Clarification to Hollysys Automation Technologies's Strategic Plan
Nov 12, 2007
Beijing, China – November 12, 2007 – Hollysys Automation Technologies, Ltd. ("Hollysys") on Thursday, November 8, 2007 provided the financial community with information regarding its strategic plan. A difference in the corporation legal requirements in China versus those in the U.S. made that announcement difficult for select U.S. investors to understand fully, and Hollysys is issuing this clarification to resolve any misunderstanding that the announcement may have caused for U.S. investors.
As stated in the announcement, Hollysys intends to use approximately US $40 million to be received from the recent call of its warrants to increase its ownership interest in Beijing HollySys, one of its two principal operating companies. As a result of that additional investment, Hollysys will increase its ownership of Beijing HollySys from the current 74.11% to approximately 85%. As a result, a proportional increase of the earnings of Beijing HollySys will accrete to Hollysys. Given the anticipated 30% - 35% annual growth rate of revenues and earnings from Beijing HollySys over the next several years, the return on that investment will generate positive value for Hollysys and its shareholders.
In addition to those benefits, the $40 million in additional capital will still be available to Beijing HollySys to make strategic acquisitions, capital expenditures or for other purposes to support the company’s strategic objectives, further enhancing its profit potential and the benefit for shareholders of Hollysys.
Hollysys has become one of the leading automation systems providers in the PRC, developing a number of core technologies and completing numerous projects utilizing a wide array of automation products. The Company specializes in the research, development, production, sale and distribution of industrial automation and control systems, competing effectively with both domestic Chinese companies and large, multinational participants in the industrial, rail and nuclear power sectors.
For further information: CONTACT: Jennifer Zhang or Serena Wu Investor Relations & Corporate Communications P.R. China: +86(10) 5898-1386 United States: +1(646) 593-8125 Email: mailto: firstname.lastname@example.org