HollySys Automation Technologies, Ltd. (NASDAQ:HOLI) Q1 2020 Earnings Conference Call - Final Transcript

Nov 13, 2019 • 08:00 pm ET

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HollySys Automation Technologies, Ltd. (NASDAQ:HOLI) Q1 2020 Earnings Conference Call - Final Transcript

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Q & A
Executive
Arden Xia

calendar year it will -- would have the ATP bidding for the new SaaS of the high-speed rail signalling control system. And based on current backlog and the prediction, we're thinking the whole fiscal year performance for the Rail Transportation could keep I mean compare -- just making -- to compare the same or just a little bit increase, we will through the after-sale services -- after sale revenue to catch up the potential and expectation of the bidding process. So the Rail Transportation still -- the performance is good

Analyst
Alex Chang

[Foreign Speech]

Executive
Arden Xia

I still want to ask about the new products, like the track circuit, like the subway CPCC system and for the future -- for this whole fiscal year, how much percentage within the backlog contribute come from these new products? And also when the subway CPCC system could start the first contract?

Executive
Baiqing Shao

[Foreign Speech]

Executive
Arden Xia

The capacity still -- we didn't test a procedure, so it will not contribute too much within the backlog for the fiscal year 2020. And CPCC system still on the rail side for -- there is more project, but not too large contract. So it is either not to contribute to the railway transportation revenue within 2020. But we will try our best to get the first large contract from the CPCC system.

Analyst
Alex Chang

[Foreign Speech]

Executive
Arden Xia

The last one more question related to the P&L, the P&L shows two new items gain, one gain is disposal of investments, the equity investee around $5.8 million and another one for the equity investee also racked booking around $1.5 million, what about the themes behind of these two items?

Executive
Baiqing Shao

[Foreign Speech]

Analyst
Alex Chang

[Foreign Speech]

Executive
Baiqing Shao

[Foreign Speech]

Analyst
Alex Chang

[Foreign Speech]

Executive
Steven Wang

[Foreign Speech] There is a share net income equity investee. [Foreign Speech]

Analyst
Alex Chang

[Foreign Speech]

Executive
Steven Wang

[Foreign Speech]

Analyst
Alex Chang

[Foreign Speech]

Executive
Baiqing Shao

[Foreign Speech]

Analyst
Alex Chang

[Foreign Speech]

Executive
Baiqing Shao

[Foreign Speech]

Analyst
Alex Chang

[Foreign Speech]

Executive
Baiqing Shao

[Foreign Speech]

Analyst
Alex Chang

[Foreign Speech]

Executive
Arden Xia

Okay, let me finish translation. The first one for the $5.7 million about gain on disposal net -- equity investee that represent the IPE company. We sold our shares in one of our joint stock company called IPE and the difference -- different between the price sold and our share original book value is recognized as gain.

And also Alex asked -- further asked about what kind of background of this company and this company is focused on the Biotech related testing. And also Alex asked about why you sold this company because you announced, you also get pharmaceutical design institution, is this any conflict between each other? The answer is no, because the IPE is really focused on the bio testing, but what we -- we -- the new acquired -- the pharmaceutical design institution is for our bid comprehensive solution because this can take the full cycle of the pharmaceutical industry process control and it can support the business synergy for the future.

But the IPE joint stock company is not, so this is the first one. The second question related to the $1.5 million, that would be cost