Investor Presentation

HollySys Automation Technologies Ltd.

MAY 2021
Disclaimer
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Agenda
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1. Strategic Objectives & Initiatives

 Strategic Objectives, Key Trends

 Initiatives

4
Strategic Objectives

The board of directors and management team have formulated its Five-Year (2021-2025) development
goals.

1. The company will align organizational structures and business strategies, offer relative independent
development forms for strategic business units, and create greater value for shareholders;

2. The company will cultivate two new strategic business units (Energy Solutions-ES
& Medical Solutions-MS) in 5 years to drive the long-term growth;

3. The Company believes that its existing two core strategic business units (IA & TA)
will grow at double market growth rate, and double the revenue and profits from that of 2020
respectively in 5 years.

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Key Trends & Drivers

1. Digitalization continue to accelerate in all industries

2. The great demand for environmental protection and energy conservation

solutions in response to climate change

3. Population aging and economic improvement promote the development of

the healthcare industry

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Strategic Initiatives
1. Organizational Structures Reform ：Relative Independent Structures for the Four SBUs

2. Cultivating Two New Strategic Business Units (ES & MS)

1）Energy Solutions-ES：Green energy related equipment and systems

2）Medical Solutions-MS：Medical equipment and systems; medical internet platforms to cover

the 4Ps ( Physicians, Patients, health care Providers, Payers)

3. Existing Strategic Business Units Growth Strategy（IA & TA）

1）Synergizing

Product portfolio: Control systems + field smart devices + industry application software

Service value-chain: Project commissioning + engineering design + operational optimization

2）Innovation

Digital-oriented: Continuous digitalization technology innovations.

Service-oriented: Move towards a more service-oriented business model.

3）Expansion：Developing new and emerging markets

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2. Organizational Structures Reform

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Align organizational structures and business strategies

HOLI

Industrial Transportation Energy Medical

Automation Automation Solutions Solutions
IA-Group TA-Group ES-Group MS-Group

Relative Independent Form for each Strategic Business Group

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Capital Allocation
According to the long-term strategic layout, the company's cash will be allocated in the following areas in strict requirements
on return on invested:

1. R&D:

1) Platform Technologies: digitized technology, Industrial Internet platforms, artificial intelligence application, Industrial data and
analysis technology

2) Industry Technologies: industrial software and intelligent manufacturing, intelligent transportation system, green energy and energy-
saving, system development of healthcare

2. Business acquisition with strategic synergy value:

1) Green Energy: green power generation equipment and system, energy storage and inverter system, smart micro-grid solution, energy
efficiency management

2) Medical: medical equipment and system, Medical Internet

3) Intelligent Manufacturing: smart control valves, smart sensors, industrial software

4) Intelligent Transportation: smart operation and maintenance, smart field devices, smart highway traffic monitoring system

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3.1 Energy Solutions Business Development Strategy

 Market Opportunities
 Business Development Strategy

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Energy Solutions Business: Huge Market Brought by Tackling Climate Changes

Sep. 22, 2020, the Chinese government made a commitment to the international community
Reach the peak of carbon dioxide emissions by 2030
Strive for carbon neutrality by 2060

Requirements on
Tackling Climate Changes
 Low carbon  Low consumption  Low consumption  Low waste
 Low emission  High-capacity density  High reliability  Low consumption

Primary energy:  Renewable  High safety level  Autonomous  High efficiency

wind, solar, water, earth, Energy consumption
tide, biomass, and emissions per
Electricity or Transmission &
nuclear, gas, Storage & Inverter Energy Consumption unit of GDP
Hydrogen Distribution
oil and coal
 Green electricity generation  Energy storage & inverter  Smart micro-grid  Energy saving equipment
equipment and systems  Hydrogen fuel cell  Energy efficiency management
 Hydrogen generation
equipment

Energy Solutions Business

Opportunities

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Energy Solutions: Business Development Strategy

1. Positioning to OEM equipment providers with strength in automation technologies.

2. HollySys has developed high power permanent magnet motors for two years, these new products
will be first launch to the heavy industries for energy saving purpose.
3. Access to other energy-related markets mainly by acquisitions.

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3.2 Medical Solutions Business Development Strategy

 Market Opportunities
 Business Development Strategy

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Opportunities for Developing the Medical Solutions Business

Medical Internet

Hospitals/Labs Physicians & Patients Medicines Health Care Products Health Insurance

 Diagnostic Equipment  Telemedicine & Expert Systems  Smart Dispensing  Extraction equipment  Insurance payment
 Treatment Equipment  Pathology and imaging  Drug Sprayers  Quality inspection  Insurance supervision
 Hospital IT Systems  Personal Health Records

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Medical Solutions: Business Development Strategy

1. Positioning to OEM equipment or device providers with strengthened automation technologies.

2. The company's affiliated enterprise has been devoting in smart system of traditional Chinese medicine (TCM)
for 10 years and has grasped a leading position. The company will preferentially base on the current market
position to expand comprehensively in key fields of TCM, develop business in the whole TCM industry chain and
achieve a rapid growth.
3. Building a medical Internet platform to support all eco-system parties include health care providers, physicians,
patients, medicine providers and health insurance.
4. Access the other medical markets mainly by acquisitions.

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4.1 Industrial Automation Growth Strategy

 Served Market & Current State of Play

 Growth Opportunities and Next Steps

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Redefining the Served Market: from control system to all three levels of products

 Production and Operations Management

 Asset Lifecycle Management
 Rotating Machinery Equipment Diagnosis
Industrial  Safety and Environmental Management
software  Recipe Management
 Alarm System
 Advanced Process Control
 Operator Training System

 Distributed Control System

 Safety Instrumented System
Control system  Programmable Logic Controller
 Compressor Control System
 Turbine Control System

 Smart Control Valves

Instrument  Smart Measurement Sensor and Transmitter
 Smart Diagnostic Sensor

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Redefining the Served Market: from project
execution to life cycle services
Operation
Optimization

Life Cycle Services

Asset Management

Systems Maintenance

Solutions
Commission
Projects Execution Services Consulting

Engineering Main Automation Vendor

Design (MAV)

Products &
Core and Self-developed Products and Platforms
Platforms Sales
（Instruments, Control System, Industrial Software）

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Total Addressable Market: Outlook on IA in 2025
China The Globe in China The Globe in
2025 Chinese PA product market China in 2025
IA market structure in 2019 2019 in 2025 2025
structure ($B)
($B) ($B) ($B) ($B)

Process Control system 5.0

16.5 114.2 23.4 136.3 (DCS/PLC/SCADA/SIS) (Current Portfolio)
Automation(PA)
Discrete Process automation instrument 13.4
11.3 77.7 16.0 92.8
Automtion(DA) (Valves/Sensors etc.) (Plan to access)
Hybrid Industrial software 5.0
5.7 38.6 8.1 46.1
Automation(HA) (MES/APC/AMS/OTS etc. ) (Accelerate the steps)

Total 33.5 230.5 47.5 275.2 Total PA in China 23.4

Note: global data in 2019 was based on Frost & Sullivan research report. PA/DA and HA market segments in China were estimated according
to global proportion. In 2025, the global data is predicted by a CAGR of 3%, and the Chinese market is predicted by a CAGR of 6%.

 The role of a control system is the core platform for project integration in PA field. Control system suppliers are in the core dominant position in PA
integration market
 HollySys has grown into one of the leading enterprises in PA on control system and project integration in Chinese market with a huge market space
left for HollySys’ PA business to grow.
 HollySys will develop its DA business with more resources.

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Current Position of HollySys IA Business in Chinese market
Market Position
 In power segment, we rank first among local suppliers.
Our main competitor is Emerson
 The petrochemical and chemical segments, we rank
the fourth, and the industry revenue has increased to
40% of the company's IA total revenue

Customers & Installed Capacity

 Accumulated over 12,000 industrial customers
 Accumulated over 35,000 systems installed
 Provided control system for over 28 nuclear power
plants

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HollySys IA Business Growth Targets

By 2025, we aim to

 Position ourselves as the leader in the Chinese power generation industry

 Establish ourselves as top 2 in market share in the petrochemical and
chemical segments
 Establish international markets as one of the main sources of revenue
 Double revenue and profits from that of 2020

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Five Growth Opportunities and Actions of IA Business of HollySys
Opportunities Actions
Market concentration: China's process automation market concentration is gradually increasing, and its market
Market penetration: increase market penetration and market share by our advantage of
share is further transferring to leading enterprises. HollySys now is in a leading positon in the market and is of a
scales and leading positon.
vantage point.

New demands for economic upgrades: air pollutant emission and carbon dioxide emission control are required
Technological innovation: Increase investment in R&D of digital technology, energy
to run through the whole industrial production process, bringing new automation demands; new demands for
saving and environmental protection technology.
digital, Industrial Internet and intelligent upgrading.

Product line portfolio expansion: the main current products are control systems and industrial software with
Product integration: combine independent R&D with M&A, complete integrated field
further expansion to are expected to field instruments and other industrial software, so there is still a lot of room
intelligent instruments and industrial software.
for business expansion.

Expansion of service scope: from the current project commissioning service and system after-sales service to Service integration: integrate cultivation internally and M&A externally , integrate
engineering design, consulting, production equipment management and operation optimization service. service chain from the perspective of global value chain .

International market development: the Chinese market contributes the main part of HollySys IA's revenue. The
Regional expansion: Cultivate partners in emerging countries, establish local sales and
international market development is still in its infancy, and there is a great space for growth in Southeast Asia
service organizations.
and other international markets.

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Development of New Generation Products for the Upgraded Markets

 New generation of integrated platform MACS V7: a new infrastructure to support an IOT-based industrial system
 Information security system: to meet the requirements of industrial information security regulations

 Versatile Remote I/O Module: significantly reduce the cost for customers

 High available DCS: provide a long-term available DCS for customers

 Smart Process Instruments：establish these product lines (valves and sensors) by acquisitions

 Smart factory software: optimize applications for manufacturing execution, equipment diagnosis, predictive
maintenance and other related needs—by acquisitions

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4.2 Transportation Automation Growth Strategy

 Served Market & Current State of Play

 Growth Opportunities and Next Steps

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 Redefining the Served Market: from railway to transportation, from CTCS to ETCS

High Speed CTCS

Rail standard
in China —————Train Control System————— ——Basic Signaling System—— —Operation and Maintenance—

High Speed Certified by EU, meet the

Rail in ETCS needs of international
Europe& standard market
Globe —Train Control System— ——Basic Signaling System——

Subway CBTC
——CBTC—— ——SCADA—— ——Intelligent Rail Products ——

Express
way
—Comprehensive Control System—— —Weather Effect Monitoring— —Operation and Maintenance—

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Current Position of HollySys RT Business in Chinese market

High Speed Rail Urban Rail Transit

 Holding full-set of security access permits  The forerunner of integrated metro operation and control
 Independent development of CTCS-0/1/2/3 system in China
control technology  Subway CBTC train control system has been applied with a
 One of the three main suppliers of high speed breakthrough project
railway train control system  Currently serves 51 lines in 15 cities around the world
 Currently serves 57 lines and 1,400 high-speed trains all over
the world

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Market Prospect: High Speed Rail a Steady Growth of Mileage in the Following 5-15
Years
 Overall scope of comprehensive and multi-dimensional transportation network: about
Outline of Plans on National Comprehensive and 700,000 km (Year 2035)
Multi-dimensional Transportation Network  Railway network:140,000 km →200,000 km (Year 2035)
 High speed railway mileage: 38,000km→70,000 km (Year 2035)

Chinese Railway Mileage (in ten thousand km) Chinese High-speed Railway Mileage
16.1 (in ten thousand km)
15.4 15.7 6.6
14.7 15.0
14.0 14.4
5.9
12.7 13.2
12.4 5.3
4.7
4.2
3.8
3.5
2.9
2.5
2.2

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Note: the total market capacity of transportation industry segment is expected to be clear in 2022. The above data is estimated based on empirical value.

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Market Prospect: Urban Rail Transit
 Orderly promote the development of Urban Rail Transit
The Fourteenth Five-Year Plan
 3,000 km of new urban rail transit operation mileage
for National Economic and Social Development  Promote the effective connection of transportation inside and outside
and the Outline the city; promote the "four networks’ integration" of rail transit
of Long-term Goals for 2035  Cultivate advanced manufacturing clusters and promote the innovation development of
advanced rail transit equipment industry

Total urban rail transit operation New urban rail transit operation
mileage of China (km) mileage of China (km)
1,298
13,649 1,236
1,178
12,351 1,121
1,068
1,017
11,115 969
9,937 880
8,816 734
7,747
6,730
5,833 5,767 535
4,158

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Data source: China Urban Rail Transit Association

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HollySys Transportation Automation Business Growth Targets

By 2025 – HollySys aims to:

 In high-speed rail, the company ranks as top 2 from comprehensive strength

aspects
 In subway SCADA market, the company ranks as top 2 from comprehensive
strength aspects
 In subway CBTC market, the company ranks as top 3 from comprehensive
strength aspects
 Lay the foundation for entry into international markets
 Double revenue and profit from that of 2020

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Five Growth Opportunities and Actions of TA Business of HollySys
Opportunities Actions
A steady growth of high-speed rail market: the entry barrier of the market is the access permission issued. As one Hold market leadership position: ensure the positon of
of the main suppliers for Chinese high speed rail control system, the company will continually involve into the the main supplier of train control system of Chinese
new construction and continue to expand its after sell service revenue. trunk railway, share the growth of the market.

Subway CBTC market opportunities: HollySys' CBTC system has been used in a small-scale project and is Make breakthrough in the large-scale project market of
expected to continue to make breakthroughs in the large-scale project market and become a new driver for rail subway train control systems: concentrate efforts and
transportation business. resources to make breakthroughs.

Intelligent upgrades of rail transit system: rail transit system is a huge infrastructure system, and there are new Technology upgrades: combining independent R&D with
demands for intelligent upgrades in locomotive body and control system, environmental safety, system operation M&A to promote business upgrades on intelligence and
and maintenance, operation and scheduling, etc. service.

Regional expansion: develop partners in emerging

International rail transit market opportunities: relying on local partners to develop rail transit automation
countries to promote the internationalization of rail
markets in emerging economies.
transit business.

Highway traffic automation market opportunities: to enter the highway traffic market with a double mode of Field expansion: Set up a highway transportation
products and integrations, leading products on accurate traffic meteorology, and intelligent operation and business department to develop business by combining
maintenance, and a breakthrough point of I-VICS. independent development with M&A.

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A New Generation of Products and Solutions
To continuously provide users with high quality products and solutions by leveraging digital capabilities to optimize transportation operations.

Cross-sector Infrastructure
Integrated business platform for Control System for Trains Control System
Control Systemfor High-Speed
for High-
New Standard Train Control Maintenance System for the
urban railways Autopilots SpeedMaglev Trains
System for National Railway Maglev Trains National Railway

• Based on two platforms: (1) • Train positioning technology • Train communication management; • Moving block technology will be • Based on the industrial Internet
Centralized big-data cloud system based on Beidou; used to realize train tracking platform, HollySys aims to
and (2) Edge computing platform; • Route and navigation search; control; integrate with industry cutting-
• IP based wireless communication edge technology.
• Constructing a three- level technology; • Route resource management; • Supporting integrated operation • Creating a platform that enables
structure of endings, edges and scheduling platforms; third-party application integration,
clouds; • Safety technology for train tails; • Mobile authorized computing; to improve technological,
• Adoption of independent ground operational and maintenance
• Currently testing in Beijing Metros; • Systems include the integrated • Open ground anastomosing safety platforms and vehicle levels of national railway systems.
design of train control and positioning; safety computer platforms;
interlocking and all electronic
control; • Usage of multi-sensor
anastomosing positioning for
• Technologies will conform to CTCS train speed measurement.
system requirements.

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M&A Strategy

1 National railway smart operation and maintenance companies

2 Smart endings providers for urban rail transit systems

3 Highway traffic automation companies

4 High quality enterprises in the international market

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5. HollySys in the Next 5 Years

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HollySys in the next 5 Years

A leading smart manufacturing

Talents
solutions & smart utilities provider in
China
Strategy Technology

Strategy：Clear goals with aligned actions

Talents：Excellent leadership with great pipeline
Technology：Core technology leader with ecosystem Capital
Capital：Efficient operation with high returns

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