HollySys Continues Its Frustrating 'Two Steps Forward, One And A Half Back' Dance

I can certainly sympathize with any long-term shareholders of HollySys (HOLI) who are wondering if their patience will ever be rewarded. HollySys shares have lost about 15% of their value over the past three years, a time period that has seen Yaskawa (OTCPK:YASKY) more than double (even with a substantial decline from the early 2018 peak), Rockwell (ROK) climb almost 50%, and even perpetually disappointing ABB (ABB) show some gains. During that time, the market for automation products (as well as train signaling products) has continued to grow in China, but HollySys just can’t seem to live up to its own goals and targets.

I used to cover a long-lagging power company (AES (AES) ) that a reader once described as “unable to ever leave its parents’ basement”, and that feels applicable here – HollySys should be making more progress as an automation provider within China, or at least communicating more pragmatically about its growth targets and goals. That said, AES eventually broke out and the same could still happen for HollySys – the company is flush with cash, has a good niche market position in process automation and train signaling, and stands to benefit from China’s Made In China 2025 (中国制造2025) strategic plan.

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HollySys Continues Its Frustrating 'Two Steps Forward, One And A Half Back' Dance