China Keli signs Multi-Million Dollar Sales Contract

VANCOUVER, May 2 /CNW/ - China Keli Electric Company Ltd. (TSXV: ZKL) ("China Keli" or the "Company") is pleased to announce it has signed a significant long-term cooperation agreement with a well-known Shenzhen-listed company, JiangSu Dong Yuan Electrical (Stock No. 002074). Under this agreement, which extends through Dec. 30, 2013, Dong Yuan Electrical will purchase minimum 1,000 product units for switchgear per year with an average price per product unit of 12000RMB. This amounts to approximately C$1.8 million/year (based on current exchange rates) in new sales for China Keli for each of the next 3 years, and represents almost 15% of the current fiscal year's revenues. Management anticipates that Dong Yuan revenue proportion of China Keli's sales will decrease as China Keli's overall total revenues grow rapidly over the next few years, but the contract will still contribute significant base revenue and margins to China Keli's overall financial performance. Overall the contract is worth approximately C$5.4 million, and this could increase if the RMB strengthens as is expected.

Keli products have passed all required testing and evaluation with Dong Yuan, and Dong Yuan has been qualified as one of a small group of vendors to take part in certain major power grid projects of special importance to the power grid companies. China Keli will begin fulfillment of this contract effective immediately, and management believes that there is a reasonable opportunity to sell the entire year's planned target of 1,000 switches before the end of December 2011.

"This contract supports our multi-channel sales strategy," said Lou Meng Cheong, China Keli's CEO. "In addition to selling direct, selling our leading-edge products though other channels increases revenues, and margins won't be significantly affected, so we can look forward to substantial revenue and net income improvements." "Signing a C$5.4 million contract is an exciting achievement for China Keli," said Madame Wong, China Keli's Chairperson, "and we will continue to explore other similar opportunities."

About China Keli Electric Company Ltd.

China Keli is a hi-tech company that develops, manufactures and installs hi-voltage electrical components and equipment, including preassembled mini-substations, electrical controllers, pressurized/vacuumed switchgears and circuit breakers in the People's Republic of China. China Keli's markets include electrical transmission and distribution systems, Smart Grid, transportation (railways, subways, street lighting, etc.), and the "Cleantech" sector (renewable energy, solid waste processing, waste water, etc).

ON BEHALF OF THE BOARD OF DIRECTORS

Mr. Lou Meng Cheong
CEO
Phone: 604.270.2345

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of this release.

Legal Notice Regarding Forward-Looking Statements: Certain statements in this news release are forward-looking statements, which reflect the expectations of management regarding the Company's ability to close the Offering. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, and in this news release include: (i) Dong Yuan Electrical will purchase a minimum of 1,000 units per year; (ii) the amount of purchase will be approximately C$1.8 million/year for the next three years; (iii) the amount of purchase will represent 15% of the company's revenues; (iv) Dong Yuan's revenue portion of China Keli's sales will decrease as China Keli's overall total revenues grow rapidly over the next few years; and (v) overall the contract is worth approximately C$5.4 million. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect, wholly or partially. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) the inability or unwillingness of Dong Yuan to fulfill their obligations under the contract, or on the terms set out above or at all, (2) a downturn in general economic conditions in North America or internationally, (3) inability to manufacture the products as demanded by Dong Yuan; and (4) fluctuation in the exchange rate between Canadian dollar and Renminbi. These forward-looking statements are made as of the date of this news release and, except as required by law, the Company assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements. Additional information about these and other assumptions, risks and uncertainties are set out in the "Risks and Uncertainties" section in the Company's MD&A filed with Canadian securities regulators.

SOURCE China Keli Electric Company Ltd.

For further information:

Scott Koyich, President
Brisco Capital Partners
(403) 262-9888
skoyich@briscocapital.com

Or

Michael Raymont
EVP Finance and Corporate Development
(403) 389-3488
mraymont@zkl.com

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China Keli Electric Company Ltd.

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