ZST Digital Networks, Inc. (ZSTN)

[chmcnfunds]

ZST Digital Networks (ZSTN) Announces Multi-Million Dollar Contract with Road Transportation Department of Zhumadian

October 17, 2011 8:06 AM EDT

ZST Digital Networks, Inc. (NASDAQ: ZSTN) today announced that it has entered into an agreement with the Road Transportation Department of Zhumadian to develop a city-wide GPS tracking platform for commercial vehicles.

Under the terms of the agreement, ZST Digital will plan, design and implement a city-wide GPS tracking platform for the city's commercial vehicles. In addition, ZST Digital will provide ongoing maintenance and support of the platform.

The Company expects the platform to be complete in the first quarter of 2012. Management estimates the total investment in the project will amount to RMB1.5 – 1.6 million (approximately US$236,000 – 252,000). The Company believes that the agreement could generate approximately RMB58 – 84 million (approximately US$9 – 13 million) in revenue in the first year upon successful completion of the platform, and it expects to begin generating revenue from this project in the first quarter of fiscal 2012.

Additionally, once the commercial vehicles are fully installed with GPS, management anticipates the Company's recurring annual revenue from Zhumadian service contracts to reach approximately RMB19 million (approximately US$3 million).
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