Cantronic Systems Inc.

Cantronic Systems Inc.

October 20, 2009 13:36 ET

Cantronic Systems Inc. Announces Recent Safe City Contract Wins Of RMB5.6 Million in China

Bringing the Total To RMB20 Million in New Safe City Contracts Since the Completion of the Acquisitions of Yellow River and AVINFO

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 20, 2009) - Cantronic Systems Inc. ("Cantronic" or the "Company") (TSX VENTURE:CTS)(PINK SHEETS:CRIXF) announced today that its China subsidiaries have recently been awarded three network video software and camera contracts worth approximately RMB5.6 million (CDN$0.85 million) with three customers in Beijing, Ningxia and Suzhou, China.

Two of the three contacts with a total of RMB3.3 million in value are primarily software contracts for intelligent video surveillance while the third one is a video surveillance solution contract involving both software and hardware valued at RMB2.3 million. We expect deliveries to happen within the next two to three months.

Previously, the company announced on July 14, 2009 that the company has been awarded through public tender a Safe City contract worth approximately RMB14 million (CDN$2.4 million) with the local government in Kaili City. With these recent contract wins, Cantronic's Safe City related projects now total to approximately RMB20 million in new contracts since the completion of the acquisitions of Yellow River and ANINFO. Installation for Kaili City project is well underway and we expect it to be completed during Cantronic's current fiscal year.

Geographically, China represents a unique opportunity, as the highly-fragmented Chinese surveillance and security market has been growing at an annual rate in excess of 30%. It is estimated to reach $43 billion by 2010, according to China Public Security Guide (published by the Chinese Security and Protection Association) due in part to the Chinese government's mandate for nationwide installation of surveillance and security systems. Programs such as the Safe City Initiative cover 666 cities country-wide.

"We expect that China will be the most important growth market for Cantronic. In fact, revenues from China alone in 2009 will likely exceed our total revenues in 2008," noted James Zahn, President and Chief Executive Officer of Cantronic Systems Inc. "The RMB2.3 video surveillance solution contract is for an integrated solution using software from AVINFO and hardware from Yellow River, validating our strategy to acquire companies with complementary products. Total solution sales provide us an opportunity for repeat sales as cities build out their security and surveillance networks. Cantronic is benefiting from the USD$586 billion stimulus package from the Chinese government as cities speed up the installation of security and surveillance networks. We are making great progress in our strategy to become a leader in China's growing security market through complementary acquisitions and organic growth."

About Cantronic

Cantronic manufactures, distributes, and provides training and services in the fields of infrared vision and video security surveillance technologies, specializing in passive and active infrared cameras, infrared illuminators, low light infrared sensitive CCD cameras and long-range night vision surveillance systems for demanding homeland security and surveillance application.

Cantronic, through its US subsidiary QWIP Technologies, Inc. ("QWIPTECH"), holds a worldwide, exclusive license from the California Institute of Technology ("Caltech") to produce and sell infrared detectors and sensors based on Caltech's Quantum Well Infrared Photodetector technology.

Cantronic, through its China subsidiaries Cantronic Security Systems (China) Co. Ltd., Beijing Advanced Videoinfo Technology Co. Ltd. ("AVINFO") and Shenzhen Huanghe Digital Technology Co. Ltd. ("Yellow River"), provides digital networked video surveillance solutions to government and corporate customers in China. Cantronic is a Tier 1 issuer on the TSX-V exchange, trading under the symbol CTS. For further information about Cantronic and QWIPTECH, please visit our websites at www.cantronics.comand

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