Hollysys Automation Technologies Ltd (NASDAQ: HOLI), , a leading provider of automation and control technologies and applications in China, stock lost over 22.4% on 15th August, 2018 (as of 10:34 AM GMT-4; Source: Google finance). The group’s bottom line missed the analyst estimates by $0.03, reaching $0.46.
The company in the fourth quarter of FY 18 has reported 26.5% growth in the Non-GAAP net income attributable to HOLI of $28.6 million. During the period, the company has delivered 6.7% rise in the total revenues of $147.2 million. During the fourth quarter, HOLI has achieved $181.2 million new contracts and the backlog as of June 30, 2018 was $569.0 million.
Moreover, during the fourth quarter, Industrial automation reported a 46.2% year-to-year in quarterly revenue at $68 million and new revenue and new contract recorded a 30.2% and 16.0% year-to-year growth respectively. The company continued to execute the low-to-high end market expansion strategy for Process Automation business. Further, the company’s contract growth in chemical and petrochemical remained healthy. Major contracts include a DCS, SIS, ITCC and AMS solution for Shandong Haiyou Chemical’s 1 million tons delayed coking equipment project, and a DCS solution for Suzhou Sinye Materials Technology Corporation Ltd covering its furan, cold-core, and sulfonic nickel curing agent project. The company has signed several additional contracts for the milestone Zhong’an United Coal Chemical Project, where HOLI applied the comprehensive solution to many new equipment for the first time.
Furthermore, on power, despite the slowdown of the coal fire industry, the growth in thermal power and new energy remained healthy. The company continued to maintain the market share in high end coal fire market, while actively expanding market for multiple product lines. Major contracts signed include a DCS solution for Shenhua Wucaiwan 2X660MW power station and a DEH solution for Datang Pingluo 2X660MW turbine unit
In the fourth quarter, DSO was 166 days, as compared to 153 days for the comparable prior year period and 196 days for the last quarter and inventory turnover was 59 days, as compared to 50 days for the comparable prior year period and 63 days for the last quarter. The total amount of cash and cash equivalents were $262.1 million, $238.0 million, and $197.6 million as of June 30, 2018, March 31, 2018 and June 30, 2017, respectively. Further, in the fourth quarter, the total net cash inflow was $24.1 million. The net cash provided by operating activities was $45.1 million. The net cash used in investing activities was $6.4 million, mainly consisted of $30.2 million time deposits placed with banks, which was partially offset by $25.1 million maturity of time deposits.