansion goal is also on track, where 40% of revenue during the quarter came from outside of Guangdong, with the top non-Guangdong markets being Fujian, Beijing, Guangxi, Hainan and Zhejiang. We now rank among the top 3 suppliers to the Shenzhen Municipal Government and operate in 32 regions throughout China.

"Our technological leadership was further reaffirmed by our win of high- level awards for innovation and technological breakthroughs in the surveying and mapping industry this past quarter. We believe that our proven capabilities in providing mission-critical security information systems, our technical expertise in successfully implementing large-scale projects and our competitive pricing continue to be winning criteria in customer contract selection processes. As such, we remain confident with our business outlook for the remainder of 2009 through the coming fiscal year."

Financial Outlook

For fiscal year 2009, the Company is raising its revenue projection to $96-$100 million and pro-forma net income projection to the range of $28.5- $30.0 million, excluding any non-cash expenses as a result of employee stock awards and amortization of intangible assets associated with recent acquisitions. This compares to the previous guidance of $94-98 million in revenue, and $26.8-$28.0 million in pro-forma net income. Additionally, with its higher visibility in the digital security, geographic information, and hospital information market, the Company is issuing guidance for the full year 2010 with projected revenue to be $133-138 million and pro forma net income to be $33.5-37.5 million.

Mr. Lin concluded, "Given our strong performance over the past two quarters, we feel confident about our business outlook. We believe that we have the strong foundation, adequate liquidity and sound business strategy to continue benefiting from strong government support for our industry. We have strategically established a portfolio of offerings in the public security, GIS and digital hospital sectors, all of which are of top priority to the Chinese government, particularly in light of recently announced projects to complete the digital surveying and mapping of almost 300 Chinese cities and to set up health archives for 900 million rural Chinese. We believe that our strong industry reputation, successful execution record in Shenzhen City, and our significant contract wins throughout the Guangdong province have validated our current business strategy. Our goal is to replicate our success with our PGIS programs in Guangdong province in other provinces and to become a national standard setter in the digital security, geographic information, and hospital information space. We are confident that as an emerging leader in each of our business segments with distinct capabilities and first-mover advantages, we are well positioned to grow with the market and capture a significant market share."

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures for earnings that exclude non-cash charges. China Information Security believes that these non- GAAP financial measures are useful to investors because they exclude non-cash charges that China Information Security's management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential operating activities of China Information Security. Accordingly, management excludes the expense arising from certain non-cash charges when making operational decisions. China Information Security believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand China Information Security's financial performance in comparison to historical periods. In addition, it allows investors to evaluate China Information Security's performance using the same methodology and information as that used by China Security's management. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the non- GAAP financial measure. However, China Information Security's management compensates for these limitations by providing the relevant disclosure of the items excluded.

The following table provides the non-GAAP financial measure and the related GAAP measure and provides a reconciliation of the non-GAAP measure to the equivalent GAAP measure.

* Table 1 Q3 2009 Reconciliation of Operating, Net Income and EPS to Exclude SBC and Amortization of Intangible Assets 3 Mos. Ended 3 Mos. Ended 30-Sep-09 30-Sep-08 Operating income 11,253,594 7,608,173 Stock based compensation ("SBC") -- 310,367 Amortization 439,840 299,378 Operating income (without SBC and Amortization) 11,693,434 8,217,918 Net income contributable to the Company 9,726,043 8,034,275 Stock based compensation ("SBC") -- 310,367 Amortization 439,840 299,378 Net income contributable to the Company (without SBC and Amortization) 10,165,883 8,644,020 Weighted Average Number of Shares Outstanding Basic 47,536,883 46,066,067 Diluted 47,536,883 46,355,078 Earnings Per Share (without SBC and Amortization) Basic $0.21 $0.19 Diluted $0.21 $0.19

Conference Call

The Company will hold a conference call to discuss the financial results at 8:00 a.m. ET on November 9, 2009. The Company invites you to join the call by dialing 1-913-312-1276. A live webcast of the conference call will be available at http://www.chinacpby.com . A replay of the call will be available from November 9, 2009 to November 16, 2009. Listeners may access the replay by dialing 1-719-457-0820, passcode: 7439029.

About China Information Security Technology, Inc.

China Information Security Technology, Inc., together with its subsidiaries, is a total solution provider of digital security, geographic information, and hospital information systems in the People's Republic of China. Headquartered in Shenzhen, China, the Company's total solutions include specialized software, hardware, systems integration, and related services organized into three business segments - Digital Information Security Technology ("DIST"), Geographic Information Systems ("GIS"), and Digital Hospital Information System ("DHIS"). With its commitment to leading-edge technology and quality assurance, the Company has won several 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 general ability of the Company to achieve its commercial objectives, including its ability to continue to successfully grow its business and brand, continue its rate of contract wins and further strengthen its competitive position; the ability of the Company to meet it's projected financial outlook for the 2009 and 2010 fiscal year; 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 CHINA INFORMATION SECURITY TECHNOLOGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2009 AND DECEMBER 31, 2008 September 30 December 31 2009 2008 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $14,464,105 $9,565,252 Short-term investments -- 5,835,838 Accounts receivable: Billed, net of allowance for doubtful accounts of $973,000 and $399,800, respectively 19,903,989 17,135,099 Unbilled 44,329,932 25,722,009 Bills receivable 47,333 4,481,340 Advances to suppliers 14,698,444 8,469,976 Amount due from related parties, net of allowance for doubtful accounts of $73,000 152,773 131,594 Inventories 8,474,861 7,107,537 Other receivables and prepaid expenses 3,212,328 6,251,484 Deferred tax assets 358,894 -- TOTAL CURRENT ASSETS 105,642,659 84,700,129 Deposit for business acquisition 8,000,000 -- Deposit for software purchase 6,827,946 -- Long-term investments 2,910,834 3,078,405 Property and equipment, net 23,575,387 23,555,603 Intangible assets, net 12,310,355 13,115,151 Goodwill 23,777,671 24,018,894 TOTAL ASSETS $183,044,852 $148,468,182 LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term bank loans $11,460,765 $6,327,992 Accounts payable 16,535,342 10,707,728 Advances from customers 2,929,749 2,476,335 Amount due to related parties 576,401 486,136 Accrued payroll and benefits 1,432,503 1,319,386 Other payables and accrued expenses 1,951,755 2,553,019 Income tax payable 2,940,967 1,592,459 TOTAL CURRENT LIABILITIES 37,827,482 25,463,055 EQUITY China Information Security Technology, Inc. equity Common stock, par $0.01; authorized capital 200,000,000 shares; shares issued and outstanding 2009: 48,803,211 and 48,797,211 shares, respectively; 2008: 47,462,404 shares 222,529 209,121 Treasury stock, 6,000 shares, at cost (11,468) -- Additional paid-in capital 64,297,531 64,127,339 Reserve 4,964,597 4,964,597 Retained earnings 55,029,341 33,748,480 Accumulated other comprehensive income 5,284,642 4,644,693 Total stockholders' equity of the Company 129,787,172 107,694,230 Non-controlling interest 15,430,198 15,310,897 Total equity 145,217,370 123,005,127 TOTAL LIABILITIES AND EQUITY $183,044,852 $148,468,182 CHINA INFORMATION SECURITY TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (UNAUDITED) Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 REVENUE Revenue - Products $2,444,969 $3,156,801 $9,055,386 $15,401,636 Revenue - Software 20,178,136 11,500,973 45,111,089 24,004,363 Revenue - System integration 5,927,117 6,044,848 14,454,193 16,853,547 Revenue - Other 130,459 918,518 828,116 1,470,661 TOTAL REVENUE 28,680,681 21,621,140 69,448,784 57,730,207 COST Cost - Products 1,765,042 2,671,672 7,385,682 11,944,863 Cost - Software 7,365,142 2,219,517 16,059,719 4,443,653 Cost - System integration 4,402,388 5,168,477 10,943,151 12,465,401 Cost - Other 28,112 409,646 190,220 685,223 TOTAL COST 13,560,684 10,469,312 34,578,772 29,539,140 GROSS PROFIT 15,119,997 11,151,828 34,870,012 28,191,067 Operating Expenses Administrative expenses (2,462,872) (2,229,282) (6,983,595) (6,225,821) Research and development expenses (687,580) (748,853) (1,911,844) (1,978,326) Selling expenses (715,951) (565,520) (1,954,016) (1,572,729) TOTAL Operating Expenses (3,866,403) (3,543,655) (10,849,455) (9,776,876) INCOME FROM OPERATIONS 11,253,594 7,608,173 24,020,557 18,414,191 OTHER INCOME (EXPENSE) Subsidy income 158,520 194,662 674,379 264,342 Other income, net 2,654 70,633 167,174 112,052 Interest income 40,948 124,228 238,492 182,103 Interest expense (109,204) (75,121) (225,858) (83,008) TOTAL OTHER INCOME 92,918 314,402 854,187 475,489 INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 11,346,512 7,922,575 24,874,744 18,889,680 Income tax expense (1,797,945) (378,183) (3,478,141) (906,808) INCOME FROM CONTINUING OPERATIONS $9,548,567 $7,544,392 $21,396,603 $17,982,872 INCOME FROM DISCONTINUED OPERATIONS (NET OF INCOME TAXES OF $0) -- 557,420 -- 857,795 NET INCOME $9,548,567 $8,101,812 21,396,603 $18,840,667 Add/(Less): Net loss (income) attributable to the NCI 177,476 (67,537) (115,742) (177,069) NET INCOME CONTRIBUTABLE TO THE COMPANY 9,726,043 8,034,275 21,280,861 18,663,598 Weighted average number of shares outstanding Basic 47,536,883 46,066,067 47,531,327 45,766,974 Diluted 47,536,883 46,355,078 47,531,327 46,173,395 Earnings per share - Basic and Diluted Basic - From continuing operations $0.20 $0.16 $0.45 $0.39 Basic - From discontinued operations -- 0.01 -- 0.02 0.20 0.17 0.45 0.41 Diluted - From continuing operations $0.20 $0.16 $0.45 $0.38 Diluted - From discontinued operations -- 0.01 -- 0.02 0.20 0.17 0.45 0.40 CHINA INFORMATION SECURITY TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Unaudited) Nine Months Ended September 30, 2009 2008 OPERATING ACTIVITIES Net income $21,396,603 $19,698,462 Adjustments to reconcile net income to net cash provided by operating activities: Provision for losses on accounts receivable 576,832 -- Depreciation 2,825,201 3,457,334 Amortization of intangible assets 1,305,550 811,553 Stock-based compensation 183,600 1,004,699 Gain (loss) on disposal of property and equipment, net 33,966 (31,840) Deferred income tax benefits (117,583) -- Impairment of long-term investment 184,397 -- Changes in operating assets and liabilities, net of effects of business acquisitions Increase in accounts receivable (17,231,581) (22,453,975) Increase in advances to suppliers (6,177,155) -- Increase in other receivables and prepaid expenses (1,315,827) (1,308,566) Increase (decrease) in amount due from (to) related parties 67,081 (53,268) Increase in inventories (620,005) (6,131,919) Increase in accounts payable 5,944,128 11,157,416 Increase (decrease) in advances from customers 439,436 (2,329,126) Decrease in other payables and accrued expenses (507,220) (555,553) Increase in income tax payable 1,338,726 712,348 Net cash provided by operating activities 8,326, 149 3,977,565 INVESTING ACTIVITIES Deposit for business acquisition of Zhongtian -- (1,458,106) Cash acquired in Geo acquisition -- 2,443,677 Cash acquired in Bocom acquisition -- 713,793 Consideration paid for acquisition of Geo -- (6,998,811) Proceeds from sale of short-term investments 5,863,600 -- Purchase of short-term investments -- (5,655,605) Proceeds from sale of marketable securities -- 14,966,752 Refund of investment in former Joint Venture 4,397,700 -- Proceeds from sales of property and equipment 100,299 1,146,671 Dividends received -- 36,507 Purchases of property and equipment (3,682,753) (7,985,935) Capitalized and purchased software development costs (435,494) (1,751) Deposit for software purchase (6,822,826) (4,751,591) Deposit for business acquisition (8,000,000) -- Net cash used in investing activities (8,579,474) (7,544,399) FINANCING ACTIVITIES Borrowings under short-term loans 6,296,041 5,875,549 Purchase of treasury stock (11,468) -- Repayment of short-term loans (1,172,720) (1,086,312) Net cash provided by financing activities 5,111,853 4,789,237 Effect of exchange rate changes on cash and cash equivalents 40,325 596,353 NET INCREASE IN CASH AND CASH EQUIVALENTS 4,898,853 1,818,756 CASH AND CASH EQUIVALENTS, BEGINNING 9,565,252 19,755,182 CASH AND CASH EQUIVALENTS, ENDING $14,464,105 $21,573,938 Supplemental disclosure of cash flow information: Cash paid during the period Income taxes $2,256,998 $195,271 Interest $209,639 $82,359 Revenues by segment for the three and nine months ended September 30, 2009 and 2008 are as follows: Three months ended Nine months ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2009 2008 2009 2008 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues(1) DIST Segment $15,058,561 $13,299,204 $37,800,499 $33,840,228 GIS Segment 9,839,180 8,321,936 23,673,159 23,889,979 DHIS Segment 3,782,940 -- 7,975,126 -- $28,680,681 $21,621,140 $69,448,784 $57,730,207 Percentage to Revenue DIST Segment 52.5% 61.5% 54.4% 58.6% GIS Segment 34.3% 38.5% 34.1% 41.4% DHIS Segment 13.2% 11.5% (1) Revenues by operating segments exclude intercompany transactions.

Listeners may access the call by dialing +1-913-312-1276. To listen to a live webcast of the event, please go to http://www.chinacpby.com and click on the Investor Relations section where conference calls are posted. Please access the website 15 minutes prior to the scheduled time to download and install any necessary audio software.

A replay of the call will be available from November 9, 2009 through November 16, 2009 by dialing +1-719-457-0820, passcode: 7439029.

About China Information Security Technology, Inc.

Through its wholly-owned Chinese subsidiary, China Information Security Technology, Inc. ("Company") 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, 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 .

    For more information, please contact:

    Company Contact:
     Iris Yan
     China Information Security Technology, Inc.
     Tel:     +86-755-8370-4767
     Email:   ir@chinacpby.com
     Website: http://www.chinacpby.com

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

The Company's "Multi-source Spatial Information Network Sharing Software Platform and Engineering Applications" project was awarded first place for the Surveying and Mapping Science and Technology Progress Award by the Chinese Society for Geodesy Photogrammetry and Cartography (the "Society") while the Company's "Zhejiang Provincial Geographic Information System" project won second place. In addition, the Company's "Nanchang Digital Garden" project was awarded third place in the Outstanding Surveying and Mapping Engineering Award. These awards are granted annually by the Society to companies and projects that have created innovative technology, found innovative and beneficial applications for existing technology, successfully adopted and developed upon foreign technology or that have achieved excellence in technological information administration, as determined by the National Science and Technology Award Principles.

Mr. Jiang Huai Lin, Chairman and CEO of CIST, commented, "We are greatly honored to receive such prestigious awards, which are the highest level awards in the Chinese surveying and mapping industry. We are greatly encouraged by the wins, which we believe demonstrate our technological strength, recognized brand name and our leading position in the GIS industry. We expect that with the Chinese government's current support of the domestic GIS product market, we will be able to leverage these awards to capture more market opportunities in the domestic digital surveying and mapping space as they arise."

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, 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 awards granted to the Company; the expectation that the Chinese government's will continue to support of the domestic GIS product market; the general ability of the Company to achieve its commercial objectives, including the ability of the Company to capture more market opportunities in the domestic digital surveying and mapping space as they arise; 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

The Company won contracts from clients in 14 provinces and provincial cities during the third quarter of 2009, increasing its market presence from 28 to 32 provinces and provincial cities throughout China. Some important contracts secured in the third quarter included:

    -- $11 million contract for Phase I of the Shenzhen Emergency Command
       Digital Trunking Mobile Communications System Project;
    -- $1.3 million contract for Phase II of the Zhuhai City Police-use GIS
       Project;
    -- $1.2 million contract for Shenzhen City Planning Bureau Digital Land
       Resource Management System.

Of this quarter's contracts, 55% were for the Company's Digital Information Security Technology ("DIST") products, 30% were for its Geographic Information Systems ("GIS") products and 15% related to its Digital Hospital Information Systems ("DHIS") products. Management expects that the majority of these contracts will be recognized as revenue in 2009.

Mr. Jiang Huai Lin, Chairman and CEO of the Company, commented, "We are very excited about our record high contract wins in the third quarter. The increased bidding and spending activities from our local governmental customers throughout this quarter indicate that the economic recovery has re-enabled many previously delayed government projects to move forward and created strong, positive momentum for our businesses. This record high value of contract wins also demonstrates further customer recognition of the quality of our industry-leading solutions in our core business segments: DIST, GIS and DHIS, all of which have experienced strong growth this quarter. We believe that the large contract win from Shenzhen Public Security Bureau, in particular, highlights an attractive potential market in applying our PGIS systems to telecommunication networks and will provide us with the competitive edge to win bids on similar projects in other provinces throughout China."

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, 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 the impact of the third quarter 2009 contract wins on the Company's business and operations; the likelihood that the Company's key customers will fully return to their regular spending activities; the general ability of the Company to achieve its commercial objectives, including the ability of the Company to successfully apply its PGIS systems to telecommunication networks and gain a competitive edge to win bids on similar projects in other provinces throughout China; 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

The Roth China Conference is being held from Monday, October 12, 2009, through Wednesday, October 14, 2009, at the Fontainebleau, Miami Beach, FL. Management is currently scheduled to meet with institutional investors and to present at 9:30 am ET on October 14, 2009.

The BNP Paribas Securities Asia 16th Annual China Conference is being held from Wednesday, October 14, 2009, through Friday, October 16, 2009, at Sheraton Hotel, in Changsha City, China. Management is currently scheduled to meet with institutional investors and to present at 4:15pm China Time on October 14, 2009.

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, 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 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:
    Iris Yan
    China Information Security Technology, Inc.
    Tel: +86-755-8370-4767
    Email: ir@chinacpby.com
    Website: http://www.chinacpby.com

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

The National Independent Innovation Products accreditation (the "Award") was created by the MST in order to help implement the State Council's National Outlines for Medium and Long-term Planning for Scientific and Technological Development and create an incentive environment with treasury funding for independent innovations. The Award is granted to creative companies that pilot innovative projects in China, to products of companies in state-level high-technology zones, as well as to products that apply recent technological breakthroughs and have won National Science and Technology Awards. GeoStar was among the first batch of products to ever receive this Award.

The awarded product is not only given purchase priority by the government for use in important national projects, but the developer, creator or manufacturer of the product also receives priority in public funding and strong support in becoming accredited as a High Technology Enterprise with the favorable policies and research and development support associated with such accreditation.

The Company's GeoStar system is one of the leading and largest-scale GIS software series with independent intellectual property ownership in China. It covers the whole GIS product family, from data acquisition and processing to large database management, GIS customization and the online publication of geographic data. GeoStar has been successfully applied in many industries, including land resourcing, surveying & mapping, urban planning and water conservation.

Mr. Jiang Huai Lin, Chairman and CEO of CIST, commented, "We are greatly honored to have our GeoStar system win a National Independent Innovation Product award. We believe that this award not only demonstrates the state-of-the-art quality of GeoStar, but it also highlights our research and development strengths and technical capabilities, and validates our position as a pioneer, innovator and leader in the domestic GIS industry. We are encouraged by this Award, which we believe will serve to further solidify our position in the industry and competitively position us to expand our share of the market for GIS products and services, as well as benefit from the adoption by the PRC government of more favorable policies in support of domestically developed GIS software products,

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, 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 the significance of the National Independent Innovation Products accreditation awarded to the Company's GeoStar v5.2 product and its impact on the Company's business and operations, including the likelihood that the win will further solidify the Company's position in the industry and lead to an expansion of market share; the business strategy, plans and objectives of the Company and its subsidiaries, including the probability that the Company will benefit from the adoption by the PRC government of more favorable policies in support of domestically developed GIS software products;; 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

SHENZHEN, China, Sep. 8, 2009 (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 and hospital information systems in China, today announced that the Company has been awarded an $11 million contract for Phase I of the Shenzhen Emergency Command Digital Trunking Mobile Communications System Project (the "Project"). The Company anticipates completing this contract within the next 12 months and will recognize revenue over that period of time.

According to the contract, CIST will serve as general contractor and systems integrator for the Project and will construct an emergency response communications system based on EADS Secure Network's TETRA (Terrestrial Trunked Radio) two-way transceiver technology. The Shenzhen Public Security Bureau's ("SPSB") previous analog system was limited to one speaker per channel. TETRA's safe, fast and reliable wireless digital transmission on the other hand allows for multiple, simultaneous one-to-one or one-to-many conversations. In addition, the Project's secured network will be directly connected wirelessly to that of the Shenzhen Police and integrated with the city's PGIS (police-use geographic information system) and first responder system, both built by CIST. The Project will enable synchronized, integrated network management among different sub-systems used by various emergency responder agencies, including police, traffic, fire, health, and others. As a result, the Project's enhanced system should greatly improve command, coordination, and response of municipal emergency services, ranging from day-to-day police activities to large-scale special events or city-wide emergencies. Going forward, the system may be expanded to cover other government agencies and industry applications such as metro transportation city management and aviation in Shenzhen City.

Mr. Jiang Huai Lin, Chairman and CEO of CIST, commented, "We are very excited about this large contract win from the Shenzhen Public Security Bureau, as this project marks the beginning of integrating our PGIS systems with telecommunication networks, which raises the technological bar even higher and has an attractive new market. Our proven success with mission-critical applications, unmatched large-scale deployment capabilities, and integrated offering clearly differentiated CIST from other bidders. We are confident that we will win the remaining $19 million of the Project's total estimated value of $30 million and will complete the entire Project prior to the opening of the 2011 Shenzhen Universidad. Since this is the pilot project in China, our successful implementation will also serve as a live demonstration for similar systems that are expected to be implemented in other major cities throughout China. We estimate this eventual nationwide rollout can create approximately $450 million in new market opportunities for CIST. This contract win further demonstrates our strategy of gaining first mover advantage in Guangdong province, which is a technological leader among provinces/regions in China."

Mr. Lin continued, "We are also very excited about our cooperation with EADS Secure Networks. We believe they were impressed with our technological strength, state-secret level certifications, and proven brand. This cooperation should further solidify CIST's industry leadership and competitive advantages, which can further drive CIST's business expansion nationally."

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, 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 the impact of the mentioned contract win on the Company's business and operations; the ability of the Company to win the remainder of the contract, the expectation that a nationwide rollout can create $450 million in new market opportunities for CIST; 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.

Source: PR Newswire (September 8, 2009 - 7:00 AM EDT)

The Rodman & Renshaw Annual Global Investment Conference is being held from Wednesday, September 9, 2009, through Friday, September 11, 2009, at the New York Palace Hotel in New York, NY. Management is currently scheduled to meet with institutional investors and to present at 9:10 am ET on September 10, 2009. A webcasting of the presentation will be available at

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, 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 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:
     Iris Yan
     China Information Security Technology, Inc.
     Tel:   +86-755-8370-4767
     Email: ir@chinacpby.com
     Website:   http://www.chinacpby.com

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

About China Yuchai International

China Yuchai International Limited, through its subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL"), engages in the manufacture, assembly, and sale of a wide array of light-duty, medium-sized and heavy-duty diesel engines for construction equipment, trucks, buses, and cars in China. GYMCL also produces diesel power generators, which are primarily used in the construction and mining industries. Through its regional sales offices and authorized customer service centers, the Company distributes its diesel engines directly to auto OEMs and retailers and provides maintenance and retrofitting services throughout China. Founded in 1951, GYMCL has established a reputable brand name, strong research & development team and significant market share in China with high-quality products and reliable after-sales support. In 2008, GYMCL sold approximately 372,000 diesel engines and was consistently ranked No. 1 in unit sales by China Association of Automobile Manufacturers. For more information, please visit http://www.cyilimited.co... .

    For more information, please contact:

     Kevin Theiss / Dixon Chen
     Grayling
     Tel:   +1-646-284-9409
     Email: kevin.theiss@us.grayling.com
            dixon.chen@us.grayling.com

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

Ms. Kazmerzak is a seasoned executive with more than 10 years' experience in corporate finance and investment management. Prior to joining CIST, she was in charge of China investments for JLF Asset Management, and before that, served as Chief Financial Officer of the publicly traded Diguang International Development Company, Ltd. Earlier in her career, Ms. Kazmerzak was a portfolio manager at Sand Hill Advisors in Palo Alto, California, and an investment officer at Northern Trust in San Francisco. She began her career at Bank of America in the corporate finance division and has been a guest lecturer at INSEAD's MBA school. A Chartered Financial Analyst (CFA), Ms. Kazmerzak serves as a Strategic Advisor to CFA China. She received her bachelor's degree in economics from Shanghai International Studies University and obtained her MBA with a concentration in finance from Arizona State University.

During her extensive career as an investment and financial executive, Ms. Kazmerzak successfully built and managed accounting systems, improved financial reporting and controls, tied employee incentives to shareholder value and served as a strategic partner for CEOs and COOs in forming business and capital markets strategies. A Shanghai native with a decade's study and investment experience in the U.S., Ms. Kazmerzak has gained a great appreciation of the differences in cultural and business practices in China and the U.S., and has helped to bridge the gap between investors and management in both countries.

"We are very pleased to welcome Jackie to our senior management team," commented Mr. Jiang Huai Lin, CEO and Chairman of the Board of China Information Security Technology. "Jackie brings us her rich experience in investment management, profound knowledge of capital markets and internal control requirements of U.S. listed companies, multi-cultural experience, strong communication skills, and a successful track record as CFO. Throughout her career, she has demonstrated successful leadership and accomplishments in various corporate functions that our Company seeks to improve. We believe that her extensive experience in investment management will also help us to better understand and address investors' needs and manage expectations. We look forward to working closely with Jackie, and we are confident that she will be invaluable in helping China Information Security accomplish its future growth objectives."

Ms. Kazmerzak's appointment as CFO was occasioned by the resignation of Ms. Wendy Wang from the post on August 7, 2009, for personal reasons, however, Ms. Wang will remain with the Company for an interim period in order to assist with the transition. Mr. Jiang Huai Lin stated, "We would like to express our deep appreciation to Wendy for her dedication, professionalism and leadership during her tenure as our CFO. She has made outstanding contributions to enhancing our finance and accounting operations. We thank her for her hard work and wish her the best in her future endeavors."

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, 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 Ms. Kazmerzak's appointment as CFO and her ability to help the Company accomplish its future growth objectives; 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:
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