DB:46H

Stock Analysis Report

Hollysys Automation Technologies

Executive Summary

Hollysys Automation Technologies Ltd. provides automation and control technologies and products in the People’s Republic of China, Southeast Asia, India, and the Middle East.

Rewards

Trading at 64.4% below its fair value

Earnings are forecast to grow 8.44% per year

Earnings grew by 11.7% over the past year

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Very undervalued with flawless balance sheet.


Similar Companies

Share Price & News

How has Hollysys Automation Technologies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 46H has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.1%

46H

-0.4%

DE Electronic

0.1%

DE Market


1 Year Return

-27.5%

46H

10.9%

DE Electronic

14.1%

DE Market

Return vs Industry: 46H underperformed the German Electronic industry which returned 10.9% over the past year.

Return vs Market: 46H underperformed the German Market which returned 14.1% over the past year.


Shareholder returns

46HIndustryMarket
7 Day-2.1%-0.4%0.1%
30 Day-10.8%7.3%0.2%
90 Day2.9%6.3%3.3%
1 Year-26.4%-27.5%13.4%10.9%17.6%14.1%
3 Year-12.2%-14.8%47.9%43.0%14.8%4.8%
5 Year-12.8%-16.2%113.8%98.5%22.2%5.4%

Price Volatility Vs. Market

How volatile is Hollysys Automation Technologies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Hollysys Automation Technologies undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 46H (€13.9) is trading below our estimate of fair value (€38.99)

Significantly Below Fair Value: 46H is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 46H is good value based on its PE Ratio (7.2x) compared to the Electronic industry average (33.9x).

PE vs Market: 46H is good value based on its PE Ratio (7.2x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: 46H is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: 46H is good value based on its PB Ratio (1x) compared to the DE Electronic industry average (1.8x).


Next Steps

Future Growth

How is Hollysys Automation Technologies forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

8.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 46H's forecast earnings growth (8.4% per year) is above the savings rate (-0.4%).

Earnings vs Market: 46H's earnings (8.4% per year) are forecast to grow slower than the German market (13.3% per year).

High Growth Earnings: 46H's earnings are forecast to grow, but not significantly.

Revenue vs Market: 46H's revenue (8% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: 46H's revenue (8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 46H's Return on Equity is forecast to be low in 3 years time (13.4%).


Next Steps

Past Performance

How has Hollysys Automation Technologies performed over the past 5 years?

6.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 46H has high quality earnings.

Growing Profit Margin: 46H's current net profit margins (22.9%) are higher than last year (20.2%).


Past Earnings Growth Analysis

Earnings Trend: 46H's earnings have grown by 6.2% per year over the past 5 years.

Accelerating Growth: 46H's earnings growth over the past year (11.7%) exceeds its 5-year average (6.2% per year).

Earnings vs Industry: 46H earnings growth over the past year (11.7%) exceeded the Electronic industry -3.9%.


Return on Equity

High ROE: 46H's Return on Equity (13.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hollysys Automation Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: 46H's short term assets ($1.1B) exceed its short term liabilities ($319.2M).

Long Term Liabilities: 46H's short term assets ($1.1B) exceed its long term liabilities ($32.0M).


Debt to Equity History and Analysis

Debt Level: 46H's debt to equity ratio (0.3%) is considered satisfactory.

Reducing Debt: 46H's debt to equity ratio has reduced from 8.6% to 0.3% over the past 5 years.

Debt Coverage: 46H's debt is well covered by operating cash flow (3697.4%).

Interest Coverage: 46H earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 46H has a low level of unsold assets or inventory.

Debt Coverage by Assets: 46H's debt is covered by short term assets (assets are 389.1x debt).


Next Steps

Dividend

What is Hollysys Automation Technologies's current dividend yield, its reliability and sustainability?

1.34%

Current Dividend Yield


Dividend Yield vs Market

company1.3%marketbottom25%1.3%markettop25%3.6%industryaverage1.2%forecastin3Years1.5%

Current dividend yield vs market & industry

Notable Dividend: 46H's dividend (1.38%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: 46H's dividend (1.38%) is low compared to the top 25% of dividend payers in the German market (3.57%).


Stability and Growth of Payments

Stable Dividend: 46H has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 46H's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (10%), 46H's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 46H's dividends in 3 years are forecast to be thoroughly covered by earnings (8.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

11.7yrs

Average board tenure


CEO

Baiqing Shao (51yo)

6.3yrs

Tenure

0

Mr. Baiqing Shao has been the Chief Executive Officer of Hollysys Automation Technologies, Ltd. since November 30, 2013 and served as its Senior Vice President of Business Development at Hollysys Automatio ...


Board Members

NamePositionTenureCompensationOwnership
Baiqing Shao
Co-Founder6.3yrsno data7.14% $60.6m
Chit Nim Sung
Independent Director12yrsno data0.075% $632.7k
Jerry Zhang
Independent Director12.4yrsno datano data
Qiao Li
Director3.1yrsUS$150.00k0.88% $7.4m
Jianyun Chai
Independent Director11.7yrsno datano data

11.7yrs

Average Tenure

53yo

Average Age

Experienced Board: 46H's board of directors are seasoned and experienced ( 11.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Hollysys Automation Technologies Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hollysys Automation Technologies Ltd.
  • Ticker: 46H
  • Exchange: DB
  • Founded: 1993
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: US$915.993m
  • Listing Market Cap: US$848.484m
  • Shares outstanding: 60.34m
  • Website: https://www.hollysys.com.sg

Number of Employees


Location

  • Hollysys Automation Technologies Ltd.
  • No. 2 Disheng Middle Road
  • Beijing Economic-Technological Development Area
  • Beijing
  • 100176
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HOLINasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 2005
46HDB (Deutsche Boerse AG)YesCommon StockDEEURAug 2005
0M58LSE (London Stock Exchange)YesCommon StockGBUSDAug 2005

Biography

Hollysys Automation Technologies Ltd. provides automation and control technologies and products in the People’s Republic of China, Southeast Asia, India, and the Middle East. The company offers a suite of industrial automation systems, including third-party hardware-centric products, such as instrumentation and actuators; proprietary software-centric distributed control systems/programmable logic controllers; and valued-added software packages comprising real-time management information system, HolliAS asset management system, operator training system, HolliAS batch application package, HolliAS advanced process control package, and safety instrumentation system, as well as HOLLiAS MACS-N DCS, a proprietary nuclear power non-safety automation and control system. It also provides train control center that monitors route condition, track status, train schedules, distance between trains, and the working status of other function devices, as well as generates control instructions and commands. In addition, the company offers automation train protection that operates as a train over-speed protection mechanism; and supervisory control and data acquisition system, an open software platform, as well as automatic train protection and other products. Further, it engages in research and development activities; and provides integrated automation systems and services, mechanical and electrical solution services, and installation services. The company serves customers in the industrial, railway, subway, nuclear power, and mechanical and electronic industries. The company was formerly known as HLS Systems International Ltd. and changed its name to Hollysys Automation Technologies Ltd. in July 2009. Hollysys Automation Technologies Ltd. was founded in 1993 and is headquartered in Beijing, the People’s Republic China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 22:08
End of Day Share Price2020/02/19 00:00
Earnings2019/09/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.