Wednesday, May 16, 2018

Strong Orders Drive A Rally For HollySys

China’s HollySys (HOLI) has continued to outperform its peers in 2018, though HollySys too had been drifting lower since early March. With strong orders in the automation business in the March quarter, though, it looks like investors feel a little more confident in the prospects of HollySys continuing to penetrate new markets in its core China market.

Consistent execution has long been a challenge for HollySys management, and the situation is not helped by volatile ordering patterns from its primary rail customer. That said, the company has been expanding its automation product offering and continues to gain business in new market verticals. While the shares don’t look like a particular bargain relative to the underlying risks, high single-digit revenue growth should support double-digit returns for shareholders.

Read more here:
Strong Orders Drive A Rally For HollySys

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