HollySys Automation Technologies, Ltd. (NASDAQ:HOLI) Q4 2018 Earnings Conference Call - Final Transcript

Aug 15, 2018 • 09:00 am ET

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HollySys Automation Technologies, Ltd. (NASDAQ:HOLI) Q4 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Hollysys Automation Technologies Earnings Conference Call for Fiscal Year 2018 and the Fourth Quarter Ended June 30, 2018. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) Please be advised that this conference is being recorded today, August 15, 2018, Beijing Time.

I would now like to hand the conference over to Mr. Arden Xia, the IR, Director of Hollysys Automation Technologies. Thank you. Please go ahead, Mr. Xia.

Executive
Arden Xia

Hello, everyone, and thank you for joining us. Today, our speakers will be Mr. Baiqing Shao, CEO of Hollysys Automation Technologies; Mr. Steven Wang, CFO of Hollysys Automation Technologies; and myself, the IR Director of Hollysys.

On today's call, Mr. Shao will provide a general overview of our business, including some highlights for the fiscal year and the quarter results. Mr. Steven Wang will discuss our performance from a financial perspective and we will answer questions afterwards.

(Forward-Looking Cautionary Statements)

The information set forth herein should be read in light of such risks. Hollysys does not assume any obligation to update the information discussed in this conference call or in its filings. Please note that all amounts noted in this conference call will be in US dollars unless otherwise noted.

And now I would like to turn the call to Mr. Baiqing Shao. Please go ahead, Mr. Shao

Executive
Baiqing Shao

Thank you, Arden, and greetings to everyone. I would like to discuss some key events during this quarter. Industrial automation recorded a 46.2% year-to-year growth in quarterly revenue at $64.0 million. Annual revenue and new contract recorded a 30.2% and 16.0% year-to-year growth respectively. Management continued to execute the low to high end market expansion strategy for process automation business.

Contract growth in chemical and petrochemical remained healthy. Major contracts included a DCS, SIS, ITCC and AMS solution for Shandong Haiyou Chemical's 1 million tons delayed coking equipment project and a DCS solution for Suzhou Sinye Materials Technology Co., Ltd, covering its furan, cold-core and sulfonic curing agent project. We signed several additional contracts in the quarter, the milestone Zhong An United Coal Chemical Project, where we applied our comprehensive solution to many new equipment for the first time.

On power, despite the slowdown of the coal fire industry, growth in the thermal power and new energy remained healthy. We continued to maintain our market share in high-end coal fire market while actively expanding market for multiple product lines. Major contracts signed include a DCS solution for Shenhua Wucaiwan 2x660MW power station and a DEH solution for Datang Pingluo 2x660MW turbine unit. We continue to address service and upgrading demand from the entire customer base.

Our databased value-added solution, including energy saving, control optimization and information security, et cetera, have received growing acceptance from customers of several industries. With our widespread national service network, we are capable of communicating with and delivering to our customers from various industries regular