ZST Digital Networks Inc. Announces Signing of Two New GPS Contracts

ZHENGZHOU, China, April 21 /PRNewswire-Asia-FirstCall/ -- ZST Digital Networks, Inc. ("ZST" or the "Company") (Nasdaq: ZSTN), a major developer, manufacturer, and supplier of digital and optical network equipment to cable system operators in China, today announced that it has entered into agreements with Henan Chong Hing Automobile Sales Ltd. ("Henan Chong Hing") and ShangQiu City Security Services Ltd. ("ShangQiu City") to provide Global Positioning System ("GPS") hardware installation and monthly call center services. The combined value of the two contracts is approximately US$1.6 million (RMB11.3 million), which includes first year service fees of approximately US$0.2 million (RMB1.3 million).

As part of the agreements, ZST will supply and install GPS tracking units for Henan Chong Hing and ShangQiu City's vehicle fleets. As part of the service offering, both companies will have access to ZST's 24/7 call center, which provides direction, information and emergency support for subscribers.

Commenting on the announcement, Mr. Zhong Bo, Chairman and Chief Executive Officer of ZST said, "We are pleased to announce the signing of two new contracts for our GPS devices and services. The GPS segment represents a key growth opportunity for ZST, and we are actively marketing our products and services to commercial enterprises in Henan Province. The signing of these two new contracts demonstrates that we are gaining traction in our sales efforts as the demand for our GPS products continues to grow."

John Chen, Chief Financial Officer of ZST, commented, "The signing of these two new contracts highlights the growth opportunity in the GPS market, while further diversifying our revenue stream. We expect that the hardware revenue generated from these two new contracts will have an impact on our top line, helping to build momentum in our second fiscal quarter, while the service component of these contracts will generate recurring service fee revenue over the life of the contracts. As we continue to market our GPS devices and services solutions, we believe we have the potential to build a powerful platform for stable financial growth to complement our market-leading position in the IPTV set-top box market."

About ZST Digital Networks, Inc.

ZST Digital Networks, Inc. (Nasdaq: ZSTN) is a China-based company, principally engaged in supplying digital and optical network equipment and providing installation services to cable system operators in China. The Company has developed a line of IPTV devices that are used to provide bundled cable television, Internet and telephone services to residential and commercial customers. The Company has assisted in the installation and construction of over 400 local cable networks in more than 90 municipal districts, counties, townships, and enterprises. The Company has also launched a commercial line of GPS devices and support services for transport-related enterprises to track, monitor and optimize their businesses. For more information about ZST Digital Networks, Inc., please visit http://www.shenyangkeji.com .

Forward-Looking Statements

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain of the statements made in the press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding the progress of new product development. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including our ability to maintain and increase revenues and sales of our products, our ability to develop and market new products, our ability to develop and service business in the GPS market, our strategic investments and acquisitions, compliances and changes in the laws of the People's Republic of China (the "PRC") that affect our operations, our ability to obtain all necessary government certifications and/or licenses to conduct our business, the vulnerability of our business to general economic downturn, especially in the PRC, adverse capital and credit market conditions and our ability to meet liquidity needs, the fact that our agreements with Henan Chong Hing and ShangQiu City may not result in the expected benefits, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.

    For more information, please contact:

    Company Contact:
     ZST Digital Networks, Inc.
     John Chen, Chief Financial Officer
     Email: [email protected]

    Investor Contact (US):
     Taylor Rafferty, LLC
     Mahmoud Siddig
     Tel:   +1-212-889-4350
     Email: [email protected]
     Web:   http://www.taylor-rafferty.com

    Investor Contact (HK):
     Taylor Rafferty, LLC
     Ruby Yim
     Tel:   +852-3196-3712
     Email: [email protected]
     Web:   http://www.taylor-rafferty.com

    Investor Contact (US):
     BPC Financial Marketing
     John Baldissera
     Tel:   +1-800-368-1217

SOURCE ZST Digital Networks, Inc.