Hollysys Vote to Pay Regular Dividend a 'Win-Win' Decision

Heng Ren Investments LP Applauds Responsiveness to Shareholders

October 6, 2016 4:00 PM EDT

(SI Newswire) This is a September 27 letter from Heng Ren Investments LP to the Chairman and Board of Directors of Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) of Beijing, China regarding the decision to pay a regular dividend to shareholders:

To the Chairman of Hollysys Automation Technologies Ltd., Mr. Jianfeng He, the Board of Directors, CEO Mr. Baiqing Shao, and all Senior Management,

On behalf of Heng Ren Investments LP and our partners we would like to congratulate you and the Board of Directors of Hollysys for the vote and decision to implement a regular dividend.

As a long-time shareholder, we believe a regular dividend will increase Hollysys’ shareholder base and reduce the current valuation discount for Hollysys compared to its domestic and international peers.

We also want to commend you and your management for being receptive to our recommendations and analysis during your consideration of a regular dividend. It demonstrates to us and shareholders that Hollysys is a strong company with management that is confident in its capabilities and its future. We believe your responsiveness to shareholders will be a key factor in your continued success as a public company.

As we stated to you in a letter on March 8, 2016 (link), we believe this regular dividend will help Hollysys over time unlock value and improve returns for all shareholders. While our valuation of the company has changed since the company reported its FY 2016 results, we still see upside for the stock price and significant opportunity from higher dividends and a significant share buyback.

We hope to see the payout ratio rise with the company\'s promising business, along with continued consideration of a share buyback program as the company\'s cash flow warrants.

We look forward to our continued dialogue and your continued success as an international public company.


Peter Halesworth

Managing Partner

Heng Ren Investments LP

Boston, Massachusetts

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