Breaking news out of China regarding a new contract award sent shares of China Information Security Technology Inc. (NASDAQ: CPBY) up sharply Tuesday, nearly a 32% gain for the day.
The Shenzhen, China-based company said it was awarded one of two contracts from State Grid Corporation of China (SGCC) to help develop China’s nationwide smart electricity grid.
SGCC is state-owned of the People’s Republic of China. SGCC has registered capital of more than USD$15 billion, and services 26 provinces, or nearly 90% of the country’s territory, of the People’s Republic of China.
China Information Security Technology (CIST) said that its proprietary GeoStar and GeoGlobe geographic information systems (GIS) were chosen to be part of China’s smart grid system. CIST –the provider of digital security, geographic information and hospital information systems in China– is expected to be the sole domestic provider for the project.
Analysts speculate that CIST may become the sole provider of GIS provider for the electric grid project, as its proprietary technology appears to lead within the space.
�This win not only demonstrates the Company�s unmatched technological leading position in Chinese GIS sector, but it is also a testament to the quality of our proprietary GeoStar and GeoGlobe GIS applications, and will lead to a broader use of GIS in many provincial and municipal level grid companies throughout China. We believe that by leveraging our strong R&D capabilities and solid industry reputation together with the Chinese government�s support for domestic GIS products, we will be able to capture important market opportunities related to GIS applications in China,� a company spokesman was quoted in the announcement.
CIST’s large China contract comes on the heals of favorable financial results filed with the Securities and Exchange Commission (SEC) in March, which revealed a better-than-expects revenue and earnings results despite the global financial crisis.
Revenue for the fiscal year ended December 31, 2009, totaled $101 million, an 18.40% jump from $85.3 million for fiscal 2008.
Net income per share from continuing operations reached 62 cents per share for the fiscal year 2009, compared with 49 cents per share for fiscal 2008. The company cited strong demand for its products for its earnings growth from last year.
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