Hollysys Automation Technologies (NasdaqGS:HOLI) - Share price, News & Analysis

HOLI fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	0/6
Past Performance	2/6
Financial Health	6/6
Dividends	2/6

HOLI Stock Overview

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

Rewards

PE ratio (11.3x) is below the US market (15.5x)

Risk Analysis

Earnings have declined by 2.6% per year over past 5 years

Dividend of 2.14% is not well covered by earnings

Hollysys Automation Technologies Competitors

Honeywell International

NasdaqGS:HON

US$131.7b

Siemens

XTRA:SIE

€92.8b

ABB

SWX:ABBN

CHF55.6b

Emerson Electric

NYSE:EMR

US$49.7b

Price History & Performance

Summary of all time highs, changes and price drops for Hollysys Automation Technologies
Historical stock prices
Current Share Price	US$14.96
52 Week High	US$21.24
52 Week Low	US$11.05
Beta	0.84
1 Month Change	-6.56%
3 Month Change	5.95%
1 Year Change	18.17%
3 Year Change	-18.92%
5 Year Change	-11.37%
Change since IPO	187.69%

Recent News & Updates

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.

Shareholder Returns

	HOLI	US Electronic	US Market
7D	-2.2%	-1.4%	-2.5%
1Y	18.2%	-12.3%	-10.4%

Return vs Industry: HOLI exceeded the US Electronic industry which returned -12.3% over the past year.

Return vs Market: HOLI exceeded the US Market which returned -10.4% over the past year.

Price Volatility

Is HOLI's price volatile compared to industry and market?
HOLI volatility
HOLI Average Weekly Movement	7.7%
Electronic Industry Average Movement	7.7%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	2.8%

Stable Share Price: HOLI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: HOLI's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1993	3,876	Changli Wang	https://www.hollysys.com

Hollysys Automation Technologies Ltd. provides automation solutions in the People’s Republic of China, Southeast Asia, India, and the Middle East. The company offers a suite of industrial automation systems, including hardware-centric products, such as instrumentation and actuators; proprietary software-centric distributed control systems/programmable logic controllers; and valued-added software packages comprising simulation training system, HolliAS asset management system, advanced process control, and manufacturing execution 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.

Hollysys Automation Technologies Fundamentals Summary

How do Hollysys Automation Technologies's earnings and revenue compare to its market cap?
HOLI fundamental statistics
Market Cap	US$926.96m
Earnings (TTM)	US$82.10m
Revenue (TTM)	US$684.11m

11.3x

P/E Ratio

1.4x

P/S Ratio

Is HOLI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HOLI income statement (TTM)
Revenue	US$684.11m
Cost of Revenue	US$446.03m
Gross Profit	US$238.08m
Other Expenses	US$155.99m
Earnings	US$82.10m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.32
Gross Margin	34.80%
Net Profit Margin	12.00%
Debt/Equity Ratio	1.3%

How did HOLI perform over the long term?

See historical performance and comparison

Dividends

2.1%

Current Dividend Yield

24%

Payout Ratio

Valuation

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

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

11.29x

Price to Earnings (PE) ratio

Share Price vs. Fair Value

Below Fair Value: HOLI ($14.96) is trading above our estimate of fair value ($3.53)

Significantly Below Fair Value: HOLI is trading above our estimate of fair value.

Price To Earnings Ratio

PE vs Industry: HOLI is good value based on its PE Ratio (11.3x) compared to the US Electronic industry average (15.4x).

PE vs Market: HOLI is good value based on its PE Ratio (11.3x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate HOLI's PEG Ratio to determine if it is good value.

Price to Book Ratio

PB vs Industry: HOLI is good value based on its PB Ratio (0.8x) compared to the US Electronic industry average (1.8x).

Future Growth

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

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-2.6%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if HOLI's forecast earnings growth is above the savings rate (1.9%).

Earnings vs Market: Insufficient data to determine if HOLI's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: HOLI's revenue is expected to decline over the next 3 years (-2.6% per year).

High Growth Revenue: HOLI's revenue is forecast to decline over the next 3 years (-2.6% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if HOLI's Return on Equity is forecast to be high in 3 years time

Past Performance

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

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-2.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HOLI has high quality earnings.

Growing Profit Margin: HOLI's current net profit margins (12%) are lower than last year (12.3%).

Past Earnings Growth Analysis

Earnings Trend: HOLI's earnings have declined by 2.6% per year over the past 5 years.

Accelerating Growth: HOLI's earnings growth over the past year (18.1%) exceeds its 5-year average (-2.6% per year).

Earnings vs Industry: HOLI earnings growth over the past year (18.1%) underperformed the Electronic industry 37.6%.

Return on Equity

High ROE: HOLI's Return on Equity (6.6%) is considered low.

Financial Health

How is Hollysys Automation Technologies's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: HOLI's short term assets ($1.5B) exceed its short term liabilities ($482.6M).

Long Term Liabilities: HOLI's short term assets ($1.5B) exceed its long term liabilities ($22.1M).

Debt to Equity History and Analysis

Debt Level: HOLI has more cash than its total debt.

Reducing Debt: HOLI's debt to equity ratio has reduced from 4.2% to 1.3% over the past 5 years.

Debt Coverage: HOLI's debt is well covered by operating cash flow (292.1%).

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

Balance Sheet

Dividend

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

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.14%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: HOLI's dividend (2.14%) is higher than the bottom 25% of dividend payers in the US market (1.54%).

High Dividend: HOLI's dividend (2.14%) is low compared to the top 25% of dividend payers in the US market (4.05%).

Stability and Growth of Payments

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

Growing Dividend: HOLI's dividend payments have increased, but the company has only paid a dividend for 6 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (23.7%), HOLI's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (98.1%), HOLI's dividend payments are not well covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Tech industry.

Management

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

1.8yrs

Average management tenure

CEO

Changli Wang (58 yo)

0.33

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

Experienced Management: HOLI's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: HOLI's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.

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.

Data	Last Updated (UTC time)
Company Analysis	2022/05/15 00:00
End of Day Share Price	2022/05/13 00:00
Earnings	2022/03/31
Annual Earnings	2021/06/30