BEIJING, April 18, 2011 /PRNewswire-Asia-FirstCall/ -- Hollysys Automation Technologies, Ltd. (NASDAQ: HOLI) ("Hollysys" or the "Company"), a leading provider of automation and control technologies and applications in China, announced today signing a contract of approximately US$ 24.30 million or RMB 159.02 million to supply its 200-250km/h high-speed rail ATPs to various local bureaus of Ministry of Railways of China. The delivery is expected to be completed by the end of May 2011.

The on-board signaling equipment ATP (Automatic Train Protection) works together with the ground-based signaling equipment TCC (Train Control Center), as the crucial control elements in the high-speed railway signaling systems to ensure the safety and reliability of the high-speed railway traffic and operation.

Dr. Changli Wang, CEO and Chairman of Hollysys, commented: "We are very pleased of winning the 200-250km/h high-speed rail ATPs contract under the current market situation. With approximately 17,000 km of high-speed rail tracks currently in construction and newly announced budget of RMB 2.8 trillion for the next five years, we are still seeing a huge market potential in high-speed rail signaling market for leading players like Hollysys to realize and capture going forward. Hollysys will continue to leverage on its core growth pillar foundations of strong R&D capability and strategic alliance to increase its market share in this unprecedented high-speed rail build-out."

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 3,000 employees with nationwide Presence in 29 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC) for industrial sector, high-speed railway signaling system of TCC (Train Control Center) and ATP (Automatic Train Protection), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control system.

Safe Harbor

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 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.

SOURCE Hollysys Automation Technologies, Ltd.

Source: PR Newswire (April 18, 2011 - 8:01 AM EDT)

Hollysys Automation Technologies, Ltd. (Nasdaq: HOLI) ("Hollysys" or the "Company"), a leading provider of automation and control technologies and applications in China, today announced its unaudited financial results for its fiscal second quarter of fiscal year 2010 ended December 31, 2009 (see attached tables).

Dr. Changli Wang, Hollysys' Chief Executive Officer, stated, "We are pleased to report a strong fiscal 2010 second quarter with solid financial and operational results and significant strategic progress. The management is satisfied with our financial performance, from both operating and financial perspective, given the adverse impact of economic downturns and uncertainties we've experienced over the past 12 months. We accomplished the net income target set out at the beginning of the fiscal year, while steadfastly increasing investment in research and development activities to maintain Hollysys a leading player in its end-markets with advanced technologies and products."

"We are very excited that during the December quarter, we have successfully completed the testing, delivery, and installation of our high-speed railway signaling systems for the Zhengzhou-Xi'an high-speed railway line. After a successful trial run on January 28, 2010, the Zhengzhou-Xi'an line became officially operational on February 6, 2010, marking a maximum speed limit of 352 km/h. Having our state-of-the-art automation and control systems installed for one of the world's fastest running high-speed rail lines is a concrete testament of our advanced R&D, production, and project implementation capabilities in the high-speed railway sector. As China continues to stay on track in achieving its 13,000 km high-speed railway build-out target by 2012, the Zhengzhou-Xi'an high-speed railway line is one of the first railway lines launched in China with a designed traveling speed of 300kph or higher, together with the Wuhan-Guangzhou high-speed railway line.

"We are also very proud that during the December quarter, we commenced delivering our proprietary designed and manufactured large-scale industrial Distributed Control Systems (DCS) to China's largest 1000 MW (1GW) ultra-supercritical thermal power station, Guohua Taishan Power Plant. This signifies China's first-ever deployment of domestic made large-scale DCS in lieu of imported systems for the ultra-supercritical thermal power stations in China. As a follow-on contract subsequent to several successful DCS applications in the 600MW thermal power stations, this strategic reference project further validated Hollysys' dominant position in China's industrial automation and control field.

"Also in the December quarter, we have initiated the non-controlling interest buyout program in acquiring 24.11% of the non-controlling interest in Beijing Hollysys, one of the two operating subsidiaries of Hollysys Automation Technologies, Ltd., from the Rilin Group. The non-controlling interest buyout initiative is of important strategic significance to Hollysys, in that the non-controlling interest acquisition will bring Beijing Hollysys to a wholly-owned subsidiary of Hollysys, and will contribute the full earnings and revenue growth potential to the listing entity, particularly in the areas of high-speed railway, subway, and nuclear automation."

Dr. Wang continued, "On top of the minority buy-out, we also managed to form a strategic partnership with Rilin Group to supply our industry-leading automation and control solutions and products to some of the exciting business lines of the Rilin group, such as wind power and shipbuilding industries. Such strategic partnership will provide Hollysys a high entry platform to further scale its core proprietary automation and control technologies to some of the most attractive end markets in China today."

Q2 Fiscal Year 2010 Unaudited Financial Results Summary

To facilitate a clear understanding of Hollysys operational result, a summary of unaudited non-GAAP financial results is included below.

    In USD thousands, except share numbers and EPS

                                                    Three Months ended
                                              Dec 31,     Dec 31,        %
                                                2009       2008       Change
    Revenues                                  $46,163     52,526      -12.1 %
      Integrated Contract Revenue             $43,970     50,225      -12.5 %
      Products Sales                          $ 2,193      2,301       -4.7 %
    Cost of Revenues                          $31,770     34,376       -7.6 %
    Gross Profit                              $14,393     18,151      -20.7 %
    Total Operating Expenses                  $ 5,365      3,976       34.9 %
      Selling                                 $ 3,573      2,651       34.8 %
      General and Administrative              $ 4,014      1,918      109.3 %
      Research and Development                $ 3,395      1,942       74.8 %
      VAT refunds and government
       subsidy                                $(5,618)    (2,536)     121.6 %
    Income from Operations                    $ 9,028     14,175      -36.3 %
    Others                                    $    17      1,013      -98.4 %
    Income Tax Expenses                       $   102      1,434      -92.9 %
    Non-GAAP Net income attributable to
     non-controlling interest                 $   864      2,608      -66.9 %
    Non-GAAP Net Income attributable to
    Hollysys Automation Technologies Ltd.     $ 8,079     11,146      -27.5 %
    Basic Non-GAAP EPS                        $  0.16       0.25      -36.2 %
    Diluted Non-GAAP EPS                      $  0.16       0.25      -36.7 %

    Stock-based Compensation Cost for         $
     Options                                      131         44      195.1 %
    Stock-based Compensation Cost for         $    --     17,000     -100.0 %
    Incentive Shares
    Net income attributable to Hollysys       $ 7,948     (5,899)    -234.7 %
    Automation Technologies Ltd.(GAAP)
    Basic GAAP EPS                            $  0.16      (0.13)    -218.6 %
    Diluted GAAP EPS                          $  0.16      (0.13)    -217.6 %

    Basic Weighted Average Common Shares   49,942,614 43,964,353       13.6 %
    Outstanding
    Diluted Weighted Average Common
     Shares                                50,653,381 43,964,353       15.2 %
    Outstanding


                                                      Six Months ended
                                              Dec 31,     Dec 31,        %
                                                2009       2008       Change
    Revenues                                  $84,357     89,831       -6.1 %
      Integrated Contract Revenue             $79,840     86,183       -7.4 %
      Products Sales                          $ 4,516      3,647       23.8 %
    Cost of Revenues                          $55,754     58,600       -4.9 %
    Gross Profit                              $28,603     31,230       -8.4 %
    Total Operating Expenses                  $11,229      8,601       30.6 %
      Selling                                 $ 6,299      5,416       16.3 %
      General and Administrative              $ 6,441      4,184       54.0 %
      Research and Development                $ 6,249      3,109      101.0 %
      VAT refunds and government
       subsidy                                $(7,760)    (4,108)      88.9 %
    Income from Operations                    $17,374     22,630      -23.2 %
    Others                                    $    49        662      -92.6 %
    Income Tax Expenses                       $   922       2217      -58.4 %
    Non-GAAP Net income attributable to
     non-controlling interest                 $ 1,794      3,785      -52.6 %
    Non-GAAP Net Income attributable to
    Hollysys Automation Technologies Ltd.     $14,707     17,290      -14.9 %

    Basic Non-GAAP EPS                        $  0.29       0.39      -25.1 %
    Diluted  Non-GAAP EPS                     $  0.29       0.39      -25.7 %

    Stock-based Compensation Cost for
     Options                                  $   262         89      195.1 %
    Stock-based Compensation Cost for         $    --     17,000     -100.0 %
    Incentive Shares
    Net income attributable to Hollysys       $14,445        202     7067.4 %
    Automation Technologies Ltd.(GAAP)
    Basic GAAP EPS                            $  0.29       0.00     6207.9 %
    Diluted GAAP EPS                          $  0.29       0.00     6160.5 %

    Basic Weighted Average Common Shares
     Outstanding                           49,942,614 43,953,484       13.6 %
    Diluted Weighted Average Common
     Shares Outstanding                    50,465,837 43,953,484       14.8 %

For the three months ended December 31, 2009, total revenues amounted to $46.2 million, compared to $38.2 million quarter over quarter, and $52.5 million year over year. Of the total revenues, revenue from integrated contracts amounted to $44.0 million, and that of each segment was as follows:

    -- $29.6 million, or 67.2%, related to Industrial Automation & Control;
    -- Rail and subway was $10.7 million, or 24.2%, of which $8.4 million, or
       19.0%, was from Rail Signaling and Control projects, and $2.3 million,
       or 5.2%, was from Subway System Integration projects; and
    -- $3.7 million, or 8.6%, related to Nuclear Plant Control projects and
       miscellaneous.

As a percentage of total revenues, overall gross margin was 31.2% for the three months ended December 31, 2009, as compared to 34.6% for the prior year period, mainly due to gross margin for products sold decreased from 74.2% to 35.7% year over year. The gross margin for integrated contracts was 31.0% for the three months ended December 31, 2009, compared to 32.7% for the same period of the prior year.

For the three months ended December 31, 2009, selling expenses were $3.6 million, compared to $2.7 million year over year. The increase in selling expenses was mainly due to the Company's increased marketing activities. As a percentage to total revenues, selling expenses were 7.7% and 7.1% for the three months ended December 31, 2009 and September 30, 2009, respectively.

General and administrative expenses, excluding non-cash share compensation expenses, were $4.1 million for the quarter ended December 31, 2009, or 8.8% of total revenues, compared to $1.9 million, or 3.7%, for the same period of the prior year. The increase was mainly due to an increase of $0.8 million in allowance for doubtful accounts, an increase of $0.5 million in staff salaries and bonus, and an increase of $0.4 million in professional fee.

Research and development expenses were $3.4 million for the three months ended December 31, 2009, a 74.8% increase as compared to $1.9 million for the same period of the prior year. As a percentage to total revenue, R&D expenses were 7.4% and 3.7% for three months ended December 31, 2009 and 2008, respectively. The increase was mainly due to increased R&D activities.

For the three months ended December 31, 2009, non-GAAP net income attributable to Hollysys excluding non-cash share compensation expense was $8.1 million, or $0.16 per diluted share based on approximately 50.6 million shares outstanding, as compared to $11.1 million, or $0.25 per share based on approximately 44 million shares outstanding, reported in the prior year period. On a GAAP basis, net income attributable to Hollysys was $7.9 million, or $0.16 per diluted share based on approximately 50.6 million shares outstanding, compared to net loss of $5.9 million, or $(0.13) per diluted share based on 44 million shares outstanding, for the same period of the prior year.

Backlog Highlights

Hollysys' backlog as of December 31, 2009 was $219.7 million, compared to $187.5 million at September 30, 2009. The detailed breakdown for the backlog by segment is as followings:

   -- $107.6 million related to subway business, or 49.0% of the total
      backlog;
   -- $53.0 million related to industrial automation, or 24.1% of the total
      backlog;
   -- $53.9 million related to high-speed rail, or 24.5% of the total backlog;
   -- $5.2 million related to Nuclear and other miscellaneous contracts, or
      2.4% of the total backlog.

Cash Flow Highlights

Hollysys generated operating cash flow of $13.7 million for the three months ended December 31, 2009. Including investing and financing activities, the total net cash inflow for the three months ended December 31, 2009 was $8.3 million.

Balance Sheet Highlights

As of December 31, 2009, Hollysys' cash and cash equivalents were $138.9 million, compared to $130.6 million at September 30, 2009. Days Sales Outstanding ("DSO") for Q2 FY 2010 is 137 days, as compared to 157 days quarter over quarter. Inventory turnover is 58 days for quarter ended December 31, 2009, compared to 75 days quarter over quarters.

Outlook for FY 2010

Dr. Wang concluded, "Given our strong backlog level and sales pipeline, we are reiterating our revenue and non-GAAP net income guidance in the range of $185.9M to $192.2M and $30.3M and $31.4M respectively."

Conference Call

Management will discuss the current status of the Company's operations during a conference call at 9:00 AM ET/10:00 PM Beijing time on Thursday, February 11, 2010. Interested parties may participate in the call by dialing the following numbers approximately 10 minutes before the call is scheduled to begin and asking to be connected to the Hollysys Automation Technologies conference call. The conference call identification number is 52373507.

    1-866-519-4004 (USA)
    800-819-0121 (China Landline)
    400-620-8038 (China Mobile)
    + 65-67357955 (International)

In addition, a recording of the conference call will be accessible within 24 hours via Hollysys' website at: subway automation market, and 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.

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 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, please contact:

    Hollysys Automation Technologies, Ltd.
     Web:   http://www.hollysys.com
     Jennifer Zhang
     Investor Relations
     Phone: +86-10-5898-1386
     Email: investors@hollysys.com

    Or

     Serena Wu
     Investor Relations
     Phone: +1-646-593-8125
     Email: serena.wu@hollysys.com



                      HOLLYSYS AUTOMATION TECHNOLOGIES LTD.
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                 (In US Dollars)

                         Three months ended            Six months ended
                            December 31,                 December 31,
                         2009           2008          2009           2008
                     (Unaudited)    (Unaudited)   (Unaudited)    (Unaudited)
    Revenues
    Integrated
     contract
     revenue         $43,969,826    $50,224,953   $79,840,377    $86,183,341
    Products sales     2,193,281      2,301,260     4,516,338      3,647,422
    Total revenues    46,163,107     52,526,213    84,356,715     89,830,763

    Cost of
     integrated
     contracts        30,360,789     33,781,932    53,944,533     57,184,167
    Cost of
     products sold     1,409,204        593,712     1,808,782      1,416,208
    Gross profit      14,393,114     18,150,569    28,603,400     31,230,388

    Operating
     expenses
    Selling            3,573,479      2,650,876     6,299,120      5,416,241
    General and
     administrative    4,145,028     18,962,598     6,703,341     21,272,337
    Research and
     development       3,395,326      1,942,224     6,248,605      3,108,688
    VAT refunds and
     government       (5,617,990)    (2,535,529)   (7,759,870)    (4,107,917)
     subsidy
    Total operating
     expenses          5,495,843     21,020,169    11,491,196     25,689,349

    Income from
     operations        8,897,271     (2,869,600)   17,112,204      5,541,039

    Other income
     (expense), net     (104,264)       664,819        44,801        872,574
    Share of net
     gains of equity
     investees           363,689        611,218       599,974        385,455
    Interest
     expense, net       (242,729)      (262,976)     (595,532)      (595,659)
    Income before
     income taxes      8,913,967     (1,856,539)   17,161,447      6,203,409

    Income taxes
     expenses            101,808      1,433,715       921,806      2,216,987
    Net income         8,812,159     (3,290,254)   16,239,641      3,986,422

    Less: Net
     income attri-
     butable to
     non-controlling
     interest            864,370      2,608,463     1,794,294      3,784,879
    Net income
     attributable
     to Hollysys
     Automation
     Technologies
     Ltd.             $7,947,789    $(5,898,717)  $14,445,347       $201,543

    Weighted
     average number
     of common
     shares           49,942,614     43,964,353    49,942,614     43,953,484

    Weighted
     average number
     of diluted
     common shares    50,653,381     43,964,353    50,465,837     43,953,484

    Basic earnings
     per share
     attributable to
     Hollysys
     Automation
     Technologies Ltd.      0.16          (0.13)         0.29           0.00

    Diluted earnings
     per share
     attributable to
     Hollysys
     Automation
     Technologies Ltd.      0.16          (0.13)         0.29           0.00

    Other
     comprehensive
     income
    Net income         8,812,159     (3,290,254)   16,239,641      3,986,422
    Translation
     adjustments          (3,563)      (777,455)      117,899        851,302
    Comprehensive
     income            8,808,596     (4,067,709)   16,357,540      4,837,724

    Less:
     Comprehensive
     income
     attributable
     to non-
     controlling
     interest            864,967      2,517,936     1,813,243      3,880,183
    Comprehensive
     income
     attributable
     to Hollysys
     Automation
     Technologies
     Ltd.              $7,943,629   $(6,585,645)  $14,544,297       $957,541



                      HOLLYSYS AUTOMATION TECHNOLOGIES LTD.
                           CONSOLIDATED BALANCE SHEETS
                                 (In US Dollars)

                                                December 31,    September 30,
                                                     2009            2009
                                                 (Unaudited)     (Unaudited)
    ASSETS
     Current Assets
       Cash and cash equivalents                $138,934,585    $130,598,078
       Contract commitment deposit in banks        3,623,312       4,407,069
       Accounts receivable, net of allowance
        for doubtful accounts of
        $7,470,817 and  $6,742,484                62,471,834      63,571,474
       Cost and estimated earnings in excess
        of billings, net of allowance
        for doubtful accounts of $910,459 and
        $759,356                                  42,257,120      43,842,207
       Other receivables, net of allowance
        for doubtful accounts of
        $154,829 and $183,175                      4,173,793       4,255,909
       Advances to suppliers                       5,435,659       4,832,369
       Amount due from related parties             9,918,280       9,919,384
       Inventories, net of provision of
        $1,187,717 and $972,778                   19,704,487      19,286,897
       Prepaid expenses                              994,471       1,043,141
       Deferred tax assets                         1,282,775         820,007
     Total current assets                        288,796,316     282,576,535

     Property, plant and equipment, net           48,640,944      48,262,000
     Long term investments                        13,751,983      13,352,627
     Goodwill                                        284,936              --
     Long term deferred expenses                          --          76,515
     Deferred tax assets                             767,822         766,389

     Total assets                                352,242,001     345,034,066

    LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities
       Short-term bank loans                       1,464,493       1,464,343
       Bonds payable                              11,715,947              --
       Accounts payable                           34,789,135      37,161,317
       Deferred revenue                           26,507,895      25,961,044
       Accrued payroll and related expense         5,195,086       4,159,199
       Income tax payable                            822,727       2,047,086
       Warranty liabilities                        2,000,454       1,865,333
       Other tax payables                          7,283,233       8,793,827
       Accrued liabilities                         7,482,159       2,565,291
       Amounts due to related parties              2,901,648       2,263,833
       Deferred tax liabilities                      231,686         219,425
       Construction cost payable                   5,221,674       9,145,412
     Total current liabilities                   105,616,137      95,646,110

       Long-term bank loans                       36,612,334      36,608,581
       Long-term bonds payable                            --      11,714,746

     Total liabilities                           142,228,471     143,969,437

     Commitments and contingencies                        --              --



                      HOLLYSYS AUTOMATION TECHNOLOGIES LTD.
                           CONSOLIDATED BALANCE SHEETS
                                 (In US Dollars)

                                                 December 31,   September 30,
                                                     2009            2009
                                                 (Unaudited)     (Unaudited)
     Stockholder's equity
       Common stock, par value $0.001 per
        share, 100,000,000 shares authorized,
        49,942,614 and 49,942,614 shares
        issued and outstanding                        49,943          49,943
       Additional paid-in capital                130,393,281     130,262,262
       Appropriated earnings                      15,135,442      15,135,442
       Retained earnings                          27,677,601      19,729,812
       Accumulated comprehensive income -
        translation adjustments                   14,000,995      14,005,155
     Total Hollysys Automation Technologies
      Ltd. stockholder's equity                  187,257,262     179,182,614

       Non-controlling interest                   22,756,268      21,882,015
     Total equity                                210,013,530     201,064,629

     Total liabilities and equity               $352,242,001    $345,034,066



                      HOLLYSYS AUTOMATION TECHNOLOGIES LTD.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In US Dollars)

                                               Three months      Six months
                                                  ended             ended
                                               December 31,      December 31,
                                                   2009              2009
                                                (Unaudited)      (Unaudited)
    Cash flows from operating activities:
      Net income                                $8,812,159       $16,239,641
    Adjustments to reconcile net income
     to net cash provided by (used in)
     operating activities:
      Depreciation and amortization                971,288         1,587,024
      Allowance for doubtful accounts              889,674         1,411,469
      Provision for inventories                    214,939            73,577
      Loss on disposal of property, plant
       and equipment                               197,072           198,658
      Share of net gains from equity
       investees                                  (363,689)         (599,974)
      Amortization of expenses accrued for
       bond payable                                 15,300            30,603
      Stock-based compensation                     131,019           262,038
      Deferred tax assets (liabilities)           (451,940)       (1,069,568)
    Changes in operating assets and
     liabilities:
      Accounts receivable                          332,724        (7,192,151)
      Cost and estimated earnings in
       excess of billings                        1,433,983         8,671,194
      Inventories                                 (632,428)         (940,693)
      Advance to suppliers                        (603,290)        2,432,197
      Other receivables                            110,462            (1,859)
      Deposits and other assets                    893,645         2,316,728
      Amount due from related parties              263,492        (1,992,884)
      Accounts payable                          (2,758,472)       (3,829,489)
      Deferred revenue                             546,851         5,435,355
      Accrued liabilities                        5,795,085         5,956,543
      Amount due to related parties                637,815         1,436,965
      Tax payable                               (2,734,953)       (2,443,943)
      Net cash provided by operating
       activities                               13,700,736        27,981,431

    Cash flows from investing activities:
      Purchase of property, plant and
       equipment                                (5,082,049)       (7,817,666)
      Proceeds from disposing property,
       plant and equipment                           2,411             4,034
      Advance to related parties                   645,238           645,238
      Acquisition of long term investments      (1,000,337)       (1,000,337)
      Dividends from equity investees               58,568            58,568
      Acquisition of a subsidiary, net of
       cash acquired                                15,302            15,302
      Acquisition of equity interest from
       non controlling interest                         --          (438,275)
      Net cash used in investing
       activities                               (5,360,867)       (8,533,136)

    Cash flows from financing activities:
      Repayments of short-term loans                    --        (4,392,579)
      Repayments of long-term bank loans                --        (5,124,676)
      Net cash used in financing
       activities                                       --        (9,517,255)

     Effect of foreign exchange rate
      changes                                       (3,362)          120,879
     Net increase in cash and cash
      equivalents                               $8,336,507       $10,051,919

     Cash and cash equivalents, beginning
      of period                                130,598,078       128,882,666
     Cash and cash equivalents, end of
      period                                  $138,934,585      $138,934,585



    Reconcile GAAP Net Income (Loss) to Non-GAAP Net Income
    The following table provides more details on the reconciliations between
GAAP financial measures that are most directly comparable to non-GAAP
financial measures.

                               Three months ended        Six months ended
                                   December 31,            December 31,
                                2009         2008       2009         2008
                            (Unaudited) (Unaudited) (Unaudited)  (Unaudited)

    Net income (loss)
     attributable to
     Hollysys Automation
     Technologies Ltd.     $7,947,789  $(5,898,717) $14,445,347     $201,543
    Adjustments:
     Stock-based
      compensation cost
      for options             131,019       44,394      262,038       88,788
     Stock-based
      compensation cost
      for incentive shares         --   17,000,000           --   17,000,000
    Non-Gaap Net Income
     attributable to
     Hollysys Automation
     Technologies Ltd.     $8,078,808  $11,145,677  $14,707,385  $17,290,331

Hollysys was contracted to design, manufacture, and install its high-speed railway signaling products for the Zhengzhou-Xian railway line through two successive contracts, totaling to contract value of USD $37 million, or approximately 254 million RMB, including both the ground-based Train Control Centers (TCC) that are stationed along the railway lines, and the train-based Automatic Train Protections (ATP) that are installed on both fronts of the passenger trains. Hollysys' state-of-the-art high-speed railway signaling systems are deployed as a pivotal component for China's high-speed passenger railways with a designed running speed between 200 km/h to 350 km/h, ensuring operational safety of the high-speed traffic.

Dr. Changli Wang, CEO of Hollysys, commented, "We are very excited to announce the successful trial operation of our high-speed railway signaling systems for the Zhengzhou-Xian high-speed railway line, which is scheduled for commercial operation right before the Chinese New Year railway transport peak. Having our state-of-the-art automation and control systems installed for one of the world's fastest running high-speed rail lines is a further validation of our leading play in this exciting market segment in China. The Zhengzhou-Xian high-speed railway line is the second high-speed railway line launched in China that falls in the higher railway traveling speed category of 300 to 350 km per hour. As China continues to stay on track in achieving its 13,000 km high-speed railway build-out target by 2012, we expect the high- speed railway business unit to be the main growth driver of our business for the years to come. Hollysys will continue to leverage on its strong technological platform to further penetrate China's rail market, both in national and city rail segments, to increase long-term returns for our shareholders."

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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 200-250kph high-speed rail segment, and is one of only two automation control systems and products providers approved in the 300-350kph high-speed rail segment.

About Zhengzhou-Xian High-Speed Railway

The Zhengzhou-Xian Passenger Dedicated Line is a high-speed railway line connecting Zhengzhou, the capital city of Henan province, with Xian, the capital city of Shaanxi province. The line is designed for a traveling speed of up to 350 kilometers per hour. Construction work began on September 25, 2005, the railway is scheduled to be opened for service on February 6, 2010. The main line is 505 km long, with another 30 km extension connecting existing Longhai Railway from Xi'an North to Xianyang West. 10 railway stations are built along the line: New Yingyang, New Gongyi, Luoyang South, New Mianchi, Sanmenxia South, New Lingbao, New Huashan, New Weinan, New Lintong, and Xi'an North.

Safe Harbor

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 impact of the event on the Company's business and operations; 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 more information, please contact:

    Hollysys Automation Technologies, Ltd.
    http://www.hollysys.com

     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com

1000MW-level (1GW) ultra-supercritical power generating units are currently China's largest thermal power units on single installed capacity. This was a follow-on contract win for Hollysys, subsequent to several successful DCS applications on 600MW thermal power station projects of Beijing Guohua Electric Power Investment Co., Ltd. Hollysys' proprietary industrial DCS systems are applied in the continuous manufacturing processes to provide real-time monitoring and control for the production flow and to ensure production reliability, efficiency and safety.

Dr. Changli Wang, CEO of Hollysys, commented, "We are very proud to be the first domestic manufacturer to deliver our proprietary designed and manufactured industrial DCS to China's GW-level ultra-supercritical thermal power station. This is a strong validation of Hollysys' cutting-edge technology and leading position in China's industrial automation and control field. Our DCS application in the Taishan ultra-supercritical power plant is a strategic reference project that lays a solid foundation for Hollysys to further penetrate the high-end industrial automation marketplace, which are still largely foreign-dominated. We attribute our current leading position in China's industrial automation market to our strong R&D capabilities and in-depth industry know-how. We will continue to leverage on our core competencies to increase our market share in China's industrial automation field across various vertical market segments."

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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 200-250kph high-speed rail segment, and is one of only two automation control systems and products providers approved in the 300-350kph high-speed rail segment.

About Taishan Power Plant

Taishan Power Plant was constructed by Beijing Guohua Electric Power Investment Co., Ltd., and is located in the city of Taishan in Tonggu Bay of Guangdong Province. Phase I construction was of 5 sub-critical 600MW power generating units, which were all put into operation by 2006. Phase II was designed with 4 units of 1000MW ultra-supercritical power generating units. Taishan Power Plant is expected to reach a total installed capacity of 9000MW and will become China's largest coal-fired power plant.

Safe Harbor

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 impact of the contract on the Company's business and operations; 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 more information, please contact:

    Hollysys Automation Technologies, Ltd.
     Web: http://www.hollysys.com
     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com

     Or

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com

Hollysys Automation Technologies primarily operates through two of its operating subsidiaries in China: Beijing Hollysys Co., Ltd. (Beijing Hollysys) that primarily engages in the businesses of high-speed railway, subway, and nuclear automation; and Hangzhou Hollysys Co., Ltd. (Hangzhou Hollysys) which focuses in the industrial automation business. The acquisition of the minority interests of 24.11% will make Beijing Hollysys a wholly-owned subsidiary of the Company.

Beijing Hollysys and Rilin also entered into a strategic cooperation agreement to supply Hollysys' automation and control technologies and products to the pertaining businesses of Rilin Group, especially in the wind power, seaport construction and operation and shipbuilding fields.

Dr. Changli Wang, CEO of Hollysys, commented, "We are very pleased to announce the minority interests buyout in Beijing Hollysys. With Hollysys' leading position in the national high-growth infrastructure sectors of high-speed rail, nuclear, and subway automation, Beijing Hollysys is expected to lead the revenue and earnings growth of the Company with substantial growth in the years to come. The minority interests buyout initiative will enable the Company to fully enjoy the earnings power of its high-growth businesses, and to reduce its management costs through more streamlined decision making processes."

"We are also very excited to form a strategic partnership with Rilin group to supply our industry-leading automation and control solutions and products to all applicable business lines of Rilin Group, which provides Hollysys with valuable opportunities to enter and establish track records in some of the exciting business segments such as wind power and shipbuilding industries. Leveraging on its core proprietary automation and control technologies, Hollysys has already proved its highly scalable business model by entering and taking leadership in some of the most attractive end markets in China today. Hollysys will continue to enter into new high-growth business segments to further expand our market share in China's automation and control field, through both organic expansion and acquisition, to create long term value for our shareholders."

Mr. Peter Li, CFO of Hollysys, also commented, "Buying out minority interests in Beijing Hollysys is a highly accretive transaction to the NASDAQ-listing entity, considering the minority interests related earnings dilution of USD 5.2 million in fiscal 2009 ended June 30, 2009. The transaction is expected to be completed in the March quarter of 2010."

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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 200-250kph high-speed rail segment, and is one of the only two automation control systems and products providers approved in the 300-350kph high-speed rail segment.

About China Rilin Group

Rilin Group is a large China-based conglomerate with its business operations covering investment management, construction, decoration, port management, waterway engineering, shipbuilding industry, modern logistics, cereal processing, paper industry, real-estate, building materials, and cultural industry. Rilin has 16 wholly owned and controlled subsidiaries located in countries and regions including South Korea, Japan, North Korea, Hong Kong, Beijing, and Shanghai. Rilin engages in the shipbuilding and repair businesses through one of its subsidiaries, Dandong Shipbuilding Heavy Industry Co., Ltd. Rilin also owns the Dandong Port Corp., a large modern port in the north-east region of China that currently operates 20 productive berths, and plans to further invest 6.4 billion RMB in the next five years for capacity expansion. Rilin also plans to invest in the wind power market.

Safe Harbor

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 impact of the transaction on the Company's business and operations; 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 more information, please contact:

    Hollysys Automation Technologies, Ltd.
     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com
     Web:   http://www.hollysys.com

    Macquarie Emerging Leaders Corporate Day
     Event:        One-on-One meetings
     Date:         Jan. 27, 2010
     Location:     Mandarin Oriental Hotel
                   5 Connaught Road, Central, Hong Kong
     Participants: Peter Li, CFO
                   Serena Wu, Investor Relations Manager

    Nomura Nuclear/Gas Corporate Day
     Event:        One-on-One meetings
     Date:         Jan. 28, 2010
     Location:     Nomura Office
                   30/F Two International Finance Centre, Central, Hong Kong
     Participants: Peter Li, CFO
                   Serena Wu, Investor Relations Manager

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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.

    For more information, please contact:

     Hollysys Automation Technologies, Ltd.
     Web: http://www.hollysys.com

     Jennifer Zhang
     Investor Relations
     Phone: +86-10-5898-1386
     Email: investors@hollysys.com

     Or

     Serena Wu
     Investor Relations
     Phone: +1-646-593-8125
     Email: serena.wu@hollysys.com

Dr. Changli Wang, CEO of Hollysys, commented, "We are pleased to commence supplying the 2nd batch of the Conventional Island automation and control products for the #1 and #2 reactors of the Ningde Nuclear power station, which is being built by our nuclear JV partner, China Guangdong Nuclear Power Holding Co. As China continues to implement the ambitious nuclear build-out plan with more emphasis on domestic components, we expect to leverage on our proprietary nuclear automation technology and strategic alliance with China's largest nuclear operator to further establish Hollysys' leading position in this area."

The Ningde nuclear power station in Fujian province is designed to have six one-gigawatt (GW) pressurized water reactors using CGNPC's proprietary CPR-1000 technology, with the total estimated cost at around USD $13 billion, or RMB 90 billion.

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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.

About China Guangdong Nuclear Power Holding Co., Ltd (CGNPC)

China Guangdong Nuclear Power Holding Co., Ltd (CGNPC) is a state-owned nuclear power corporation under Assets Supervision and Administration Commission (SASAC) of the State Council of China. CGNPC was established in 1994 with nuclear power as its core business. With CGNPC as its core enterprise, China Guangdong Nuclear Power Group (CGNPG) is comprised of more than twenty wholly-owned or controlling subsidiaries.

About China Techenergy Co., Ltd. (CTEC)

China Techenergy Co., Ltd. (CTEC) is a joint venture co-funded by China Guangdong Nuclear Power Holding Co., Ltd. (CGNPC) and Beijing Hollysys Co., Ltd. (Hollysys) in October, 2005. The company is engaged in engineering design of digital Instrument &Control systems, system integration, and technical services for nuclear power plants in China. Since its inception, the company has been dedicated to assimilating cutting-edge technologies from global renowned nuclear players through project cooperation and technical exchanges, and developing its proprietary technologies for the nuclear safety-level control. CTEC employs over 500 people and has over ten years of professional experience in nuclear power I&C systems in all nuclear power plants in China either under construction or already in service.

Safe Harbor

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 impact of the Company's contract signing on the Company's business and operations; 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 more information, please contact:

    Hollysys Automation Technologies, Ltd.
    Web:   http://www.hollysys.com

    Jennifer Zhang
    Investor Relations
    Phone: +86-10-5898-1386
    Email: investors@hollysys.com

    Or

    Serena Wu
    Investor Relations
    Phone: +1-646-593-8125
    Email: serena.wu@hollysys.com

Hollysys will supply its high-speed railway on-ground signaling control product TCCs for the 72 kilometers Chengdu-Guanxian railway line, which is the first inter-city high-speed railway line built in China. The line is designed with a traveling speed of 200kph, with 12 railway stations connecting Chengdu, Pixian County, and Dujiangyan City, in the Sichuan Province of China. Hollysys' on-ground signaling system TCC is one of the major product offerings of the Company's product portfolio in the high-speed railway sector, which works together with the on-board signaling system ATP (Automatic Train Protection), to ensure the safe and reliable operation of the high-speed railway traffic.

Dr. Changli Wang, CEO of Hollysys, commented, "We are very pleased to win the follow-on Chengdu-Guanxian railway contract, subsequent to our previous contract win in China's southwest region on the Dacheng high-speed railway line. The new contract win is a solid recognition from China's Chengdu Railway Bureau, on Hollysys' strong project implementation capabilities and high-quality TCC products supplied for the previous Dacheng line, for which we completed all the delivery within two months horizon to accommodate the tight commissioning schedule. This follow-on project for Hollysys to work with China's Chengdu Railway Bureau again will further strengthen our presence in the country's southwest region railway build-out. As China's high-speed railway network continues to expand, a lot more inter-city transit lines will be built in the next few years. As one of the leading players in China's high-speed railway signaling segment, Hollysys will continue to take its fair share in this booming marketplace, and to further strengthen its leadership position going forward."

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.

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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.

Safe Harbor

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 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 HLS' 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 more information, please contact:

    Hollysys Automation Technologies, Ltd.
     http://www.hollysys.com

     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com

Under the terms of the contract signed, Hollysys is to provide engineering, procurement, and construction (EPC) services for the Changping Line subway signaling systems, including system design, procurement, manufacture, inspection, testing, commissioning, personnel training. The Changping Line of the Beijing subway network is 31.24 kilometers in length with 11 stops, with Phase I to be completed in 2010 and Phase II in 2012.

Dr. Changli Wang, CEO of Hollysys, commented, "We are very excited to set our foothold in China's fast growing subway signaling market by our first-ever contract win in the subway signaling market after 4 years of constant effort. Through hands-on project implementation for the Changping Line signaling systems, Hollysys can further expedite the R&D process in developing our proprietary technologies in this field, which in turn, will substantially improve our gross margin and further strengthen our leadership position in the subway automation sector. China's ongoing subway expansion ushered in a golden era for local-based technologies and products in the subway market. With our established brand-name awareness in the subway market, Hollysys will continue to accelerate the development of localized subway signaling products by leveraging on the technologies deployed in the high-speed railway signaling field to achieve further breakthroughs. The historical growth pattern of Hollysys has demonstrated a strong track record for the company to enter, to penetrate, and to take leading positions in high growth market segments such as high-speed railway and nuclear industries. We will continue to leverage on our core competency to capture our fair share in other fast growing sectors, both in China and in the world at large, to continue enhancing long-term returns for our shareholders."

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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.

About Beijing Changping Subway Line

The Changping Line of the Beijing Subway is a rapid transit subway line in northern Beijing. The line will run north from the Xi'erqi station on Line 13 to the Thirteen Tombs Scenic Area, connecting central Changping District with Beijing subway network. The line will be 31.24 km long with 11 stations. The construction will be completed in two phases. Phase I will feature 21.24 km and 7 stations in the south from Xi'erqi to Chengnan. Phase II will complete the remaining northern portion, about 10 km and 5 stations. Phase I is set to be completed by the end of 2010, and Phase II is scheduled for completion by 2012.

About Beijing Mass Transit Railway Operation Corp. Ltd.

Beijing Mass Transit Railway Operation Co., Ltd. is a wholly state owned operator mainly responsible for the construction of new subway lines approved by the Beijing municipal government. The company's operational management includes structural and construction design, tender procurement, implementation, acceptance testing, and commissioning for the subway projects. At present, the lines run by the company which has more than 10,000 employees include: Line 1, Line 2, Line 13 and Line Ba-Tong in Beijing.

Safe Harbor

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 impact of the Company's contract signing on the Company's business and operations; 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 more information, please contact:

    Contact information:
     Hollysys Automation Technologies, Ltd.
     Web: http://www.hollysys.com

     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com

    Or

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com

    Bank of America Merrill Lynch China Investment Summit

    Event:        Corporate Presentation, Q&A, One-on-One meetings
    Date:         Nov. 4 - Nov. 6, 2009
    Location:     The Ritz-Carlton
                  Beijing, China
    Participants: Peter Li, CFO
                  Serena Wu, Investor Relations Manager

About Hollysys Automation Technologies, Ltd. (NASDAQ: HOLI - News)

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway and nuclear industries. Its proprietary technologies are applied in product lines, including Distributed Control Systems (DCS) and Programmable Logic Controllers (PLC), high-speed railway Train Control Centers (TCC) and Automatic Train Protection (ATP), and safety control product NMS 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.

For more information, please contact: Hollysys Automation Technologies, Ltd. http://www.hollysys.com Jennifer Zhang Investor Relations Tel: +86-10-5898-1386 Email: investors@hollysys.com Serena Wu Investor Relations Tel: +1-646-593-8125 Email: serena.wu@hollysys.com

The Company will host a conference call at 9:00 a.m. ET /10:00 p.m. Beijing Time on November 12, 2009, to discuss the financial results for the fiscal 2010 first quarter and its business outlook for the rest of fiscal year 2010.

Joining Mr. Peter Li, Chief Financial Officer of Hollysys Automation Technologies, will be Dr. Changli Wang, Chief Executive Officer.

To participate, please call the following numbers ten minutes before the scheduled start of the call. The conference call identification number is 38764131.

    1-866-519-4004 (USA)
    800-819-0121 (China Landline)
    400-620-8038 (China Mobile)
    + 65-67357955 (International)

In addition, a recording of the conference call will be accessible within 24 hours via Hollysys' website at:

http://www.hollysys.com
Jennifer Zhang
Investor Relations
Tel: +86-10-5898-1386
Email: investors@hollysys.com

Serena Wu
Investor Relations
Tel: +1-646-593-8125
Email: serena.wu@hollysys.com
]]> message_3717 27 Oct 2009 12:00:00 GMT http://chinasecurities.com/ir/hls/messages/3717 BEIJING, Oct. 27 /PRNewswire-Asia-FirstCall/ -- Hollysys Automation Technologies, Ltd. (Nasdaq: HOLI - News; "Hollysys" or the "Company"), a leading provider of automation and control technologies and applications in China, today announced that its proprietary high-speed railway on-board control ATP product has been certified to safety integrity level (SIL) 4, according to the CENELEC (European Committee for Electrotechnical Standardization) standards. This certification, being the first granted to a Chinese local company for the railway ATP product, further extends Hollysys' leadership position in providing safety-critical technology and products for the railway signaling sector.

Hollysys' ATP is designed to work together with Hollysys' Train Control Center (TCC), which is the ground control of the railway signaling system, to provide a well integrated control for the train operation and provide full protection and safety for the high-speed railway traffic. It receives line data, speed limit ahead, operation status, and route instructions collected from the ground control system, and combines with train parameters to produce train operation protection curves to ensure the safe operation of the train. The on-board control ATP also has over-speed protection functions, which outputs the braking signal to guarantee the safe operation of the train when the train is over-speeding or detects a possible collision.

SIL4 certification process involves assessment of every product development phase of related hardware and software components, including the specification and demonstration of reliability, availability, maintainability and safety (RAMS), software for railway control and protection systems, and safety related electronic systems.

Dr. Changli Wang, CEO of Hollysys, commented, "We are very proud that our proprietary high-speed rail ATP product has been certified under the most stringent safety standard in the world. It is a strong validation of Hollysys' R&D capabilities in developing its proprietary products in its leading end-markets. The SIL4 certification laid a foundation for Hollysys' proprietary high-speed railway ATP products to enter the global arena, and we expect to further enhance our market position in the domestic marketplace through getting more of our safety products in high-speed railway and subway segments certified to world-class standards. We will continue to leverage on our strong R&D platform and market penetration capabilities to strengthen our leading position in the existing end-markets, and to further explore new exciting end-markets both domestically and internationally."

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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.

About Safety Integrity Level (SIL)

Safety Integrity Level (SIL) is a measurement of performance required for a Safety Instrumented Function (SIF). Four SILs are defined, with SIL4 being the most stringent and SIL1 being the least. A SIL is determined based on a number of quantitative factors in combination with qualitative factors such as development process and safety life cycle management. The International Electrotechnical Commission (IEC) and European Committee for Electrotechnical standardization (CENELEC) standards define SIL using requirements grouped into two broad categories: hardware safety integrity and systematic safety integrity. A device or system must meet the requirements for both categories to achieve a given SIL.

Safe Harbor

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 impact of the certification on the Company's business and operations; 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 more information, please contact:

     Hollysys Automation Technologies, Ltd.
     Web:   http://www.hollysys.com

     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com

     Or

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com

   BNP Paribas Securities Asia's 16th Annual China Conference
    Event:         Corporate Presentation, Q&A, One-on-One meetings
    Date:          Oct. 14 - 16, 2009
    Location:      Sheraton Hotel
                   Changsha, China
    Participants:  Serena Wu, Investor Relations Manager

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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.

Contact information: Hollysys Automation Technologies, Ltd. www.hollysys.com Jennifer Zhang Investor Relations (8610) 5898-1386 investors@hollysys.com Or Serena Wu Investor Relations 1-646-593-8125 serena.wu@hollysys.com

    CLSA Corporate Access Day
    Event:        One-on-One meetings
    Date:         Oct. 8 - 9, 2009
    Location:     JW Marriott
                  Hong Kong
    Participants: Peter Li, CFO
                  Serena Wu, Investor Relations Manager

    Macquarie Asia Pacific Infrastructure & Transportation Conference
    Event:        Corporate Presentation, Q&A, One-on-One meetings
    Date:         Dec. 7 - 8, 2009
    Location:     The Mandarin Oriental Hotel
                  Hong Kong
    Participants: Peter Li, CFO
                  Serena Wu, Investor Relations Manager

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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.

    For more information, please contact:

    Hollysys Automation Technologies, Ltd.
     http://www.hollysys.com
     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com

    OR

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com

Under the three-year contract, Hollysys is committed to provide its proprietary subway signaling products to Tongji University's pilot railway line, and entitled to conduct test runs of its proprietary subway products, including signaling systems, on this pilot line. The intended use of the 2.1 km pilot line, built by the Railway and Urban Rail Transit Institute of Shanghai Tongji University, is to accelerate China's localization of urban transportation technologies by meeting experimental needs of trial operations for trains. This pilot line of Tongji University will eventually form a portion of the 11th line of the Shanghai Subway Network.

Dr. Changli Wang, CEO of Hollysys, commented, "We are very pleased to cooperate with Tongji University to access its pilot railway line in testing our proprietary subway signaling systems. Commercial environment testing is a prerequisite for commercializing our proprietary signaling products. Tongji Universtiy's utilization of our signaling products for its pilot railway line is a strong validation of Hollysys' strong brand name and recognition. We hope this working relationship will result in the further cooperation of establishing a joint R&D laboratory with Tongji University to co-develop urban transit-related automation and control technologies. By leveraging Tongji University's academic resources and infrastructure platform, Hollysys will continue to make progress in developing and commercializing our proprietary technologies in the subway sector."

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with nine sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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.

About the Institute of Railway and Urban Rail Transit of Tongji University

The Institute of Railway and Urban Rail Transit of Tongji University, Shanghai, China, is mainly engaged in teaching and researching works in the field of equipment and facilities of railway transportation such as intercity rail, metro, LRV, and maglev vehicle, etc. It is committed to develop innovative, convenient, and environmental-friendly public transportation systems. The focus areas of the Institute include: vehicle dynamics, vehicle safety technology, vehicle dependability technology, train breaking technology, the relationship between wheel & rail, rail track engineering, electric traction and control technology, train control and fault diagnostic technology, information transmission and display technology.

Safe Harbor

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 impact of the Company's contract signing on the Company's business and operations; 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 more information, please contact:

    Hollysys Automation Technologies, Ltd.
     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com
     Web:   http://www.hollysys.com

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com

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BEIJING, Sept. 3 /PRNewswire-Asia-FirstCall/ -- Hollysys Automation Technologies, Ltd. (Nasdaq: HOLI - News; "Hollysys" or the "Company"), a leading provider of automation and control technologies and applications in China, today announced its contract signing with China Techenergy Co., Ltd. (CTEC), to supply its proprietary conventional island automation and control products to Ningde Nuclear Power Station. CTEC is a 50-50 joint venture by Hollysys Automation Technologies and China Guangdong Nuclear Power Holding Co., Ltd. (CGNPC). The contract is valued at USD $2.25 million, or RMB 15.4 million, which is the first batch of a series of product supply contracts granted to Hollysys for Ningde Nuclear Power Station project.

Hollysys is contracted to supply its proprietary conventional island nuclear automation and control products for #1 and #2 reactors of Ningde Nuclear power station. The Ningde nuclear power station in Fujian province is funded and constructed by a consortium of power corporations led by China Guangdong Nuclear Power Holding Co. The plant is built to have six one-gigawatt (GW) pressurized water reactors using CGNPC's proprietary CPR-1000 technology, with the total estimated cost at around USD $13 billion, or RMB 90 billion.

Dr. Changli Wang, CEO of Hollysys, commented, "It is another testament to Hollysys' leading position in China's nuclear automation and control field to supply our automation and control products for the conventional island of Ningde nuclear power station. We expect to see continuous flow of contracts to supply our proprietary conventional island nuclear automation and control products to the nuclear power stations built by China Guangdong Nuclear Power Holding Co. With our strategic alliance in place with the leading nuclear operator in China, Hollysys will continue to capture its fair share in China's nuclear build-out in the next decade."

Mr. Qian Zhimin, Chairman of CGNPC, also commented, "The nuclear station automation and control system is a pivotal component to nuclear station, as the brain and nerve system is to the human body. We are very pleased that the localization degree for Ningde Nuclear project will achieve a breakthrough for all GW-level nuclear stations in China. The proportion of domestic components for #1 and #2 reactors is expected to account for 75%."

Another comment from government senior official Mr. Zhang Guobao further validated the milestone achieved in China's nuclear development through Ningde project. In the equipment procurement signing ceremony held in July, 2009, Mr. Zhang commented, "China Guangdong Nuclear Power Holding Corporation has played an important role in China's progress in localizing nuclear technology and increasing nuclear electricity generation." Mr. Zhang is the Deputy Director of China's National Development and Reform Commission, and also the General Secretary of the National Energy Bureau in China.

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC), high-speed railway Train Control Center (TCC) and Automatic Train Protection (ATP), subway supervisory and control platform (SCADA), and nuclear conventional island automation and control products. Hollysys is the largest SCADA systems supplier to China's subway automation market, and 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.

About China Guangdong Nuclear Power Holding Co., Ltd (CGNPC)

China Guangdong Nuclear Power Holding Co., Ltd (CGNPC) is a state-owned nuclear power corporation under Assets Supervision and Administration Commission (SASAC) of the State Council of China. CGNPC was established in 1994 with nuclear power as its core business. With CGNPC as its core enterprise, China Guangdong Nuclear Power Group (CGNPG) is comprised of more than twenty wholly-owned or controlling subsidiaries.

About China Techenergy Co., Ltd. (CTEC)

China Techenergy Co., Ltd. (CTEC) is a joint venture co-funded by China Guangdong Nuclear Power Holding Co., Ltd. (CGNPC) and Beijing Hollysys Co., Ltd. (Hollysys) in October, 2005. The company is engaged in engineering design of digital Instrument &Control systems, system integration, and technical services for nuclear power plants in China. Since its inception, the company has been dedicated to assimilating cutting-edge technologies from global renowned nuclear players through project cooperation and technical exchanges, and developing its proprietary technologies for the nuclear safety-level control. CTEC employs over 500 people and has over ten years of professional experience in nuclear power I&C systems in all nuclear power plants in China either under construction or already in service.

Safe Harbor

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 impact of the Company's contract signing on the Company's business and operations; 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 more information, please contact:

    Hollysys Automation Technologies, Ltd.
     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com
     Web:   http://www.hollysys.com

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com

    CLSA's 14th China Forum
     Event:        Corporate Presentation, Q&A, One-on-One meetings
     Date:         Sep. 14 - 15, 2009
     Location:     Grand Hyatt
                   Shanghai, China
     Participants: Peter Li, CFO
                   Serena Wu, Investor Relations Manager

    Susquehanna Financial Group's Third Annual Beijing Management Summit
     Event:        Corporate Presentation, Q&A, One-on-One meetings
     Date:         Sep. 16 - 17, 2009
     Location:     Grand Hyatt
                   Beijing, China
     Participants: Peter Li, CFO
                   Serena Wu, Investor Relations Manager

    Bank of America Merrill Lynch's China Clean Energy Industry Day
     Event:        Corporate Presentation, Q&A, One-on-One meetings
     Date:         Oct. 12, 2009
     Location:     Merrill Lynch Client Centre
                   Hong Kong
     Participant:  Serena Wu, Investor Relations Manager

    Roth Capital's 2009 China Conference
     Event:        Corporate Presentation, Q&A, One-on-One Meetings
     Date:         Oct. 12 - 14, 2009
     Location:     Fontainebleau Miami Beach, FL
                   USA
     Participant:  Peter Li, CFO

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway and nuclear industries. Its proprietary technologies are applied in product lines, including Distributed Control Systems (DCS) and Programmable Logic Controllers (PLC), high-speed railway Train Control Centers (TCC) and Automatic Train Protection (ATP), and safety control product NMS 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.

    For more information, please contact:

    Hollysys Automation Technologies, Ltd.
     http://www.hollysys.com
     Jennifer Zhang
     Investor Relations
     Tel:   +86-10-5898-1386
     Email: investors@hollysys.com

    Or

     Serena Wu
     Investor Relations
     Tel:   +1-646-593-8125
     Email: serena.wu@hollysys.com

Hollysys Automation Technologies, Ltd. (Nasdaq: HOLI - News; "Hollysys" or the "Company"), a leading provider of automation and control technologies and applications in China, today announced its unaudited financial results for its fiscal forth quarter and fiscal year 2009 ended June 30, 2009 (see attached tables).

Dr. Changli Wang, Hollysys' Chief Executive Officer, stated, "We are very pleased to report that we have concluded fiscal 2009 with another quarter of solid results. The rapid growth of our higher margin and higher growth business units of high-speed railway, subway, and nuclear was the dominant driver underpinning our revenue and net income growth for fiscal 2009.

"During this quarter, Hollysys won a contract to supply its train control center products (TCC) to China's Dacheng high-speed railway line of Chengdu Railway Bureau in April, and had completed delivering all the TCC components by the end of May. This contract win signified Hollysys' foothold in China's southwest region of high-speed railway market, as Dacheng line forms part of the Shanghai-Wuhan-Chengdu high-speed railway horizontal in the national high-speed railway network build-out plan. In addition, the expedited delivery requirements of the Dacheng railway project evidenced that China's ramped up stimulus spending on infrastructure has resulted in material impacts on our railway business. The successful delivery, installation, and commissioning of the railway line within such short timeframe fully demonstrated Hollysys team's strong project implementation capability and flexible production system, which will continue to remain as one of the key competitive differentiators to ensure Hollysys' leading position in China's high-speed railway build-out," commented by Dr. Wang.

Dr. Wang continued, "We are honored to be named as one of "China's Top Ten Automation Enterprises" by the Chinese Association of Automation, together with ABB, Emerson, and GE, at the 2009 Chinese Automation Industries Event (CAIE) held in May. This award is a validation of Hollysys' leading position in the automation field in China. As a technology-driven company, we dedicate significant resources to our R&D activities, which are the cornerstone to our dominant position in high-speed rail, nuclear and industrial automation. Hollysys will continue to leverage its strong R&D capabilities to enter and penetrate the market segments that are currently dominated by foreign players, and to continue delivering superb financial performance and creating long-term value for our shareholders."

Fourth Quarter and Fiscal Year 2009 Unaudited Financial Results Summary

To facilitate a clear understanding of Hollysys operational result, a summary of unaudited non-GAAP financial results is included below.

In USD thousands, except share numbers and EPS Three Months ended June 30, June 30, % 2009 2008 Change Revenues $44,772 31,929 40.2% Integrated Contract Revenue $41,791 28,883 44.7% Products Sales $2,981 3,046 -2.1% Cost of Revenues $29,779 20,523 45.1% Gross Profit $14,993 11,406 31.4% Total Operating Expenses $6,905 4,313 60.1% Selling $2,327 2,652 -12.3% General and Administrative $2,752 2,186 25.9% Research and Development $3,593 972 269.5% VAT Refunds $(1,767) (1,497) 18.1% Income from Operations $8,088 7,093 14.0% Non-GAAP Net Income $6,342 5,855 8.3% Basic Non-GAAP EPS $0.14 0.13 3.5% Diluted Non-GAAP EPS $0.14 0.13 3.0% Amortization of discount and interest on notes payable $-- -- related to bridge loan Stock-based Compensation Cost $22,240 -- for Incentive Shares Stock-based Compensation Cost $131 37 253.8% for Options Net Income (GAAP) $(16,029) 5,818 -375.5% Basic GAAP EPS $(0.35) 0.13 -363.2% Diluted GAAP EPS $(0.35) 0.13 -361.9% Basic Weighted Average Common 45,986,570 43,942,614 4.7% Shares Outstanding Diluted Weighted Average 46,233,857 43,944,911 5.2% Common Shares Outstanding Year ended June 30, June 30, % 2009 2008 Change Revenues $157,502 121,499 29.6% Integrated Contract Revenue $149,303 112,357 32.9% Products Sales $8,199 9,142 -10.3% Cost of Revenues $102,924 84,871 21.3% Gross Profit $54,578 36,628 49.0% Total Operating Expenses $22,329 16,857 32.5% Selling $10,022 9,680 3.5% General and Administrative $9,422 9,504 -0.9% Research and Development $8,829 3,834 130.3% VAT Refunds $(5,944) (6,161) -3.5% Income from Operations $32,249 19,771 63.1% Non-GAAP Net Income $25,708 18,652 37.8% Basic Non-GAAP EPS $0.57 0.50 15.5% Diluted Non-GAAP EPS $0.57 0.50 15.3% Amortization of discount and interest on notes payable -- 3,244 -100.0% related to bridge loan Stock-based Compensation Cost $39,240 17,000 130.8% for Incentive Shares Stock-based Compensation Cost $319 85 277.7% for Options Net Income (GAAP) $(13,851) (1,677) 725.9% Basic GAAP EPS $(0.31) (0.04) 591.9% Diluted GAAP EPS $(0.31) (0.04) 590.8% Basic Weighted Average Common 44,950,833 37,658,437 19.4% Shares Outstanding Diluted Weighted Average 45,023,755 37,658,437 19.6% Common Shares Outstanding

For the three months ended June 30, 2009, total revenues increased 40.2% to $44.8 million, from $31.9 million in the comparable prior fiscal year period. Of the total revenues, revenue from integrated contracts increased 44.7% to $41.8 million, from $28.9 million for the same period of the prior year. The Company's integrated contract revenue by segment was as follows:

-- $18.8 million, or 45.0%, related to Industrial Automation & Control; -- Rail and subway was $22.8 million, or 54.5%, of which $15.4 million, or 36.7%, was from Rail Signaling and Control projects, and $7.4 million, or 17.8%, was from Subway System Integration projects; and -- $0.2 million, or 0.5%, related to Nuclear Plant Control projects.

For fiscal year 2009, total revenues increased 29.6% to $157.5 million, from $121.5 million in the prior fiscal year. Of the total revenues, revenue from integrated contracts increased 32.9% to $149.3 million, from $112.4 million for the prior fiscal year. The Company's integrated contract revenue by segment was as follows:

-- $81.5 million, or 54.6%, related to Industrial Automation & Control; -- Rail and subway was $59.7 million, or 40.0%, of which $31.6 million, or 21.2%, was from Rail Signaling and Control projects, and $28.1 million, or 18.8%, was from Subway System Integration projects; and -- $6.3 million, or 4.2%, related to Nuclear Plant Control projects.

For the three months ended June 30, 2009, Hollysys' total cost of revenues was $29.8 million, compared to $20.5 million for the same period of the prior year. The cost of integrated contracts increased to $28.1 million, or 67.2% of integrated contract revenue, for the three months ended June 30, 2009, compared to $19.4 million, or 67.0%, for the same period of the prior year.

For fiscal year 2009, Hollysys' total cost of revenues was $102.9 million, compared to $84.9 million for the prior year. The cost of integrated contracts increased to $99.4 million, or 66.6% of integrated contract revenue, for the year ended June 30, 2009, compared to $81.4 million, or 72.5%, for the prior year.

As a percentage of total revenues, overall gross margin was 33.5% for the three months ended June 30, 2009, as compared to 35.7% for the prior year period, mainly due to gross margin for products sold reduced from 61.9% to 42.5% year over year. The gross margin for integrated contracts was 32.8% for the three months ended June 30, 2009, compared to 33.0% for the same period of the prior year.

As a percentage of total revenues, overall gross margin was 34.7% for fiscal year 2009, significantly increased from 30.1% for the prior year. The gross margin for integrated contracts was 33.4% for fiscal 2009, compared to 27.5% year over year, mainly due to the revenue mix shifting towards higher margin businesses.

For the three months ended June 30, 2009, selling expenses were $2.3 million, compared to $2.7 million year over year, and $2.3 million quarter over quarter. As a percentage to total revenues, selling expenses were 5.2% and 8.3% for the three months ended June 30, 2009 and 2008, respectively.

For fiscal 2009, selling expenses were $10.0 million, compared to $9.7 million for the prior year. As a percentage of total revenues, selling expenses were 6.4% and 8.0% for year ended June 30, 2009 and 2008, respectively.

General and administrative expenses excluding non-cash stock-based compensation expense were $2.8 million for quarter ended June 30, 2009, or 6.1% as a percentage of total revenues, compared to $2.2 million, or 6.8%, for the same period of the prior year. Including the non-cash stock compensation cost recorded on a GAAP basis, G&A expenses were $25.1 million and $2.2 million for three months ended June 30, 2009 and 2008, respectively.

General and administrative expenses excluding non-cash stock-based compensation expense were $9.4 million, or 6.0% as a percentage of total revenues, for fiscal year 2009, as compared to $9.5 million, or 7,8%, year over year. Including the non-cash stock compensation recorded on a GAAP basis, G&A expenses were $49.0 million and $26.6 million for fiscal year 2009 and 2008, respectively.

Research and development expenses were $3.6 million for the three months ended June 30, 2009, compared to $1.0 million for the same period of the prior year. As a percentage to total revenue, R&D expenses were 8.0% and 3.0% for three months ended June 30, 2009 and 2008, respectively. The increase was mainly due to increased R&D activities.

Research and development expenses were $8.8 million for fiscal 2009, compared to $3.8 million for the prior year. As a percentage to total revenue, R&D expenses were 5.6% and 3.2% for year ended June 30, 2009 and 2008, respectively. The increase was mainly due to increased R&D activities.

For the three months ended June 30, 2009, non-GAAP net income excluding non-cash stock compensation cost was $6.3 million, or $0.14 per diluted share based on 46 million shares outstanding. This represents an increase of $0.4 million, or 8.3%, over the $5.9 million, or $0.13 per share based on 43 million shares outstanding, reported in the prior year period. On a GAAP basis, net income was $(16.0) million, or $(0.35) per diluted share based on 46 million shares outstanding, compared to net income of $5.8 million, or $0.13 per diluted share based on 44 million shares outstanding, for the same period of the prior year.

For fiscal year 2009, non-GAAP net income excluding non-cash stock compensation cost was $25.7 million, or $0.57 per diluted share based on 45 million shares outstanding. This represents an increase of $7.0 million, or 37.8%, over the $18.7 million, or $0.50 per share based on 38 million shares outstanding, reported in the prior year period. On a GAAP basis, net income was $(13.9) million, or $(0.31) per diluted share based on 45 million shares outstanding, compared to net income of $(1.7) million, or $(0.04) per diluted share based on 38 million shares outstanding, for the prior year.

Backlog Highlights

Hollysys' backlog as of June 30, 2009 was $188.9 million, compared to $177.7 million at March 31, 2009, and $178.5 million at June 30, 2008. The detailed breakdown for the backlog by segment is as followings:

-- $65.3 million related to Industrial Automation & Control, or 34.7% of the total backlog; -- $60.1 million related to System Integration projects for Subway, or 31.8% of the total backlog; -- $58.1 million related to Rail Signaling and Control projects, or 30.7% of the total backlog; -- $5.4 million related to Nuclear and other miscellaneous contracts, or 2.8% of the total backlog.

Cash Flow Highlights

Hollysys generated operating cash flow of $8.9 million for the three months ended June 30, 2009. Including investing and financing activities, the total net cash inflow for the three months ended June 30, 2009 was $22.6 million. For fiscal year 2009, the operating cash inflow was $40.1 million, and total cash and cash equivalents increased by $64.6 million from fiscal year beginning.

Balance Sheet Highlights

As of June 30, 2009, Hollysys' cash and cash equivalents were $128.9 million, compared to $106.2 million at March 31, 2009, and $64.3 million at June 30, 2008. Days Sales Outstanding ("DSO") for fiscal 2009 is 147 days, significantly reduced from 167 days for the prior year. Inventory turnover is 79 days for year ended June 30 2009, as compared to 84 days year over year.

Outlook for FY 2010

Dr. Wang concluded, "Given the tangible impacts from the Chinese government's stimulus plan and our leadership position in some of the most beneficial end markets in China, we believe that our growth will continue at a healthy rate of 20% in fiscal 2010."

Based on our operating results for fiscal 2009, we project our fiscal 2010 revenues to be in the range of USD 185.9M to USD 192.2M. We expect our fiscal 2010 non-GAAP net income to be in the range of USD 30.3M to USD 31.4M, which will translate into net income per share of USD 0.61 to USD 0.63, based on expected 50 million shares outstanding.

Conference Call

Management will discuss the current status of the Company's operations during a conference call at 9:00 AM ET/9:00 PM Beijing time on Tuesday, August 18, 2009. Interested parties may participate in the call by dialing the following numbers approximately 10 minutes before the call is scheduled to begin and asking to be connected to the Hollysys Automation Technologies conference call. The conference call identification number is 23681292.

1-866-519-4004 (USA) 800-819-0121 (China Landline) 400-620-8038 (China Mobile) + 65-67357955 (International)

In addition, a recorded replay of the conference call will be accessible within 24 hours via Hollysys' website at:

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 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, please contact: Hollysys Automation Technologies, Ltd. Web: http://www.hollysys.com Jennifer Zhang Investor Relations Tel: +86-10-5898-1386 Email: investors@hollysys.com Or Serena Wu Investor Relations Tel: +1-646-593-8125 Email: serena.wu@hollysys.com HOLLYSYS AUTOMATION TECHNOLOGIES LTD. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In US Dollars) Three months ended June 30, Fiscal Year 2009 2008 2009 2008 (Unaudited) (Unaudited) (Unaudited) (Audited) Revenues Integrated contract revenue $41,791,402 $28,882,564 $149,303,309 $112,357,126 Products sales 2,980,910 3,046,301 8,198,758 9,141,626 Total revenues 44,772,312 31,928,865 157,502,067 121,498,752 Cost of integrated contracts 28,065,525 19,362,285 99,423,487 81,414,648 Cost of products sold 1,713,861 1,160,473 3,500,471 3,456,398 Gross profit 14,992,926 11,406,107 54,578,109 36,627,706 Operating expenses Selling 2,326,647 2,651,539 10,021,832 9,680,284 General and Administrative 25,122,689 2,222,791 48,981,078 26,588,771 Research and Development 3,592,739 972,364 8,829,402 3,833,925 VAT refunds (1,767,347) (1,496,602) (5,943,701) (6,160,583) Total operating expenses 29,274,728 4,350,092 61,888,611 33,942,397 Income (loss) from operations (14,281,802) 7,056,015 (7,310,502) 2,685,309 Other income (expense), net (60,291) 51,934 723,269 14,936 Share of net gains of equity investees 45,619 221,453 178,167 693,115 Government subsidy 510,956 730,274 1,760,023 3,159,229 Interest expense, net (227,587) (373,980) (954,078) (4,304,170) Income (loss) before income taxes (14,013,105) 7,685,696 (5,603,121) 2,248,419 Income taxes expenses 841,276 407,465 3,061,141 1,092,477 Income (loss) before minority interest (14,854,381) 7,278,231 (8,664,262) 1,155,942 Minority interest 1,174,409 1,459,986 5,186,802 2,833,120 Net income (loss) $(16,028,790) $5,818,245 $(13,851,064) $(1,677,178) Weighted average number of common shares 45,986,570 43,942,614 44,950,833 37,658,437 Weighted average number of diluted common shares 46,233,857 43,944,911 45,023,755 37,658,437 Basic earnings (loss) per share (0.35) 0.13 (0.31) (0.04) Diluted earnings (loss) per share (0.35) 0.13 (0.31) (0.04) Other comprehensive income (loss) Net income (loss) (16,028,790) 5,818,245 (13,851,064) (1,677,178) Translation adjustments 106,963 3,068,060 538,033 9,490,632 Comprehensive income (loss) $(15,921,827) $8,886,305 $(13,313,031) $7,813,454 HOLLYSYS AUTOMATION TECHNOLOGIES LTD. CONSOLIDATED BALANCE SHEETS (In US Dollars) June 30, 2009 March 31, 2009 (Unaudited) (Unaudited) ASSETS Current Assets Cash and cash equivalents $128,882,666 $106,237,008 Contract commitment deposit in banks 5,504,375 6,125,887 Accounts receivable, net of allowance for doubtful accounts of $6,276,670 and $5,781,307 56,548,509 55,000,421 Cost and estimated earnings in excess of billings, net of allowance for doubtful accounts of $744,113 and $787,460 51,094,660 45,123,125 Other receivables, net of allowance for doubtful accounts of $178,532 and $191,648 4,148,842 3,794,761 Advances to suppliers 7,867,856 7,393,679 Amount due from related parties 7,203,058 7,021,251 Inventories, net of provision of $1,114,140 and $427,789 18,837,270 21,756,105 Prepaid expenses 1,368,918 1,551,788 Deferred tax assets 319,737 958,096 Prepayment for minority interest 2,195,582 -- Total current assets 283,971,473 254,962,121 Property, plant and equipment, net 47,102,749 45,560,157 Long term investments 13,570,578 10,523,337 Long term deferred expenses 91,779 107,013 Deferred tax assets 706,943 647,953 Total assets 345,443,522 311,800,581 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Short-term bank loans 5,854,887 5,851,461 Current portion of long- term loans 5,123,026 7,314,326 Accounts payable 37,421,717 27,696,334 Deferred revenue 21,072,540 27,722,572 Accrued payroll and related expense 4,162,851 4,209,740 Income tax payable 1,397,706 1,871,771 Warranty liabilities 1,631,407 2,136,529 Other tax payables 9,152,197 6,965,456 Accrued liabilities 2,634,107 2,707,546 Amounts due to related parties 1,464,683 1,455,552 Deferred tax liabilities 277,337 377,363 Construction cost payable 10,929,116 11,702,921 Total current liabilities 101,121,574 100,011,571 Long-term bank loans 36,593,041 11,702,921 Long-term bonds payable 11,709,773 11,702,921 Total liabilities 149,424,388 123,417,413 Minority interest 22,479,241 21,292,467 Commitments and contingencies -- -- Stockholder's equity Common stock, par value $0.001 per share, 100,000,000 shares authorized, 49,942,614 and 45,942,614 shares issued and outstanding 49,943 45,943 Additional paid-in capital 131,220,209 108,853,190 Appropriated earnings 15,135,442 11,676,276 Retained earnings 13,232,254 32,720,210 Cumulative translation adjustments 13,902,045 13,795,082 Total stockholder's equity 173,539,893 167,090,701 Total liabilities, minority interests and stockholders' equity $345,443,522 $311,800,581 HOLLYSYS AUTOMATION TECHNOLOGIES LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (In US Dollars) Three months Year ended ended June 30, June 30, 2009 2009 (Unaudited) (Unaudited) Cash flows from operating activities: Net income (loss) $(16,028,790) $(13,851,064) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Minority interest 1,174,409 5,186,802 Depreciation and amortization 541,183 2,241,344 Allowance for doubtful accounts 456,953 1,145,770 Provision for inventories 686,351 517,694 Loss on disposal of property, plant and equipment 10,846 58,133 Share of net losses (gains) from equity investees (45,619) (178,167) Gain on disposal of an equity investee -- (400,556) Amortization of expenses accrued for bond payable 15,299 61,222 Stock-based compensation 22,371,019 39,559,026 Deferred tax assets 479,343 530,229 Loss on deemed acquisition of a subsidiary -- 18,962 Changes in operating assets and liabilities: Accounts receivable (7,989,692) (5,784,288) Inventories 2,232,484 5,311,489 Advance to suppliers (474,177) (861,429) Other receivables (281,095) (573,733) Deposits and other assets 565,797 (1,975,917) Due from related parties 368,546 (4,581,972) Accounts payable 10,416,426 13,056,177 Advance from customers (6,650,032) 397,735 Accruals and other payable (625,449) (2,748,314) Due to related parties 9,131 (17,671) Tax payable 1,712,676 3,015,986 Net cash provided by operating activities 8,945,609 40,127,458 Cash flows from investing activities: Purchase of property, plant and equipment (3,325,665) (8,728,334) Proceeds from disposing property, plant and equipment 6,192 13,271 Repayment from related parties -- 1,134,090 Acquisition of long term investments (3,661,414) (3,895,781) Proceeds from disposal of an equity investee 55,354 2,103,136 Dividends from long-term investment -- 69,568 Acquisition of a subsidiary, net of cash acquired -- (439,374) Prepayment for minority interest (2,196,869) (2,196,869) Net cash used in investing activities (9,122,402) (11,940,293) Cash flows from financing activities: Proceeds from short-term bank loans -- 1,464,579 Proceeds from long-term bank loans 24,896,130 36,614,479 Repayments of long-term bank loans (2,196,869) (2,196,869) Net cash provided by financing activities 22,699,261 35,882,189 Effect of foreign exchange rate changes 123,190 562,754 Net increase in cash and cash equivalents $22,645,658 $64,632,108 Cash and cash equivalents, beginning of period 106,237,008 64,250,558 Cash and cash equivalents, end of period $128,882,666 $128,882,666 Reconcile GAAP Net Income (Loss) to Non-GAAP Net Income The following table provides more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures. Three months ended Fiscal year June 30, 2009 2008 2009 2008 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net income (loss) $(16,028,790) $5,818,245 $(13,851,064) $(1,677,178) Adjustments: Amortization of discount and interest on notes payable related to bridge loan -- -- -- 3,244,434 Stock-based compensation cost for incentive shares 22,240,000 -- 39,240,000 17,000,000 Stock-based compensation cost for options 131,019 37,028 319,026 84,473 Non-Gaap Net Income (Loss) $6,342,229 $5,855,273 $25,707,962 $18,651,729

The Company will host a conference call at 9:00 a.m. ET /9:00 p.m. Beijing Time on August 18, 2009, to discuss the financial results for the fiscal fourth quarter and year ended June 30, 2009, and its business outlook for the next fiscal year 2010.

Joining Mr. Peter Li, Chief Financial Officer of Hollysys Automation Technologies, will be Dr. Changli Wang, Chief Executive Officer.

To participate, please call the following numbers ten minutes before the scheduled start of the call. The conference call identification number is 23681292.

1-866-519-4004 (USA)
800-819-0121 (China Landline)
400-620-8038 (China Mobile)
+ 65-67357955 (International)

In addition, a recording of the conference call will be accessible within 24 hours via Hollysys' website at:

Hollysys Automation Technologies, Ltd.
Web: http://www.hollysys.com

Jennifer Zhang
Investor Relations
Tel: +86-10-5898-1386
Email: investors@hollysys.com

Or

Serena Wu
Investor Relations
Tel: +1-646-593-8125
Email: serena.wu@hollysys.com

Other than the name change, there are no changes to Hollysys' corporate structure, management team or business operations. The Company's NASDAQ ticker symbol, "HOLI" also remains the same.

Dr. Changli Wang, Hollysys' Chief Executive Officer, stated, "We believe that the new corporate name more accurately reflects the Company's core value of leveraging proprietary technologies to provide state-of-the-art automation and control solutions for our clients. We believe that our proprietary automation and control technology is a critical foundation for Hollysys to continue expanding our market share and delivering superb financial performance. As the only local automation technology provider to the nuclear industry and one of the very few automation product providers to the high-speed rail market in China, we plan to continue seeking technology breakthroughs in new and existing markets, and further strengthen our competitiveness and brand recognition in the marketplace."

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies, Ltd. (formerly, HLS Systems International) is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability and efficiency. Founded in 1993, Hollysys has approximately 2,100 employees with 9 sales centers and 13 service centers in 21 cities in China and serves over 1700 customers in the industrial, railway and nuclear industries. Its proprietary technologies are applied in product lines, including Distributed Control Systems (DCS) and Programmable Logic Controllers (PLC), high-speed railway Train Control Centers (TCC) and Automatic Train Protection (ATP), and safety control product NMS 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.

Safe Harbor

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 impact of the Company's name change on the Company's business and operations; 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 HLS' 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.

BEIJING, June 18, 2009 -- HLS Systems International, Ltd. (Nasdaq:HOLI - News; "HLS" or the "Company"), a leading automation and control systems and products provider in China, announced today that its Board of Directors has authorized the establishment of a share repurchase program for the Company to purchase up to 3 million shares of its common stock on the open market with an expiration date of March 31, 2010. The share repurchase will be cash-financed by HLS' positive cash flow from operation. The timing of such purchases will be determined by HLS' management taking into consideration of market conditions, stock prices, and other factors

Dr. Changli Wang, HLS' Chief Executive Officer, stated, "HLS' establishment of a stock repurchase plan is a strong demonstration of our commitment to leveraging our strong cash position in order to maximize long-term returns for our shareholders. With our operations generating an average of $10 million cash flow each quarter in this fiscal year, we plan to continue showing our commitment through future corporate actions and initiatives."

The Company also announced that it has cancelled its incentive share plan, which totaled 7 million remaining shares in aggregate for the years of 2009, 2010, and 2011, through the immediate issuance of 4 million shares to its Chinese subsidiaries' original selling shareholders. The incentive share plan was part of the merger agreement between Gifted Time Holdings and Chardan North Acquisition Corp., in which HLS Systems International was created. Under the terms of the merger agreement, the Company was obligated to issue to the original selling shareholders up to 11 million shares over 5 years, commencing in 2007 (2 million shares per year for the first four years and 3 million shares in the fifth year) should the Company achieve certain pre-determined comprehensive income targets. The selling shareholders previously earned 4 million shares under this plan in 2007 and 2008.

Dr. Wang stated, "We are pleased that the original selling shareholders have agreed to cancel the future years' incentive share program, which totaled 7 million remaining shares, through the immediate issuance of 4 million shares. We expect that the cancellation of this future annual incentive share plan will significantly reduce, from 15.2% to 8.7%, the potential dilutive effects of such issuances on HLS' issued and outstanding shares, based on 46 million shares currently issued and outstanding. We believe that this will clean up our capital structure by eliminating the last SPAC transaction overhang, and will enable management to focus on achieving the Company's long-term growth targets. Given the burgeoning opportunities for China's high-speed rail and nuclear industries, we expect to continue to leverage HLS' substantial cash position and listed company advantage to increase our competitive advantages and further establish our position as a market leader."

About HLS Systems International

HLS Systems International is a leading automation and control systems and products provider in China. Founded in 1993, HLS 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. HLS is the only certified domestic automation control systems provider to the nuclear industry in China. HLS 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.

Safe Harbor

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 impact of the Company's stock repurchase plan and the agreement to cancel the Company's future incentive share program with its Chinese Subsidiaries' selling shareholders on the Company's business and operations; 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 HLS' 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.

Contact:
HLS Systems International, Ltd.www.hollysys.comJennifer Zhang, Investor Relations(8610) 5898-1386investors@hollysys.comSerena Wu, Investor Relations646-593-8125serena.wu@hollysys....

BEIJING, May 26, 2009 -- HLS Systems International, Ltd. (NasdaqGS:HOLI - News) (``HLS'' or the ``Company''), a leading automation and control systems and products provider in China, today announced unaudited financial results for its fiscal third quarter ended March 31, 2009 (see attached tables).

Dr. Changli Wang, HLS' Chief Executive Officer, stated, ``We are pleased to deliver a solid quarterly financial performance with strong momentum from the industrial automation and rail segments. We improved our revenues, gross margins, and generated an operating cash flow of $11.3 million. HLS continued to further establish itself as one of the major players in the high-speed rail automation and control segment this quarter through winning a new contract to provide its Train Control Center products to the Zhengzhou-Xian High-Speed Railway project. This follow-on contract is valued at approximately $15 million, which is in addition to HLS' previous contract win of over $22 million last year for the same project.''

Dr. Wang continued, ``HLS is currently benefiting from China's favorable political and economic environment during the economic slowdown. Following the RMB4 trillion stimulus package, on May 12, 2009, the Chinese government also announced the Equipment Manufacturing Industry Revitalization Action Plan, which is aimed at increasing the usage of domestic manufactured equipment in ten key industries including: the high-speed rail, urban rail transportation, and clean energy industries. The plan includes government provided value-added tax (VAT) refunds to domestic equipment manufacturers, more stringent monitoring of major equipment procurement to favor domestic equipment, and insurance programs for the first-time adoption of domestic made equipment in commercial projects. We feel that this action plan will better position HLS to compete with international competitors for projects in the industrial, rail, nuclear, and clean energy sectors.''

Fiscal 2009 Third Quarter Unaudited Financial Results Summary

To facilitate a clear understanding of HLS, a summary of unaudited non-GAAP financial results is included below.

 In USD thousands, except share numbers and EPS
 ----------------------------------------------

                        Q3 FY2009                   Q3 FY2008
                   --------------------  -----------------------------
                     Amount     % to        Amount     % to    Y-O-Y %
                                Revenue               Revenue  CHANGE
                   -----------  -------  -----------  -------  -------

 Revenues          $    22,899   100.0%  $    18,458   100.0%    24.1%
   Integrated
    Contract
    Revenue        $    21,329    93.1%  $    16,667    90.3%    28.0%
   Products Sales  $     1,570     6.9%  $     1,791     9.7%   -12.3%
 Cost of Revenues  $    14,544    63.5%  $    14,268    77.3%     1.9%
 Gross Profit      $     8,355    36.5%  $     4,190    22.7%    99.4%
 Total Operating
  Expenses         $     5,690    24.8%  $     3,334    18.1%    70.7%
   Selling         $     2,279    10.0%  $     1,647     8.9%    38.4%
   General and
    Administrative $     2,586    11.3%  $     2,270    12.3%    13.9%
   Research and
    Development    $     2,128     9.3%  $     1,180     6.4%    80.3%
   VAT Refunds     $    (1,303)   -5.7%  $    (1,763)   -9.6%   -26.1%
 Income from
  Operations       $     2,665    11.6%  $       856     4.6%   211.2%
 Non-GAAP Net
  Income           $     2,075     9.1%  $     2,016    10.9%     3.0%
 Basic Non-GAAP
  EPS              $      0.05           $      0.05             -6.0%
 Diluted Non-GAAP
  EPS              $      0.05           $      0.05             -6.0%

 Stock-based
  Compensation
  Cost for Options $        99     0.4%  $        47     0.3%   109.1%
 Net Income (GAAP) $     1,976     8.6%  $     1,968    10.7%     0.4%
 Basic GAAP EPS    $      0.04           $      0.05             -8.3%
 Diluted GAAP EPS  $      0.04           $      0.05             -8.4%

 Basic Weighted
  Average Common
  Shares
  Outstanding       45,942,614            41,964,592              9.5%
 Diluted Weighted
  Average Common
  Shares
  Outstanding       45,987,015            41,974,193              9.6%

For the three months ended March 31, 2009, total revenues increased 24.1% to $22.9 million, from $18.5 million in the comparable prior fiscal year period. Of the total revenues, revenue from integrated contracts increased 28.0% to $21.3 million, from $16.7 million for the same period of the prior year. The Company's integrated contract revenue by segment was as follows:

 * $14.4 million, or 67.7%, related to Industrial Automation &
   Control;
 * Rail and subway was $5.8 million, or 27.0%, of which $4.1 million,
   or 19.0%, was from Rail Signaling and Control projects, and $1.7
   million, or 8.0%, was from Subway System Integration projects;
 * $0.6 million, or 2.8%, related to Nuclear Plant Control projects;
   and
 * $0.5 million, or 2.5%, related to miscellaneous contracts.

For the three months ended March 31, 2009, HLS' total cost of revenues was $14.5 million, compared to $14.3 million for the same period of the prior year. The cost of integrated contracts increased to $14.2 million, or 66.5% of integrated contract revenue, for the three months ended March 31, 2009, compared to $14.0 million, or 83.9%, for the same period of the prior year.

As a percentage of total revenues, overall gross margin improved to 36.5% for the three months ended March 31, 2009, up from 22.7% for the prior fiscal year period. The gross margin for integrated contracts was 33.5% for the three months ended March 31, 2009, compared to 16.1% for the same period of the prior year, largely due to higher gross margin in industrial automation and rail revenue recognized for the quarter ended March 31, 2009.

For the three months ended March 31, 2009, selling expenses were $2.3 million, an increase of $0.7 million, compared to $1.6 million for the same period of the prior year. As a percentage to total revenues, selling expenses were 10.0% and 8.9% for the three months ended March 31, 2009 and 2008, respectively.

General and administrative expenses were $2.6 million for the three months ended March 31, 2009, or 11.3% as a percentage of total revenues, compared to $2.3 million, or 12.3%, for the same period of the prior year.

Research and development (``R&D'') expenses were $2.1 million for the three months ended March 31, 2009, compared to $1.2 million for the same period of the prior year. As a percentage to total revenue, R&D expenses were 9.3% and 6.4% for three months ended March 31, 2009 and 2008, respectively. The increase was mainly due to increased R&D activities.

For the three months ended March 31, 2009, non-GAAP net income, excluding non-cash stock compensation cost, was $2.1 million, or $0.05 per diluted share based on 46 million shares outstanding. This represents an increase of $0.1 million, or 3.0%, over the $2.0 million, or $0.05 per share, based on 42 million shares outstanding, reported in the prior year period. On a GAAP basis, net income was $2.0 million, or $0.04 per diluted share, based on 46 million shares outstanding, compared to net income of $2.0 million, or $0.05 per diluted share, based on 42 million shares outstanding, for the same period of the prior year.

Backlog Highlights

HLS' backlog as of March 31, 2009 was $177.7 million, compared to $164.2 million at December 31, 2008, and $153.7 million at March 31, 2008. The detailed breakdown for the backlog by segment is as followings:

 * $56.6 million related to Industrial Automation & Control, or 31.9%
   of the total backlog;
 * $50.2 million related to System Integration projects for Subway, or
   28.2% of the total backlog;
 * $68.1 million related to Rail Signaling and Control projects, or
   38.3% of the total backlog;
 * $2.8 million related to Nuclear and other miscellaneous contracts,
   or 1.6% of the total backlog.

Cash Flow Highlights

HLS generated an operating cash flow of $11.3 million for the three months ended March 31, 2009. Including investing and financing activities, the total net cash inflow for the three months ended March 31, 2009 was $19.8 million.

Balance Sheet Highlights

As of March 31, 2009, HLS' cash and cash equivalents were $106.2 million, compared to $86.4 million at December 31, 2008. Days Sales Outstanding (``DSO'') for the quarter ended March 31, 2009 is 250 days, reduced from 289 days for the prior year period, but significantly increased from 114 days for the quarter ended December 31, 2008 mainly due to seasonally lower revenues.

Outlook for FY 2009

Dr. Wang concluded, ``HLS' management team is committed to delivering strong and sustainable growth to our shareholders. We are well on track to achieve our previously provided annual guidance for FY 2009 of revenues between $150 million and $165 million and gross margin between 30% and 35%. We continue to see more opportunities in each of HLS' business segments, especially in high-speed rail, driven by the government's economic stimulus package. HLS is currently in a strong financial position with over $106 million in cash, which we expect will enable us to carry out HLS' corporate strategic plan to accelerate HLS growth.''

Conference Call

Management will discuss the current status of the Company's operations during a conference call at 9:00 AM ET on Wednesday, May 27, 2009. Interested parties may participate in the call by dialing (888) 787-0460 (U.S.) or (706) 679-3200 (International) approximately 10 minutes before the call is scheduled to begin and ask to be connected to the HLS Systems conference call. In addition, the conference call will be broadcast live over the internet at

The HLS Systems International, Ltd. logo is available at 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.

                    HLS SYSTEMS INTERNATIONAL LTD.
      CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                            (In U.S. Dollars)

                      Three months ended          Nine months ended
                            March 31,                 March 31,
                   ------------------------- -------------------------
                       2009         2008         2009         2008
                       ----         ----         ----         ----
                    (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
                   ------------ ------------ ------------ ------------
 Revenues
 Integrated
  contract revenue $ 21,328,566 $ 16,667,323 $107,511,907 $ 83,474,562
 Products sales       1,570,426    1,790,719    5,217,848    6,095,325
                   ------------ ------------ ------------ ------------
 Total revenues      22,898,992   18,458,042  112,729,755   89,569,887

 Cost of integrated
  contracts          14,173,795   13,992,001   71,357,962   62,052,363
 Cost of products
  sold                  370,402      275,809    1,786,610    2,295,925
                   ------------ ------------ ------------ ------------
 Gross profit         8,354,795    4,190,232   39,585,183   25,221,599

 Operating expenses
 Selling              2,278,944    1,647,200    7,695,185    7,028,745
 General and
  administrative      2,586,052    2,269,647   23,858,389   24,365,980
 Research and
  development         2,127,975    1,180,254    5,236,663    2,861,561
 VAT refunds         (1,302,685)  (1,763,024)  (4,176,354)  (4,663,981)
                   ------------ ------------ ------------ ------------
 Total operating
  expenses            5,690,286    3,334,077   32,613,883   29,592,305

                   ------------ ------------ ------------ ------------
 Income (loss) from
  operations          2,664,509      856,155    6,971,300   (4,370,706)

 Other income
  (expense), net        (89,014)      82,305      783,560      (36,998)
 Share of net gains
  (losses) of
  equity investees     (252,907)     108,387      132,548      471,662
 Government subsidy      14,819    1,150,799    1,249,067    2,428,955
 Interest expense,
  net                  (130,832)    (198,224)    (726,491)  (3,930,190)
                   ------------ ------------ ------------ ------------
 Income (loss)
  before income
  taxes               2,206,575    1,999,422    8,409,984   (5,437,277)

 Income taxes
  expenses (credit)       2,878     (209,464)   2,219,865      685,012
                   ------------ ------------ ------------ ------------
 Income (loss)
  before minority
  interest            2,203,697    2,208,886    6,190,119   (6,122,289)

 Minority interest      227,514      240,400    4,012,393    1,373,134
                   ------------ ------------ ------------ ------------
 Net income (loss) $  1,976,183 $  1,968,486 $  2,177,726 $ (7,495,423)
                   ============ ============ ============ ============

 Weighted average
  number of common
  shares             45,942,614   41,964,592   44,606,848   33,373,132
 Weighted average
  number of diluted
  common shares      45,987,015   41,974,193   44,621,648   33,373,132


 Basic earnings
  (loss) per share         0.04         0.05         0.05        (0.22)
                   ------------ ------------ ------------ ------------
 Diluted earnings
  (loss) per share         0.04         0.05         0.05        (0.22)
                   ------------ ------------ ------------ ------------

 Other
  comprehensive
  income (loss)
 Net income (loss)    1,976,183    1,968,486    2,177,726   (7,495,423)
 Translation
  adjustments          (324,925)   3,225,628      431,070    6,422,572
                   ------------ ------------ ------------ ------------
 Comprehensive
  income (loss)    $  1,651,258 $  5,194,114 $  2,608,796 $ (1,072,851)
                   ============ ============ ============ ============


                      HLS SYSTEMS INTERNATIONAL LTD.
                        CONSOLIDATED BALANCE SHEETS
                            (In U.S. Dollars)

                                             March 31,    December 31,
                                               2009          2008
                                               ----          ----
                                            (Unaudited)   (Unaudited)
                                            ------------  ------------

 ASSETS
  Current Assets
   Cash and cash equivalents                $106,237,008  $ 86,433,081
   Contract commitment deposit in banks        6,125,887     6,108,769
   Accounts receivable, net of allowance
    for doubtful accounts of $5,781,307 and
    $5,129,999                                55,000,421    61,535,561
   Cost and estimated earnings in excess of
    billings, net of allowance for doubtful
    accounts of $787,460 and $722,693         45,123,125    46,727,333
   Other receivables, net of allowance for
    doubtful accounts of $191,648 and
    $243,855                                   3,794,761     3,121,150
   Advances to suppliers                       7,393,679     9,244,172
   Amount due from related parties             7,021,251     6,343,320
   Inventories, net of provision of $427,789
    and $460,865                              21,756,105    21,155,570
   Prepaid expenses                            1,551,788       373,971
   Deferred tax assets                           958,096       722,456
                                            ------------  ------------
  Total current assets                       254,962,121   241,765,383

  Property, plant and equipment, net          45,560,157    31,343,861
  Long term investments                       10,523,337    10,715,614
  Long term deferred expenses                    107,013       122,541
  Deferred tax assets                            647,953       673,138

  Total assets                               311,800,581   284,620,537
                                            ------------  ------------

 LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities
   Short-term bank loans                       5,851,461     5,862,953
   Current portion of long-term loans          7,314,326     7,328,692
   Accounts payable                           39,399,255    29,542,186
   Deferred revenue                           27,722,572    19,020,953
   Accrued payroll and related expense         4,209,740     5,943,049
   Income tax payable                          1,871,771     1,901,730
   Warranty liabilities                        2,136,529     2,049,842
   Other tax payables                          6,965,456     8,933,977
   Accrued liabilities                         2,707,546     3,299,301
   Amounts due to related parties              1,455,552     2,022,007
   Deferred tax liabilities                      377,363       544,811
                                            ------------  ------------
  Total current liabilities                  100,011,571    86,449,501

   Long-term bank loans                       11,702,921            --
   Long-term bonds payable                    11,702,921    11,725,907

  Total liabilities                          123,417,413    98,175,408
                                            ------------  ------------

  Minority interest                           21,292,467    21,104,906

  Commitments and contingencies
                                                      --            --

  Stockholder's equity
   Common stock, par value $0.001 per share,
    100,000,000 shares authorized,
    43,942,614 and 45,942,614 shares issued
    and outstanding                               45,943        43,943
   Additional paid-in capital                108,853,190   108,755,971
   Appropriated earnings                      11,676,276    11,676,276
   Retained earnings                          32,720,210    30,744,027
   Cumulative translation adjustments         13,795,082    14,120,007
                                            ------------  ------------
  Total stockholder's equity                 167,090,701   165,340,224

  Total liabilities, minority interests and
   stockholders' equity                     $311,800,581  $284,620,538
                                            ------------  ------------


                    HLS SYSTEMS INTERNATIONAL LTD.
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In U.S. Dollars)

                                            Three months  Three months
                                               ended         ended
                                              March 31,   December 31,
                                                2009          2008
                                             (Unaudited)   (Unaudited)
                                            ------------  ------------

 Cash flows from operating activities:
       Net income (loss)                    $  1,976,183  $ (5,898,717)
 Adjustments to reconcile net income to net
  cash provided by (used in) operating
  activities:
  Minority interest                              227,514     2,608,463
  Depreciation and amortization                  575,630       564,230
  Allowance for doubtful accounts                985,126         6,072
  Provision (reversal) for inventories           (33,076)     (135,581)
  Loss on disposal of property, plant and
   equipment                                      41,905         2,540
  Loss on deemed acquisition of a subsidiary          --        18,984
  Share of net losses (gains) from equity
   investees                                     252,907      (611,218)
  Amortization of expenses accrued for bond
   payable                                        15,294        16,791
  Stock-based compensation                        99,219    17,044,394
  Deferred tax assets (liabilities)             (377,903)      302,046
 Changes in operating assets and
  liabilities:
  Accounts receivable                          7,102,015    (2,355,863)
  Inventories                                   (567,460)    2,245,292
  Advance to suppliers                         1,850,493         8,166
  Other receivables                             (652,111)      558,080
  Deposits and other assets                     (755,497)       (4,434)
  Due from related parties                      (676,800)   (2,942,084)
  Accounts payable                            (2,625,026)    3,769,242
  Advance from customers                       8,701,619    (6,564,551)
  Accruals and other payable                  (2,320,481)      244,917
  Due to related parties                        (566,455)      539,653
  Tax payable                                 (1,998,480)    2,797,591
                                            ------------  ------------
  Net cash provided by operating activities   11,254,616    12,214,013

 Cash flows from investing activities:
  Purchase of property, plant and equipment   (2,913,264)      (82,478)
  Proceeds from disposing property, plant
   and equipment                                     758         5,066
  Repayment from (Advance to) related
   parties                                       (81,788)    1,417,973
  Dividends from long-term investments                --        69,609
  Acquisition of a subsidiary, net of cash
   acquired                                           --      (439,638)
                                            ------------  ------------
  Net cash provided by (used in) investing
   activities                                 (2,994,294)      970,532

 Cash flows from financing activities:
  Repayments of short-term loans                      --    (2,930,467)
  Proceeds from long-term bank loans          11,718,349            --
                                            ------------  ------------
  Net cash provided by (used in) financing
   activities                                 11,718,349    (2,930,467)

  Effect of foreign exchange rate changes       (174,744)     (879,244)
                                            ------------  ------------
  Net increase (decrease) in cash and cash
   equivalents                              $ 19,803,927  $  9,374,834
                                            ============  ============

  Cash and cash equivalents, beginning of
   period                                     86,433,081    77,058,247
  Cash and cash equivalents, end of period  $106,237,008  $ 86,433,081



 Reconcile GAAP Net Income (Loss) to Non-GAAP Net Income

 The following table provides more details on the reconciliations
 between GAAP financial measures that are most directly comparable to
 non-GAAP financial measures.

                       Three months ended        Nine months ended
                            March 31,                March 31,
                    ------------------------  ------------------------
                       2009         2008          2009         2008
                       ----         ----          ----         ----
                    (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
                    -----------  -----------  -----------  -----------
 Net income (loss)  $ 1,976,183  $ 1,968,486  $ 2,177,726  $(7,495,423)
                    -----------  -----------  -----------  -----------
 Adjustments:
   Amortization of
    discount and
    interest on
    notes payable
    related to
    bridge loan              --           --           --    3,244,434
   Stock-based
    compensation
    cost for
    incentive shares         --           --   17,000,000   17,000,000
   Stock-based
    compensation
    cost for options     99,219       47,445      188,007       47,445
                    -----------  -----------  -----------  -----------
 Non-GAAP net
  income            $ 2,075,402  $ 2,015,931  $19,365,733  $12,796,456
                    ===========  ===========  ===========  ===========

          HLS Systems International Ltd.
          Investor Relations
          Jennifer Zhang
          (8610) 5898-1386
          investors@hollysys.com

          The Equity Group Inc.
          Adam Prior
          (212) 836-9606
          aprior@equityny.com

BEIJING, May 21, 2009 (GLOBE NEWSWIRE) -- HLS Systems International, Ltd. (NasdaqGS:HOLI - News) (``HLS'' 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-Xian 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 HLS' contract won in September 2008 for the same high-speed railway line.

HLS' 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 Xian, 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.

HLS' 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 HLS' 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 HLS, commented, ``We believe that the follow-on contract win of the Zhengzhou-Xian high-speed railway automation works is a testament to the high quality of HLS 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 HLS 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 HLS 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 HLS Systems International

HLS Systems International is a leading automation and control systems and products provider in China. Founded in 1993, HLS 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. HLS is the only certified domestic automation control systems provider to the nuclear industry in China. HLS 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.

The HLS Systems International logo is available at 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.

Contact:

         HLS Systems International, Ltd.
         Jennifer Zhang, Investor Relations and Corporate Communications
         8610-5898-1386
         investors@hollysys.com
         www.hollysys.com
         
         The Equity Group Inc.
         Investor Relations Counsel
         Adam Prior
         212-836-9606
         aprior@equityny.com