Reminds Shareholders of Similar Fact Pattern in 2021

Fully Expects Board to Move Forward with Special Meeting After it Confirmed Receipt of Updated Material From Shareholders

Provides Update on Engagement and Legal Due Diligence

Buyer consortium (“the consortium”) led by Recco Control Technology Pte. Ltd. (“Recco Control Technology”) and Dazheng Group (Hong Kong) Investment Holdings Company Limited (“Dazheng Group”) today issued a statement regarding Hollysys Automation Technologies Ltd.’s (NASDAQ: HOLI) (“Hollysys”) update on its ongoing sale process and disclosure of a supposed management-backed buyout proposal. Members of the consortium also include TFI Asset Management Limited, and Great Wall Capital Co., Ltd, who have entered into a memorandum of strategic cooperation with Recco Control Technology and Dazheng Group in connection with the proposed acquisition of Hollysys.

The Consortium remains extremely interested in acquiring Hollysys and is motivated to move swiftly through negotiations and due diligence with Hollysys. The Consortium encourages an independent and transparent sale process. In that regard, the Consortium believes shareholders should be aware of the full context regarding the ongoing sale process and relevant history regarding unsolicited takeover proposals at Hollysys.

Management Buyout – An Empty Gesture Already Used

Dating back to August 2021, Hollysys has publicly announced multiple take private offers from its management team. Ironically, the only two times Hollysys management has expressed apparent interest in taking the company private have coincided with the time periods when the Hollysys Board was evaluating proposals from unaffiliated bidders:

• On August 24^th, 2021, Hollysys announced it received a proposal to acquire the Company for US$23.00 per share in cash from a group that included an outside investor and the Company’s founder and co-chief operating officers. Notably, nothing ever materialized with this proposal, despite it being at a sizable premium at the time. This either calls into question the Board’s willingness to assess attractive takeover offers, or calls into question the management group’s sincerity or its ability to secure credible financing to back its takeover offers.
• Today, Hollysys has announced it received a proposal to acquire the Company for US$25.00 per share in cash from the same co-chief operating officers. At this time, this group does not consist of any outside investors or reference any funding source, meaning this proposal seems to be an even emptier gesture than the 2021 management takeover proposal. This announcement also draws attention away from the fact that nearly a third of shareholders have requested the Board to call a special meeting.

Shareholders Have Properly Resubmitted Request to Call Special Meeting

An important aspect of any sale process is for a Board of Directors or independent Special Committee to solicit and internalize the views of its shareholders. This sale process is no different. The Consortium believes it is the best course of action for the Hollysys Board and Special Committee to listen to the views of its shareholders. An independent Board elected by shareholders is the best way to ensure unaffiliated shareholders’ interests are protected during this sale process.

In its announcement today, the Board has essentially confirmed that certain shareholders owning nearly a third of shares outstanding have provided updated materials with the proper record date – a date that was set by the Hollysys Board. Now that shareholders have provided the Board with updated materials, the Consortium fully expects the Board to fulfill its fiduciary and legal obligation to convene a special meeting without delay.

Update on Engagement and Legal Due Diligence

As part of an independent and transparent sale process, the Consortium seeks to proactively provide an update to shareholders on recent engagement between the Consortium and the Special Committee. At this time, despite Hollysys announcing the formal sale process over three weeks ago, the Consortium has still been unable to access any due diligence materials from Hollysys.

The Consortium is seeking to enter good faith due diligence and negotiations regarding its US$25 per share all-cash proposal with the Special Committee directly. The Consortium resubmitted it’s offer two months ago, but still the Company has not allowed the Consortium to enter into the due diligence process yet.

The Consortium is seeking to reserve the right to make competing offers to any bids received by the Special Committee and, only if deemed necessary, take a proposal directly to Hollysys shareholders. The Consortium firmly believes that this element of a sale process – the element of fair, transparent, and open competition amongst potential bidders – is crucial to ensuring value is maximized for the shareholders of Hollysys.

Slowing down the legal due diligence process is contrary to the Board’s stated goal of “conducting an expedited process to solicit and review serious and compelling offers”. Instead, it extends the length of the sale process. Additionally, the Consortium notes that any engagement with regards to the sale process should not interfere with the Board’s ability to convene a special meeting in line with the requests of Hollysys shareholders. It is important in this regard for all shareholders to remember that the Company has never held any general meeting of its shareholders since it became a public company.

Consortium Motivated to Engage Constructively Regarding Attractive All-Cash Offer

The Consortium reiterates its interest in acquiring Hollysys and motivation to enter due diligence and further negotiations with the Special Committee. The Consortium is confident its all-cash offer of US$25 per share is at an attractive premium and would see significant support from Hollysys shareholders. The Consortium looks forward to conducting due diligence and engaging constructively with the Special Committee.

Advisors

UBS Investment Bank is serving as financial advisor to the consortium and Sullivan & Cromwell LLP and DLA Piper LLP are serving as U.S. legal advisors to the consortium. Conyers Dill & Pearman is advising the consortium on BVI law.

About Recco

Recco Control Technology Pte. Ltd is a Singapore-incorporated investor in the automation industry and was founded by Mr. Ke Lei, a veteran in the automation industry in China.

About Dazheng

Dazheng Group (Hong Kong) Investment Holdings Company Limited is a Hong Kong-incorporated financial investor founded by sophisticated entrepreneurs and investment banking professionals.

About TFI

TFI Asset Management Limited is a Hong Kong-based asset management firm which is an indirect subsidiary of Tianfeng Securities Co., Ltd. (also known as TF Securities, SH: 601162).

About Great Wall Capital

Great Wall Capital Co., Ltd. is a Beijing-based private equity investment firm under China Great Wall Asset Management Co., Ltd., one of the four Chinese state-owned asset management companies.

Cautionary Statement Regarding Forward-looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words “believe,” “envision,” “will,” “expect,” “anticipate,” “intend,” “estimate,” “plan” and similar expressions. Although the management of Recco, Dazheng, TFI and Great Wall Capital believe that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of any of Recco, Dazheng, TFI and Great Wall Capital, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Other than as required by applicable law, none of Recco, Dazheng, TFI and Great Wall Capital undertakes any obligation to update or revise any forward-looking information or statements. The information and opinions contained herein do not take into account the particular investment objectives, financial situation, or needs of any recipient and should not be construed as an offer to buy or sell or the solicitation of an offer to buy or sell the securities mentioned or an invitation to the public. Under no circumstances shall the information contained herein or the opinions expressed herein constitute a personal recommendation to anyone.

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