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YOUR LOGO
Safe Harbor
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Hollysys Automation Technologies Ltd. Investors Presentation FY2019 - - PowerPoint PPT Presentation
Hollysys Automation Technologies Ltd. Investors Presentation FY2019 - - PowerPoint PPT Presentation
Automation for Better Life Hollysys Automation Technologies Ltd. Investors Presentation FY2019 Q1 YOUR LOGO Safe Harbor This presentation may contain forward-looking statements within the meaning of the private securities litigation reform
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- NASDAQ: HOLI
- Approximately 60MM shares outstanding
- Founded in 1993
- The leading provider of automation & control technologies in China
- Headquartered in Beijing
- Nationwide presence in 60 cities
- Worldwide subsidiaries and offices in Singapore, Dubai, Malaysia,
India, etc.
- Proprietary technologies and products tailored to Industrial, Rail,
Subway and Nuclear Industries Market Data History Operation Offerings
Corporation Overview
- 3,300 employees worldwide
- 650+ in R&D
Headcounts
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1 2 Business Overview Industrial Automation Rail Transportation 3 Overseas 4 Management & Market Leadership Position 5 Financials 6
Agenda
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41.6% 36.3% 22.1% Revenue by sector for FY2019Q1 Industrial Automation Rail Transportation M&E Solution
Business Overview
Industrial Automation:
- Intelligent plant automation
solution;
- DCS, PLC, MC, SCADA, MES
and etc. Rail Transportation:
- High-speed rail signaling
system: ATP, TCC, and etc.
- Subway SCADA and CBTC
Mechanical & Electrical Solution and others:
- Design, electrification and
engineering service
- Other businesses
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Safety Concern Environment Protection Energy Conservation
Industrial Automation Growth Drivers
Accelerated Automation and Control Technologies Demand Production Efficiency
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- Offering:
Proprietary technologies in solution, design, manufacture, Integration and installation.
- Products:
DCS, Batch, MES (Manufacturing Execution System), AMS (Asset Management System), SIS (Safety Instrumentation System), etc.
- Track record:
More than 30,000 projects completed.
- China market share:
Around 13 -15%
- Clients:
10,000+ customers, including SOEs, Multinationals, and SMEs.
- Competitors:
ABB, Siemens, Emerson, Honeywell,Supcon
Plant Automation Solution
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Industrial Automation – Process Control
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Distributed Control System
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16 20 24 30 35 38 44 50 56
10 20 30 40 50 60 70 80 90
China Nuclear Market
In # reactors Nuclear Electricity (TWh) Total Electricity (TWh) Nuclear Utilization (%) France 419 549 76.3% World 2,441 21,226 11.5 % China 161.2 5,373 3.0 %
(As of July, 2018. Source: World Nuclear Association, IAEA)
76.3% 11.5% 3.0% France World China
Industrial Automation – Nuclear Power Control
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Projects
- Qin Shan I/II/III, Da Yawan, Ling Ao, Tian Wan, Hong Yanhe, Ning De, Yang Jiang, Fang Cheng
Gang, etc.
Offerings
- Proven proprietary nuclear power plant control systems and reactor protection system.
- Engineering design, procurement, integration, installation, support, and specialized services
for the safe, reliable, and economical operation of the nuclear power plant
- The only proven domestic company to supply control systems to nuclear power automation
market in China
- J/V with the China’s largest nuclear station operator: China General Nuclear Power Group
(CGNPG)
Market Position Competitors
- SIEMENS/AREVA/INVENSYS
Nuclear Power – Business Overview
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PLC, MC and SCADA
Machine Control City Transportation and Sewage Treatment Coal Mining
- MC1000 motion coordinator
and LK/LE PLC control servo or stepper motors, up to 32 Axes.
- Build-in Industry Ethernet :
EtherCAT, RTEX, Ethernet/IP
- Safety: IEC61508 SIL2
Certification
- Security: Achillies Level 1
Certification
- Supply intergrate solution of
city transportation and sewage treatment, including SCADA, LE PLC, LK PLC etc.
- Major player
- Plenty of successful
completed projects
- Provide control
application in coal mining industry, as well as intrinsic safety device
- JV with Shenhua Group
Industrial Automation - Discrete Control
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Industrial Software
DCS/SIS/PLC/MC Software Embedded Software MES/APS/WMS/EMS ERP/CRM/SCM/BPM/PLM SCADA/APC/BATCH Field Device Control Monitoring Management Industrial Cloud Execution
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Industrial Internet of Things (IIOT)
Data Lake Model Reservoir MicroService Pool
Application CIM CIM CIM CIM CIM CIM CIM MS MS MS MS MS MS MS BP BP BP BP BP BP BP BP BP BP BP BP
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- Improved Production
Procedure Management
- Energy Conservation
- Enviroment Protection
- Product Quality
Improvement
Software Advanced Control Solutions
Process Control
- DCS, PLC, SIS, etc.
Instrumentation
- Transmitters, Actuators, Valves, Analyzer, etc.
Industrial Automation – Turn-key Solution
Achievements
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- SCADA, AMS, MES,
Batch, EMS, APC, etc.
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Industrial Automation – Competitive Advantages
Items HOLI Multis Local Brand Name Pricing Service Customization Quality
- Industry leading brand name recognition
through more than 20 years’ operation.
- Continuous investment in R&D to deliver
advanced technology.
- Extensive service network in more than 60
industrial cities across China, focusing on service and long-term client relationship.
- Cost structure advantage enables Hollysys
deliver pricing competitive solution and products. Advantages of Hollysys
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8,358 19,000 30,000 38,000 45,000 2010 2015 2020E 2025E 2030E
KM
China High Speed Railway Market Growth
High-speed Rail Market of China
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High-speed Rail – Signaling System
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High-speed Rail Signaling System
HSR signaling products: ATP , TCC, LEU and etc. In China: Market Position:
1 of the only 3 approved providers in 300-350km/h segment;
1 of the only 3 approved providers in 200-250km/h segment, Competitors: China Railway Signal & Communication Corp (CRSC), Academy of Railway Science, Zhuzhou CRRC
Overseas: Market Position: First international contract win from Hong Kong
MTR for HongKong-Shenzhen High-speed rail line
Competitors: Bombardier, Siemens, Ansaldo, Hitachi.
High-speed Rail – Business Overview
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City In operation (km) Total Length by 2020 (km) Beijing 604 1,000 Shanghai 643 900 Tianjin 147 304 Guangzhou 247 700 Shenzhen 179 425 Nanjing 187 330 2014 2016 2020E 3,173 4,630 8,314 China Subway Market Growth
In # kilometers
China Subway Market
Page 19 (As of the end of 2015. Source: China Association of Metros)
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Clients: Beijing, Shenzhen, Guangzhou, Hong Kong MTR Market position: The leading SCADA (Supervisory Control and Data Acquisition) system supplier Competitor: Nanjing Automation Research Institute (NARI) SCADA Clients: China and international subway construction authorities Market position: One of the key proprietary subway signaling system provider Competitors: Siemens, Alstom, Thales
Signaling System SCADA
Subway Automation – Business Overview
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Beijing Headquarter Hangzhou Facility Bond Xi’an Facility Singapore Office Concord
Internationalization Presence
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India Office Indonesia Office
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Name Title Working Years Previous Experience
- Mr. SHAO Baiqing
CEO & Chairman 26 years
- General Manager of Hollysys Group
- Master of Computer Science from the 6th Research
Institute
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China Electronics Corporation and MBA from Peking University
- Mr. WANG Steven
CFO 23 years
- Previously
as Chief Financial Officer and Vice President of Xinhua Lian Investment Co., Ltd.
- Previous experience at various managerial positions
at Globe Specialty Metals Inc. and Zoomlion Heavy Industry Science & Technology Co.,Ltd.
- MBA degree in Finance from the Wharton School,
the University of Pennsylvania.
Hollysys Management Team
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Market Leadership Position
10,000+ customers 30,000 projects customer base Industry leading automation and
control brand name
JV with China General Nuclear
Power Holding Corp
JV with Shen Hua Group Successful integration of rail team Acquisition of Concord and Bond
Early entry to high-speed rail Early entry to nuclear Re-focusing in industrial automation Increasing R&D investment Wide range of core technologies Various industry expert solutions 650+ R&D engineers
Market Leadership
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State of the Art Production Line
In-house Production
- State of the art production line
- Almost fully automated production process
- Enough capacity for accelerated growth
- Multiple round of precise testing
- Flexible and efficient in house production for different demand
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262.8 321.7 349.1 521.3 531.4 544.3 431.9 540.8 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Revenue by Fiscal Year
In US$ million
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42.0 57.4 57.6 86.9 103.3 121.5 70.1 108.9 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Non-GAAP Net Income by Fiscal Year
In US$ million
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35.6 40.7 46.3 74.3 7.6% 14.3% 13.8% 60.0% 6.9% 7.9% 10.7% 13.7% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 FY2015 FY2016 FY2017 FY2018
After Sale Revenue
After Sales Revenue After Sale Growth After Sale as Revenue%
National Spread Service Network, Professional & High Quality Service
In US$ million
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Gross Margin & EBIT Margin Performance
16.0% 17.8% 16.5% 16.7% 19.4% 20.14% 19.5% 21.3% 25.2% 26.1% 19.8% 24.3% 36.2% 34.7% 41.2% 37.9% 32.7% 38.20% FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Non-GAAP Gross Margin Non-GAAP EBIT Margin Non-GAAP Net Margin
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Gross Margin of Each Business Sector
Industrial Automation Total Solution 35% - 40% Nuclear 60% - 75% Rail Transportation High-speed Rail Signaling 40% - 50% Subway SCADA 15% - 20% M&E Solution and
- thers
Design, electrification, installation 10%- 15%
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25.6 32.5 36.5 35.8 36.6 30.1 36.6 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
R&D Expenditure
Heavy R&D Investment to Continuously Deliver Leading Technologies
New Products Development
Motion Control Energy Conservation Environment Protection Subway Signaling Industrial Internet of Things (IIOT)
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In US$ million 7.6% 8.0% 9.3% 7.0% 6.7% 6.7% 7.0% % of revenue
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9.1 8.4 4.6 7.9 3.7 1.9 30.7 83.3 84.0 46.7 69.8 122.2 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
CAPEX Operating Cash Flow
Sufficient Cash On-hand & Solid Operating Cash Flow Performance
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In $MM
23.92 29.1 30.4 31.1 28 36.1 402.1 293.8 271.8 257.5 190.5 133.1 FY2018 FY2017 FY2016 FY2015 FY2014 FY2013 Debt Cash and equivalents + time deposits
In $MM
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389.8 488.7 556 568.5 527.2 524 569
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Backlog
High Backlog Ensures Another Strong Year Ahead
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95.0 244.7 176.5 Industrial Automation Rail Transportati
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M&E Solution Backlog Breakdown as of Sep 30, 2018
In US$ million In US$ million
Total Backlog: US$516.2 million
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Automation for Better Work , Life and Environment
Dedicated customized solutions
Customized control system:
- Alternative energies: Nuclear power, wind power etc.
- Water process
- Demographic Change, shortage
- f labor
- Environmental protection
- Urbanization Process of China
- Customer’s buying behavior
change
- Automation solutions to offset
labor cost increase
- Dedicated customized solutions for
energy conservation and efficiency improvment
- Leading position in China’s high-
speed rail and subway automation control market
- Customer- centric approach,
enlarge service team and enhance service capabilities
Striving to be a world leading automation and control system provider
Macro Enviroment Strategy
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