Telestone Technologies Signs Letter of Intent to Acquire Regional Competitor in Sichuan Province

Under the term of LOI, Telestone will use a combination of cash and Telestone common stock to fund the acquisition, whose terms are still being finalized.  Telestone expects to sign a definitive acquisition agreement with Sichuan Ruideng soon.

Located in Chengdu in Sichuan province, Sichuan Ruideng specializes in telecom network construction and system-integration services. SR was founded in 1993 with registered capital of RMB 32.0 million (approximately $4.9 million). Today, Sichuan Ruideng is one of the largest provides of telecom network engineering services in Sichuan province and southwestern China, which has over 300 employees and about $20 million of average annual revenue in the past several years. Its business mainly covers regions of Sichuan, Yunnan, Guizhou, Hubei, and Qinghai provinces.

"We are pleased to have reached a preliminary acquisition agreement with Sichuan Ruideng, which is an important strategic move in our business expansion strategy in the southwestern China market," commented Mr. Daqing Han, Chairman and Chief Executive Officer of Telestone.  "We believe that the combination of Sichuan Ruideng's local knowledge and business relationships with Telestone's advanced technology and marketing and business expertise will significantly enhance our presence in this important regional market.  We look forward to providing a greater number of customized products and services to local customers and further gain market share in the near future."

Mr. Yanqun Xie, Chief Executive Officer of Sichuan Ruideng Telecom Corporation stated, "We are delighted at the prospect of joining Telestone.  In addition to its high market recognition and its strong industry presence, we believe Telestone's WFDS technology and applications will offer promising business opportunities during the next several years.  We hope to work together with Telestone to create value for its shareholders."

About Telestone Technologies Corporation

Telestone is a leader and innovator in wireless local-access network technologies and solutions. The Company has a global presence, with 30 sales offices throughout China and a network of international branch offices and sales agents. For more than 10 years, Telestone has installed radio-frequency (RF)-based 1G and 2G systems throughout China for its leading telecommunications companies. After intensive research on the needs of carriers in the 3G age, Telestone developed and commercialized its proprietary third-generation local-access network technology, WFDS(TM) (Wireless Fiber-optic Distribution System), which provides a scalable, multi-access local access network solution for China's three cellular protocols. Telestone also offers services including project design, manufacturing, installation, maintenance and after-sales support. The Company has approximately 1,200 employees.

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