Hollysys Automation Technologies Commences Shipment of Its Automation and Control Products to Zhengzhou-Xi'an High-Speed Railway Project Under a New $15 Million Contract
May 21, 2009
BEIJING--May 21, 2009-- Hollysys Automation Technologies, Ltd. (NASDAQ: HOLI) ("Hollysys" or the "Company"), a leading automation and control systems and products provider in China, announced today that it commenced shipping its Train Control Center products (TCC) to the Zhengzhou-Xi'an High-Speed Railway project, pursuant to a contract with the China Railway Electrification Bureau Group, valued at RMB 103 million, or approximately USD$15 million. This is a new contract in addition to Hollysys' contract won in September 2008 for the same high-speed railway line.
Hollysys' TCC product will ensure centralized train control of the 459 km Zhengzhou-Xian railway line connecting Zhengzhou, the capital city of Henan province, with an approximate population of over 7 million, with Xi'an, the capital city of Shaanxi province, with a population of approximately 8.3 million. The line is designed for a traveling speed of up to 350 kilometers per hour.
Hollysys' TCCs will be located at each station along the railway line and will generate train control information through logic calculation of on-ground collected data, and transmit the information to on-board devices by a track circuit and switchable balise. The TCCs will work together with Hollysys' Automatic Train Protection (ATP), which is an on-board device of the train control system that provides real-time train monitoring and control.
Dr. Changli Wang, CEO of Hollysys, commented, "We believe that the follow-on contract win of the Zhengzhou-Xi'an high-speed railway automation works is a testament to the high quality of Hollysys products and our successful project implementation in the high-speed railway automation and control segment. The win also signals the recognition of our product and work quality by China's Ministry of Railways and our partners in the industry. As China is experiencing an accelerating railway build-out boosted by the government's RMB 4 trillion stimulus plan, we expect that Hollysys will benefit from an increasing number of market opportunities in the high-speed railway segment."
Dr. Wang continued, "We were pleased to read the comments from China's Ministry of Railways' chief spokesman Mr. Wang Yongping in an article published in The Wall Street Journal on April 17, 2009, where he noted that China will invest an additional $2 billion this year into the railway sector as part of its stimulus plan to bolster domestic transportation network. In the article, Mr. Wang was quoted as saying, 'China wants to create an internationally competitive railway industry and to do that it will spend most of the money on domestic companies rather than buying from abroad.' As one of the five automation product providers in the 200km to 250 km per hour segment, and one of the only two automation product providers in 300km to 350km per hour segment in China, we believe that Hollysys is well-positioned to take its fair share in this unprecedented railway build-out." (Source: The Wall Street Journal, "China's Railways to Spend Stimulus Funds at Home" by Ian Johnson.)
About China Railway Electrification Bureau Co., Ltd.
China Railway Electrification Bureau Co., Ltd. is a wholly owned subsidiary of China Railway Engineering Group Co., Ltd. (CREC), a state-owned Chinese conglomerate with a multi-disciplinary group of corporations covering a broad business scope. Over the past century, CREC has successively taken part in the construction of more than 100 major railway lines in China, and has completed the design and construction of thousands of key state projects, including airports, wharfs, water and electricity facilities, power plants, and communication and signaling projects. As one of China's major state-owned backbone enterprises, CREC is also playing a critical role in China's recent economic development. Subordinated to CREC, the China Railway Electrification Group Co., Ltd. is mainly engaged in providing electrification projects for railways, roads, urban facilities and urban mass transit, as well as construction projects. In a recent credit rating report issued by Dagong Global Credit Rating Co., Ltd, China Railway Electrification Bureau Group Co., Ltd. was noted as stable and given a AA-rating, reflecting its great market opportunities and high-quality assets.
About Hollysys Automation Technologies
Hollysys Automation Technologies is a leading automation and control systems and products provider in China. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China with over 1700 customers in industrial, railway & nuclear industries. Its product lines include Distributed Control Systems (DCS) and Programmable Logic Controllers (PLC), high-speed railway Train Control Centers (TCC) and Automatic Train Protection (ATP), and safety controls for nuclear power plants. Hollysys is the only certified domestic automation control systems provider to the nuclear industry in China. Hollysys is also one of only five automation control systems and products providers approved by China's Ministry of Railways in the 200km to 250km high-speed rail segment, and is one of only two automation control systems and products providers approved in the 300km to 350km high-speed rail segment.
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This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding: the significance of the Zhengzhou-Xian contract win and the Company's ability to successfully implement the project; the Company's ability to benefit from market opportunities in the high-speed railway segment through 2011 as a result of the Chinese government's stimulus plan; the ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. 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. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For further information: CONTACT: Jennifer Zhang Investor Relations & Corporate Communications P.R. China: +86(10) 5898-1386 United States: +1(646) 593-8125 Email: mailto: firstname.lastname@example.org