Jennifer Zhang – IR Director Baiqing Shao – CEO Herriet Qu – CFO

David Jin - Goldman Sachs Baiding Rong - Credit Suisse Kevin Luo - Morgan Stanley Nick Zheng - JPMorgan Huimin Wu - CICC Alex Chang - Citigroup Patrick Xu - Nomura

Ladies and gentlemen, thank you for standing by, and welcome to the Hollysys Automation Technologies' Second Quarter and First Half of Fiscal Year 2015 Ended December 31st, 2014 Earnings Conference Call. [Operator Instructions] Please be advised that this conference is being recorded today, February 13, 2015. I would now like to hand the conference over to Ms. Jennifer Zhang, the Investor Relations Director of Hollysys Automation Technologies. Please go ahead, Ms. Zhang.

Hello everyone and thank you for joining us. Today our speakers will be Mr. Baiqing Shao, CEO of Hollysys Automation Technologies; Ms. Herriet Qu, CFO of Hollysys; and myself, the IR Director of Hollysys. On today's call Mr. Shao will provide a general overview of our business, including some highlights for the quarter, and Ms. Qu will discuss our performance from a financial perspective and financial outlook for fiscal year 2014. And the whole senior management will answer questions afterwards. Before we get started, I would like to remind everyone that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, including statements relating to the expected growth of Hollysys' future product introductions, the mix of products in future periods and future operating results. Such forward-looking statements, based upon the current beliefs and expectations of Hollysys' management, are subject to risks and uncertainties which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the statements: business conditions in China and in Southeast Asia; continued compliance with government regulations; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which Hollysys is engaged; cessation or changes in government incentive programs; potential trade barriers affecting international expansion; fluctuations in customer demand; management of rapid growth and transitions to new markets; intensity of competition from or introduction of new and superior products by other providers of automation and control system technology; timing, approval and market acceptance of new product introductions; general economic conditions; geopolitical events and regulatory changes; as well as other relevant risks detailed in Hollysys' filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. Hollysys does not assume any obligation to update the information discussed in this conference call or its filings. Please note that all amounts noted in this conference call will be in U.S. dollars unless otherwise noted. And now I'd like to turn the call over to Mr. Baiqing Shao. Please go ahead, Mr. Shao.

Thank you, Jennifer, and greetings to everyone. In the second quarter and last month, we achieved solid financial and operational result amid the weak general economic environment and made quite a few achievements and new contract wins. Here I would like to discuss some key events during this quarter: In industrial automation business, during this quarter, we continuously insisted in executing our strategies to vertically penetrate the high-end industrial automation market and provide more complete solutions horizontally. In the end of January 2015, we signed a significant contract to provide our Distributed Control System to 2 gigawatt Supercritical Coal Fire Power Generating Units for Guohua Shouguang Power Plant in Shandong Province. There are more than 40,000 points to be controlled in this project. Hollysys won this project from fierce competition with multinational and local competitors, which demonstrate our technology and affirm our market position in the high-end coal fire power market in China. Besides high-end market penetration, Hollysys also focused on reallocating our resources and putting more efforts in comparably high growth industries such as medical industry, food and beverage industry, and environmental protection related industries, and reducing the resources on no growth or even declining industries such as cement manufacturing, metallurgy and et cetera. We were also focusing on building strong aftersales department and set long-term goals on improving aftersales services. Our solution in reducing waste emission and environment protection proved successful. Externally, with China becoming an aging society and labor shortage tending to be a bigger problem, China is putting more efforts in automation to replace labor and improve efficiency to reduce emission and protect environment. We believe we will financially benefit more in the long run. Even though in the short term we got pressure under the current weak external environment, we are confident of the long term industrial automation growth. Going forward, we will continue to expand our sales force and allocate more resources to high-growth industries, penetrate further into high-end market while increasing market share in the low to mid-end market, expand our products supply such as software and safety protection solution, increase our overall market share and grow the business in the industrial automation leveraging our advanced technologies, experienced professionals, profound industry expertise, customization and innovation capability. In rail transportation, this quarter's rail revenue performance is because of its revenue's quarterly volatility due to the sizable contract signing process and afterwards revenue recognition. We are still very confident of the whole fiscal year's strong rail revenue performance. And excitingly, we achieved a few sizable contract wins in the recent past few months which will contribute to rail revenue afterwards. In December 2014, we won our first contract to provide the CTCS-2 Train Control Centers with Automatic Train Operation technology to Foshan-Zhaoqing intercity high-speed railway line, one of the first two intercity high-speed railway lines with ATO technology currently open for bidding in China. Even though the contract size is not large, which is RMB18.8 million or USD3.1 million for this line of 79.7 kilometers, this contract win demonstrates our leading technology, opens the gate to gain more ATO technology based intercity high-speed rail signaling system contracts in the future, lays the foundation for winning ATP with ATO function contracts of following projects, accumulates experience of C2+ATO type lines, and helps the company to further penetrate China's future intercity high-speed rail market; Besides, at the end of January 2015, we signed a very sizable contract to provide ATP equipment and system for two batches of high-speed trains in 200 kilometers per hour and 300 kilometers per hour running speed valued at RMB580 million or USD 95 million, which demonstrates our solid technology capability and solid market position. The products delivery is expected to be finished around June 2015. What's more, we also worked to expand our rail products supply such as track circuit. We have finished one-year testing of this product and the official admission progress and got the permit to enter track circuit market. We are expecting to gain our first track circuit contract in calendar year 2015. In addition, in December quarter 2014 we finished quite a few important high-speed rail projects and assisted the successful operation of Lanzhou-Xinjiang High-Speed Rail Line, Qingdao-Rongcheng High-Speed Rail Line, Guiyang-Guangzhou High-Speed Rail Line Guiyang-Congjiang Section. We felt honored and excited in contributing for China's national rail construction and assisting in these artery lines' successful operation. For subway business, we are following both domestic and overseas opportunities in both subway SCADA and subway signaling projects, we will continue to deliver quality works and work closely with subway authorities in the future to promote our SCADA system and future subway signaling technologies both in China and abroad. With China's tremendous rail and subway construction nationwide, there is going to be an exciting prospect for Hollysys. As a well-recognized rail signaling system provider, we are confident that with our strong R&D capability, solid execution and reliable products, Hollysys will continue to penetrate China's vast rail and subway construction market and achieve significant results. In the mechanical and electrical solution segment, Bond and Concord delivered solid growth during this quarter given their solid local market position, abundant customer resources and strong execution in Southeast Asia. For the overseas industrial automation and rail transportation expansion, we are sending qualified and experienced engineers from China to overseas, and recruiting local engineers to expand our overseas team. We have also established offices in Dubai and India to further expand our overseas business. With our proprietary technology and products, industry expertise and strong competitive advantages, together with our expanded local channels through Bond and Concord, we will continue to make exciting achievements in the international market in both industrial and rail transportation fields, and create value for our shareholders. With that, I'd like to turn the call over to Jennifer Zhang who will read the financial results analysis on behalf of CFO Ms. Herriet Qu. Jennifer?

Thank you, Mr. Shao. I would like to share some highlights for the second quarter and the first half of fiscal year 2015 ended December 31st, 2014. In the first half of fiscal year 2015, total revenues were $271 million, increase by 1.6% compared to the first half of last fiscal year. Non-GAAP net income was $50.7 million, increase by 9.6% compared to the same period last year. Non-GAAP gross margin was 39%, compared to 34.1% for the first half of 2014. Non-GAAP diluted EPS were $0.86, increase by 7.5% compared to the first half of last fiscal year. In the second quarter of this fiscal year 2015, total revenues were $130.3 million, representing a decrease of 15.1% year over year. Compared to the same quarter of last year, integrated contracts revenue decreased by 18.7% to $119 million. Product sales revenue increased by 76.2% to $10.3 million. And services revenue decreased by 15.7% to $1 million. The company's total revenue by segment were as follows. Industrial automation $56.8 million, railway transportation $33.6 million, mechanical and electrical solution $37 million, miscellaneous $2.9 million. Overall gross margin excluding non-cash amortization of acquired intangibles was 38.3% for the second quarter, as compared to 32.3% for the same period of last year. The non-GAAP gross margin for integrated contracts, product sales, and services rendered were 35.7%, 63.7% and 80.4% for the second quarter, as compared to 30.7%, [34.2%], and 19.6% for the same quarter of last year. The gross margin fluctuation was mainly due to the different revenue mix with different margin. The GAAP overall gross margin, which includes non-cash amortization of acquired intangibles, was 37.1% for this quarter, as compared to 31% for the same period of last year. The GAAP gross margin for integrated contracts, product sales, and service rendered were 34.4%, 63.7% and 80.4% for the second quarter, as compared to 29.3%, 74.2%, and 19.6% for the same period of last year, respectively. Selling expenses were $7.2 million for the second quarter, representing a decrease of $2.3 million or 23.8% compared to $9.5 million for the same quarter of last year, mainly due to the company's efforts in efficiency improvement. Presented as a percentage of total revenues, selling expenses were 5.5% and 6.2% for the three months ended December 31, 2014, and 2013, respectively. General and administrative expenses, excluding non-cash share-based compensation expenses were $15.5 million for the second quarter, representing an increase of $6.6 million or 73.6%, as compared to $8.9 million for the same period of last year. The increase was mainly due to an increase of $2.8 million in bad debt expenses, $2.4 million in employee compensation expenses, and $0.6 million in amortization and depreciation expenses. The increase in employee compensation expenses was mainly caused by the accrued bonus expenses. Presented as a percentage of total revenues, non-GAAP G&A expenses were 11.9% and 5.8% for the quarters ended December 31, 2014 and 2013, respectively. The GAAP G&A expenses, which include the non-cash share-based compensation expenses, were $15.9 million and $10.1 million for the three months ended December 31, 2014 and 2013, respectively. Research and development expenses were $10.1 million for the second quarter, a decrease of $2.1 million or 17.4% compared to $12.2 million for the same quarter of last year. Presented as a percentage of total revenues, R&D expenses were 7.8% and 8% for the quarter ended December 30, 2014 and 2013, respectively. The VAT refunds and government subsidies were $5 million for the second quarter, as compared to $10.4 million for the same period of last year, representing a $5.4 million or 51.8% decrease which primarily due to the decrease of the VAT refunds for $5.7 million. The income tax expenses and the effective tax rate were negative $0.3 million and negative 1.5% for the second quarter, as compared to $3.6 million and 16.3% for comparable prior year period. During the second quarter of fiscal year 2015, Beijing Hollysys and Hangzhou Hollysys were certified as HNTE, high-tech enterprise tax -- high-tech enterprise effective for three years from January 1, 2014 to December 31, 2014, and are applied to the preferential enterprise income tax of 15%. In the second quarter, Beijing Hollysys and Hangzhou Hollysys accordingly recalculated the tax expenses accrual for calendar year 2014 based on the newly applied enterprise income tax rate of 15% instead of 25%. Excluding the impact of the accrual adjustment for the prior fiscal year, the effective tax rate for the current period was 15.2%. The non-GAAP net income attributable to Hollysys, which excludes non-cash share-based compensation expenses, amortization of acquired intangibles and acquisition-related consideration fair value adjustments, was $23.6 million or $0.40 per diluted share based on 59.2 million shares outstanding for the second. This represents a 11.1% decrease over the $25.9 million or $0.45 per share based on 58.2 million shares outstanding reported in the comparable prior-year period. On a GAAP basis, net income attributable to Hollysys was $19.1 million or $0.32 per diluted share, representing an increase 4.3% over the $18.3 million or $0.31 per diluted share reported in the comparable prior-year period. Hollysys' backlog for the integrated contracts as of December 31, 2014 was $433.7 million, representing a decrease of 12.5% compared to $495.7 million as of September 30, 2014, and a decrease of 13.8% compared to $503.3 million as of December 31, 2013. The detailed breakdown of backlog for integrated contracts by segments is: industrial automation $139.3 million, railway transportation $219.7 million, mechanical and electrical solutions $74.7 million. For the second quarter, the total net cash inflow was $25.8 million. The net cash provided by operating activities was $24 million. The net cash provided by investing activities was $1.4 million. The net cash used in financing activities was $0.4 million. The total amount of cash and cash equivalents and time deposits with original maturities over three months were $215.8 million, $191.1 million, and $150.1 million as of December 31, September 30, 2014, and December 31, 2013, respectively. As of December 31, 2014, the company held $188.7 million in cash and cash equivalents and $27.1 million in time deposits with original maturities over three months. For the second quarter, days sales outstanding was 206 days, as compared to 156 days for the comparable prior-year period and 176 days from last quarter. And inventory turnover was 52 days, as compared to 27 days for the comparable prior year period and 41 days for the last quarter. Given our strong backlog currently on-hand and sales pipeline envisioned so far, we reiterate our guidance for fiscal year 2015 with revenue in the range of $565 million to $600 million and the non-GAAP net income in the range of $94 million to $98 million. At this time we'd like to open up for the Q&A session. Please note that for Chinese-speaking participants, we can also do the Q&A in Mandarin and we will provide translation. [Chinese Language Spoken]

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from David Jin from Goldman Sachs. Please go ahead, David. David Jin - Goldman Sachs: [Chinese Language Spoken]

Thank you, David. The first question is regarding the industrial automation. DCS performance was weak for the first quarter because of the weak external general environment. For the first half of this fiscal year, I would like to know the percentage of the process automation and discrete automation in the industrial automation segment. And the second question is regarding the rail, because in the -- in January Hollysys signed a big contract to provide ATP to CRC, so that means there will be a big increase in the revenue in the third and fourth quarter in the rail segment. So -- and also I would like to know the track circuit penetration pace in -- for -- because it is a new product. I would like to when the company can sign the first contract of the track circuit.

[Interpreted] For the first question, sorry, we did not disclose the percentage of the discrete average versus the process automation in the whole industrial automation segment, but the discrete takes a very small percentage in the whole IA. During the past few years we increased our efforts in growing the discrete automation business, so in the future we believe the percentage for the discrete will take a larger percentage, and which we'll achieve a balanced performance of the process and discrete in the whole IA sector. And for the second question, yes, we signed a big order in the rail in January, so we think we'll achieve solid revenue performance in the rail in the third and fourth quarter, and we think we can achieve our rail guidance in this fiscal year. For the third question, for the track circuit and also the subway signaling system, we are confident that we will make and achieve our first breakthrough project in the current year of 2015.

Okay. Thank you, David.

The next question comes from Baiding Rong. Please ask your question. Baiding Rong - Credit Suisse: [Chinese Language Spoken]

Okay. Thank you, Baiding. The first question is regarding the track circuit. I'd like to know the amount for bidding each year and also the market size of the track circuit. And the second question, I had noticed that the company has signed a high-speed rail contract with the ATO type of technology, so I want to know what kind of -- how many potential and what potential projects, ATO projects, the company participate in the bidding right now? And third question is regarding the CBTC. Also I want to know the products the company is bidding for the CBTC.

[Interpreted] Okay. Firstly, for the track circuit, the track circuit is applied for both high-speed rail and lower-speed rail lines. The market size is, while it's similar, of the ATP and DPC, currently high-speed rail technology we are providing to the rail segment, so the market size is quite large for the track circuit. And because it's a new product and we believe, because of our technology, we are confident to sign our first contract with track circuit this year. And second, for the ATO, we are aggressively participating in the ATO bidding, but sorry, I cannot disclose the project name of the ATO we are participating. So maybe we can communicate later after this conference call. And thirdly, for the CBTC, we are bidding for the railway line both in China and overseas. And besides, we also recruit more experts joining Hollysys in helping us to bidding for the CBTC projects. And we believe that we can make some achievement in this year 2015. Baiding Rong - Credit Suisse: [Chinese Language Spoken]

Xie-xie, Baiding. Next question please?

The next question comes from Kevin Luo. Please go ahead, Kevin. Kevin Luo - Morgan Stanley: Hey.

Hey, hello. Kevin Luo - Morgan Stanley: Hi, Jennifer. Ni hao. [Chinese Language Spoken]

[Chinese Language Spoken]

Okay. Mr. Kevin Luo has two questions. First one, he noticed that in the second quarter the gross margin and operating margin increased. And also he noticed that the percentage of rail revenue is smaller in the whole company's revenue. So, is that because of the improvement of the gross margin from the M&E segment or there are some other reasons? And the second question is about the track circuit. Is that -- the track circuit will be used on the -- outside the railway lines every 2 kilometers? Is that used to receive and send signals? And then Mr. Shao answered the second question. He thinks the understanding from Mr. Luo is right. Yes, that is also a safety signaling system that is used to receive and send signals on the ground base. Okay. Ms. Qu will answer the first question.

[Interpreted] Okay. The margin increase is mainly because the industrial automation, not because of the M&E segment, gross margin increased. Even though every quarter has a very good gross margin performance, but IA is especially better, that is because of the previous better improvement and the margin increasing of the single -- each single product we supply to the industrial automation. So that makes the whole IA sector gross margin is the higher compared to the past. So that makes the whole second quarter's gross margin is higher. Kevin Luo - Morgan Stanley: [Chinese Language Spoken]

Okay. The next question is about the pricing of the contract we signed in the January about the ATP product supply. Mr. Kevin noticed that the products supplied by the CNR [ph] and CSR [ph] was lower. Is Hollysys placed the same situation?

[Interpreted] Okay. I didn't give a calculation of each single ATP price compared with past, but for your info, the gross margin in the rail segment is not lower compared with the past. So that means we still maintain a very good same gross margin of the rail compared with the past. Kevin Luo - Morgan Stanley: Thank you very much.

The next question comes from Nick Zheng. Please go ahead. Nick Zheng - JPMorgan: [Chinese Language Spoken]

[Chinese Language Spoken] Nick Zheng - JPMorgan: [Chinese Language Spoken]

Okay. Thank you, Nick. Okay, Nick has three questions. The first question is about the industrial automation. He want to know the -- each industry performance in the industrial automation. And the second question is that he want to know the guidance of each individual sector of the industrial automation and the rail and also the M&E segment. And the third question is about the dividend, because Hollysys has announced a dividend paying for the first half of this calendar year. And does the company have a policy to pay the dividend every year? Or -- and also, does that mean that the company does not have a short-term target for the M&A? Thank you.

[Interpreted] Okay. Firstly, we adjust our efforts allocating into different industry sectors. Firstly, we reduced our investment in the pollution related environment industries, and we are more focusing on the contract quality in those industries, such as cement, metallurgy and et cetera, and other industries. And also we increased our efforts in those industries such as environment protection and the medical and food beverage industries. And also certainly, in the aftersales service, the increase is good compared with the past because of our efforts in doing more aftersales service in the industrial automation. And also fourthly, we have very good growth from the discrete automation such as the medical solution, the growth was strong, in the [inaudible] a few quarters.

The next question comes from Huimin Wu. Please go ahead.

I'm sorry, operator?

Yes.

We haven't finished up.

I do apologize. I'll bring them back.

Thank you. [Chinese Language Spoken]

[Chinese Language Spoken] Nick Zheng - JPMorgan: [Chinese Language Spoken]

[Chinese Language Spoken]

Okay. The different segment guidance may be a little bit different compared with the previously guidance. Firstly, for the industry automation, previously we are -- we were guiding around 8% to 15% growth, but now we think that maybe a little bit overoptimistic. Now we are guiding slight growth of the industrial automation segment for the revenue, but because of the gross margin increase, so the net profit of the IA maybe still [inaudible] in the range of our previous guidance. For the rail, previously we are guiding the flat performance of the rail, now we still maintain the same guidance, because our strong order and strong backlog, and also we are expecting more subway contract wins in this year. But because it takes time for the contracts to turn to be the revenue, so the revenue contribution from the subway will be small. So we are still guiding a flat performance in the rail. For the M&E segment, because previously we are guiding 15% to 20%, now we are still reading [ph] our expectation in the similar performance. So, okay, that's the guidance of the different segment. Also for the --

[Interpreted] Okay. So just question of the dividend. This dividend is the special cash dividend, but that does not mean we are not considering the long-term dividend payout policy. And also this does not mean that we will not spend just mainly on the M&A target, because now it only means that we have enough cash on hand, so we want to take some money and to reward the investors. And if we have any good M&A target, we are able to have the enough money to finish the M&A. Thank you. Nick Zheng - JPMorgan: [Chinese Language Spoken]

Xie-xie, Nick.

Okay. Operator, next question please.

The next question comes from Huimin Wu. Please go ahead. Huimin Wu - CICC: [Chinese Language Spoken]

[Chinese Language Spoken] Huimin Wu - CICC: [Chinese Language Spoken]

Okay. Thank you, Huimin. Huimin has two questions. Firstly, the Bombardier and NUG former joint venture in doing the signaling, so potentially there may be another provider of the signaling in the rail segment. So does that mean the company facing more competition in the rail? And then secondly, for the overseas market penetration, because a lot of big SLEs [ph] are doing more overseas projects and participate in a lot of biddings, so the company, I want to know the company's overseas play in the rail segment. Thank you.

[Interpreted] Firstly, because of the safety concern and the permission by the CRC, the strict control of the permission, so we don't think we will face competition in the near term and the competition landscape will not change in the near future. Secondly, we have won our [inaudible] in providing SCADA to the Singapore LTA, Land Transport Authority, and now we are increasing our cooperation and communication with the local large customer. Beside that, we are also talking with the big contractors and increasing our cooperation and discussion with the large SLEs [ph] and increasing our cooperation. So we will all do the overseas projects in the above three ways, including the local customer communication and the communication with big contractors, and also the cooperation with large SLE [ph] companies in doing the project in overseas [inaudible]. Thank you. Huimin Wu - CICC: [Chinese Language Spoken]

Thank you, Huimin. Okay, next question please?

The next question comes from Alex Chang. Please go ahead. Alex Chang - Citigroup: [Chinese Language Spoken]

[Chinese Language Spoken] Alex Chang - Citigroup: [Chinese Language Spoken]

Okay. Thank you, Alex. Firstly, I noticed that the accounts receivable and inventory absolute amount increased a lot. And there was one reason, because of revenue decrease in this quarter. And also I want to know which sector contributed the increase to accounts receivable most. And also in the bad debt allowance, there was $2.8 million bad debt allowance in this quarter. Is that enough? And also for the inventory, I also noticed the increase of the inventory. So what is the reason?

[Chinese Language Spoken]

Okay. Thank you, Qu-zong. The main reason is because of the internal policy change, because of the more strict control of the accounts receivables. You have noticed that the total amount of the accounts receivables viewed accounts receivables and [inaudible] receivables, the total amount actually decreased, because the company is now more actively chasing the accounts receivable and [inaudible] we're adopting more strict measures in define the accounts receivable so that it makes the account receivable seem to be larger, even though that makes in the short the DSO, days receivables increase. But in the long term it may benefit the company in better control the accounts receivable and eventually reduce the day sales outstanding.

[Interpreted] Okay, for the bad debt allowance, actually the bad debt allowance increased by $2.8 million in this quarter. It's not only $2.8 million bad debt allowance incurred in this quarter, so. And currently we think the bad debt allowance is enough in the current situation. Okay. For the inventory, your understanding is right, because the -- especially because of the contract signing with rail, the CRC, because the contract is now signed. But actually before the contract is signed, we have already executed the contract in preparing and also delivering of the products. So that makes the inventory increase for this single contract reason, there was about $10 million in the inventory. Alex Chang - Citigroup: [Chinese Language Spoken]

[Chinese Language Spoken] Okay. Because of time constraint, we'll take our last question. Operator, please.

The next question comes from Patrick Xu. Please go ahead. Patrick Xu - Nomura: [Chinese Language Spoken]

Okay. Patrick has three questions. Firstly is about G&A expenses, the G&A expense and also the percentage increased in this quarter, so what is the reason, and especially for this one-time reason? And also for the second question, I noticed there's some investing loss with the related enterprise, so, what is the enterprise? And also for the nuclear power business, does the company expect any breakthrough or improvement in the nuclear power performance in the first half of this calendar year? Thank you.

[Interpreted] Okay. There are two major reasons for the increase of G&A expense. Firstly is the bad debt allowance increase by $2.8 million. And the second reason is because of the bonus for the Bond, because Bond after -- Bond delivered very strong performance in the past two years, and now they finished their review period. So we have more expense for the bonus in the G&A. The investment loss is mainly because of the joint venture with CGNPC, the name is CTech [ph]. We're holding 40% holding of the CTech [ph]. Okay. For the nuclear, we are more optimistic. We think we will have better development of the nuclear power business in this year. Besides our cooperation and business with CGNPC, we are also starting cooperating with CNC, that is a good news for Hollysys and also for the investors. Patrick Xu - Nomura: Xie-xie.

Thank you, Patrick.

Okay. Thank you everyone for joining us on the call today. If you haven't got a chance to raise your questions, we'll be pleased to answer them through follow-up contacts. We look forward to speaking with you again in the near future. Thank you. Xie-xie.

That does conclude our conference for today. Thank you for your participation. You may now all disconnect.

Thank you. Bye-bye.