HLS Systems International Announces Signing of a $22 Million High Speed Railway Control Systems Contract

July 17, 2008

HLS Systems International, Ltd. (OTCBB:HLSYF ) ("HLS" or "the Company"), today announced that the Company, along with its partner Ansaldo STS, has been awarded a contract by the People´s Republic of China (PRC) Ministry of Railways for the design, construction, implementation, and maintenance of a new 300 kilometer per hour high speed rail line. When completed, this rail line will span 459 kilometers, or approximately 285 miles, and link Zhengzhou in Henan province and Xi´an in Shaanxi province.

The project was awarded to a consortium formed by HLS and Ansaldo STS, a leading technology company listed on the Milan Stock Exchange that operates in the global Railway and Mass Transit Transportation Systems business. The total contract value amounts to RMB660 million, or approximately US$97 million, with HLS´ portion for the control system amounting to RMB151 million, or approximately US$22 million. HLS will begin recognizing revenues upon the commencement of the project in the current quarter. The project is expected to be completed by the end of 2009.

Dr. Wang Changli, HLS´ Chief Executive Officer commented, "The 300 kilometer per hour high speed train will be one of the fastest passenger trains in China and we are very excited to announce that HLS has been awarded the automation control system contract for this prestigious project. We have been successful in implementing our control systems in the current 200 kilometer per hour high speed rail lines in China and this new contract for the more advanced 300 kilometer per hour rail line is a testament to our high quality system design and performance.

HLS is one of only five companies authorized by China´s Ministry of Railways to provide automation control systems for its railway systems, one of only three companies that have the capability to provide control systems for high speed rail networks and one of only two companies able to provide automation systems for trains with speeds of 300 kilometers per hour or greater. Based on our track record and close cooperation with the Ministry of Railways, we believe that HLS is well positioned to receive additional contracts in this 300 kilometer per hour rail category."

About HLS Systems International

HLS Systems International has become one of the leading automation systems providers in the PRC, developing a number of core technologies and completing numerous projects utilizing a wide array of automation products. With its philosophy of sincere concern for customers and its technical innovation capabilities, HLS Systems International specializes in the research, development, production, sale and distribution of industrial automation for digital railway signals and information systems, e-government, motor drive transmissions and safety controls for nuclear power reactors. To know more, start here: www.hollysys.com.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding: the significance of the Zhengzhou - Xi´an rail contract win to the Company´s future earnings; the ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Such forward-looking statements, based upon the current beliefs and expectations of HLS´ management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company´s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company´s reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

　