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HOLI

Hollysys Automation Technologies NasdaqGS:HOLI Stock Report

Last Price

US$14.95

Market Cap

US$926.3m

7D

-0.9%

1Y

-23.4%

Updated

10 Aug, 2022

Data

Company Financials
HOLI fundamental analysis
Snowflake Score
Valuation2/6
Future Growth0/6
Past Performance2/6
Financial Health6/6
Dividends2/6

HOLI Stock Overview

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

Hollysys Automation Technologies Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Hollysys Automation Technologies
Historical stock prices
Current Share PriceUS$14.95
52 Week HighUS$21.24
52 Week LowUS$11.05
Beta0.80
1 Month Change-4.04%
3 Month Change-0.73%
1 Year Change-23.37%
3 Year Change-5.08%
5 Year Change-24.30%
Change since IPO187.50%

Recent News & Updates

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.

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.

Shareholder Returns

HOLIUS ElectronicUS Market
7D-0.9%-0.05%1.2%
1Y-23.4%-14.2%-11.6%

Return vs Industry: HOLI underperformed the US Electronic industry which returned -16.2% over the past year.

Return vs Market: HOLI underperformed the US Market which returned -13.5% over the past year.

Price Volatility

Is HOLI's price volatile compared to industry and market?
HOLI volatility
HOLI Average Weekly Movement4.0%
Electronic Industry Average Movement7.5%
Market Average Movement7.9%
10% most volatile stocks in US Market17.0%
10% least volatile stocks in US Market3.2%

Stable Share Price: HOLI is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: HOLI's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19933,876Changli Wanghttps://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 CapUS$926.34m
Earnings (TTM)US$82.10m
Revenue (TTM)US$684.11m

11.3x

P/E Ratio

1.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
HOLI income statement (TTM)
RevenueUS$684.11m
Cost of RevenueUS$446.03m
Gross ProfitUS$238.08m
Other ExpensesUS$155.99m
EarningsUS$82.10m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.32
Gross Margin34.80%
Net Profit Margin12.00%
Debt/Equity Ratio1.3%

How did HOLI perform over the long term?

See historical performance and comparison

Dividends

2.1%

Current Dividend Yield

24%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is HOLI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HOLI?

Other financial metrics that can be useful for relative valuation.

HOLI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.3x
Enterprise Value/EBITDA2.8x
PEG Ration/a

Price to Earnings Ratio vs Peers

How does HOLI's PE Ratio compare to its peers?

HOLI PE Ratio vs Peers
The above table shows the PE ratio for HOLI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average32.6x
NSSC Napco Security Technologies
52.8x51.4%US$928.6m
OSIS OSI Systems
15.5x-0.6%US$1.7b
VPG Vishay Precision Group
16.8xn/aUS$478.0m
BMI Badger Meter
45.3x8.5%US$2.9b
HOLI Hollysys Automation Technologies
11.3xn/aUS$926.3m

Price-To-Earnings vs Peers: HOLI is good value based on its Price-To-Earnings Ratio (11.3x) compared to the peer average (32.6x).


Price to Earnings Ratio vs Industry

How does HOLI's PE Ratio compare vs other companies in the US Electronic Industry?

Price-To-Earnings vs Industry: HOLI is good value based on its Price-To-Earnings Ratio (11.3x) compared to the US Electronic industry average (16.1x)


Price to Earnings Ratio vs Fair Ratio

What is HOLI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HOLI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio11.3x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate HOLI's Price-To-Earnings Fair Ratio for valuation analysis.


Share Price vs Fair Value

What is the Fair Price of HOLI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HOLI ($14.95) is trading above our estimate of fair value ($5.08)

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


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.


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Future Growth

How is Hollysys Automation Technologies forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

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


14.4%

Forecasted Tech industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Hollysys Automation Technologies has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


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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 26.1%.


Return on Equity

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


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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


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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

  • Cash Flow 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 (1.51%).

High Dividend: HOLI's dividend (2.14%) is low compared to the top 25% of dividend payers in the US market (4.09%).


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.


Discover strong dividend paying companies

Management

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

2.1yrs

Average management tenure


CEO

Changli Wang (59 yo)

0.58

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 considered experienced (2.1 years average tenure).


Board Members

Experienced Board: HOLI's board of directors are not considered experienced ( 1.9 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.


Top Shareholders

Company Information

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


Key Information

  • Name: Hollysys Automation Technologies Ltd.
  • Ticker: HOLI
  • Exchange: NasdaqGS
  • Founded: 1993
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Implied Market Cap: US$926.336m
  • Shares outstanding: 61.96m
  • Website: https://www.hollysys.com

Number of Employees


Location

  • Hollysys Automation Technologies Ltd.
  • No. 2 Disheng Middle Road
  • Beijing Eco-Tech Dev Area
  • Beijing
  • 100176
  • China

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/10 00:00
End of Day Share Price2022/08/10 00:00
Earnings2022/03/31
Annual Earnings2021/06/30


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.