Hollysys Automation Technologies Ltd.

NasdaqGS:HOLI Stock Report

Market Cap: US$1.6b

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

Hollysys Automation Technologies Management

Management criteria checks 2/4

Hollysys Automation Technologies' CEO is Changli Wang, appointed in Jan 2022, has a tenure of 2.5 years. directly owns 2.1% of the company’s shares, worth $34.52M. The average tenure of the management team and the board of directors is 4 years and 3.2 years respectively.

Key information

Changli Wang

Chief executive officer

n/a

Total compensation

CEO salary percentagen/a
CEO tenure2.5yrs
CEO ownership2.1%
Management average tenure4yrs
Board average tenure3.2yrs

Recent management updates

Recent updates

Seeking Alpha • Sep 03

Hollysys: Umpteenth Time's A Charm

Summary Hollysys Automation Technologies Ltd. is on the verge of entering a take-private deal. A deal could be valued as high as $29/sh. The buyout story up until this point suggests a binding transaction will materialize between Hollysys and the company's CEO. There is a ~50% upside if a deal is reached under the reported terms. Therefore, speculative investors should consider adding HOLI to the portfolio. Hollysys Automation Technologies Ltd. (HOLI) is on the verge of entering a take-private deal? The latest news makes it seem so. Seeking Alpha, crediting Reuters, reported that HOLI's current CEO is closing in on making an offer to take the company private for $29/sh. That is a whopping ~50% premium over today's price. While investors have heard this story before (see previous articles here and here), this leak seems like a plausible ending to the buyout saga that is HOLI. Synthesized Buyout Story December 2020, HOLI received a take-private proposal from CPE Funds Management Limited, Ace Leads Profits Limited, and Baiqing Shao, former HOLI CEO, ("Shao Consortium") to acquire the company at $15.47/sh in cash. June 2021, the Shao Consortium raises proposal to $17.10/sh in cash. July 2021, Mr. Changli Wang, HOLI's founder and previous CEO, and Ascendent Capital Partners (“Emerald Consortium”) submitted a non-binding proposal to take HOLI private for $23/sh in cash. September 2021, Zhejiang Longsheng Group Co., Ltd. and Loyal Valley Innovation Capital Limited ( “Longshen Consortium“), presented a take-private proposal for $24/sh in cash. January 3, 2022, Changli Wang was reappointed as HOLI's CEO and nominated to the board. January 24, 2022, Recco Control Technology Pte. Ltd. and Dazheng Group Investment Holdings Company Ltd., ("Recco Consortium") announced it had previously submitted on December 3, 2021 a take-private proposal for $25/sh in cash. The consortium stated in its release, "[o]ver the last seven weeks, we have attempted to engage with [HOLI], your financial advisor and legal counsel in friendly discussions... but so far there has been no substantive progress, and the Proposal has not been made public". Also in its release, the consortium disclosed that it already had debt financing arranged through the Bank of China. Also on January 24, 2022, HOLI board decides to suspend its evaluation of all buyout proposals citing it "believes [HOLI] possesses significant value creation potential with its leading position in the automation industry, and that it is important for the Board and the management team to focus on strengthening and optimizing the business operations". March 11, 2022, TFI Asset Management Ltd. joins the Recco Consortium. March 15, 2022, Bloomberg reports that Beijing Infrastructure Investment Co., the state-owned operator of Beijing’s railway and subway, had "preliminary discussions" to take HOLI private for ~$1.9b (or ~$31/sh). April 2022, HOLI disclosed that CEO Wang purchased 1,055,000 ordinary shares in the open market. July 2022, the Recco Consortium, joined by Great Wall Capital Co., reaffirmed its $25/sh in cash take-private proposal. In its release, the consortium stated: the subsequent announcement by [HOLI] to suspend evaluation of all unsolicited buyout proposals and the board's continuing non-engaging with the consortium is not in the best interest of Hollysys' shareholders, especially in light of the attractive premium... as well as the management's inability to increase shareholders' value. September 2, 2022, Reuters reported that CEO Wang received endorsement from the municipal government and is finalizing financing to take HOLI private at $29/sh. According to the article, Wang, "acting under the local government's guidance, has joined hands with a Beijing-based state firm for the potential deal" and was close to securing financing. Imminent Buyout Theory The thesis is quite simple really. Changli Wang genuinely wants to acquire HOLI and is in the home stretch of solidifying a deal. After the company received the $24/sh Longshen Consortium and the $25/sh Recco Consortium proposals, which were both superior to his own $23/sh proposal, Wang moved to reinstitute himself as CEO of the company in order to stymie further buyout progression. On the same day that the $25/sh proposal became public (which was concealed from investors for 7 weeks!), Wang persuaded HOLI's board to publicly announce it was suspending evaluation of "all unsolicited buyout proposals". By doing so, he gave himself time to arrange a proposal that would be superior to the increasingly competitive bids for the company.
Seeking Alpha • Aug 12

HollySys Automation Non-GAAP EPS of $0.40, revenue of $182.1M

HollySys Automation press release (NASDAQ:HOLI): Q4 Non-GAAP EPS of $0.40. Revenue of $182.1M (+14.7% Y/Y). GUIDANCE FISCAL YEAR 2023 The revenue is expected to be between $810 million and $885 million, with a year-on-year increase of 15% to 25%.
Seeking Alpha • Jul 15

Hollysys: Waiting For A Better Entry (Technical Analysis)

Shares are currently trying to regain their 200-day moving average. We continue to like Hollysys' long-term prospects. Balance sheet, valuation and profitability trends all point to rising prices over the long haul. Intro We wrote about Hollysys Automation Technologies Ltd. (HOLI) back in early 2021 when we liked what we saw concerning the company's fundamentals and technicals. As the long-term chart illustrates below, shares briefly traded close to the $10 area back in early 2020 before registering a long-term buy signal through the popular MACD technical indicator. Because of how many shares were oversold at that time, we began to trade the stock in 2020 from the long side before finally liquidating our long exposure in Hollysys when shares lost their 10-month moving average in the following year. From a technical standpoint at present, with shares stagnating over the past few months and the monthly MACD locked in a neutral position, Hollysys seems to be at a crossroads concerning its near-term trend. In saying this, any bullish move here in the near term should bring trend followers into play on the long side, so the next few weeks of trading in this stock will be interesting. HOLI´s Trend Remains Bullish long-Term (StockCharts.com) What we are saying above regarding shares of HOLI currently at a crossroads can also be seen on the daily chart. We state this because volume trends have been very encouraging recently, but shares remain in a fight not to lose their 200-day moving average. Suffice it to say, shares must regain this crucial support level to ensure a bearish descending triangle does not play out to the downside. Daily Chart Of HOLI (StockCharts.com) Suffice it to say, given the downside potential which is still clearly evident on the monthly chart, we are only interested in trading HOLI once shares regain their 200-day moving average once more. Long-term, this stock is going higher, but we would rather not be on the other side of the trade temporarily and thus suffer an opportunity cost over a given time period which could turn out to be many months. On the contrary, long-term investors who do not mind collecting the dividend while we wait for a significant up-move just need to keep focused on the following. Many investors focus on cash-flow metrics in a stock but sometimes make the mistake of not focusing on the potential for sustained cash-flow generation over the long term. With respect to Hollysys (being a profitable company for many years now), it is all about how its earnings get converted into cash over the long haul. Well in the company's most recent reported quarter, Hollysys' cash balance and short-term investments came in well over $700 million. Given the company's present market cap of $948 million, this $700+ million number is the real calling card in Hollysys for the following reasons. Profitability Trends How does a cash balance usually get whittled down in a stock which results in cash exiting a company? This usually comes from a negative earnings trend where not enough cash is being generated to pay for operations, pay dividends or pay debts, etc. if needs be. Hollysys though is expected to announce 29% bottom-line growth ($2.09 per share) on revenues of $586 million (8% growth rate) in the fiscal year that ends in June 2022. Furthermore, shareholder equity ($1.227 billion) continues to grow and Hollysys has no debt to speak of on its balance sheet. Suffice it to say, as long as Hollysys can report sufficient sales to keep earnings and cash-flow numbers buoyant, then the balance sheet should keep on getting stronger from strategic investments in each of the company's segments. Valuation This takes care of the profitability argument from an earnings standpoint, but what if we are wrong? What if Hollysys does not live up to its billing with respect to what is expected from the stock going forward? Well, in essence, there are two drivers of long-term earnings growth which are Hollysys' assets and also its sales. At present, Hollysys trades with a book multiple of 0.77 and a sales multiple of 1.36 which are both easily 50%+ beneath the stock's respective 5-year averages for these multiples. These multiples would obviously be significantly lower if shares indeed did test the lower trend-line in the long-term chart depicted above.
Seeking Alpha • Jul 08

Buyer consortium reaffirms $25/share acquisition proposal for Hollysys

A buyer consortium led by Recco Control Technology and Dazheng Investment announced its proposed acquisition of Hollysys Automation Technologies (NASDAQ:HOLI). The consortium has hired UBS Hong Kong Branch for its financial advisor. Consortium also includes TFI Asset Management and Great Wall Capital who have entered into a memorandum of strategic cooperation with Recco Control Technology and Dazheng forthe acquisition. The consortium reaffirms its non-binding indicative all-cash offer of $25/share to acquire Hollysys; offer marks a premium of 65.5% over Hollysys' closing share price of $15.11 on July 7, 2022. There is no assurance that any agreement would be reached with Hollysys board for the potential acquisition.
Seeking Alpha • Mar 05

Hollysys Finds Its Future In Its Past, But Investability Is A Real Question

Hollysys has brought back its founding CEO and announced that it is no longer considering go-private offers. Since my last article, the company has changed auditors, changed CEO, and reported FQ4'21 earnings almost eight months after quarter's end, with minimal explanation for any of it. Hollysys has a credible opportunity in process automation within China, and perhaps recovery potential in the rail business, but communication with investors has been very poor. Hollysys may well be exceptionally cheap here, but I consider it effectively uninvestable given poor/inconsistent communication and no recent information on strategy/strategic priorities.
Seeking Alpha • Nov 23

Caveat Emptor: There Is A Reason HollySys Is So Cheap

HOLI is trading at a steep discount based on fundamentals. To boot, HOLI's board has three competing offers to take the company private for as high as $24/ADS. It is, however, unclear what is going on behind-the-scenes at HOLI and with its board. Trust has become a major issue and lag on the stock price. Therefore, it is recommended to stay on the sidelines for now.
Seeking Alpha • Aug 27

Hollysys Investors Seeing A Light At The End Of The Tunnel... And It's Not An Oncoming Train

Hollysys has a strong $23/share bid on the table from a group that includes Ascendent Capital Partners and Changli Wang, the founder, former Chairman, and former CEO of Hollysys. Management is late reporting fiscal fourth quarter results, leading me to think they're seriously considering the bid, and the company recently announced two current executive officers are supporting the bidders. A top-level preannouncement from management suggests materially better fourth quarter results than I expected, including strong Industrial Automation sales, and recent awards have been very encouraging. The $23/share bid approximates my estimate of Hollysys' value today and there's no execution risk for shareholders, though it comes at the cost of standalone upside.
Analysis Article • Mar 16

Calculating The Intrinsic Value Of Hollysys Automation Technologies Ltd. (NASDAQ:HOLI)

Today we will run through one way of estimating the intrinsic value of Hollysys Automation Technologies Ltd...
Analysis Article • Feb 02

Here's Why We Think Hollysys Automation Technologies' (NASDAQ:HOLI) Statutory Earnings Might Be Conservative

It might be old fashioned, but we really like to invest in companies that make a profit, each and every year. Having...
Analysis Article • Dec 07

The Trends At Hollysys Automation Technologies (NASDAQ:HOLI) That You Should Know About

There are a few key trends to look for if we want to identify the next multi-bagger. One common approach is to try and...
Analysis Article • Nov 24

Key Things To Consider Before Buying Hollysys Automation Technologies Ltd. (NASDAQ:HOLI) For Its Dividend

Is Hollysys Automation Technologies Ltd. (NASDAQ:HOLI) a good dividend stock? How can we tell? Dividend paying...

CEO

Changli Wang (61 yo)

2.5yrs
Tenure
US$466,391
Compensation

Dr. Changli Wang serves as Chief Executive Officer, Chief Strategy Officer and Director at Hollysys Automation Technologies Ltd. since January 01, 2022. He has been the Chief Executive Officer of Beijing H...

Leadership Team

NamePositionTenureCompensationOwnership
Changli Wang
CEO, Chief Strategy Officer & Director2.5yrsUS$466.39k2.1%
$ 34.5m
Steven Wang
Chief Financial Officer6.1yrsno datano data
Lei Fang
Co-Chief Operating Officer4yrsno data0.11%
$ 1.8m
Yue Xu
Co-Chief Operating Officer4yrsno data0.11%
$ 1.8m
Chunming He
Chief Technology Officer4yrsno datano data
Chuan Xia
Chief Public Relations Officer & Investor Relations Director3.1yrsno datano data
Hongyuan Shi
Chief Human Resource Officer4yrsno datano data
4.0yrs
Average Tenure
56yo
Average Age

Experienced Management: HOLI's management team is considered experienced (4 years average tenure).

Board Members

NamePositionTenureCompensationOwnership
Changli Wang
CEO, Chief Strategy Officer & Director2.5yrsUS$466.39k2.1%
$ 34.5m
Kok Peng Teh
Independent Director3.8yrsno datano data
Li Qiao
Chairwoman of the Board7.5yrsUS$150.00k0.20%
$ 3.2m
Jianyun Chai
Independent Director16.1yrsno data0%
$ 0
Khiaw Ngoh Tan
Independent Director3.8yrsno datano data
Guanghua Miao
Independent Directorless than a yearno datano data
Wei Ding
Independent Directorless than a yearno datano data
Demiao Zhu
Independent Directorless than a yearno datano data
3.2yrs
Average Tenure
66yo
Average Age

Experienced Board: HOLI's board of directors are considered experienced (3.2 years average tenure).

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/07/25 11:32
End of Day Share Price 2024/07/25 00:00
Earnings2024/03/31
Annual Earnings2023/06/30

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

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.

Analysis Model and Snowflake

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Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Hollysys Automation Technologies Ltd. is covered by 15 analysts. 1 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Jay HuangBernstein
Chun-Kai WangCitigroup Inc
Paul QuahCLSA