Hollysys Automation Technologies Announces Strategic Alliance with Shenhua Group, the Largest Power Plant Developer and Operator in China

BEIJING – Aug 13, 2008 – Hollysys Automation Technologies, Ltd. (NASDAQ: HOLI) ("Hollysys" or the "Company"), today announced a strategic alliance with China Machinery Electronics Export Products Investment Corporation, a wholly owned subsidiary of Shenhua Group Corporation Limited ("Shenhua"), to provide automation control and management systems to its coal mining, power plants, and railways in China. Shenhua, with 150,000 employees, is one of the largest comprehensive energy companies in China.

Shenhua is China's largest developer and operator of coal mining and power plants, with an existing installed power generation capacity of over 16 GW. Hollysys has been providing automation control systems to a portion of Shenhua's new power plants since 2006, and based on the successful performance of these systems, has formalized its relationship and now expects to get a majority, if not all, of the control systems business from Shenhua going forward.

Dr. Wang Changli, Hollysys' CEO commented, "This strategic alliance is a significant milestone for Hollysys and strengthens our position as a market leader in automation control systems in China. China's power needs continue to soar and it is expected that the power generated from China's coal plants will increase from its current level of approximately 570GW to approximately 900GW by 2020, with a majority of the new plants focused on utilizing clean coal power production technologies.

Hollysys' proprietary automation control system for power plants is one of these technologies as it makes power production from coal fired plants more efficient. Our system effectively increases the amount of power generated from each unit of coal, while simultaneously reducing the amount of emissions created by each plant."

About Hollysys Systems

Hollysys Automation Technologies, based in Beijing, China, with 1,800 employees, is the leading domestic provider of automation control systems to China's surging nuclear, rail and industrial markets and will soon begin providing control systems to China's booming wind energy market. Hollysys has developed a series of proprietary high quality, low cost control systems that meet or exceed international standards and is able to effectively compete against the world's leading automation control companies.