HLS Systems International Named 2007 Top 50 Global Automation Vendor by ARC Advisory Group and Control Magazine

Business Wire, Jan 4, 2008

Company is the Only China-Based Vendor in the Top 50

ARC Expects Market for Programmable Logic Controllers in China to Grow at 12.4% Over the Next 5 Years

BEIJING -- HLS Systems International, Ltd. (OTCBB: HLSYF) ("HLS") today announced that the Company's operating subsidiary, Beijing HollySys Co., Ltd., was named as one of the "Top 50 Global Automation Vendors in 2007" by ARC Advisory Group ("ARC") and CONTROL magazine. HollySys is the only China-based vendor included on the list, which can be viewed in its entirety in the magazine's December issue or at www.controlglobal.com/articles/2007/454.html.> ARC also recently published a study entitled, "Programmable Logic Controllers Outlook for China," and noted that it expects the China market for Programmable Logic Controllers ("PLCs") to grow at a compounded annual growth rate of 12.4% over the next five years. PLCs are advanced digital computers used for automation of industrial processes. The PLC market in China was close to $750 million in 2006 and is forecasted to be over $1.3 billion in 2011.

"The manufacturing sector's search for sustainable competitive advantages through continuous productivity improvements will lead to the application of plant level automation across all vertical industries in a major way. These developments will spur the growth of the PLC market in China," according to Senior Analyst Himanshu Shah, co-author of the study. The announcement can be viewed in its entirety at: http://www.arcweb.com/txtlstvw.aspx?LstID=e7382c62-cddf-4670-bf65- 26191d76a8f8. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

Dr. Wang Changli, HLS' Chief Executive Officer, stated, "This is a very exciting and important recognition for HLS, as the goal of our management team is to expand our presence within China and to grow HLS into an internationally recognized provider of automation designs, products and services. This ranking is a reflection of the dedication and hard work of our 1,500 employees, and we are very grateful for their efforts. Further, the recent study from ARC regarding the projected growth of the PLC market in China mirrors our own projections for this segment of our industrial, nuclear, and rail business. We plan to introduce and rollout of HLS' new LK series large-scale PLCs and begin generating revenue in 2008. This LK series meets the requirements of system integrators worldwide for both continuous and discrete applications."

Founded in 1986, ARC Advisory Group is the leading research and advisory firm in manufacturing and supply chain solutions. CONTROL is the only magazine exclusively dedicated to the global process automation market with a readership of 65,000 plus engineering, operations and management professionals.

About HLS Systems

HLS 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. The Company specializes in the research, development, production, sale and distribution of industrial automation and control systems, competing effectively with both domestic Chinese companies and large, multinational participants in the industrial, rail and nuclear power sectors.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements are statements that are not historical facts, including statements relating to the expected growth of HLS and its markets, product introduction plans and anticipated revenues. 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. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions in China and in Southeast Asia; continued compliance with government regulations; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which HLS is engaged; cessation or changes in government incentive programs: potential trade barriers affecting international expansion; fluctuations in customer demand; management of rapid growth and transitions to new markets; intensity of competition from or introduction of new and superior products by other providers of automation and control system technology; timing, approval and market acceptance of new product introductions; general economic conditions; geopolitical events and regulatory changes, as well as other relevant risks detailed in HLS' filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. HLS does not assume any obligation to update the information contained in this press release or filings.