Buyer Consortium Led by Recco Control Technology Pte. Ltd. and Dazheng Group (Hong Kong) Investment Holdings Company Limited Announces Non-Binding Offer to Acquire Hollysys

SINGAPORE and HONG KONG,China,Jan. 24,2022 -- Recco Control Technology Pte. Ltd. and Dazheng Group (Hong Kong) Investment Holdings Company Limited,as certain members of the buyer consortium,announced today that,on December 3,2021,the consortium submitted a non-binding proposal to acquire Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) (the "Company") in an all-cash transaction via a friendly negotiated merger and sent today a letter to the board of directors of the Company reiterating the proposal and requesting to commence due diligence and negotiation processes with the buyer consortium in order to maximize shareholder value.

Under the terms of the proposed acquisition,Hollysys shareholders would receive $25 per Hollysys share in cash,representing a 69.4% premium over Hollysys' closing share price of $14.76 on January 21,2022. The consortium's offer also represents a premium of 75.5% over the volume-weighted average closing share price during the 30 trading days prior to January 22,2022,and a premium of 51.7% over the volume-weighted average closing share price during the 180 trading days prior to January 22,2022.

At this stage,there can be no assurance that any agreement could be reached between the consortium and Hollysys.

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Below is the full text of the letter sent today.

January24,2022

The Board of Directors

Hollysys Automation Technologies Ltd.

No.2 Disheng Middle Road

Beijing Economic-Technological Development Area

Beijing,People's Republic of China,100176

Attention: Ms. Li Qiao,Chairwoman

Dear Members of the Board:

As you know,we submitted to you a non-bindingproposal (the "Proposal") for a potential acquisition of Hollysys Automation Technologies Ltd. (the "Company") via a friendly-negotiated merger. Over the last sevenweeks,we have attempted to engage with you,your financial advisor and legal counsel in friendly discussions to explain and expand upon our Proposal,but so far there has been no substantive progress,and the Proposal has not been made public by the Company.

Our Proposal is superior to (i)the $23 per share proposal made by Superior Emerald (Cayman) Limited and Mr. Changli Wang on July 20,2021 and (ii)the $24 per share proposal made by Zhejiang Longsheng Group Co.,Ltd. and Loyal Valley Innovation Capital (HK) Limited on September 10,2021 (collectively,the "Previous Bids"),both of which have been disclosed by the Company.Therefore,we strongly believe that our Proposal would provide the Company's shareholderswith immediate,certain and highly attractive value that reflects the potential of the Company's business as well as benefits of the acquisition.

This letter reiterates the terms of our Proposal,which has been approved by each member of our consortium,ledby Recco Control Technology Pte. Ltdand Dazheng Group (Hong Kong) Investment Holdings Company Limited and include other members,including a Chinese state-owned strategic investor.

Our Proposal

Price:We are prepared to acquire all of the issued and outstanding shares of the Company not owned by our consortiumfor $25.00 per share in cash,to be implemented via a friendly-negotiated merger of the Company with an acquisition vehicle to be established by us. We believe this all-cash offer presents the Company'sshareholders the best opportunity to maximize the full value of their shares immediately,with certainty. Our offer represents:

A premium of 69.4% over the closing share price of $14.76 on January 21,2022

A premium of 75.5% over the volume-weighted average closing share price during the 30 trading days prior to January 22,2022

A premium of 51.7% over the volume-weighted average share price during the 180 trading days prior to January 22,2022

Our proposal fully values the Company and its subsidiariesand also takes into account the synergies that we envision will result from the acquisition of the Company by our consortium. Compared to the Previous Bids that have been announced by you,our bid offers the highest price premium.

Financing:Our all-cash offer provides transaction certainty. We have engaged in an extensive analysis of the potential financing options available to us and we are highly confident in our ability to secure definitive commitments for the required debt and equity funding,subject to terms and conditions to be set forth therein,to be in place when the definitive agreements for the acquisition are signed. In this regard,we note that the consortium has received,and shared a copy with you of,a memorandum of understanding from the Industrial Bank of China,sealed with the official chop of the bank,that would cover the entirety of the debt financing needs of the consortium for the proposed transaction,and that each consortium member has sufficient cash on hand to fund their respective portions of the equity component.

Regulatory:We have analyzed the potential regulatory aspects and are very confident that we will be able to obtain all necessary approvals in a timely manner.

Integration:As our consortium includesa Chinese state-owned strategic investor in the same and adjacent industries,we envision a transaction with our consortium will generate synergies for the Company,and we foresee no impediments to effectively integrating our respective businesses and organizations.

Timing and due diligence:The consortium is prepared to move expeditiously to complete customary due diligence,negotiate and execute definitive transaction documentation,and announce the proposed acquisition. This proposal is subject to execution of the definitive agreements,and the proposed per-share price and other terms and conditions of this proposal are subject to satisfactory due diligence.

We are convinced that the acquisition of the Company as outlined in our Proposal represents a compelling opportunityfor the Company and its shareholders. Please contact Mr. Ke LEI at leike0920@gmail.com or +86 139 0290 1093as soon as possible in order to allow us to arrange discussions toward agreeing upon the proposed acquisition.

We look forward to hearing from you and commencing due diligence and friendly negotiations promptly.

Yours sincerely,

RECCO Control Technology Pte. Ltd.

By: /s/ Ke LEI

Name: Ke LEI

Title: Director

Dazheng Group (Hong Kong) Investment Holdings Company Limited

By: /s/ Li YU

Name: Li YU

Title: Chairman

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About the Consortium

The consortium is led by Recco Control Technology Pte. Ltd and Dazheng Group (Hong Kong) Investment Holdings Company Limited and include other members,including a Chinese state-owned strategic investor in the same and adjacent industries.

Contact:

Mr. Ke LEI,Tel. +86 139 0290 1093

E-Mail: leike0920@gmail.com

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. No tender offer for the shares of Hollysys Automation Technologies Ltd. has commenced at this time.

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 consortium's management believes 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 the consortium,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,the consortium does not undertake any obligation to update or revise any forward-looking information or statements.

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