China Fire & Security (NASDAQ:CFSG)

Financial Outlook for 2010

Based on the Company's current backlog and contract pipeline, for full year 2010,

• The Company now expects to achieve revenues of $118 million to $125 million, representing an annual top line growth of 45%-54%.
  
• The Company estimates that GAAP net income will be in the range of $34 million to $36 million, or EPS of $1.20 to $1.26 based on fully diluted shares outstanding of 28.5 million, representing an annual bottom line growth of 39% - 47%. This is in comparison to the previous targets of revenue of $135 million to $145 million, net income of $47 million to $49 million and EPS of $1.65 to $1.70.

Mr. Lin concluded, "We believe that the current setback within China's iron and steel industry is only a short-term challenge to our business. We find it prudent to revise our 2010 outlook accordingly. We remain fully confident in our ability to grow our business and expand our market share in different verticals. The long-term $2 billion market potential of retrofitting opportunities within the iron and steel industry has not changed, and in our view, we are well-positioned to capture tremendous business opportunities from the industry recovery and from China's industrialization process overall. As such, we believe that China Fire's current stock price level does not reflect the intrinsic value of our Company, and so we intend to actively implement our existing share buy-back plan of $10 million. We are confident that by leveraging our proprietary products, leading brand name and strong track record, China Fire will continue to gain significant market shares from the iron and steel, power generation, chemical, transportation and international markets."