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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 9/22/22 Hollysys Automation Techs, Ltd. 20-F 6/30/22 150:16M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size
1: 20-F Annual or Annual-Transition Report by a Foreign HTML 3.89M
Non-Canadian Issuer
2: EX-2.2 Plan of Acquisition, Reorganization, Arrangement, HTML 61K
Liquidation or Succession
3: EX-8.1 Opinion of Counsel re: Tax Matters HTML 43K
6: EX-13.1 Annual or Quarterly Report to Security Holders HTML 39K
7: EX-13.2 Annual or Quarterly Report to Security Holders HTML 39K
4: EX-12.1 Statement re: the Computation of Ratios HTML 42K
5: EX-12.2 Statement re: the Computation of Ratios HTML 42K
8: EX-15.1 Letter re: Unaudited Interim Financial Info HTML 38K
14: R1 Cover Page HTML 117K
15: R2 Consolidated Balance Sheets HTML 249K
16: R3 Consolidated Balance Sheets (Parenthetical) HTML 72K
17: R4 Consolidated Statements of Comprehensive Income HTML 182K
18: R5 Consolidated Statements of Comprehensive Income HTML 53K
(Parenthetical)
19: R6 Consolidated Statements of Cash Flows HTML 202K
20: R7 Consolidated Statements of Stockholders' Equity HTML 96K
21: R8 Organization and Business Background HTML 67K
22: R9 Summary of Significant Accounting Policies HTML 145K
23: R10 Inventories HTML 49K
24: R11 Accounts Receivable HTML 61K
25: R12 Costs and Estimated Earnings in Excess of Billings HTML 67K
26: R13 Revenue From Contracts With Customers HTML 64K
27: R14 Property, Plant and Equipment HTML 64K
28: R15 Prepaid Land Leases HTML 51K
29: R16 Intangible Assets, Net HTML 56K
30: R17 Goodwill HTML 51K
31: R18 Equity Investments HTML 125K
32: R19 Warranty Liabilities HTML 57K
33: R20 Short-Term Bank Loans HTML 45K
34: R21 Long-Term Loans HTML 63K
35: R22 Fair Value Measurements HTML 45K
36: R23 Stockholders' Equity HTML 49K
37: R24 Share-Based Compensation Expenses HTML 89K
38: R25 Employee Benefits HTML 42K
39: R26 Income Tax HTML 168K
40: R27 Operating Leases HTML 88K
41: R28 Earnings Per Share HTML 85K
42: R29 Related Party Transactions HTML 119K
43: R30 Commitments and Contingencies HTML 52K
44: R31 Segment Reporting HTML 124K
45: R32 Acquisition of Subsidiary HTML 86K
46: R33 Disposal of Subsidiary HTML 41K
47: R34 Subsequent Events HTML 42K
48: R35 Endorsement of Note Receivables HTML 42K
49: R36 Condensed Financial Information of the Parent HTML 145K
Company
50: R37 Summary of Significant Accounting Policies HTML 224K
(Policies)
51: R38 Organization and Business Background (Tables) HTML 62K
52: R39 Summary of Significant Accounting Policies HTML 49K
(Tables)
53: R40 Inventories (Tables) HTML 49K
54: R41 Accounts Receivable (Tables) HTML 63K
55: R42 Costs and Estimated Earnings in Excess of Billings HTML 68K
(Tables)
56: R43 Revenue From Contracts With Customers (Tables) HTML 58K
57: R44 Property, Plant and Equipment (Tables) HTML 63K
58: R45 Prepaid Land Leases (Tables) HTML 53K
59: R46 Intangible Assets, Net (Tables) HTML 57K
60: R47 Goodwill (Tables) HTML 49K
61: R48 Equity Investments (Tables) HTML 121K
62: R49 Warranty Liabilities (Tables) HTML 57K
63: R50 Long-Term Loans (Tables) HTML 68K
64: R51 Share-Based Compensation Expenses (Tables) HTML 86K
65: R52 Income Tax (Tables) HTML 156K
66: R53 Operating Leases (Tables) HTML 87K
67: R54 Earnings Per Share (Tables) HTML 83K
68: R55 Related Party Transactions (Tables) HTML 113K
69: R56 Commitments and Contingencies (Tables) HTML 46K
70: R57 Segment Reporting (Tables) HTML 124K
71: R58 Acquisition of Subsidiary (Tables) HTML 88K
72: R59 Condensed Financial Information of the Parent HTML 146K
Company (Tables)
73: R60 Organization and Business Background (Details) HTML 110K
74: R61 Organization and Business Background - Additional HTML 61K
Information (Details)
75: R62 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - HTML 58K
Property, plant and equipment, net (Details)
76: R63 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - HTML 45K
Intangible assets, net (Details)
77: R64 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - HTML 126K
Additional Information (Details)
78: R65 Inventories (Details) HTML 47K
79: R66 Accounts Receivable (Details) HTML 50K
80: R67 Accounts Receivable - Allowance For Credit Losses HTML 51K
(Details)
81: R68 Costs and Estimated Earnings in Excess of Billings HTML 49K
(Details)
82: R69 Costs and Estimated Earnings in Excess of Billings HTML 48K
- Movements in Allowance For Credit Losses
(Details)
83: R70 REVENUE FROM CONTRACTS WITH CUSTOMERS - Additional HTML 43K
Information (Details)
84: R71 REVENUE FROM CONTRACTS WITH CUSTOMERS - HTML 69K
Disaggregated Revenue Information (Details)
85: R72 REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract HTML 51K
assets and contract liabilities (Details)
86: R73 Property, Plant and Equipment (Details) HTML 60K
87: R74 Property, Plant and Equipment - Assets leased to HTML 50K
others under operating leases (Details)
88: R75 PROPERTY, PLANT AND EQUIPMENT - Additional HTML 45K
Information (Details)
89: R76 Prepaid Land Leases (Details) HTML 48K
90: R77 Prepaid Land Leases - Annual Amortization Of HTML 47K
Prepaid Land Leases (Details)
91: R78 PREPAID LAND LEASES - Additional Information HTML 41K
(Details)
92: R79 Intangible Assets, Net (Details) HTML 47K
93: R80 Intangible Assets, Net - Annual Amortization HTML 50K
Expense Of Intangible Assets (Details)
94: R81 INTANGIBLE ASSETS, NET - Additional Information HTML 45K
(Details)
95: R82 GOODWILL - Changes in the carrying amount HTML 48K
(Details)
96: R83 GOODWILL - Additional Information (Details) HTML 48K
97: R84 EQUITY INVESTMENTS - Long Term Investments HTML 105K
(Details)
98: R85 EQUITY INVESTMENTS - Additional Information HTML 60K
(Details)
99: R86 Warranty Liabilities (Details) HTML 53K
100: R87 Short-Term Bank Loans (Details) HTML 60K
101: R88 Long-Term Loans (Details) HTML 53K
102: R89 Long-Term Loans - Scheduled principal and interest HTML 56K
payments (Details)
103: R90 LONG-TERM LOANS - Additional Information (Details) HTML 63K
104: R91 Stockholders' Equity (Details) HTML 70K
105: R92 SHARE-BASED COMPENSATION EXPENSES - Share option HTML 63K
activity (Details)
106: R93 SHARE-BASED COMPENSATION EXPENSES - The fair value HTML 50K
of each option is estimated on the date of grant
using the Binomial model (Details)
107: R94 SHARE-BASED COMPENSATION EXPENSES - The fair value HTML 42K
of each option is estimated on the date of grant
using the Black-Scholes model (Details)
(Parenthetical)
108: R95 SHARE-BASED COMPENSATION EXPENSES - Restricted HTML 64K
shares (Details)
109: R96 Share-Based Compensation Expenses (Details) HTML 73K
110: R97 Employee Benefits (Details) HTML 41K
111: R98 INCOME TAX - Income before income taxes (Details) HTML 49K
112: R99 INCOME TAX - Income tax expense (Details) HTML 55K
113: R100 INCOME TAX - Reconciliation of the income tax HTML 73K
expenses (Details)
114: R101 INCOME TAX - Deferred tax assets/liabilities HTML 77K
(Details)
115: R102 INCOME TAX - Additional Information (Details) HTML 104K
116: R103 OPERATING LEASES -Additional Information (Details) HTML 53K
117: R104 OPERATING LEASES - Schedule of lease and Non-Lease HTML 47K
Components (Details)
118: R105 OPERATING LEASES - Schedule Of Other Information HTML 52K
Related To Operating Leases (Details)
119: R106 OPERATING LEASES - Schedule of Future Minimum HTML 54K
lease Payments for Operating leases (Details)
120: R107 OPERATING LEASES - Summary of Operating Lease HTML 54K
Payments (Details)
121: R108 EARNINGS PER SHARE - Computation of Basic And HTML 98K
Diluted Net Earnings Per Share Attributable
(Details)
122: R109 EARNINGS PER SHARE - Additional Information HTML 43K
(Details)
123: R110 Related Party Transactions (Details) HTML 57K
124: R111 Related Party Transactions - Due to related HTML 54K
parties (Details)
125: R112 RELATED PARTY TRANSACTIONS - Purchases of Goods HTML 47K
and Services From Related Parties (Details)
126: R113 RELATED PARTY TRANSACTIONS - Sales of Goods and HTML 52K
Integrated Solutions To Related Parties (Details)
127: R114 RELATED PARTY TRANSACTIONS - Other Income From HTML 51K
Related Parties (Details)
128: R115 RELATED PARTY TRANSACTIONS - Research And HTML 45K
Development To Related Parties (Details)
129: R116 RELATED PARTY TRANSACTIONS - Additional HTML 47K
Information (Details)
130: R117 COMMITMENTS AND CONTINGENCIES - Purchase HTML 49K
Obligation (Details)
131: R118 COMMITMENTS AND CONTINGENCIES - Additional HTML 59K
Information (Details)
132: R119 SEGMENT REPORTING - Summary of Information By HTML 101K
Segment (Details)
133: R120 SEGMENT REPORTING - Revenues by Geographical Area HTML 53K
(Details)
134: R121 SEGMENT REPORTING - Long-lived Assets Other Than HTML 46K
Goodwill and Intangible Assets by Geographical
Area (Details)
135: R122 ACQUISITION OF SUBSIDIARY - Additional Information HTML 45K
(Details)
136: R123 ACQUISITION OF SUBSIDIARY - Schedule of Excess HTML 48K
Purchase Price over the Fair Value of Net Assets
Acquired (Details)
137: R124 ACQUISITION OF SUBSIDIARY - Schedule of Recognized HTML 87K
Identified Assets Acquired and Liabilities Assumed
(Details)
138: R125 ACQUISITION OF SUBSIDIARY - Summary of the Value HTML 50K
Allocated to the Intangible Assets Acquired
(Details)
139: R126 DISPOSAL OF SUBSIDIARY - Additional Information HTML 49K
(Detail)
140: R127 SUBSEQUENT EVENTS - Additional Information HTML 53K
(Details)
141: R128 ENDORSEMENT OF NOTE RECEIVABLES - Additional HTML 40K
Information (Details)
142: R129 Condensed Financial Information of the Parent HTML 120K
Company - Balance Sheets (Details)
143: R130 Condensed Financial Information of the Parent HTML 54K
Company - Parentheticals (Details)
144: R131 Condensed Financial Information of the Parent HTML 88K
Company - Comprehensive Income (Details)
145: R132 Condensed Financial Information of the Parent HTML 99K
Company - Cash Flows (Details)
148: XML IDEA XML File -- Filing Summary XML 283K
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| Form 20-F |
| i ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| i ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| i ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| i ☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
i Ordinary Shares, $0.001 par value per share |
i HOLI |
The i NASDAQ Global Select Market | ||
i Preferred Share Purchase Rights |
i N/A |
The i NASDAQ Global Select Market |
| i Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||
| Emerging growth company | i ☐ | |||||||||
| i U.S. GAAP ☒ | International Financial Reporting Standards as issued | Other ☐ | ||||||
| by the International Accounting Standards Board | ☐ |
Page |
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| PART I |
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| PART II |
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| ITEM 13. |
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| ITEM 16A. |
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| ITEM 16F. |
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| ITEM 16G. |
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| PART III |
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| ITEM 17. |
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| • | “Hollysys,” “we,” “us,” or “our,” and the “Company,” refer to the combined business of Hollysys Automation Technologies Ltd., a BVI company, and its consolidated subsidiaries, HI, HAP, HAIP, PTHAI, Bond Group, Concord Group, CSHK, GTH, Clear Mind, World Hope, Helitong, Hollysys Group, Hangzhou Hollysys, Hangzhou System, Hollysys Industrial Software, Beijing Hollysys, Hollysys Electronics, Xi’an Hollysys, Hollysys Investment, HollySys Smart Energy, Shandong Lukang, Xuzhou HollySys, Hollysys Intelligent, HollySys System Integration, HollySys Control, HollySys Education, Xiamen HollySys, and Chengdu HollySys Transportation; |
| • | “HI” refers to Hollysys International Pte. Limited, a Singapore company; |
| • | “HAP” refers to Hollysys (Asia Pacific) Pte. Limited, a Singapore company; |
| • | “HAIP” refers to Hollysys Automation India Private Limited, an India Company; |
| • | “Bond Group” refers to a group of our subsidiaries, including Bond Corporation Pte. Ltd. (“BCPL”), a Singapore company, Bond M&E Pte. Ltd. (“BMSG”), a Singapore Company, Bond M&E Sdn. Bhd. (“BMJB”), a Malaysia company, and Bond M&E (KL) Sdn. Bhd. (“BMKL”), a Malaysia company; |
| • | “Concord Group” refers to a group of our subsidiaries, including Concord Corporation Pte. Ltd. (“CCPL”), a Singapore company, and CCPL’s subsidiaries, Concord Electrical Sdn. Bhd. (“CESB”), a Malaysia company, Concord Corporation Pte. Ltd., Dubai Branch (“CCPL Dubai”), Concord Electrical Contracting Ltd. (“CECL”), a Qatar company, Concord M Design and Engineering Company Limited. (“CMDE”), a Macau company, and Concord Electrical, Inc. (“CEI”), a Philippines company; |
| • | “CSHK” refers to Concord Solutions (HK) Limited, a Hong Kong company; |
| • | “PTHAI” refers to PT Hollysys Automation Indonesia, an Indonesian company; |
| • | “GTH” refers to Gifted Time Holdings Limited, a BVI company; |
| • | “Clear Mind” refers to Clear Mind Limited, a BVI company; |
| • | “World Hope” refers to World Hope Enterprises Limited, a Hong Kong company; |
| • | “Helitong” refers to Beijing Helitong Science & Technology Exploration Co., Ltd., a PRC company; |
| • | “Hollysys Group” refers to Hollysys Group Co., Ltd., formerly known as Beijing Hollysys Science & Technology Co., Ltd, a PRC company; |
| • | “Hangzhou Hollysys” refers to Hangzhou Hollysys Automation Co., Ltd., a PRC company; |
| • | “Hangzhou System” refers to Hangzhou Hollysys System Engineering Co., Ltd., a PRC company; |
| • | “Hollysys Industrial Software” refers to Beijing Hollysys Industrial Software Company Ltd., a PRC company; |
| • | “Beijing Hollysys” refers to Beijing Hollysys Co., Ltd., a PRC company; |
| • | “Hollysys Electronics” refers to Beijing Hollysys Electronics Technology Co., Ltd., a PRC company; |
| • | “Xi’an Hollysys” refers to Xi’an Hollysys Co., Ltd., a PRC company; |
| • | “Hollysys Investment” refers to Hollysys (Beijing) Investment Co., Ltd., a PRC company; |
| • | “HollySys Smart Energy” refers to HollySys Smart Energy Technology (Beijing) Co., Ltd., a PRC company; |
| • | “Shandong Lukang” refers to Shandong Lukang Pharmaceutical Engineering Design Co., Ltd., a PRC company; |
| • | “Xuzhou HollySys” refers to Xuzhou HollySys Valve Technology Co., Ltd., a PRC company; |
| • | “Hollysys Intelligent” refers to Beijing Hollysys Intelligent Technologies Co., Ltd., a PRC company; |
| • | “HollySys System Integration” refers to Beijing HollySys System Integration Co., Ltd., a PRC company; |
| • | “HollySys Control” refers to Beijing HollySys Control Technology Co., Ltd., a PRC company; |
| • | “HollySys Education” refers to Beijing HollySys Education Technology Co., Ltd, a PRC company; |
| • | “Xiamen HollySys” refers to Xiamen HollySys Co., Ltd., a PRC company; |
| • | “Chengdu HollySys Transportation” refers to HollySys Intelligent Transportation Technology (Chengdu) Co., Ltd., a PRC company; |
| • | “RMB” and “CNY” refer to Renminbi, the legal currency of China; “SGD” and “S$” refer to the Singapore dollar, the legal currency of Singapore; “US dollar,” “$” and “US$” refer to the legal currency of the United States; “MYR” refers to the Malaysian Ringgit, the legal currency of Malaysia; “AED” refers to the United Arab Emirates Dirham, the legal currency of the United Arab Emirates; “HKD” refers to the Hong Kong dollar, the legal currency of Hong Kong; “MOP” refers to the Macau Pataca, the legal currency of Macau; “INR” refers to the Indian Rupee, the legal currency of India; “QAR” refers to the Qatar Riyal, the legal currency of Qatar; “IDR” refers to Indonesia Rupiah, the legal currency of Indonesia, and “PHP” refers to Philippine Peso, the legal currency of Philippines; |
| • | “BVI” refers to the British Virgin Islands; |
| • | “China,” “PRC” and “mainland China” refer to the People’s Republic of China, and only in the context of describing PRC rules, laws, regulations, regulatory authority, and any PRC entities or citizens under such rules, laws and regulations and other legal or tax matters in this annual report, excludes Taiwan, Hong Kong and Macau; |
| • | “Hong Kong” and “Hong Kong SAR” refer to the Hong Kong Special Administrative Region of China; |
| • | “Macau” refers to the Macau Special Administrative Region of China; |
| • | “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; and |
| • | “Securities Act” refers to the Securities Act of 1933, as amended. |
| • | CTCS-2: Chinese Train Control System Level 2 |
| • | CTCS-3: Chinese Train Control System Level 3 |
| • | TCC: Train Control Center |
| • | ATP: Automation Train Protection |
| • | DCS: Distributed Control System |
| • | DEH: Digital Electro-Hydraulic |
| • | GW: Gigawatt |
| • | IIoT: Industrial Internet of Things |
| • | MW: Megawatt |
| • | PaaS: Platform as a Service |
| • | PLC: Programmable Logic Controller |
| • | SaaS: Software as a Service |
| • | SCADA: Supervisory Control and Data Acquisition |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
| • | We commit substantial resources to new product and service development and acquisition opportunities in order to stay competitive and grow our business, and we may fail to offset the increased cost of such investment with a sufficient increase in net sales or margins. |
| • | Our businesses and financial performance may be affected by changes in the PRC government policies promoting infrastructural development, such as high-speed rail and urban mass transit. Any decrease in public expenditures on, or any change in the public procurement policies or industry standards relating to, such industries may affect our business. |
| • | Our capital and human resources committed to product and service offerings may not always achieve anticipated results and we may not be able to develop new product and service offerings that meet market demand or successfully introduce new products in a timely manner. |
| • | Loss of major customers or changes in their orders may have an adverse impact on our business. |
| • | We do not have long-term purchase commitments from our customers, and we are exposed to potential volatility in our turnover. |
| • |
| • | We may face risks associated with our international operations and expansion, which could result in significant additional costs for our business operations. |
| • | If we fail to accurately estimate the overall risks or costs under the contracts with our customers, or the time needed to complete the relevant projects under such contracts, we may experience cost overruns, schedule delays, lower profitability or even losses under such contracts when we perform such contracts. |
| • | Our products may contain design or manufacturing defects that could result in product liability claims and cause us to suffer losses, and such defects could adversely affect demand for our products and services. |
| • | Since we use a variety of raw materials and components in our production, shortages or price fluctuations of raw materials and the inability of key suppliers to meet our quantity or quality requirements could increase the cost of our products, undermine our product quality and adversely impact our business. |
| • | Changes in the economic and political policies of the PRC government could have a material and adverse effect on our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies. For details, see page 24 of this annual report. |
| • | Uncertainties with respect to the PRC legal system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in policies, laws and regulations in China, could adversely affect us. For details, see page 24 of this annual report. |
| • | The PRC government may intervene in or influence our operations at any time, or may exert more control over our future overseas offerings or foreign investments in us, which could result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, and could cause the value of our securities to significantly decline or become worthless. For details, see page 25 of this annual report. |
| • | PRC regulations regarding acquisitions impose significant regulatory approval and review requirements, which could make it more difficult for us to pursue growth through acquisitions. For details, see page 25 of this annual report. |
| • | The approval, filing or other requirements of the CSRC or other PRC government authorities may be required under PRC law in connection with our issuance of securities overseas, or maintenance of the listing status of our ordinary shares could result in a material adverse change in our operations and the value of our ordinary shares. For details, see page 26 of this annual report. |
| • | The audit report included in this annual report is prepared by an auditor who is not inspected by the Public Company Accounting Oversight Board, and as such, our investors are deprived of the benefits of such inspection. In addition, the enactment of the Holding Foreign Companies Accountable Act and the adoption of any rules, legislations or other efforts to increase U.S. regulatory access to audit information could cause uncertainty and our securities listed on the NASDAQ Global Select Market could be delisted or prohibited from being traded “over-the-counter” if we are unable to meet the PCAOB requirement in time. For details, see page 28 of this annual report. |
| • | The market price of our ordinary shares is volatile, leading to the possibility of its value being depressed at a time when you want to sell your holdings. |
| • | Share prices of companies with business operations primarily in China have fluctuated widely in recent years, and the trading prices of our ordinary shares are likely to be volatile, which could result in substantial losses to investors. |
| • | research and development activities on existing and potential product solutions; |
| • | additional engineering and other technical personnel; |
| • | advanced design, production and test equipment; |
| • | manufacturing services that meet changing customer needs; |
| • | technological changes in manufacturing processes; |
| • | expansion of manufacturing capacity; and |
| • | acquiring technology through licensing and acquisitions. |
| • | uncertain political and economic climates; |
| • | lack of familiarity and burdens of complying with foreign laws, accounting and legal standards, regulatory requirements, tariffs and other barriers; |
| • | unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions; |
| • | lack of experience in connection with the localization of our applications, including translation into foreign languages and adaptation for local practices, and associated expenses and regulatory requirements; |
| • | difficulties in adapting to differing technology standards; |
| • | longer sales cycles and accounts receivable payment cycles and difficulties in collecting accounts receivable; |
| • | difficulties in managing and staffing international operations, including differing legal and cultural expectations for employee relationships and increased travel, infrastructure and legal compliance costs associated with international operations; |
| • | challenges to our corporate culture resulting from a dispersed workforce; |
| • | difficulties in managing, growing, and staffing international operations, including in countries in which foreign employees may become part of labor unions, employee representative bodies, or collective bargaining agreements, and challenges relating to work stoppages or slowdowns; |
| • | fluctuations in exchange rates that may increase the volatility of our foreign-based revenue and expenses; |
| • | potentially adverse tax consequences, including the complexities of foreign value-added tax, goods and services tax and other transactional taxes; |
| • | reduced or varied protection for intellectual property rights in some countries; |
| • | difficulties in managing and adapting to differing cultures and customs; |
| • | difficulties in implementing and maintaining the financial systems and processes needed to enable compliance across multiple offerings, services and jurisdictions; |
| • | data privacy laws which require that customer data be stored and processed in a designated territory subject to laws different from those of the PRC; |
| • | new and different sources of competition as well as laws and business practices favoring local competitors and local employees; |
| • | compliance with anti-bribery laws, including compliance with the Foreign Corrupt Practices Act (the “FCPA”); |
| • | increased financial accounting and reporting burdens and complexities; and |
| • | restrictions on the transfer of funds across borders or repatriation of earnings. |
| • | unidentified or unforeseeable liabilities or risks may exist in the potential assets or business to be acquired; |
| • | failure to assimilate acquired business and personnel into our operations or failure to realize anticipated cost savings or other synergies from the acquisition; |
| • | integration challenges related to implementing or improving internal controls, procedures and/or policies at a business that prior to the acquisition lacked the same level of controls, procedures and/or policies; |
| • | incurring additional debts which could reduce our available funds for operations and other purposes as a result of increased debt repayment obligations; |
| • | inability to retain employees; |
| • | the assumption of certain known and unknown liabilities of the acquired business; |
| • | loss of customers; and |
| • | disruption of our ongoing business and diversion of resources and management attention from existing businesses and strategic matters. |
| • | our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors; |
| • | changes in financial estimates by us or by any securities analysts who might cover our share; |
| • | speculation about our business in the press or the investment community; |
| • | significant developments relating to our relationships with our customers or suppliers; |
| • | stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in our industry; |
| • | customer demand for our services and products; |
| • | investor perceptions of our industry in general and our company in particular; |
| • | the operating and share performance of comparable companies; |
| • | general economic conditions and trends; |
| • | major catastrophic events; |
| • | announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures; |
| • | changes in accounting standards, policies, guidance, interpretation or principles; |
| • | loss of external funding sources; |
| • | sales of our ordinary shares, including sales by our directors, officers or significant shareholders; |
| • | additions or departures of key personnel; and |
| • | investor perception of litigation, investigation or other legal proceedings involving us or certain of our individual shareholders or their family members. |
| • | have a majority of the board be independent (although all of the members of the audit committee must be independent under the Exchange Act); |
| • | have a compensation committee and a nominating committee to be comprised solely of “independent directors”; and |
| • | hold an annual meeting of shareholders no later than one year after the end of the Company’s fiscal year-end. |
ITEM 4. |
INFORMATION ON THE COMPANY |
| • | We prioritize the health and safety of our employees, and have taken various preventative measures in response to the pandemic’s impact. A comprehensive healthcare guidance was established, and required to be strictly followed, in each of our bases in China, including health conditions reporting through online survey, mandated mask wearing, health QR code checking at the entrance, daily temperature measurement, distancing policy for particular areas, unified vaccination arrangements, etc. |
| • | While we have seen gradual recovery of our overall business resulting from improving health statistics in China since March 2020, the pandemic continued to have an adverse effect on our overseas business, especially in Southeast Asia and South Asia. We implement the policy requesting non-essential or all employees to work remotely based on COVID-19 situation in different regions. As a result of the pandemic, some tenders and projects have also been delayed. |
| • | Proprietary and core technologies |
| • | In-depth understanding of our clients’ industrial processes |
| • | Dedicated pursuit of customer satisfaction |
| • | Compliant with international standards |
| • | Leading functionality and quality |
| • | Strong product safety and reliability |
| • | Highly flexible customization |
| • | Cost-effective solutions |
| • | Comprehensive service capability |
| • | Solution planning |
| • | Solution design |
| • | Solution implementation |
| • | generating synergy and improving efficiency of our customers through integrating communications, marketing and service functions; |
| • | utilizing our industry and process knowledge to develop customized solutions that improve the efficiency of our customers; |
| • | providing a software platform for the optimization of management operations, which provides real-time automation and information solutions throughout a business; and |
| • | offering maintenance and training services to our customers, which helps to cut costs and improve operating efficiency. |
| • | Solution planning and design . |
| • | System manufacturing and installation |
| • | Customer acceptance |
| • | Warranty period |
| • | Market leadership with a strong reputation |
| • | 1st domestic DCS with practical application (1993); |
| • | 1st domestic nuclear power station computing system to enter operation (1997); |
| • | 1st domestic railway transportation SCADA (2002); |
| • | 1st proprietary domestic large-scale PLC system (2007); |
| • | 1st passenger line with CTCS-2 Train Control System (2008); |
| • | 1st GW Nuclear Power Station Digital Instrumentation Control System (2011); |
| • | 1st to introduce CTCS-3 category high-speed rail control system in an overseas market (2012); |
| • | 1st domestic SIS (2012); and |
| • | 1st and only Chinese company to provide DEH control system for gigawatt power plant (as of 2018). |
| • | we have led or participated in the formulation of national standards including industrial enterprise information integration system standards GB/T 26335-2010, the first section of network safety of programmable logic controller (PLC) for industrial automation and control systems, system requirements of GB/T 33008.1-2016, urban rail transit integrated supervision and control system design specifications GB/T 50636-2018, industrial-process measurement, and reference model GB/Z 32235-2015 for control and automation production facility (digital factory); |
| • | we received awards and recognition of National Enterprise Technology Center, National Innovative Enterprise, one of the first batch of National Intelligent Manufacturing Pilot Demonstration Enterprises, National Standardization Management System Consulting Service Institution under the strategy of integrating industrialization and information technology, national quality benchmark for industrial enterprises, a key software enterprise in national planning and layout, and national one-stop application program demonstration enterprise. We were also among the first batch of enterprises selected into the recommended directory of national intelligent manufacturing system solution suppliers, and were selected by the Ministry of Industry and Information Technology as green design demonstration enterprise for industrial products and green factory enterprise. In addition, we were awarded the “Ten-year Achievement Award of National
High-tech Industrialization” by the National Development and Reform Commission, the second prize of National Science and Technology Progress, the first prize of Beijing Science and Technology Award, etc.; and |
| • | we have received product and service quality awards from the Hong Kong MTR for five consecutive years, including the Gold Quality Award in 2016, the highest honor given by the Hong Kong MTR in respect to project quality management. |
| • | Proven credentials with high barriers to entry |
| • | Integrated, customized solutions leading to high customer satisfaction and stickiness. |
| • | Strong technology, engineering and R&D capabilities |
| • | Visionary and professional board and management team |
| • | Strengthening market leadership and expanding market shares |
| • | Further expanding our comprehensive automation solutions matrix |
| • | Continuing to optimize our operations and enhance profitability |
| • | Investing in research and development, and our talent |
| • | Exploring international business opportunities and expanding overseas presence strategically |
| • | publishing internal research reports and customer newsletters; |
| • | conducting seminars and conferences; |
| • | conducting ongoing public relations programs; and |
| • | creating and placing advertisements |
C. |
Organizational Structure |
| (i) | On November 24, 2015, the Company established CECL to explore the market in Qatar. CCPL has a 49% direct ownership of CECL and the remaining 51% equity interest is held by a nominee shareholder. Through a series of contractual arrangements, CCPL is entitled to appoint majority of directors of CECL who have the power to direct the activities that significantly impact CECL’s economic performance. Further, CCPL is entitled to 99% of the variable returns from CECL’s operations. As a result, despite of its minority direct ownership of CECL arrangements, CCPL is considered the primary beneficiary of CECL. |
| (ii) | In July 2017, BCPL, a wholly-owned Singapore subsidiary of the Company, and a Malaysian citizen (the “Trustee”) entered into a trust deed, under which, 49.1% of BCPL’s equity interests in BMJB, a Malaysian company, which previously was a 100% subsidiary of BCPL, was transferred to the Trustee. According to the trust deed, all of the beneficial interests in BMJB belong to BCPL and the Trustee shall hold the legal title of the transferred shares on trust for and act on behalf of BCPL absolutely. Any dividend, interest and other benefits received or receivable by the Trustee will be transferred to BCPL. The Trustee shall exercise the managerial rights and voting power in a manner directed by a prior written notice from BCPL. The Trustee shall be obligated to vote in the same manner as BCPL in the absence of any written notice. In addition,
an undated Form of Transfer of Securities with the transferee’s name left blank was duly executed by the Trustee and delivered to BCPL. Therefore, BCPL can transfer the 49.1% of equity interests to any party at any time without further approval by the Trustee. Accordingly, we believe we hold all beneficial rights, obligation and the power of the 100% equity interest in BMJB, and therefore consolidate 100% of equity interests in BMJB into our financial statements. |
D. |
Property, Plant and Equipment |
| Location |
Approximate Sq. Meters |
|||
| Beijing |
120,000 | |||
| Hangzhou |
25,000 | |||
| Singapore |
1,200 | |||
| Malaysia |
3,400 | |||
ITEM 4A. |
UNRESOLVED STAFF COMMENTS |
Fiscal Years Ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Number of new contracts won during the year |
4,784 | 5,588 | 6,003 | |||||||||
| Total amount of new contracts (million) |
$ | 549.2 | $ | 734.3 | $ | 1,065.4 | ||||||
| Average price per contract |
$ | 114,790 | $ | 131,408 | $ | 177,474 | ||||||
Fiscal Years Ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Backlog Situation: |
||||||||||||
| Contracts newly entered and unfinished (million) |
$ | 262.3 | $ | 356.5 | $ | 588.1 | ||||||
| Contracts entered in prior years and unfinished (million) |
$ | 309.5 | $ | 328.6 | $ | 360.7 | ||||||
| Total amount of backlog (million) |
$ | 571.8 | $ | 685.0 | $ | 948.8 | ||||||
| • | The ability in developing and acquiring new products and systems in order to improve competitiveness, which can increase both sales revenue and margins. The success of our business depends in great measure on our ability to keep pace with or even lead changes that occur in our industry. |
| • | The success in expanding our business in targeted emerging markets and overseas markets, which may require us to overcome domestic competition and trade barriers. |
| • | The ability to retain our existing customers and to obtain additional business opportunities. Since we do not have long-term purchase commitments from customers, our customers can shift to other competitors for future projects. It is important to maintain our customer base in order to sustain and expand our business. |
| • | The ability to secure a steady stream of new customers. In order for our business to continue to succeed and grow, it is vital to secure contracts with new customers on a regular basis. |
| • | The ability to secure adequate engineering resources and relatively low cost engineering staff, which can increase our profitability and potential business prospects. One of the competitive advantages that we enjoy is the access to lower cost engineering staff as compared to those of our Western and Japan-based competitors. The plentiful supply of affordable engineering talent in China is a key element of our overall business strategy. |
| • | Further improvement in product design and maintaining high standards of quality control, which can reduce or avoid product defects. Any product defects will result in additional costs and cause damage to our business reputation. |
| • | The ability to secure and protect our intellectual property rights as our business is based on a number of proprietary products and systems, and we strive to strengthen and differentiate our product portfolio by developing new and innovative products and product improvements. |
| • | The success in penetrating into the railway, conventional and nuclear power market sectors, which can develop revenue streams and improve margins. In addition to the traditional industrial automation business, our plan for future growth includes an increasing emphasis on rail control systems, power generation control systems and mechanical and electrical solutions both in China and internationally. |
| • | The ability to obtain greater financial resources to match or even exceed our major competitors, in order to compete effectively with them, and to weather any extended weaknesses in the automation and control market. |
| • | The continued growth in the Chinese and Southeast Asia industry in general. This continued growth will create more business opportunities for us, because industrial companies in Asia are our principal source of revenues. |
| • | The ability to maintain key personnel and senior management, who will have significant impact and contribution to our future business. The ability to attract and retain additional qualified management, technical, sales and marketing personnel will be vital. |
| • | The continuation of the preferential tax treatment and subsidies currently available to our PRC subsidiaries, which will be critical to our future operating results. If governmental subsidies were reduced or eliminated, our after-tax income would be adversely affected. |
| • | The exchange rate fluctuation of RMB and SGD against US dollars, which will result in future translation gain or loss as most of our assets are denominated in RMB and SGD. In addition, some of our raw materials, components and major equipment are imported from overseas. In the event that the RMB and SGD appreciate against other foreign currencies, our costs will decrease and our profitability will increase. However, the impact will be the other way around if RMB and SGD depreciate against other foreign currencies. |
| • | The impact of COVID-19 pandemic. Following the outbreak of COVID-19, our business has been adversely impacted since the third quarter of the fiscal year 2020, but we have seen a gradual recovery of our overall business resulting from improving health statistics in China since March 2020. Though the future development will still depend on the duration and severity of COVID-19, we are expecting limited impact on the domestic business on the financial statements as a result of the COVID-19 outbreak. However, we anticipate the pandemic will continue to have an adverse effect on our overseas business, especially in Southeast Asia and South Asia. The duration and magnitude of the impact from the pandemic on our business will depend on numerous evolving factors that cannot be accurately predicted or evaluated. For additional details on the impact of the COVID-19 outbreak, see “Item 3. Key Information—D. Risk Factors—Risks Related
to Our Business—An outbreak of disease or similar public health threat, or fear of such an event, could have a material adverse impact on our business, operating results and financial condition.” |
| • | Total assets increased by $77.5 million from $1,594.3 million as of June 30, 2021 to $1,671.8 million as of June 30, 2022. The increase was mainly due to an increase of $43.3 million in inventories, an increase of $32.2 million in costs and estimated earnings in excess of billings, an increase of $18.9 million in goodwill, which was partially offset by a decrease of $36.6 million in short-term investments and a decrease of $13.6 million in investments in equity investees. |
| • | Cash and cash equivalents increased by $15.4 million from $664.3 million as of June 30, 2021 to $679.8 million as of June 30, 2022. The increase was mainly due to $13.3 million net cash provided by investing activities and $54.5 million cash generated from operating activities, partially offset by $19.6 million cash used in financing activities. |
| • | Short-term investments as of June 30, 2022 were $12.2 million compared to $48.8 million as of June 30, 2021, representing a decrease of $36.6 million, or 75.0%. The decrease was mainly due to $100.6 million maturity of short-term investments, partially offset by $64.4 million purchases of short-term investments. |
| • | Accounts receivables decreased by $13.1 million, or 4.0%, from $330.9 million as of June 30, 2021 to $317.8 million as of June 30, 2022. |
| • | Property, plant and equipment increased by $4.2 million, or 4.5%, from $94.0 million as of June 30, 2021 to $98.2 million as of June 30, 2022. |
| • | Investments in equity investees decreased by $13.6 million, or 22.6%, from $60.2 million as of June 30, 2021 to $46.6 million as of June 30, 2022. |
| • | Deferred tax assets were $4.5 million as of June 30, 2022. Based on our historical operating results and order backlog, we believe that it is more than likely that the deferred tax assets net of valuation allowance would be realized. |
| • | Total liabilities increased by $53.7 million, or 11.9%, from $452.3 million as of June 30, 2021 to $505.9 million as of June 30, 2022. The increase in liabilities was mainly due to an increase of $33.7 million in accounts payable, an increase of $21.7 million in deferred revenue, partially offset by a decrease of $3.8 million in deferred tax liabilities. |
| • | Accounts payables increased by $33.7 million, or 24.0%, from $140.2 million as of June 30, 2021 to $174.0 million as of June 30, 2022. |
| • | Deferred revenue increased by $21.7 million, or 11.7%, from $184.5 million as of June 30, 2021 to $206.2 million as of June 30, 2022. |
(In USD millions) |
Fiscal Year Ended June 30, |
|||||||||||||||
2022 |
||||||||||||||||
$ |
% of Revenues |
$ |
% of Revenues |
|||||||||||||
| Industrial Automation |
337.1 | 56.8 | 439.9 | 62.2 | ||||||||||||
| Rail Transportation |
188.2 | 31.7 | 183.8 | 26.0 | ||||||||||||
| Mechanical and Electrical Solution |
68.2 | 11.5 | 83.8 | 11.8 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
593.5 |
100.0 |
707.5 |
100.0 |
||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
(In USD thousands) |
Fiscal Years Ended June 30, |
|||||||||||
2021 |
2022 |
|||||||||||
| Net cash provided by operating activities |
$ | 175,124 | $ | 79,283 | $ | 54,526 | ||||||
| Net cash (used in)/provided by investing activities |
$ | (187,580 | ) | $ | 270,258 | $ | 13,257 | |||||
| Net cash used in financing activities |
$ | (18,213 | ) | $ | (12,218 | ) | $ | (19,556 | ) | |||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash |
$ | (8,621 | ) | $ | 39,127 | $ | (24,747 | ) | ||||
| Net (decrease) increase in cash, cash equivalents and restricted cash |
$ | (39,290 | ) | $ | 376,450 | $ | 23,480 | |||||
| Cash, cash equivalents and restricted cash, beginning of year |
$ | 358,387 | $ | 319,097 | $ | 695,547 | ||||||
| Cash, cash equivalents and restricted cash, end of year |
$ | 319,097 | $ | 695,547 | $ | 719,027 | ||||||
(In USD thousands) |
Total |
Less than 1 year |
1-3 years |
3-5 years |
More than 5 years |
|||||||||||||||
| Short-term & Long-term Loans |
||||||||||||||||||||
| -Principal |
15,710 | 15,276 | 266 | 77 | 91 | |||||||||||||||
| -Interest |
73 | 23 | 21 | 8 | 21 | |||||||||||||||
| Operating Lease Obligations (1) |
4,145 | 2,712 | 1,331 | 102 | — | |||||||||||||||
| Purchase Obligations (2) |
331,895 | 218,487 | 73,742 | 27,813 | 11,853 | |||||||||||||||
| Capital Obligations (3) |
47,426 | 41,553 | 5,873 | — | — | |||||||||||||||
| Standby Letters of Credit (4) |
629 | 629 | — | — | — | |||||||||||||||
| Performance Guarantees (5) |
75,406 | 32,308 | 41,013 | 2,085 | — | |||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
475,284 |
310,988 |
122,246 |
30,085 |
11,965 |
|||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
(1) |
Operating lease obligations represent the future minimum payments under non-cancelable operating leases. |
(2) |
As of June 30, 2022, we had $331.9 million in purchase obligations for the coming fiscal years, for purchases of inventories and subcontracts. The inventories will be mainly used for fulfilling existing contracts or new contracts resulted from the expansion of our operations. |
(3) |
As of June 30, 2022, we had $47.4 million in capital obligations for the coming fiscal year, mainly for the construction of facilities. |
(4) |
We have issued letters of credit to our suppliers to serve as assurance of payment, and issued to our subsidiaries as comprehensive credit. When a letter of credit is issued, a proportion of the total amount covered by the letter of credit may be required to be deposited in the bank, and is not available until the payment has been settled or the letter of credit has expired. As of June 30, 2022, we had $0.6 million in standby letters of credit obligations. |
(5) |
We have provided performance guarantees to our customers to serve as assurance of performance for the contractual obligations. When a performance guarantee is issued, a proportion of the total guarantee amount may be required to be deposited in the bank, and is not available until the guarantee is expired. As of June 30, 2022, we had $75.4 million of outstanding performance guarantees obligation, with $3.0 million of restricted cash deposited in banks for performance guarantees. |
| • | Study phase |
| • | Requirement phase |
| • | Designing phase |
| • | Implementation phase |
| • | Testing phase |
| • | Inspection phase |
| • | Maintaining phase |
| • | Transportation Automation; |
| • | Manufacturing Automation; and |
| • | Process Automation. |
| Name |
Age |
Position | ||
| Li QIAO |
65 | Chairwoman and Director | ||
| 58 | Chief Executive Officer, Chief Strategy Officer and Director | |||
| Jianyun CHAI |
61 | Director | ||
| Kok Peng TEH |
74 | Director | ||
| Khiaw Ngoh TAN |
65 | Director | ||
| Chit Nim (Colin) SUNG |
56 | Deputy Chief Executive Officer | ||
| Steven WANG |
54 | Chief Financial Officer | ||
| Yue XU |
61 | Co-Chief Operating Officer | ||
| Lei FANG |
45 | Co-Chief Operating Officer | ||
| Chunming HE |
54 | Chief Technology Officer | ||
| Hongyuan SHI |
53 | Chief Human Resource Officer | ||
| Chuan (Arden) XIA |
38 | Chief Public Relations Officer |
| Name |
Ordinary Shares Underlying Options Granted/Restricted Shares Awarded |
Exercise Price (US$ per Option Granted) |
Date of Grant |
Date of Expiration | ||||
| Li QIAO |
* (1) |
11.85 | November 16, 2020 | November 16, 2030 | ||||
| * (2) |
— | — | ||||||
| Jianyun CHAI |
* (2) |
— | — | |||||
| Kok Peng TEH |
* (2) |
— | November 16, 2020 | — | ||||
| Khiaw Ngoh TAN |
* (2) |
— | November 16, 2020 | — | ||||
| Chit Nim (Colin) SUNG |
* (1) |
11.85 | November 16, 2020 | November 16, 2030 | ||||
| * (2) |
— | — | ||||||
| Steven WANG |
* (1) |
11.85 | November 16, 2020 | November 16, 2030 | ||||
| * (2) |
— | November 16, 2020 | — | |||||
| Yue XU |
* (1) |
11.85 | November 16, 2020 | November 16, 2030 | ||||
| * (2) |
— | November 16, 2020 | — | |||||
| Lei FANG |
* (1) |
11.85 | November 16, 2020 | November 16, 2030 | ||||
| * (2) |
— | November 16, 2020 | — | |||||
| Chunming HE |
* (1) |
11.85 | November 16, 2020 | November 16, 2030 | ||||
| * (2) |
— | November 16, 2020 | — | |||||
| Hongyuan SHI |
* (1) |
11.85 | November 16, 2020 | November 16, 2030 | ||||
| * (2) |
— | November 16, 2020 | — | |||||
| Chuan (Arden) XIA |
* (1) |
11.85 | November 16, 2020 | November 16, 2030 | ||||
| * (2) |
— | November 16, 2020 | — |
| * | Less than 1% of our total outstanding ordinary shares on an as-converted basis. |
| (1) | Represents ordinary shares underlying options. |
| (2) | Represents restricted shares awarded. These restricted shares are vested in quarterly installment over a three-year period commencing from January 2017 to November 2020 in the case of directors and March 2021 in the case of executive officers and other employees. Holders of restricted shares are entitled to dividend and voting rights attached to the underlying ordinary shares but are not permitted to transfer such shares to any third parties unless such shares are registered and qualified under the Securities Act, or unless an exemption from such registration and qualification is otherwise available. |
| • | selecting our independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors; |
| • | reviewing with our independent auditors any audit problems or difficulties and management’s response; |
| • | reviewing and approving all proposed related-party transactions; |
| • | discussing the annual audited financial statements with management and our independent auditors; |
| • | reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of significant internal control deficiencies; |
| • | annually reviewing and reassessing the adequacy of our audit committee charter; |
| • | such other matters that are specifically delegated to our audit committee by our board of directors from time to time; |
| • | meeting separately and periodically with management and our internal and independent auditors; and |
| • | reporting regularly to the full board of directors. |
| • | approving and overseeing the compensation package for our chief executive officer and the other senior executive officers; |
| • | reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of those goals and objectives, and setting the compensation level of our chief executive officer based on this evaluation; |
| • | reviewing and making recommendations in respect of director compensation; |
| • | engaging and overseeing compensation consultants; |
| • | reviewing periodically and making recommendations to the Board regarding any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans and the administration of those plans; and |
| • | reviewing and making recommendations to the Board regarding succession plans for the chief executive officer and other senior officers. |
| • | identifying and recommending to the Board nominees for election or re-election to the board, or for appointment to fill any vacancy; |
| • | reviewing annually with the board the current composition of the board in light of the characteristics of independence, age, skills, experience and availability of service to us; |
| • | identifying and recommending to the board the directors to serve as members of the board’s committees; and |
| • | monitoring compliance with our Corporate Governance Guidelines. |
| Board Diversity Matrix (as of September 2, 2022) |
||||||||||||||||
| Country of Principal Executive Offices |
China | |||||||||||||||
| Foreign Private Issuer |
Yes | |||||||||||||||
| Disclosure Prohibited Under Home Country Law |
No | |||||||||||||||
| Total Number of Directors |
5 | |||||||||||||||
Female |
Male |
Non-Binary |
Did Not Disclose Gender |
|||||||||||||
| Part I: Gender Identity |
||||||||||||||||
| Directors |
2 | 3 | 0 | 0 | ||||||||||||
| Part II: Demographic Background |
||||||||||||||||
| Underrepresented Individual in Home Country Jurisdiction |
0 | |||||||||||||||
| LGBTQ+ |
0 | |||||||||||||||
| Did Not Disclose Demographic Background |
5 | |||||||||||||||
| Category |
China |
Overseas |
Total |
|||||||||
| Sales & Marketing |
580 | 15 | 595 | |||||||||
| Research and development |
1,118 | — | 1,118 | |||||||||
| Engineering |
1,288 | 511 | 1,799 | |||||||||
| Production |
389 | 6 | 395 | |||||||||
| Management |
418 | 73 | 491 | |||||||||
| |
|
|
|
|
|
|||||||
| Total |
3,793 |
605 |
4,398 |
|||||||||
| |
|
|
|
|
|
|||||||
Ordinary Shares Beneficially Owned as of |
||||||||||
| Title (if any) |
Number |
% |
||||||||
| Officers and Directors † |
||||||||||
| Li QIAO |
Chairwoman | 689,338 | (1) |
1.11 | ||||||
| Director, Chief Executive Officer and Chief Strategy Officer |
1,306,942 | (2) |
2.11 | |||||||
| Jianyun CHAI |
Director | * | * | |||||||
| Kok Peng TEH |
Director | * | * | |||||||
| Khiaw Ngoh TAN |
Director | * | * | |||||||
| Chit Nim (Colin) SUNG |
Deputy Chief Executive Officer | * | * | |||||||
| Steven WANG |
Chief Financial Officer | * | * | |||||||
| Yue XU |
Co-Chief Operating Officer | * | * | |||||||
| Lei FANG |
Co-Chief Operating Officer | 842,570 | (3) |
1.36 | ||||||
| Chunming HE |
Chief Technology Officer | * | * | |||||||
| Hongyuan SHI |
Chief Human Resource Officer | * | * | |||||||
| Chuan (Arden) XIA |
Chief Public Relations Officer | * | * | |||||||
| All directors and officers as a group |
3,548,139 | 5.71 | ||||||||
| 5% Securities Holder |
||||||||||
| Davis Selected Advisers, L.P. |
6,802,977 | (4) |
10.98 | |||||||
| FIL Ltd |
4,447,326 | (5) |
7.18 | |||||||
| Ace Lead Profit Limited |
4,144,223 | (6) |
6.69 | |||||||
| * | Less than 1% of the total issued and outstanding shares. |
| † | The business address of each director and officer set forth in the table is c/o Hollysys Automation Technologies Ltd., No. 2 Disheng Middle Road, Beijing Economic-Technological Development Area, Beijing, China 100176. |
| (1) | Represents (i) 528,088 ordinary shares held by Ms. Li QIAO through Acclaimed Insight Investments Ltd, Glory Pearl International Ltd and Time Keep Investment Ltd., (ii) 88,750 vested restricted shares, (iii) 46,250 unvested restricted shares, and (iv) 26,250 ordinary shares underlying options exercisable within 60 days after September 2, 2022. |
| (2) | Represents ordinary shares held by Mr. Changli WANG through Excellent Link Enterprises Limited and Jewelake Capital Limited. |
| (3) | Represents (i) 749,076 ordinary shares held by Mr. Lei FANG through Golden Result Enterprises Limited and Gannan Times Holding Limited, (ii) 32,070 vested restricted shares (iii) 44,930 unvested restricted shares, and (iv) 16,494 ordinary shares underlying options exercisable within 60 days after September 2, 2022. |
| (4) | Represents 6,934,478 ordinary shares held by Davis Selected Advisers, L.P., as last reported in a Schedule 13G/A filed with the SEC on February 11, 2022. |
| (5) | Represents 4,380,844 ordinary shares held by FIL Ltd, as last reported in a Schedule 13G filed with the SEC on February 9, 2022. |
| (6) | Represents 4,144,223 ordinary shares held by Ace Lead Profits Limited, as reported in a Schedule 13D filed with the SEC on June 29, 2021. As set forth therein, Ace Lead Profits Limited is wholly owned and controlled by Baiqing Shao and Baiqing Shao may be deemed to be a beneficial owner of the shares held by Ace Lead Profits Limited. |
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
ITEM 8. |
FINANCIAL INFORMATION |
ITEM 9. |
THE OFFER AND LISTING |
ITEM 10. |
ADDITIONAL INFORMATION |
| • | certain financial institutions; |
| • | insurance companies; |
| • | dealers and traders in securities who use a mark-to-market method of tax accounting; |
| • | persons holding ordinary shares as part of a hedging transaction, straddle, conversion transaction or other integrated transaction; |
| • | persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar; |
| • | entities classified as partnerships for U.S. federal income tax purposes; |
| • | persons subject to the alternative minimum tax; |
| • | tax-exempt entities, including “individual retirement accounts” and “Roth IRAs”; |
| • | regulated investment companies; |
| • | persons that own or are deemed to own 10% or more of the stock of the Company, by vote or value; |
| • | persons holding the ordinary shares in connection with a trade or business carried on outside the United States; or |
| • | persons who acquired ordinary shares pursuant to the exercise of any employee stock option or otherwise as compensation. |
| • | a citizen or individual resident of the United States; |
| • | a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or of any political subdivision thereof; or |
| • | an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. |
| Fiscal Year |
Announcement Date |
Record Date |
Payment Date |
Dividend Amount (per ordinary share) | ||||
| 2016 |
September 26, 2016 | October 26, 2016 | November 11, 2016 | $0.20 | ||||
| 2017 |
September 25, 2017 | October 16, 2017 | November 06, 2017 | $0.12 | ||||
| 2018 |
September 27, 2018 | October 22, 2018 | November 12, 2018 | $0.18 | ||||
| 2019 |
September 27, 2019 | October 22, 2019 | November 12, 2019 | $0.21 | ||||
| 2020 |
October 5, 2020 | October 22, 2020 | November 20, 2020 | $0.20 | ||||
| 2021 |
March 10, 2022 | April 4, 2022 | April 25, 2022 | $0.32 |
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITIES HOLDERS AND USE OF PROCEEDS |
ITEM 15. |
CONTROLS AND PROCEDURES |
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. |
CODE OF ETHICS |
ITEM 16C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Union Power |
Ernst & Young |
|||||||||||
(in USD) |
FY2022 |
FY2021 |
FY2021 |
|||||||||
| Audit fees (1) |
$ | 1,075,000 | $ | 2,800,000 | $ | 1,206,143 | ||||||
| Audit-related fees (2) |
500,000 | — | 89,737 | |||||||||
| Tax fees (3) |
— | — | 31,834 | |||||||||
| |
|
|
|
|
|
|||||||
| Total |
$ | 1,575,000 | $ | 2,800,000 | $ | 1,327,714 | ||||||
| |
|
|
|
|
|
|||||||
| (1) | Audit fees were related to the audit of our annual financial statements and services that are normally provided by the accountant in connection with statutory and regulatory filings. |
| (2) | Audit-related fees include fees for services rendered related to our quarterly financial information for the fiscal years ended June 30, 2022 and 2021. |
| (3) | Tax fees were related to the tax service, including tax compliance and tax advice. |
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
| Period |
(a) Total number of Shares Purchased |
(b) Average Price Paid per Share (in US$) |
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs |
||||||||||||
| July 1—31, 2021 |
— | — | — | — | ||||||||||||
| August 1—31, 2021 |
— | — | — | — | ||||||||||||
| September 1—30, 2021 |
— | — | — | — | ||||||||||||
| October 1—31, 2021 |
— | — | — | — | ||||||||||||
| November 1—30, 2021 |
— | — | — | — | ||||||||||||
| December 1—31, 2021 |
— | — | — | — | ||||||||||||
| January 1—31, 2022 |
— | — | — | — | ||||||||||||
| February 1—28, 2022 |
— | — | — | — | ||||||||||||
| March 1—31, 2022 |
1,055,000 | (1) |
17.16 | — | — | |||||||||||
| April 1—30, 2022 |
— | — | — | — | ||||||||||||
| May 1—31, 2022 |
93,682 | (2) |
14.73 | — | — | |||||||||||
| June 1—30, 2022 |
41,736 | (2) |
14.72 | — | — | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
1,190,418 |
16.88 |
— |
— |
||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| (1) | Dr. Changli Wang, the CEO and director of Hollysys, through a special purpose vehicle beneficially owned and funded by him, purchased a total of 1,055,000 ordinary shares of the Company in the open market in compliance with applicable laws and regulations. |
| (2) | Certain members of the senior management of Hollysys purchased ordinary shares of the Company in open market transactions in compliance with applicable laws and regulations. |
ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16G. |
CORPORATE GOVERNANCE |
ITEM 16H. |
MINE SAFETY DISCLOSURE |
ITEM 16l. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
ITEM 17. |
FINANCIAL STATEMENTS |
ITEM 18. |
FINANCIAL STATEMENTS |
ITEM 19. |
EXHIBITS |
| Number |
Description | |
| 1.1 | ||
| 2.1 | ||
| 2.2 | ||
| 4.1 | ||
| 8.1 | ||
| Number |
Description | |
| 11.1 | ||
| 12.1 | ||
| 12.2 | ||
| 13.1* | ||
| 13.2* | ||
| 15.1 | ||
| 15.2 | ||
| 99.1 | ||
| 101.INS | Inline XBRL Instant Document—this instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104. | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
| * | Furnished with this annual report on Form 20-F |
| HOLLYSYS AUTOMATION TECHNOLOGIES LTD. |
| /s/ Changli Wang |
| Chief Executive Officer |
• |
We tested the effectiveness of internal controls over the recognition of revenue and the determination of estimated contract costs including controls over the review of management’s assumptions and key inputs used to recognize revenue and costs on integrated solutions contracts using the cost-to-cost |
• |
We evaluated the appropriateness and consistency of management’s methods and assumptions used to recognize revenue and costs on integrated solutions contracts using the cost-to-cost |
• |
• |
Comparing costs incurred to date to the costs management estimated to be incurred to date. |
• |
Evaluating management’s ability to achieve the estimates of total cost by performing corroborating inquiries with Company personnel, including project managers, and comparing the estimates to documentation such as management’s work plans, contract terms and requirements, and purchase orders with suppliers. Our evaluation of management’s assumptions included consideration of historical and current project performance such as consistency of gross margin, identified risks related to project timing including technical and schedule matters, and the status of internal and third-party activities such as hardware, software, and labor. |
| We have served as the Company’s auditor since 2021. |
| Hong Kong |
| September 22 , 2022 |
| We have served as the Company’s auditor since 2021. i Hong Kong September 22 , 2022F-5 |
June 30, |
||||||||||||
Notes |
2021 |
2022 |
||||||||||
| ASSETS |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
$ | i 664,321 | $ | i 679,754 | ||||||||
| Short-term investments |
i 48,808 | i 12,203 | ||||||||||
| Restricted cash |
i 25,294 | i 38,486 | ||||||||||
| Accounts receivable, net of allowance for credit losses of $ i 66,839 and $ i 77,603 as of June 30,
2021 and 2022, respectively |
4 | i 330,853 | i 317,763 | |||||||||
| Costs and estimated earnings in excess of billings, net of allowance for credit losses of |
5 | i 196,706 | i 228,877 | |||||||||
| Accounts receivable retention |
6 | i 4,943 | i 6,005 | |||||||||
| Other receivables, net of allowance for credit losses of $ i 16,675 and $ i 12,449 as of June 30,
2021 and 2022, respectively |
i 18,937 | i 26,100 | ||||||||||
| Advances to suppliers |
i 20,140 | i 33,851 | ||||||||||
| Amounts due from related parties |
22 | i 28,243 | i 27,360 | |||||||||
| Inventories |
3 | i 47,912 | i 91,243 | |||||||||
| Prepaid expenses |
i 937 | i 667 | ||||||||||
| Income tax recoverable |
i 464 | i 258 | ||||||||||
| |
|
|
|
|||||||||
| Total current assets |
i 1,387,558 |
i 1,462,567 |
||||||||||
| |
|
|
|
|||||||||
| Non-current assets: |
||||||||||||
| Restricted cash |
i 5,932 | i 787 | ||||||||||
| Costs and estimated earnings in excess of billings |
i 1,230 | i 3,021 | ||||||||||
| Accounts receivable retention |
6 | i 4,397 | i 6,561 | |||||||||
| Prepaid expenses |
i 1 | i 1 | ||||||||||
| Property, plant and equipment, net |
7 | i 94,046 | i 98,249 | |||||||||
| Prepaid land leases |
8 | i 16,568 | i 12,447 | |||||||||
| Intangible assets, net |
9 | i 1,399 | i 10,742 | |||||||||
| Investments in equity investees |
11 | i 60,166 | i 46,581 | |||||||||
| Investments in securities |
i 2,622 | i 1,693 | ||||||||||
| Goodwill |
10 | i 1,598 | i 20,539 | |||||||||
| Deferred tax assets |
19 | i 12,480 | i 4,540 | |||||||||
| Operating lease right-of-use |
20 | i 6,256 | i 4,045 | |||||||||
| |
|
|
|
|||||||||
| Total non-current assets |
i 206,695 |
i 209,206 |
||||||||||
| |
|
|
|
|||||||||
| Total assets |
$ |
i 1,594,253 |
$ |
i 1,671,773 |
||||||||
| |
|
|
|
|||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
| Current liabilities |
||||||||||||
| Short-term bank loans |
13 | i — | i 66 | |||||||||
| Current portion of long-term loans |
14 | i 15,308 | i 15,210 | |||||||||
| Accounts payable |
i 140,235 | i 173,953 | ||||||||||
| Construction costs payable |
i 1,292 | i 92 | ||||||||||
| Deferred revenue |
i 184,543 | i 206,222 | ||||||||||
| Accrued payroll and related expenses |
i 22,077 | i 23,535 | ||||||||||
| Income tax payable |
i 3,508 | i 4,509 | ||||||||||
| Warranty liabilities |
12 | i 5,902 | i 3,280 | |||||||||
| Other tax payables |
i 6,373 | i 11,587 | ||||||||||
| Accrued liabilities |
i 38,633 | i 37,282 | ||||||||||
| Amounts due to related parties |
22 | i 1,661 | i 6,299 | |||||||||
| Current portion of o ther liability |
— | i 3 | ||||||||||
| Operating lease liabilities |
20 | i 3,098 | i 2,518 | |||||||||
| |
|
|
|
|||||||||
| Total current liabilities |
i 422,630 |
i 484,556 |
||||||||||
| |
|
|
|
|||||||||
| Non-current liabilities |
||||||||||||
| Accrued liabilities |
i 4,569 | i 3,349 | ||||||||||
| Long-term loans |
14 | i 698 | i 434 | |||||||||
| Accounts payable |
i 982 | i 1,556 | ||||||||||
| Deferred tax liabilities |
19 | i 16,829 | i 12,966 | |||||||||
| Warranty liabilities |
12 | i 3,649 | i 1,722 | |||||||||
| Operating lease liabilities |
20 | i 2,928 | i 1,282 | |||||||||
| Long-term o ther liabilities |
— | i 80 | ||||||||||
| |
|
|
|
|||||||||
| Total non-current liabilities |
i 29,655 |
i 21,389 | ||||||||||
| |
|
|
|
|||||||||
| Total liabilities |
i 452,285 |
i 505,945 | ||||||||||
| |
|
|
|
|||||||||
| Commitments and contingencies |
23 | i — | i — | |||||||||
| Stockholders’ equity: |
16 | |||||||||||
| Ordinary shares, par value $ i i 0.001 /
per share, i i 100,000,000 / shares authorized; i i 61,367,337 /
shares and i i 61,962,449 / shares issued and outstanding as of June 30,
2021 and 2022, respectively |
i 61 | i 62 | ||||||||||
| Additional paid-in capital |
i 233,768 | i 243,476 | ||||||||||
| Statutory reserves |
i 64,449 | i 77,263 | ||||||||||
| Retained earnings |
i 806,598 | i 857,141 | ||||||||||
| Accumulated other comprehensive income (loss) |
i 32,814 | ( i 12,655 | ) | |||||||||
| |
|
|
|
|||||||||
| Total Hollysys Automation Technologies Ltd. stockholders’ equity |
i 1,137,690 | i 1,165,287 | ||||||||||
| Non-controlling interests |
i 4,278 | i 541 | ||||||||||
| |
|
|
|
|||||||||
| Total equity |
i 1,141,968 | i 1,165,828 | ||||||||||
| |
|
|
|
|||||||||
| Total liabilities and equity |
$ |
i 1,594,253 |
$ | i 1,671,773 | ||||||||
| |
|
|
|
Year ended June 30, |
||||||||||||||||
Notes |
2020 |
2021 |
2022 |
|||||||||||||
| Net revenues |
||||||||||||||||
| Integrated solutions contracts revenue (including revenue from related parties of $ i 227, $ i 1,446
and $ i 2,288 for the years ended June 30, 2020, 2021 and 2022, respectively) |
$ | i 414,272 | $ | i 460,180 | $ | i 573,567 | ||||||||||
| Product sales (including revenue from related parties of $ i 3,003, $ i 8,186 and $ i 4,018
for the years ended June 30, 2020, 2021 and 2022, respectively) |
i 20,144 | i 28,667 | i 38,486 | |||||||||||||
| Revenue from services |
i 68,911 | i 104,619 | i 95,409 | |||||||||||||
| |
|
|
|
|
|
|||||||||||
| Total net revenues |
i 503,327 |
i 593,466 |
i 707,462 |
|||||||||||||
| Costs of integrated solutions contracts (including purchases from related parties of $ i 1,400, $ i 1,860
and $ i 1,214 for the years ended June 30, 2020, 2021 and 2022, respectively) |
i 281,818 | i 336,471 | i 422,236 | |||||||||||||
| Costs of products sold (including purchases from related parties of $ i 177, $ i 1,198
and $ i 519 for the years ended June 30, 2020, 2021 and 2022, respectively) |
i 5,456 | i 5,293 | i 10,247 | |||||||||||||
| Costs of services rendered |
i 25,485 | i 33,423 | i 35,622 | |||||||||||||
| |
|
|
|
|
|
|||||||||||
| Gross profit |
i 190,568 |
i 218,279 |
i 239,357 |
|||||||||||||
| Operating expenses |
||||||||||||||||
| Selling |
i 30,642 | i 35,197 | i 45,301 | |||||||||||||
| General and administrative |
i 39,114 | i 69,982 | i 80,241 | |||||||||||||
| Goodwill impairment charge |
i 35,767 | i — | i — | |||||||||||||
| Research and development (including research and development from related parties of $ i 655, $ i 212
and $ i 208 for the years ended June 30, 2020, 2021 and 2022, respectively) |
i 41,876 | i 55,954 | i 69,580 | |||||||||||||
| VAT refunds and government subsidies |
( i 26,259 | ) | ( i 30,099 | ) | ( i 30,309 | ) | ||||||||||
| |
|
|
|
|
|
|||||||||||
| Total operating expenses |
i 121,140 |
i 131,034 |
i 164,813 |
|||||||||||||
| |
|
|
|
|
|
|||||||||||
| Income from operations |
i 69,428 |
i 87,245 |
i 74,544 |
|||||||||||||
| Other income, net (including other income from related parties of $ i 3,414, $ i 2,445 and $ i 2,830
for the years ended June 30, 2020, 2021 and 2022, respectively) |
i 4,683 | i 10,449 | i 2,185 | |||||||||||||
| Foreign exchange gain (loss) |
i 599 | ( i 6,219 | ) | i 1,789 | ||||||||||||
| Gains on disposal of an investment in an equity investee |
i 5,763 | i — | i 7,995 | |||||||||||||
| Losses on disposal of subsidiaries |
i — | i — | ( i 3 | ) | ||||||||||||
| Gains on disposal of an investment in securities |
i — | i 3,323 | i — | |||||||||||||
| Impairment loss of investments in cost investees |
i — | i — | ( i 773 | ) | ||||||||||||
| Share of net income of equity investees |
i 3,131 | i 604 | i 1,838 | |||||||||||||
| Interest income |
i 13,060 | i 14,131 | i 12,698 | |||||||||||||
| Interest expenses |
( i 306 | ) | ( i 553 | ) | ( i 731 | ) | ||||||||||
| Dividend income from investments in securities |
i 1,139 | i 912 | i 85 | |||||||||||||
| |
|
|
|
|
|
|||||||||||
| Income before income taxes |
i 97,497 |
i 109,892 |
i 99,627 |
|||||||||||||
| Income tax expenses |
19 | i 18,171 | i 20,554 | i 16,634 | ||||||||||||
| |
|
|
|
|
|
|||||||||||
| Net income |
i 79,326 |
i 89,338 |
i 82,993 |
|||||||||||||
| Less: Net loss attributable to non-controlling interests |
( i 70 | ) | ( i 371 | ) | ( i 189 | ) | ||||||||||
| |
|
|
|
|
|
|||||||||||
| Net income attributable to Hollysys Automation Technologies Ltd. |
$ |
i 79,396 |
$ |
i 89,709 |
$ |
i 83,182 |
||||||||||
| |
|
|
|
|
|
|||||||||||
| Other comprehensive income, net of tax of nil |
||||||||||||||||
| Translation adjustments |
$ | ( i 28,313 | ) | $ | i 96,577 | $ | ( i 46,590 | ) | ||||||||
| |
|
|
|
|
|
|||||||||||
| Comprehensive income |
i 51,013 |
i 185,915 |
i 36,403 |
|||||||||||||
| |
|
|
|
|
|
|||||||||||
| Less: Comprehensive loss attributable to non-controlling interests |
( i 387 | ) | ( i 125 | ) | ( i 1,310 | ) | ||||||||||
| |
|
|
|
|
|
|||||||||||
| Comprehensive income attributable to Hollysys Automation Technologies Ltd. |
$ |
i 51,400 |
$ |
i 186,040 |
$ |
i 37,713 |
||||||||||
| |
|
|
|
|
|
|||||||||||
| Net income per share: |
||||||||||||||||
| Basic |
21 | $ | i 1.31 | i 1.48 | i 1.36 | |||||||||||
| Diluted |
21 | $ | i 1.31 | i 1.46 | i 1.35 | |||||||||||
| Shares used in net income per share computation: |
||||||||||||||||
| Basic |
i 60,478,717 | i 60,566,709 | i 61,007,806 | |||||||||||||
| Diluted |
i 60,609,242 | i 61,513,749 | i 61,568,476 |
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Cash flows from operating activities: |
||||||||||||
| Net income |
$ | i 79,326 | $ | i 89,338 | $ | i 82,993 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
| Depreciation of property, plant and equipment |
i 8,483 | i 9,959 | i 10,263 | |||||||||
| Amortization of prepaid land leases |
i 384 | i 454 | i 382 | |||||||||
| Amortization of intangible assets |
i 300 | i 316 | i 1,356 | |||||||||
| Allowance for credit losses |
i 690 | i 8,656 | i 16,122 | |||||||||
| Gain on disposal of long-lived assets |
( i 67 | ) | ( i 7 | ) | ( i 75 | ) | ||||||
| Impairment loss on property, plant and equipment |
i 17 | i — | i — | |||||||||
| Goodwill impairment charge |
i 35,767 | i — | i — | |||||||||
| Share of net income of equity investees |
( i 3,131 | ) | ( i 604 | ) | ( i 1,838 | ) | ||||||
| Dividends received from an equity investee |
i — | i 91 | i — | |||||||||
| Loss on disposal of subsidiaries |
i — | i — | i 3 | |||||||||
| Impairment loss on investment in a cost investee |
i 773 | |||||||||||
| Gains on disposal of an investment of an equity investee |
( i 5,763 | ) | i — | ( i 7,995 | ) | |||||||
| Gain on disposal of an investment in securities |
i — | ( i 3,323 | ) | i — | ||||||||
| Share-based compensation expenses |
i 410 | i 9,724 | i 9,709 | |||||||||
| Deferred income tax expenses (benefit) |
i 6,414 | ( i 5,838 | ) | i 4,179 | ||||||||
| Accretion of convertible bond |
i 57 | i — | i — | |||||||||
| Other income, net |
i — | ( i 6,724 | ) | i — | ||||||||
| Changes in operating assets and liabilities: |
||||||||||||
| Accounts receivable and retention |
i 30,894 | ( i 88,854 | ) | ( i 11,807 | ) | |||||||
| Costs and estimated earnings in excess of billings |
i 3,186 | i 3,049 | ( i 39,839 | ) | ||||||||
| Inventories |
( i 6,474 | ) | i 4,657 | ( i 40,007 | ) | |||||||
| Advances to suppliers |
( i 4,745 | ) | ( i 1,253 | ) | ( i 14,274 | ) | ||||||
| Other receivables |
( i 1,897 | ) | i 11,183 | ( i 3,425 | ) | |||||||
| Prepaid expenses |
( i 19 | ) | ( i 268 | ) | i 257 | |||||||
| Due from related parties |
i 11,988 | i 6,784 | i 4,903 | |||||||||
| Accounts payable |
i 15,010 | i 10,178 | i 28,470 | |||||||||
| Deferred revenue |
i 1,825 | i 31,432 | i 19,221 | |||||||||
| Accruals and other payable |
( i 1,663 | ) | ( i 966 | ) | ( i 16,417 | ) | ||||||
| Due to related parties |
( i 1,819 | ) | ( i 1,915 | ) | i 4,638 | |||||||
| Income tax payable |
i 3,335 | i 514 | i 1,423 | |||||||||
| Other tax payables |
i 2,616 | i 2,700 | i 5,511 | |||||||||
| |
|
|
|
|
|
|||||||
| Net cash provided by operating activities |
$ |
i 175,124 |
$ |
i 79,283 |
$ |
i 54,526 |
||||||
| Cash flows from investing activities: |
||||||||||||
| Purchases of short-term investments |
( i 426,846 | ) | ( i 147,237 | ) | ( i 64,383 | ) | ||||||
| Maturity of short-term investments |
i 242,174 | i 443,095 | i 100,562 | |||||||||
| Purchases of property, plant and equipment |
( i 8,098 | ) | ( i 18,131 | ) | ( i 26,369 | ) | ||||||
| Proceeds from disposal of property, plant and equipment |
i 983 | i 314 | i 140 | |||||||||
| Investments made in equity investees |
i — | ( i 9,459 | ) | ( i 1,261 | ) | |||||||
| Proceeds from disposal of a subsidiary |
i — | i — | i 3,797 | |||||||||
| Proceeds received from disposal of equity investments |
i 4,458 | i 5,187 | i 9,497 | |||||||||
| Acquisition of a subsidiary, net of cash acquired |
( i 251 | ) | ( i 9,406 | ) | ( i 8,726 | ) | ||||||
| Proceeds received from investment in equity securities without readily determinable fair value |
i — | i 5,895 | i — | |||||||||
| |
|
|
|
|
|
|||||||
| Net cash (used in) provided by investing activities |
( i 187,580 |
) |
i 270,258 |
i 13,257 |
||||||||
| Cash flows from financing activities: |
||||||||||||
| Proceeds from short-term bank loans |
$ | i 2,371 | $ | i — | $ | i 128 | ||||||
| Repayments of short-term bank loans |
( i 4,243 | ) | i — | ( i 59 | ) | |||||||
| Proceeds from long-term bank loans |
i 15,423 | i 520 | i 875 | |||||||||
| Repayments of long-term bank loans |
( i 437 | ) | ( i 633 | ) | ( i 673 | ) | ||||||
| Capital contributions from subsidiaries’ non-controlling interest shareholders |
i 2,139 | i — | i — | |||||||||
| Payment of dividends |
( i 12,713 | ) | ( i 12,107 | ) | ( i 19,827 | ) | ||||||
| Principal repayment of convertible bond |
( i 20,753 | ) | i — | i — | ||||||||
| Proceeds from issuance of shares of a subsidiary |
i — | i 2 | i — | |||||||||
| |
|
|
|
|
|
|||||||
| Net cash used in financing activities |
( i 18,213 |
) |
( i 12,218 |
) |
( i 19,556 |
) | ||||||
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash |
( i 8,621 | ) | i 39,127 | ( i 24,747 | ) | |||||||
| |
|
|
|
|
|
|||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash |
$ |
( i 39,290 |
) |
$ |
i 376,450 |
$ |
i 23,480 |
|||||
| |
|
|
|
|
|
|||||||
| Cash, cash equivalents and restricted cash, beginning of year |
i 358,387 | i 319,097 | i 695,547 | |||||||||
| |
|
|
|
|
|
|||||||
| Cash, cash equivalents and restricted cash, end of year |
$ |
i 319,097 |
$ |
i 695,547 |
$ |
i 719,027 |
||||||
| |
|
|
|
|
|
|||||||
| Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets: |
||||||||||||
| Cash and cash equivalents |
i 288,782 | i 664,321 | i 679,754 | |||||||||
| Current portion of restricted cash |
i 8,663 | i 25,294 | i 38,486 | |||||||||
| Non-current portion of restricted cash |
i 21,652 | i 5,932 | i 787 | |||||||||
| |
|
|
|
|
|
|||||||
| Total cash, cash equivalents and restricted cash |
i 319,097 |
i 695,547 |
i 719,027 |
|||||||||
| |
|
|
|
|
|
|||||||
| Supplemental disclosures of cash flow information: |
||||||||||||
| Interest expense paid |
$ | i 306 | $ | i 553 | $ | i 731 | ||||||
| Income tax paid |
$ | i 8,772 | $ | i 16,804 | $ | i 15,632 | ||||||
| Supplemental disclosures of non-cash information: |
||||||||||||
| Acquisition of property, plant and equipment included in construction costs payable and accrued liabilities |
$ | i 6,759 | $ | i 477 | $ | i 5,987 |
Ordinary shares |
Additional paid-in capital |
Statutory reserves |
Retained earnings |
Accumulated other comprehensive income |
Total Hollysys Automation Technologies Ltd. stockholders’ equity |
Non-controlling interest |
Total equity |
|||||||||||||||||||||||||||||
| Balance at June 30, 2019 |
i 60,342,099 |
$ |
i 60 |
$ |
i 223,634 |
$ |
i 48,698 |
$ |
i 708,515 |
$ |
( i 35,521 |
) |
$ |
i 945,386 |
$ |
i 1,774 |
$ |
i 947,160 |
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Issuance of ordinary shares |
i 195,000 |
i 1 |
( i 1 |
) |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
| Share-based compensation |
— |
— |
i 410 |
— |
— |
— |
i 410 |
— |
i 410 |
|||||||||||||||||||||||||||
| Net income for the year |
— |
— |
— |
— |
i 79,396 |
— |
i 79,396 |
( i 70 |
) |
i 79,326 |
||||||||||||||||||||||||||
| Appropriations to statutory reserves |
— |
— |
— |
i 725 |
( i 725 |
) |
— |
— |
— |
— |
||||||||||||||||||||||||||
| Dividend paid |
— |
— |
— |
— |
( i 12,713 |
) |
— |
( i 12,713 |
) |
— |
( i 12,713 |
) | ||||||||||||||||||||||||
| Capital contribution from subsidiaries’ non-controlling interest shareholders |
— |
— |
— |
— |
— |
— |
— |
i 3,016 |
i 3,016 |
|||||||||||||||||||||||||||
| Translation adjustments |
— |
— |
— |
— |
— |
( i 27,996 |
) |
( i 27,996 |
) |
( i 317 |
) |
( i 28,313 |
) | |||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Balance at June 30, 2020 |
i 60,537,099 |
$ |
i 61 |
$ |
i 224,043 |
$ |
i 49,423 |
$ |
i 774,473 |
$ |
( i 63,517 |
) |
$ |
i 984,483 |
$ |
i 4,403 |
$ |
i 988,886 |
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Issuance of ordinary shares |
i 830,238 |
— |
i 1 |
— |
— |
— |
i 1 |
— |
i 1 |
|||||||||||||||||||||||||||
| Share-based compensation |
— |
— |
i 9,724 |
— |
— |
— |
i 9,724 |
— |
i 9,724 |
|||||||||||||||||||||||||||
| Net income for the year |
— |
— |
— |
— |
i 89,709 |
— |
i 89,709 |
( i 371 |
) |
i 89,338 |
||||||||||||||||||||||||||
| Appropriations to statutory reserves |
— |
— |
— |
i 15,026 |
( i 15,026 |
) |
— |
— |
— |
— |
||||||||||||||||||||||||||
| Dividend paid |
— |
— |
— |
— |
( i 12,107 |
) |
— |
( i 12,107 |
) |
— |
( i 12,107 |
) | ||||||||||||||||||||||||
| Translation adjustments |
— |
— |
— |
— |
— |
i 96,331 |
i 96,331 |
i 246 |
i 96,577 |
|||||||||||||||||||||||||||
| Effect of change in accounting principle - ASC 326 |
— |
— |
— |
— |
( i 30,451 |
) |
— |
( i 30,451 |
) |
— |
( i 30,451 |
) | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Balance at June 30, 2021 |
i 61,367,337 |
$ |
i 61 |
$ |
i 233,768 |
$ |
i 64,449 |
$ |
i 806,598 |
$ |
i 32,814 |
$ |
i 1,137,690 |
$ |
i 4,278 |
$ |
i 1,141,968 |
|||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Issuance of ordinary shares |
i 595,112 |
i 1 |
( i 1 |
) |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||
| Share-based compensation |
— |
— |
i 9,709 |
— |
— |
— |
i 9,709 |
— |
i 9,709 |
|||||||||||||||||||||||||||
| Net income for the year |
— |
— |
— |
— |
i 83,182 |
— |
i 83,182 |
( i 189 |
) |
i 82,993 |
||||||||||||||||||||||||||
| Appropriations to statutory reserves |
— |
— |
— |
i 12,812 |
( i 12,812 |
) |
— |
— |
— |
— |
||||||||||||||||||||||||||
| Dividend paid |
— |
— |
— |
— |
( i 19,827 |
) |
— |
( i 19,827 |
) |
— |
( i 19,827 |
) | ||||||||||||||||||||||||
| Capital contribution from subsidiaries’ non-controlling interest shareholders |
— |
— |
— |
— |
— |
— |
— |
i 695 |
i 695 |
|||||||||||||||||||||||||||
| Deconsolidation of a subsidiary |
— |
— |
— |
i 2 |
— |
— |
i 2 |
( i 3,122 |
) |
( i 3,120 |
) | |||||||||||||||||||||||||
| Translation adjustments |
— |
— |
— |
— |
— |
( i 45,469 |
) |
( i 45,469 |
) |
( i 1,121 |
) |
( i 46,590 |
) | |||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Balance at June 30, 2022 |
i 61,962,449 |
$ |
i 62 |
$ |
i 243,476 |
$ |
i 77,263 |
$ |
i 857,141 |
$ |
( i 12,655 |
) |
$ |
i 1,165,287 |
$ |
i 541 |
$ |
i 1,165,828 |
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
2022 |
||||||||
| Current assets |
$ | i 5,588 | $ | i 3,391 | ||||
| Non-current assets |
i 37 | i 6 | ||||||
| |
|
|
|
|||||
| Total assets |
i 5,625 | i 3,397 | ||||||
| |
|
|
|
|||||
| Current liabilities |
$ | i 3,230 | $ | i 1,547 | ||||
| |
|
|
|
|||||
| Total liabilities |
i 3,230 | i 1,547 | ||||||
| |
|
|
|
|||||
Year ended June 30, |
||||||||
2022 |
||||||||
| Net revenue |
$ | i 46 | $ | i 7 | ||||
| Cost of revenue (1) |
( i 2,177 | ) | ( i 1,474 | ) | ||||
| Net profit |
i 2,223 | i 1,481 | ||||||
| Net cash used in operating activities |
( i 451 | ) | ( i 323 | ) | ||||
(1) |
Cost of revenue is negative because of the reversal of warranties provision which was overprovided in previous years. |
| Buildings |
i 30 - i 50 years |
|||
| Machinery |
i 5 - i 10 years | |||
| Software |
i 3 - i 10 years | |||
| Vehicles |
i 5 - i 10 years | |||
| Electronic and other equipment |
i 3 - i 10 years |
| Category | Estimated useful life | |||
| Patents and copyrights |
i 5 - i 10 years |
|||
Level 1 |
- |
Quoted prices in active markets for identical assets or liabilities. | ||
Level 2 |
- |
Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||
Level 3 |
- |
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||
2022 |
||||||||
Raw materials |
$ | i 23,469 | $ | i 53,304 | ||||
Work in progress |
i 12,165 | i 16,026 | ||||||
Finished goods |
i 12,278 | i 21,913 | ||||||
| $ | i 47,912 | $ | i 91,243 | |||||
2022 |
||||||||
Notes receivable |
$ | i 54,830 | $ | i 68,953 | ||||
Accounts receivable |
i 342,862 | i 326,413 | ||||||
Allowance for credit losses |
( i 66,839 | ) | ( i 77,603 | ) | ||||
| $ | i 330,853 | $ | i 317,763 | |||||
2021 |
2022 |
|||||||||||
Balance at the beginning of year |
$ | i 47,162 | $ | i 41,618 | $ | i 66,839 | ||||||
Adoption of ASU 2016-13 |
i — | i 16,284 | i — | |||||||||
Additions |
i 178 | i 7,749 | i 15,972 | |||||||||
Written off |
( i 4,399 | ) | ( i 3,965 | ) | ( i 3,852 | ) | ||||||
Translation adjustment |
( i 1,323 | ) | i 5,153 | ( i 1,356 | ) | |||||||
Balance at the end of year |
$ | i 41,618 | $ | i 66,839 | $ | i 77,603 | ||||||
2022 |
||||||||
Contract costs incurred plus estimated earnings |
$ | i 988,496 | $ | i 1,072,872 | ||||
Less: Progress billings |
( i 779,955 | ) | ( i 831,817 | ) | ||||
Cost and estimated earnings in excess of billings |
i 208,541 | i 241,055 | ||||||
Less: Allowance for credit losses |
( i 11,835 | ) | ( i 12,178 | ) | ||||
| $ | i 196,706 | $ | i 228,877 | |||||
2021 |
2022 |
|||||||||||
| Balance at the beginning of year |
$ | i 6,981 | $ | i 6,150 | $ | i 11,835 | ||||||
| Adoption of ASU 2016-13 |
i — | i 3,111 | i — | |||||||||
| Additions (reversals) |
( i 651 | ) | i 1,758 | i 209 | ||||||||
| Translation adjustments |
( i 180 | ) | i 816 | i 134 | ||||||||
| |
|
|
|
|
|
|||||||
| Balance at the end of year |
$ | i 6,150 | $ | i 11,835 | $ | i 12,178 | ||||||
| |
|
|
|
|
|
|||||||
Year ended June 30, 2022 |
||||||||||||
PRC |
Non-PRC |
Total |
||||||||||
| Integrated solutions contracts revenue |
$ | i 483,555 | i 90,012 | i 573,567 | ||||||||
| Product sales |
i 37,464 | i 1,022 | i 38,486 | |||||||||
| Maintenance service revenue |
i 89,742 | i 1,525 | i 91,267 | |||||||||
| Extended warranty service revenue |
i 4,142 | — | i 4,142 | |||||||||
| |
|
|
|
|
|
|||||||
| Total |
$ | i 614,903 | i 92,559 | i 707,462 | ||||||||
| |
|
|
|
|
|
|||||||
| Contract assets, current |
$ | i 202,462 | i 235,712 | |||||
| Contract assets, non-current |
i 5,627 | i 9,582 | ||||||
| Contract liabilities |
i 185,596 | i 208,636 | ||||||
2022 |
||||||||
| Buildings |
$ | i 73,617 | $ | i 70,944 | ||||
| Machinery |
i 15,110 | i 15,619 | ||||||
| Software |
i 16,294 | i 20,293 | ||||||
| Vehicles |
i 4,860 | i 4,717 | ||||||
| Electronic and other equipment |
i 41,154 | i 45,512 | ||||||
| Construction in progress |
i 22,434 | i 27,213 | ||||||
| |
|
|
|
|||||
| $ | i 173,469 | $ | i 184,298 | |||||
| Less: Accumulated depreciation and impairment |
( i 79,423 | ) | ( i 86,049 | ) | ||||
| |
|
|
|
|||||
| $ | i 94,046 | $ | i 98,249 | |||||
| |
|
|
|
|||||
2022 |
||||||||
| Buildings leased to others - at original cost |
$ | i 23,491 | $ | i 22,664 | ||||
| Less: Accumulated depreciation |
( i 7,950 | ) | ( i 8,044 | ) | ||||
| |
|
|
|
|||||
| Buildings leased to others - net |
$ | i 15,541 | $ | i 14,620 | ||||
| |
|
|
|
|||||
2022 |
||||||||
| Prepaid land leases |
$ | i 20,200 | $ | i 16,146 | ||||
| Less: Accumulated amortization |
( i 3,632 | ) | ( i 3,699 | ) | ||||
| |
|
|
|
|||||
| $ | i 16,568 | $ | i 12,447 | |||||
| |
|
|
|
|||||
| Year ending June 30, |
||||
| 202 3 |
$ | i 349 | ||
| 202 4 |
i 349 | |||
| 202 5 |
i 349 | |||
| 202 6 |
i 349 | |||
| 202 7 |
i 349 | |||
2022 |
||||||||||||||||||||||||
Gross carrying value |
Accumulated amortization |
Net carrying value |
Gross carrying value |
Accumulated amortization |
Net carrying value |
|||||||||||||||||||
| Patents and copyrights |
$ | i 2,867 | ( i 1,468 | ) | i 1,399 | $ | i 14,204 | ( i 3,462 | ) | i 10,742 | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Year ending June 30, |
||||
$ |
i 1,598 | |||
| 2024 |
i 1,435 | |||
| 2025 |
i 1,259 | |||
| 2026 |
i 1,123 | |||
| 2027 |
i 1,123 | |||
| Balance as of July 1, 2020 |
$ | i 1,460 | ||
| Translation adjustment |
i 138 | |||
| |
|
|||
| Balance as of June 30, 2021 |
$ | i 1,598 | ||
| Goodwill upon acquisition |
i 19,697 | |||
| Translation adjustment |
( i 756 | ) | ||
| Balance as of June 30, 2022 |
$ | i 20,539 | ||
| |
|
Interest held |
Long-term investment, at cost, less impairment |
Share of undistributed profits |
Disposal |
Advance to investee company |
Total |
|||||||||||||||||||
| Equity method |
||||||||||||||||||||||||
| Beijing Hollycon Medicine & Technology Co., Ltd. |
i 30.00 | % | $ | i 23,874 | i 5,741 | i — | i — | i 29,615 | ||||||||||||||||
| Beijing Hollysys Electric Motor Co., Ltd. |
i 40.00 | % | i 820 | i 6,677 | i — | i — | i 7,497 | |||||||||||||||||
| Suqian Runhe Emerging Industry Investment Center (limited partnership) |
i 29.97 | % | i 9,754 | ( i 163 | ) | i — | i — | i 9,591 | ||||||||||||||||
| China Techenergy Co., Ltd. |
i 40.00 | % | i — | i 11,811 | i — | i — | i 11,811 | |||||||||||||||||
| Ningbo Hollysys Intelligent Technologies Co., Ltd. |
i 40.00 | % | i 4,369 | ( i 4,369 | ) | i — | i — |
i — | ||||||||||||||||
| Hunan LingXiang Maglev Technology Co., Ltd. |
i 17.67 | % | i 1,548 | ( i 141 | ) | i — | i — | i 1,407 | ||||||||||||||||
| Beijing AIRmaker Technology Co., Ltd. |
i 20.00 | % | i 155 | ( i 18 | ) | i — | i — | i 137 | ||||||||||||||||
| Southcon Development Sdn Bhd. |
i 30.00 | % | i 219 | ( i 111 | ) | i — | i — | i 108 | ||||||||||||||||
| Beijing Hollysys Machine Automation Co., Ltd. |
i 30.00 | % | i 464 | ( i 464 | ) | i — | i — | i — | ||||||||||||||||
| Beijing Jing Yi Intelligent Technologies Innovation Center Co., Ltd. |
i 46.00 | % | i — | i — | i — | i — | i — | |||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
| i 41,203 | i 18,963 | i — | i — | i 60,166 | ||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest held |
Long-term investment, at cost, less impairment |
Share of undistributed profits |
Disposal |
Advance to investee company |
Total |
|||||||||||||||||||
| Equity method |
||||||||||||||||||||||||
| Beijing Hollycon Medicine & Technology Co., Ltd. |
i 30.00 | % | $ | i 8,609 | i 5,544 | i — | i — | i 14,153 | ||||||||||||||||
| Beijing Hollysys Electric Motor Co., Ltd. |
i 40.00 | % | i 791 | i 6,893 | i — | i — | i 7,684 | |||||||||||||||||
| Suqian Runhe Emerging Industry Investment Center (limited partnership) |
i 29.97 | % | i 9,410 | ( i 168 | ) | i — | i — | i 9,242 | ||||||||||||||||
| China Techenergy Co., Ltd. |
i 40.00 | % | i — | i 13,751 | i — | i — | i 13,751 | |||||||||||||||||
| Ningbo Hollysys Intelligent Technologies Co., Ltd. |
i 40.00 | % | i 4,215 | ( i 4,215 | ) | i — | i — | i — | ||||||||||||||||
| Hunan LingXiang Maglev Technology Co., Ltd. |
i 17.67 | % | i 1,494 | ( i 136 | ) | ( i 1,358 | ) | i — | i — | |||||||||||||||
| Beijing AIRmaker Technology Co., Ltd. |
i 20.00 | % | i 149 | ( i 18 | ) | i — | i — | i 131 | ||||||||||||||||
| Southcon Development Sdn Bhd. |
i 30.00 | % | i 211 | ( i 111 | ) | i — | i — | i 100 | ||||||||||||||||
| Beijing Hollysys Machine Automation Co., Ltd. |
i 30.00 | % | i 448 | ( i 448 | ) | i — | i — | i — | ||||||||||||||||
| Beijing Jing Yi Intelligent Technologies Innovation Center Co., Ltd. |
i 46.00 | % | i — | i — | i — | i — |
i — | |||||||||||||||||
| Beijing Hollysys Digital Technology Co.,Ltd. |
i 25.00 | % | i 1,437 | ( i 1,036 | ) | i — | i — |
i 401 | ||||||||||||||||
| Shandong MassDatas Development Co., Ltd. |
i 20.00 | % | i 1,195 | ( i 76 | ) | i — | i — | i 1,119 | ||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
| i 27,959 | i 19,980 | ( i 1,358 | ) | i — | i 46,581 | |||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
2022 |
||||||||
| Beginning balance |
$ | i 10,064 | $ | i 9,551 | ||||
| Consolidation of subsidiary |
— | i 145 | ||||||
| Expense accrued |
i 4,431 | i 2,595 | ||||||
| Expense incurred |
( i 5,639 | ) | ( i 7,064 | ) | ||||
| Translation adjustment |
i 695 | ( i 225 | ) | |||||
| |
|
|
|
|||||
| $ | i 9,551 | $ | i 5,002 | |||||
| Less: Current portion of warranty liabilities |
( i 5,902 | ) | ( i 3,280 | ) | ||||
| |
|
|
|
|||||
| Long-term warranty liabilities |
$ | i 3,649 | $ | i 1,722 | ||||
| |
|
|
|
|||||
2022 |
||||||||||
| MYR denominated loans |
(i) | i 842 | i 596 | |||||||
| SGD denominated loans |
(ii) | i 164 | i 113 | |||||||
| USD denominated loan |
(iii) | i 15,000 | i 14,935 | |||||||
| |
|
|
|
|||||||
| $ | i 16,006 | $ | i 15,644 | |||||||
| Less: Current portion |
( i 15,308 | ) | ( i 15,210 | ) | ||||||
| |
|
|
|
|||||||
| $ | i 698 | $ | i 434 | |||||||
| |
|
|
|
|||||||
| i. | The MYR denominated loans are repayable in 3 to 75 installments with the last installment due in April 2039. For the years ended June 30, 2021 and 2022, the effective interest rates ranged from i 2.08% to i 4.05%
per annum and i 2.08% to i 3.27%
per annum, respectively. The borrowings are secured by the mortgages of buildings and vehicles in Malaysia, with an aggregate carrying value of $ i 964
and $ i 883 as of June 30, 2021 and 2022, respectively. |
| ii. | The SGD denominated loans are repayable in 10 to 31 installments with the last installment due on March 4, 2024. For the years ended June 30, 2021 and 2022, the effective interest rates ranged from i 2.44% to i 2.78%
per annum and i 2.44% to i 2.78%
per annum, respectively. For the year ended June 30, 2022, the weighted average interest rate was i 2.63%. The borrowing is secured by vehicles with a total carrying value of $ i 204
and $ i 173 as of June 30, 2021 and 2022, respectively. |
| iii. | The USD denominated loan was drawn on and is repayable on i April 22, 2022. Prior to the repayment dated April 22, 2022, the Company started negotiation with the bank for an extension was granted
in August 2022. The loan contract was renewed and the loan term was extended to April 2024. For the year ended June 30, 2022, the effective interest rate was |
| Year ending June 30, |
||||
| $ | i 15,210 | |||
| 2024 |
i 159 | |||
| 2025 |
i 107 | |||
| 2026 |
i 62 | |||
| 2027 onwards |
i 106 | |||
| |
|
|||
$ |
i 15,644 |
|||
| |
|
|||
| Share Options |
Number of shares |
Weighted average exercise price |
Weighted average remaining contractual life (years) |
Aggregate intrinsic value |
||||||||||||
| Outstanding, vested and exercisable at June 30, 2020 |
i — | i — | — | — | ||||||||||||
| Granted on November 16, 2020 |
i 90,000 | i 11.85 | i 10 | — | ||||||||||||
| Granted on March 17, 2021 |
i 478,500 | i 11.85 | i 9.95 | i 1,165 | ||||||||||||
| Outstanding, vested and exercisable at June 30, 2021 |
i 568,500 | i 11.85 | i 9.66 | i 1,734 | ||||||||||||
| Forfeited |
( i 12,250 | ) | — | — | — | |||||||||||
| |
|
|||||||||||||||
| Outstanding, vested and exercisable at June 30, 2022 |
i 556,250 | i 11.85 | i 8.66 | i 1,641 | ||||||||||||
| |
|
|||||||||||||||
| Risk-free interest rate (i) |
i 0.91 |
% |
i 1.62 |
% | ||||
| Expected dividend yield (ii) |
i 2.21 |
% |
i 1.83 |
% | ||||
| Expected life (years) (iii) |
i 10 Years |
i 9.66 Years |
||||||
| Expected volatility (iv) |
i 46.98 |
% |
i 47.35 |
% | ||||
(i) |
Risk-free interest rate is based on the yields of United States Treasury securities with maturities similar to the expected life of the share options in effect at the time of grant. |
(ii) |
Expected dividend yield is assumed to be a $ i i 0.15 /
dividend payout. |
(iii) |
Expected life of share options is based on management’s estimate on timing of exercise of share options. |
(iv) |
Expected volatility is assumed based on the historical volatility of the Company and the Company’s comparable companies in the period equal to the expected life of each grant. |
Number of restricted shares |
Weighted average grant-date fair value |
|||||||
| Un-vested at June 30, 2020 |
i 63,125 | i 16.06 | ||||||
| Granted |
i 1,434,500 | i 11.85 | ||||||
| Vested |
( i 177,288 | ) | i 13.35 | |||||
| Un-vested at June 30, 2021 |
i 1,320,337 | i 11.85 | ||||||
| Forfeited |
( i 28,586 | ) | i 11.85 | |||||
| Vested |
( i 588,710 | ) | i 11.85 | |||||
| |
|
|||||||
| Un-vested at June 30, 2022 |
i 703,041 | i 11.85 | ||||||
| |
|
|||||||
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| PRC |
$ |
i 140,539 |
$ |
i 137,520 |
$ |
i 116,210 |
||||||
| Non-PRC |
( i 43,042 |
) |
( i 27,628 |
) |
( i 16,583 |
) | ||||||
| |
|
|
|
|
|
|||||||
$ |
i 97,497 |
$ |
i 109,892 |
$ |
i 99,627 |
|||||||
| |
|
|
|
|
|
|||||||
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Current income tax expense |
||||||||||||
| PRC |
i 10,369 |
i 25,634 |
i 11,839 |
|||||||||
| Non-PRC |
i 1,388 |
i 758 |
i 616 |
|||||||||
| |
|
|
|
|
|
|||||||
$ |
i 11,757 |
$ |
i 26,392 |
$ |
i 12,455 |
|||||||
| Deferred income tax expense (benefit) |
||||||||||||
| PRC |
i 5,577 |
( i 7,971 |
) |
i 7,150 |
||||||||
| Non-PRC |
i 837 |
i 2,133 |
( i 2,971 |
) | ||||||||
| |
|
|
|
|
|
|||||||
$ |
i 6,414 |
( i 5,838 |
) |
i 4,179 |
||||||||
| |
|
|
|
|
|
|||||||
$ |
i 18,171 |
$ |
i 20,554 |
$ |
i 16,634 |
|||||||
| |
|
|
|
|
|
|||||||
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Income before income taxes |
$ |
i 97,497 |
$ |
i 109,892 |
$ |
i 99,627 |
||||||
| |
|
|
|
|
|
|||||||
| Expected income tax expense at statutory tax rate in the PRC |
i 24,374 |
i 33,221 |
i 24,998 |
|||||||||
| Effect of different tax rates in various jurisdictions |
i 3,997 |
i 4,665 |
i 3,541 |
|||||||||
| Effect of preferential tax treatment |
( i 11,797 |
) |
( i 14,334 |
) |
( i 12,707 |
) | ||||||
| Effect of non-taxable income |
( i 250 |
) |
( i 4,770 |
) |
( i 74 |
) | ||||||
| Effect of additional deductible research and development expenses |
( i 7,241 |
) |
( i 9,838 |
) |
( i 9,398 |
) | ||||||
| Effect of non-deductible expenses |
i 10,661 |
i 6,644 |
i 4,020 |
|||||||||
| (Over) under provision of income tax in previous years |
( i 6,118 |
) |
i 2,102 |
i 1,419 |
||||||||
| Change in valuation allowance |
i 3,746 |
i 1,718 |
i 2,124 |
|||||||||
| Withholding tax on dividends paid by subsidiaries |
i 799 |
i — |
i 3,692 |
|||||||||
| Others |
i — |
i 1,146 |
( i 981 |
) | ||||||||
| |
|
|
|
|
|
|||||||
| Total |
$ |
i 18,171 |
$ |
i 20,554 |
$ |
i 16,634 |
||||||
| |
|
|
|
|
|
|||||||
2022 |
||||||||
| Deferred tax assets |
||||||||
| Allowance for doubtful accounts |
$ | i 12,480 | $ | i 12,932 |
||||
| Deferred subsidies |
i 529 | i 845 |
||||||
| Warranty liabilities |
i 911 | i 773 |
||||||
| Inventory provision |
i 199 | i 555 |
||||||
| Long-term assets |
i 622 | i 591 |
||||||
| Deferred revenue |
i 105 | i 373 |
||||||
| Provision for loss contracts |
i 64 | i 1,699 |
||||||
| Net operating loss carry forward |
i 17,290 | i 20,351 |
||||||
| Valuation allowance |
( i 17,424 | ) | ( i 19,554 |
) | ||||
| Others |
i 214 | i — |
||||||
| |
|
|
|
|||||
| Total deferred tax assets |
$ | i 14,990 | $ | i 18,565 | ||||
| |
|
|
|
|||||
| Deferred tax liabilities |
||||||||
| Property, plant and equipment |
$ | ( i 678 | ) | $ | ( i 645 |
) | ||
| Costs and estimated earnings in excess of billings |
( i 1,159 | ) | ( i 10,079 |
) | ||||
| Share of net losses of equity investees |
( i 1,352 | ) | ( i 1,798 |
) | ||||
| PRC dividend withholding tax |
( i 8,829 | ) | ( i 5,198 |
) | ||||
| Intangible assets and other non-current assets |
( i 7,321 | ) | ( i 7,390 |
) | ||||
| Others |
i — | ( i 1,881 | ) | |||||
| |
|
|
|
|||||
| Total deferred tax liabilities |
$ | ( i 19,339 | ) | $ | ( i 26,991 | ) | ||
| |
|
|
|
|||||
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Operating lease costs |
$ |
i 1,608 |
$ |
i 2,324 |
$ |
i 3,484 |
||||||
| Short-term lease costs |
i 537 |
i 1,000 |
i 191 |
|||||||||
| Amortization of prepaid land leases |
i 384 |
i 454 |
i 382 |
|||||||||
| Total lease costs |
$ |
i 2,529 |
$ |
i 3,778 |
$ |
i 4,057 |
||||||
| |
|
|
|
|
|
|||||||
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities |
$ |
i 2,460 |
$ |
i 4,045 |
$ |
i 3,810 |
||||||
| ROU assets obtained in exchange for new operating lease liabilities |
i 1,614 |
i 3,011 |
i 1,554 |
|||||||||
| Weighted-average remaining lease term (in years): |
||||||||||||
| Operating leases |
i 2.25 |
i 1.97 |
i 1.83 |
|||||||||
| Weighted-average discount rate: |
||||||||||||
| Operating leases |
i 3.76 |
% |
i 4.17 |
% |
i 3.05 |
% | ||||||
As of June 30, 2022 |
||||
| 202 3 |
$ | i 2,712 | ||
| 202 4 |
i 1,136 | |||
| 202 5 |
i 195 | |||
| 202 6 |
i 102 | |||
| Total minimum lease payments |
i 4,145 | |||
| Less: imputed interest |
i 345 | |||
| Total lease liability balance |
$ |
i 3,800 | ||
| Year ending June 30, |
Minimum lease payments |
|||
| 2023 |
$ | i 3,501 | ||
| 2024 |
i 2,112 | |||
| 2025 |
i 1,873 | |||
| 2026 |
i 1,929 | |||
| 2027 |
i 1,987 | |||
| Thereafter |
i 12,426 | |||
| |
|
|||
| Total minimum lease payments to be received |
$ |
i 23,828 |
||
| |
|
|||
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Numerator: |
||||||||||||
| Net income attributable to the Company as reported |
$ | i 79,396 | $ | i 89,709 | $ | i 83,182 | ||||||
| Less: Earnings allocated to participating securities |
( i 83 | ) | i — | i — | ||||||||
| |
|
|
|
|
|
|||||||
| Net income attributable to common stockholders - basic |
$ | i 79,313 | $ | i 89,709 | $ | i 83,182 | ||||||
| |
|
|
|
|
|
|||||||
| Add: |
||||||||||||
| Effect of Convertible Bond |
i 93 | i — | i — | |||||||||
| Earnings allocated to participating securities |
i 83 | i — | i — | |||||||||
| Less: |
||||||||||||
| Earnings reallocated to participating securities considered potentially dilutive securities |
( i 83 | ) | i — | i — | ||||||||
| |
|
|
|
|
|
|||||||
| Net income attributable to common stockholders – diluted |
$ | i 79,406 | $ | i 89,709 | $ | i 83,182 | ||||||
| |
|
|
|
|
|
|||||||
| Denominator: |
||||||||||||
| Weighted average ordinary shares outstanding used in computing basic earnings per share(i) |
i 60,478,717 | i 60,566,709 | i 61,007,806 | |||||||||
| Effect of dilutive securities |
||||||||||||
| Convertible Bond |
i 130,525 | i — | i — | |||||||||
| Share options |
— | — | i 65,337 | |||||||||
| Restricted shares |
i — | i 947,040 | i 495,333 | |||||||||
| |
|
|
|
|
|
|||||||
| Weighted average ordinary shares outstanding used in computing diluted earnings per share |
i 60,609,242 | i 61,513,749 | i 61,568,476 | |||||||||
| |
|
|
|
|
|
|||||||
| Earnings per share – basic |
$ | i 1.31 | i 1.48 | i 1.36 | ||||||||
| |
|
|
|
|
|
|||||||
| Earnings per share – diluted |
$ | i 1.31 | i 1.46 | i 1.35 | ||||||||
| |
|
|
|
|
|
|||||||
| (i) | Vested and unissued restricted shares of i 15,000, i 15,000
and i 15,000 shares are included in the computation of basic and diluted earnings per share for the years ended June 30, 2020, 2021 and 2022, respectively. |
| Name of related parties |
Relationship with the Company | |
| China Techenergy Co., Ltd. (“China Techenergy”) | 40% owned by Beijing Hollysys | |
| Beijing Hollysys Electric Motor Co., Ltd. (“Electric Motor”) | 40% owned by Beijing Hollysys | |
| Beijing Hollycon Medicine & Technology. Co., Ltd. (“Hollycon”) | 30% owned by Hollysys Group Co., Ltd.(“Hollysys Group”) | |
| Ningbo Hollysys Intelligent Technologies Co., Ltd. (“Ningbo Hollysys”) | 40% owned by Hollysys Group | |
| Beijing Hollysys Digital Technology Co., Ltd. (“Beijing Digital”) | 25% owned by Beijing Hollysys Intelligent Technologies Co., Ltd. (“Hollysys Intelligent”) | |
2022 |
||||||||
| China Techenergy |
$ | i 19,241 | $ | i 17,529 | ||||
| Ningbo Hollysys |
i 11,190 | i 286 | ||||||
| Hollycon |
i 64 | i 15,066 | ||||||
| Beijing Digital |
i — | i 257 | ||||||
| Others |
i 3 | i — | ||||||
| Allowance for credit losses |
( i 2,255 | ) | ( i 5,778 | ) | ||||
| |
|
|
|
|||||
$ i 28,243 |
$ i 27,360 |
|||||||
| |
|
|
|
|||||
2022 |
||||||||
| China Techenergy |
$ | i 1,028 | $ | i 2,012 | ||||
| Ningbo Hollysys |
i 529 | i 4,285 | ||||||
| Hollycon |
i 23 | i 1 | ||||||
| Hunan LingXiang |
i 81 | i — | ||||||
| Others |
— | i 1 | ||||||
| |
|
|
|
|||||
$ i 1,661 |
$ i 6,299 |
|||||||
| |
|
|
|
|||||
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Ningbo Hollysys (i) |
$ | i 1,838 | $ | i 3,051 | $ | i 1,164 | ||||||
| Hollycon |
i — | i 7 | i 569 | |||||||||
| |
|
|
|
|
|
|||||||
| $ | i 1,838 | $ | i 3,058 | $ | i 1,733 | |||||||
| |
|
|
|
|
|
|||||||
(i) |
The Company purchases products from Ningbo Hollysys which are used to provide an integrated automation and control system to its customers. |
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| China Techenergy (i) |
$ | i 1,711 | $ | i 8,458 | $ | i 5,118 | ||||||
| Hollycon (ii) |
i 1,302 | i 866 | i 221 | |||||||||
| Ningbo Hollysys (ii) |
i 179 | i 308 | i 967 | |||||||||
| HuNan LingXiang |
i 38 | i — | i — | |||||||||
| |
|
|
|
|
|
|||||||
| $ | i 3,230 | $ | i 9,632 | $ | i 6,306 | |||||||
| |
|
|
|
|
|
|||||||
(i) |
The Company sells automation control systems to China Techenergy which is used for non-safety operations control in the nuclear power industry. China Techenergy incorporates the Company’s non-safety automation control systems with their proprietary safety automated control systems to provide an overall automation and control system for nuclear power stations in China. The Company is not a party to the integrated sales contracts executed between China Techenergy and its customers. The
Company’s pro rata shares of the intercompany profits and losses are eliminated until realized through a sale to third party customers, as if China Techenergy is a consolidated subsidiary. |
(ii) |
The Company sells products to Hollycon and Ningbo Hollysys, which incorporate the Company’s product with their automated systems to provide an integrated automation and control system to their customers. The Company’s pro rata shares of the intercompany profits and losses are eliminated until realized through a sale to third party customers, as if Hollycon and Ningbo Hollysys are consolidated subsidiaries. |
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Ningbo Hollysys (i) |
$ | i 2,214 | $ | i 2,281 | $ | i 133 | ||||||
| Hollycon (ii) |
i 880 | i 460 | i 2,443 | |||||||||
| Beijing Digital |
i — | i — | i 254 | |||||||||
| China Techenergy |
i 1,122 | i — | i — | |||||||||
| |
|
|
|
|
|
|||||||
| $ | i 4,216 | $ | i 2,741 | $ | i 2,830 | |||||||
| |
|
|
|
|
|
|||||||
| (i) | The Company entered into an operating lease agreement with Ningbo Hollysys to lease part of a building in Beijing. The lease term is for i one year from the commencement date of January 1, 2022 to December 31, 2022. |
| (ii) | The Company entered into an operating lease agreement with Hollycon to lease part of building located in Beijing. The lease term is for i one year from the commencement date of January 1, 2022 to December 31, 2022. |
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Ningbo Hollysys (i) |
$ | i 655 | $ | i 212 | $ | i 208 | ||||||
| |
|
|
|
|
|
|||||||
(i) |
The Company purchases research and development services from Ningbo Hollysys for research and development projects in the field of intelligent manufacturing. |
| Years ending June 30, |
Minimum payments |
|||
| 202 3 |
$ | i 218,487 | ||
| 202 4 |
i 49,496 | |||
| 202 5 |
i 24,246 | |||
| 202 6 |
i 11,905 | |||
| 202 7 |
i 27,761 | |||
Year ended June 30, 2020 |
||||||||||||||||
IA |
Rail |
M&E |
Consolidated |
|||||||||||||
| Revenues from external customers |
||||||||||||||||
| Integrated solutions contracts revenue |
$ | i 207,421 | i 145,750 | i 61,101 | i 414,272 | |||||||||||
| Product sales |
i 15,504 | i 4,640 | i — | i 20,144 | ||||||||||||
| Maintenance service revenue |
i 15,985 | i 49,140 | i 916 | i 66,041 | ||||||||||||
| Extended warranty service revenue |
i 1,061 | i 1,809 | i — | i 2,870 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
i 239,971 | i 201,339 | i 62,017 | i 503,327 | ||||||||||||
| Costs of revenue |
i 154,298 | i 107,382 | i 51,079 | i 312,759 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Gross profit |
$ | i 85,673 | i 93,957 | i 10,938 | i 190,568 | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Year ended June 30, 2021 |
||||||||||||||||
IA |
Rail |
M&E |
Consolidated |
|||||||||||||
| Revenues from external customers |
||||||||||||||||
| Integrated solutions contracts revenue |
$ | i 291,106 | i 100,877 | i 68,197 | i 460,180 | |||||||||||
| Product sales |
i 22,772 | i 5,895 | i — | i 28,667 | ||||||||||||
| Maintenance service revenue |
i 21,402 | i 79,874 | i 46 | i 101,322 | ||||||||||||
| Extended warranty service revenue |
i 1,772 | i 1,525 | i — | i 3,297 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
i 337,052 | i 188,171 | i 68,243 | i 593,466 | ||||||||||||
| Costs of revenue |
i 227,107 | i 90,386 | i 57,694 | i 375,187 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Gross profit |
$ | i 109,945 | i 97,785 | i 10,549 | i 218,279 | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Year ended June 30, 2022 |
||||||||||||||||
IA |
Rail |
M&E |
Consolidated |
|||||||||||||
| Revenues from external customers |
||||||||||||||||
| Integrated solutions contracts revenue |
$ | i 380,516 | i 109,342 | i 83,709 | i 573,567 | |||||||||||
| Product sales |
i 31,559 | i 6,927 | i — | i 38,486 | ||||||||||||
| Maintenance service revenue |
i 26,725 | i 64,492 | i 50 | i 91,267 | ||||||||||||
| Extended warranty service revenue |
i 1,118 | i 3,024 | i — | i 4,142 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
i 439,918 | i 183,785 | i 83,759 | i 707,462 | ||||||||||||
| Costs of revenue |
i 294,642 | i 98,150 | i 75,313 | i 468,105 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Gross profit |
$ | i 145,276 | i 85,635 | i 8,446 | i 239,357 | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Revenues: |
||||||||||||
| PRC |
$ | i 441,305 | $ | i 518,170 | $ | i 614,903 | ||||||
| Non-PRC |
i 62,022 | i 75,296 | i 92,559 | |||||||||
| |
|
|
|
|
|
|||||||
| $ | i 503,327 | $ | i 593,466 | $ | i 707,462 | |||||||
| |
|
|
|
|
|
|||||||
2022 |
||||||||
| Long-lived assets other than goodwill and acquired intangible assets |
||||||||
| PRC |
$ | i 163,343 | $ | i 159,598 | ||||
| Non-PRC |
i 11,458 | i 10,114 | ||||||
| |
|
|
|
|||||
| $ | i 174,801 | $ | i 169,712 | |||||
| |
|
|
|
|||||
| Purchase price |
$ |
i 20,908 |
||
| Less: Final fair value of net assets acquired(see table below) |
i 1,211 |
|||
| |
|
|||
| Excess purchase price over fair value of net assets acquired |
i 19,697 |
|||
| |
|
| Assets Acquired: |
||||
| Cash and cash equivalents |
$ |
i 3,018 |
||
| Restricted cash |
i 1 |
|||
| Accounts receivable, net |
i 8,776 |
|||
| Cost and estimated earnings in excess of billings, net |
i 2,499 |
|||
| Other receivables, net |
i 1,221 |
|||
| Advances to suppliers |
i 667 |
|||
| Inventories, net |
i 6,513 |
|||
| Income tax recoverable |
i 25 |
|||
| Property, plant and equipment, net |
i 2,886 |
|||
| Operating lease right-of-use assets |
i 3 |
|||
| Intangible assets, net |
i 11,245 |
|||
| Investments in equity investees |
i 1,490 |
|||
| |
|
|||
| Total assets acquired |
i 38,344 |
|||
| |
|
|||
| Liabilities Assumed: |
||||
| Accounts payable |
i 11,553 |
|||
| Deferred revenue |
i 9,803 |
|||
| Accrued payroll and related expenses |
i 1,018 |
|||
| Warranty liabilities |
i 145 |
|||
| Accrued liabilities |
i 14,614 |
|||
| |
|
|||
| Total liabilities assumed |
i 37,133 |
|||
| |
|
|||
| Fair Value of Net Assets Acquired |
$ |
i 1,211 |
||
| |
|
| Asset Class |
Amortization Period |
Amount Assigned at Acquisition Date |
Accumulated Amortization and Foreign Currency Translation |
Net Carrying Value |
||||||||||
| Intangible assets |
i 10 Years |
$ |
i 11,245 |
$ |
( i 1,394 |
) |
$ |
i 9,851 |
||||||
2022 |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | i 7,824 | $ | i 7,500 | ||||
| Amounts due from subsidiaries |
i 53,503 | i 53,503 | ||||||
| Prepaid expenses |
i 166 | i 202 | ||||||
| |
|
|
|
|||||
| Total current assets |
i 61,493 |
i 61,205 |
||||||
| Investment in subsidiaries |
i 1,221,755 | i 1,276,497 | ||||||
| |
|
|
|
|||||
| Total assets |
$ |
i 1,283,248 |
$ |
i 1,337,702 |
||||
| |
|
|
|
|||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accrued liabilities |
i 5,143 | i 98 | ||||||
| Amounts due to subsidiaries |
i 140,415 | i 172,317 | ||||||
| |
|
|
|
|||||
| Total liabilities |
i 145,558 |
i 172,415 |
||||||
| |
|
|
|
|||||
| Equity: |
||||||||
| Ordinary shares, par value $ i i 0.001 /
per share, i i 100,000,000 /
shares authorized; i i 61,367,337 /
shares issued and i i 61,962,449 /
shares issued and outstanding as of June 30, 2021 and 2022, respectively |
i 61 | i 62 | ||||||
| Additional paid-in capital |
i 233,768 | i 243,476 | ||||||
| Retained earnings |
i 871,047 | i 934,404 | ||||||
| Accumulated other comprehensive income (loss) |
i 32,814 | ( i 12,655 | ) | |||||
| |
|
|
|
|||||
| Total equity |
i 1,137,690 |
i 1,165,287 |
||||||
| |
|
|
|
|||||
| Total liabilities and equity |
$ |
i 1,283,248 |
$ |
i 1,337,702 |
||||
| |
|
|
|
|||||
Year Ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| General and administrative expenses |
$ | i 1,344 | $ | i 21,090 | $ | i 17,223 | ||||||
| |
|
|
|
|
|
|||||||
| Loss from operations |
( i 1,344 |
) |
( i 21,090 |
) |
( i 17,223 |
) | ||||||
| Interest income |
i 309 | i 117 | i — | |||||||||
| Interest expenses |
( i 90 | ) | i — | i — | ||||||||
| Foreign exchange (losses) gains |
( i 1,043 | ) | i 1,532 | i 197 | ||||||||
| Share of net income of subsidiaries |
$ | i 81,564 | $ | i 109,150 | $ | i 100,208 | ||||||
| |
|
|
|
|
|
|||||||
| Income before income taxes |
i 79,396 |
i 89,709 |
i 83,182 |
|||||||||
| Income tax expenses |
i — | i — | i — | |||||||||
| |
|
|
|
|
|
|||||||
| Net income |
i 79,396 |
i 89,709 |
i 83,182 |
|||||||||
| Other comprehensive income, net of tax of nil |
|
|||||||||||
| Translation adjustment |
( i 27,996 | ) | i 96,331 | ( i 45,469 | ) | |||||||
| |
|
|
|
|
|
|||||||
| Comprehensive income |
$ |
i 51,400 |
$ |
i 186,040 |
$ |
i 37,713 |
||||||
| |
|
|
|
|
|
|||||||
Year ended June 30, |
||||||||||||
2021 |
2022 |
|||||||||||
| Cash flows from operating activities: |
||||||||||||
| Net income |
$ | i 79,396 | $ | i 89,709 | $ | i 83,182 | ||||||
| Adjustments to reconcile net income to net cash used in operating activities: |
|
|||||||||||
| Share of net income of subsidiaries |
( i 81,564 | ) | ( i 109,150 | ) | ( i 100,208 | ) | ||||||
| Share-based compensation expenses |
i 410 | i 9,724 | i 9,709 | |||||||||
| Accretion of convertible bond |
i 57 | i — | i — | |||||||||
| Change in operating assets and liabilities |
( i 142 | ) | i 5,065 | i 26,820 | ||||||||
| |
|
|
|
|
|
|||||||
| Net cash (used in) provided by operating activities |
$ | ( i 1,843 | ) | $ | ( i 4,652 | ) | $ | i 19,503 | ||||
| Cash flows from investing activities: |
||||||||||||
| Loans to subsidiaries |
( i 19,775 | ) | i — | i — | ||||||||
| Maturity of short-term investments |
i — | i 11,318 | i — | |||||||||
| |
|
|
|
|
|
|||||||
| Net cash (used in) provided by investing activities |
$ |
( i 19,775 |
) |
$ |
i 11,318 |
$ | i — | |||||
| Cash flows from financing activities: |
||||||||||||
| Repayment of convertible bond |
( i 20,753 | ) | i — | i — | ||||||||
| Proceeds of loans from subsidiaries |
i 20,000 | i — | i — | |||||||||
| Payment of dividends |
( i 12,713 | ) | ( i 12,107 | ) | ( i 19,827 | ) | ||||||
| |
|
|
|
|
|
|||||||
| Net cash used in financing activities |
$ |
( i 13,466 |
) |
$ |
( i 12,107 |
) |
$ |
( i 19,827 |
) | |||
| |
|
|
|
|
|
|||||||
| Net decrease in cash and cash equivalents |
$ |
( i 35,084 |
) |
$ |
( i 5,441 |
) |
$ |
( i 324 |
) | |||
| |
|
|
|
|
|
|||||||
| Cash and cash equivalents, beginning of period |
i 48,349 | i 13,265 | i 7,824 | |||||||||
| |
|
|
|
|
|
|||||||
| Cash and cash equivalents, end of period |
$ | i 13,265 | $ | i 7,824 | $ | i 7,500 | ||||||
| |
|
|
|
|
|
|||||||
| This ‘20-F’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 11/16/30 | ||||
| 9/27/30 | ||||
| 10/30/24 | ||||
| 3/4/24 | ||||
| 6/30/23 | ||||
| 12/31/22 | ||||
| 10/19/22 | ||||
| Filed on: | 9/22/22 | |||
| 9/2/22 | ||||
| 8/26/22 | ||||
| For Period end: | 6/30/22 | |||
| 4/25/22 | ||||
| 4/22/22 | ||||
| 4/4/22 | ||||
| 4/2/22 | ||||
| 3/10/22 | 6-K | |||
| 2/23/22 | ||||
| 2/18/22 | 20-F | |||
| 2/15/22 | ||||
| 2/11/22 | SC 13G/A | |||
| 2/9/22 | SC 13G | |||
| 2/4/22 | ||||
| 1/24/22 | 6-K | |||
| 1/1/22 | ||||
| 12/27/21 | ||||
| 12/24/21 | ||||
| 12/16/21 | ||||
| 12/6/21 | ||||
| 12/3/21 | ||||
| 12/2/21 | ||||
| 11/24/21 | ||||
| 11/15/21 | 6-K | |||
| 11/5/21 | ||||
| 11/3/21 | ||||
| 11/1/21 | ||||
| 10/31/21 | ||||
| 10/28/21 | ||||
| 9/22/21 | ||||
| 9/10/21 | ||||
| 9/1/21 | ||||
| 8/20/21 | ||||
| 8/2/21 | 6-K | |||
| 7/30/21 | ||||
| 7/20/21 | ||||
| 7/15/21 | 6-K | |||
| 7/6/21 | 6-K | |||
| 7/1/21 | 6-K | |||
| 6/30/21 | 20-F, NT 20-F | |||
| 6/29/21 | SC 13D/A | |||
| 6/22/21 | ||||
| 6/10/21 | ||||
| 6/1/21 | ||||
| 3/17/21 | ||||
| 3/9/21 | ||||
| 2/1/21 | 6-K | |||
| 1/8/21 | 6-K | |||
| 1/7/21 | ||||
| 12/31/20 | 6-K | |||
| 12/18/20 | ||||
| 12/15/20 | ||||
| 12/10/20 | 6-K | |||
| 12/7/20 | SC 13D/A | |||
| 11/20/20 | ||||
| 11/16/20 | ||||
| 10/22/20 | ||||
| 10/17/20 | ||||
| 10/5/20 | 6-K | |||
| 9/27/20 | ||||
| 9/25/20 | 6-K, 8-A12B/A | |||
| 9/1/20 | 6-K | |||
| 7/7/20 | 6-K | |||
| 7/1/20 | ||||
| 6/30/20 | 20-F | |||
| 6/23/20 | ||||
| 4/24/20 | ||||
| 2/14/20 | ||||
| 1/1/20 | ||||
| 12/30/19 | ||||
| 11/12/19 | ||||
| 10/22/19 | ||||
| 9/27/19 | 6-K | |||
| 9/19/19 | 20-F | |||
| 7/30/19 | ||||
| 6/30/19 | 20-F | |||
| 6/18/19 | ||||
| 4/23/19 | ||||
| 4/1/19 | ||||
| 3/20/19 | ||||
| 3/15/19 | ||||
| 12/29/18 | ||||
| 11/12/18 | ||||
| 10/26/18 | ||||
| 10/22/18 | ||||
| 9/27/18 | 6-K | |||
| 2/3/18 | ||||
| 12/31/17 | ||||
| 11/6/17 | ||||
| 11/1/17 | ||||
| 10/17/17 | ||||
| 10/16/17 | ||||
| 9/25/17 | ||||
| 8/24/17 | ||||
| 7/28/17 | ||||
| 6/28/17 | ||||
| 2/24/17 | ||||
| 1/26/17 | ||||
| 12/10/16 | ||||
| 11/11/16 | ||||
| 10/26/16 | 6-K | |||
| 10/1/16 | ||||
| 9/26/16 | 6-K, SC 13D, SC 13D/A | |||
| 8/11/16 | ||||
| 6/9/16 | ||||
| 5/27/16 | ||||
| 5/26/16 | ||||
| 3/1/16 | ||||
| 11/24/15 | ||||
| 6/1/15 | ||||
| 5/14/15 | 6-K | |||
| 4/14/15 | ||||
| 3/30/15 | ||||
| 2/13/15 | 6-K, SC 13G/A | |||
| 2/3/15 | 6-K | |||
| 7/4/14 | ||||
| 4/29/14 | ||||
| 3/1/14 | ||||
| 1/29/14 | ||||
| 1/24/14 | ||||
| 12/28/13 | ||||
| 8/30/13 | ||||
| 7/1/13 | ||||
| 4/1/13 | ||||
| 12/28/12 | ||||
| 9/1/11 | ||||
| 8/1/11 | ||||
| 7/27/11 | ||||
| 7/1/11 | ||||
| 6/27/11 | ||||
| 9/21/10 | 6-K, 8-A12B | |||
| 8/27/10 | ||||
| 6/19/10 | ||||
| 2/1/10 | ||||
| 1/9/10 | ||||
| 12/10/09 | SC 13G/A | |||
| 10/27/09 | 6-K | |||
| 7/17/09 | ||||
| 6/22/09 | ||||
| 4/22/09 | ||||
| 8/5/08 | ||||
| 8/1/08 | CERTNAS | |||
| 2/29/08 | ||||
| 1/29/08 | 6-K | |||
| 1/1/08 | ||||
| 9/20/07 | 8-K | |||
| 4/1/07 | ||||
| 1/1/07 | ||||
| 12/8/06 | ||||
| 9/8/06 | ||||
| 8/8/06 | ||||
| 3/30/06 | S-4 | |||
| 2/6/06 | ||||
| 10/27/05 | ||||
| 7/21/05 | ||||
| 3/10/05 | ||||
| 8/28/04 | ||||
| 8/8/02 | ||||
| 8/3/02 | ||||
| 12/20/01 | ||||
| 10/27/01 | ||||
| 12/25/99 | ||||
| 11/15/96 | ||||
| 1/29/96 | ||||
| 7/1/94 | ||||
| 2/22/93 | ||||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/18/22 Hollysys Automation Techs, Ltd. 20-F 6/30/21 147:16M Donnelley … Solutions/FA 1/08/21 Hollysys Automation Techs, Ltd. 6-K 1/08/21 3:308K Donnelley … Solutions/FA 9/28/20 Hollysys Automation Techs, Ltd. 6-K/A 9/28/20 2:267K Donnelley … Solutions/FA 9/21/18 Hollysys Automation Techs, Ltd. 20-F 6/30/18 137:14M Toppan Merrill/FA 12/18/15 Hollysys Automation Techs, Ltd. S-8 12/18/15 4:492K Toppan Merrill/FA 3/30/06 Hollysys Automation Techs, Ltd. S-4 7:4.6M Toppan Merrill/FA |