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 act of 1995. Forward looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of Hollysys' management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions in China; continued compliance with government regulations; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which Hollysys is engaged; cessation or changes in government incentive programs: potential trade barriers affecting international expansion; fluctuations in customer demand; management of transitions to new markets; intensity of competition from or introduction of new and superior products by other providers of automation and control system technology; timing, approval and market acceptance of new product introductions; as well as other relevant risks detailed in Hollysys' filings with the securities and exchange commission. The information set forth herein should be read in light of such risks. Hollysys does not assume any obligation to update the information contained in this presentation or filings. * All $ amounts in this presentation are in USD unless otherwise noted. YOUR LOGO Page  2

Corporation Overview  NASDAQ: HOLI Market Data  Approximately 60MM shares outstanding  Founded in 1993 History  The leading provider of automation & control technologies in China  Headquartered in Beijing  Nationwide presence in 60 cities Operation  Worldwide subsidiaries and offices in Singapore, Dubai, Malaysia, India, etc.  Proprietary technologies and products tailored to Industrial, Rail, Offerings Subway and Nuclear Industries  3,300 employees worldwide Headcounts  650+ in R&D YOUR LOGO Page  3

Agenda 1 Business Overview 2 Industrial Automation 3 Rail Transportation 4 Overseas 5 Management & Market Leadership Position 6 Financials YOUR LOGO Page  4

Business Overview Revenue by sector for FY2019Q1 Industrial Automation: Industrial Automation • Intelligent plant automation Rail Transportation solution; • DCS, PLC, MC, SCADA, MES M&E Solution and etc. Rail Transportation: • High-speed rail signaling 22.1% system: ATP, TCC, and etc. • Subway SCADA and CBTC 41.6% Mechanical & Electrical Solution and others: 36.3% • Design, electrification and engineering service • Other businesses YOUR LOGO Page  5

Industrial Automation Growth Drivers Production Efficiency Accelerated Automation and Safety Environment Control Technologies Demand Concern Protection Energy Conservation YOUR LOGO Page  6

Industrial Automation – Process Control Plant Automation Solution  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 YOUR LOGO Page  7

Distributed Control System YOUR LOGO Page  8

Industrial Automation – Nuclear Power Control 90 China Nuclear Market In # reactors France 76.3% 80 70 World 11.5% 60 56 50 China 3.0% 50 44 35 38 40 30 30 24 20 Nuclear Total Nuclear 20 16 Electricity Electricity Utilization (TWh) (TWh) (%) 10 France 419 549 76.3% 0 World 2,441 21,226 11.5 % China 161.2 5,373 3.0 % (As of July, 2018. Source: World Nuclear Association, IAEA) YOUR LOGO Page  9

Nuclear Power – Business Overview 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 Market Position  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) Projects  Qin Shan I/II/III, Da Yawan, Ling Ao, Tian Wan, Hong Yanhe, Ning De, Yang Jiang, Fang Cheng Gang, etc. Competitors  SIEMENS/AREVA/INVENSYS YOUR LOGO Page  10

Industrial Automation - Discrete Control PLC, MC and SCADA City Transportation and Coal Mining Machine Control Sewage Treatment  Supply intergrate solution of  MC1000 motion coordinator  Provide control city transportation and and LK/LE PLC control servo or application in coal mining sewage treatment, including stepper motors, up to 32 Axes. industry, as well as SCADA, LE PLC, LK PLC etc. intrinsic safety device  Build-in Industry Ethernet :  Major player  JV with Shenhua Group EtherCAT, RTEX, Ethernet/IP  Plenty of successful  Safety: IEC61508 SIL2 completed projects Certification  Security: Achillies Level 1 Certification YOUR LOGO Page  11

Industrial Software Industrial Cloud Management ERP/CRM/SCM/BPM/PLM Execution MES/APS/WMS/EMS SCADA/APC/BATCH Monitoring DCS/SIS/PLC/MC Control Software Field Embedded Device Software YOUR LOGO

Industrial Internet of Things (IIOT) BP BP BP BP BP BP BP BP Application BP BP BP BP MS MS MS MS MS MS MS MicroService Pool CIM CIM CIM CIM CIM CIM CIM Model Reservoir Data Lake YOUR LOGO Page  13

Industrial Automation – Turn-key Solution Achievements  SCADA, AMS, MES, Software • Improved Production Batch, EMS, APC, etc. Advanced Procedure Management Control Solutions • Energy Conservation Process Control  DCS, PLC, SIS, etc. • Enviroment Protection Instrumentation • Product Quality Improvement  Transmitters, Actuators, Valves, Analyzer, etc. YOUR LOGO Page  14

Industrial Automation – Competitive Advantages Advantages of Hollysys Items HOLI Multis Local  Industry leading brand name recognition Brand Name through more than 20 years’ operation.  Continuous investment in R&D to deliver Pricing advanced technology.  Extensive service network in more than 60 Service industrial cities across China, focusing on service and long-term client relationship. Customization  Cost structure advantage enables Hollysys deliver pricing competitive solution and Quality products. YOUR LOGO Page  15

High-speed Rail Market of China China High Speed Railway Market Growth 45,000 38,000 30,000 19,000 8,358 2010 2015 2020E 2025E 2030E KM (As of July, 2016. Source: National Development and Reform Commission) YOUR LOGO Page  16

High-speed Rail – Signaling System YOUR LOGO Page  17

High-speed Rail – Business Overview 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. YOUR LOGO Page  18

China Subway Market In operation Total Length City (km) by 2020 (km) China Subway Market Growth In # kilometers Beijing 604 1,000 8,314 Shanghai 643 900 4,630 Tianjin 147 304 3,173 Guangzhou 247 700 Shenzhen 179 425 2014 2016 2020E Nanjing 187 330 (As of the end of 2015. Source: China Association of Metros) YOUR LOGO Page  19

Subway Automation – Business Overview  Clients: China and international subway construction authorities  Market position: Signaling One of the key proprietary subway signaling system System provider  Competitors: Siemens, Alstom, Thales  Clients : SCADA Beijing, Shenzhen, Guangzhou, Hong Kong MTR Placeholder for text  Market position : SCADA The leading SCADA (Supervisory Control and Data Acquisition) system supplier  Competitor : Nanjing Automation Research Institute (NARI) YOUR LOGO Page  20

Internationalization Presence Beijing Headquarter Xi’an Facility India Office Hangzhou Facility Singapore Office Indonesia Office Bond Concord YOUR LOGO Page  21