Mail Stop 3561

	May 5, 2006

Mr. Li Zhang
Chief Executive Officer
HLS Systems International Ltd.
625 Broadway, Suite 1111
San, Diego CA 92101

	Re:	HLS Systems International Ltd.
		Registration Statement on Form S-4
		Filed on March 30, 2006
		File No. 333-132826

Dear Mr. Li:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

General

1. Please file the proxy card in your next amendment.

2. Provide the disclosure required by Rule 14a-5(e) as required by
Item 1(c) of Schedule 14A.  See Item 18(a)(1) of Form S-4.

3. We note that 23,500,000 shares of HLS common stock will be
issued
HollySys stockholders and their designees as payment for all the
outstanding common stock of HollySys.  Also, you state that as
additional consideration, the HollySys Stockholders and their
designees will be issued up to an aggregate of 8,000,000 shares of
common stock of HLS (2,000,000 per year on an all-or-one basis).
Please advise whether those shares will be registered and if not,
which exemption you plan to rely upon and the facts supporting
your
reliance upon the exemption.

4. Please define "designees." Please explain "all-or-one" basis.

5. Please clearly explain the affiliations between Gifted Time
Holdings, Shanghai Jingquiaotong Industrial, HollySys, Team Spirit
and OSCAF International.

6. Chardan`s S-1 registration indicated that all shares of the
existing stockholders are placed into an escrow account and will
not
be released from escrow until August 2, 2008.  Please state in the
S-
4 registration how many shares are in escrow and their
dispositions
in light of the redomestication merger and stock purchase
agreement.

7. Please disclose whether any federal, state and foreign
regulatory
requirements must be complied with or approval must be obtained in
connection with the transactions, and if so, the status of such
compliance or approval.  See Item 3(i) of Form S-4.

8. Please provide the information required by Item 7 of Form S-4
and
Item 507 of Regulation S-K regarding reoffering by persons and
parties deemed to be underwriters.

9. We note that solicitation may be made by phone or by person.
Please provide the information required by Item 4 of Schedule 14A.

10. Where appropriate, please:

* describe how ownership of HollySys` third subsidiary, Beijing
HollySys Hoatong Science & Technology Development Co., Ltd., will
be
obtained;

* expand disclosure of the operating life of each company
throughout
the filing as disclosed in Note 1 on FII-8; and

* disclose Kerry Propper`s prior and current SPAC involvement
(Origin
Agritech, Chardan South China Acquisition Corp., etc.).

Cover Page of the Prospectus

11. The reference to "financial statements of HollySys. . ." on
page
12 should be clarified.  There are no financial statements bearing
that name.

Questions and Answers about the Meeting, page 13

12. In the answer to the question "What will I receive in the
Redomestication Merger," please explain the effect of dilution
even
though Chardan security holders will receive an equal number of
shares of common stock of HLS.

13. You state that HollySys Stockholders and their designees
initially will own 77% of the issued and outstanding shares
immediately after the acquisition and Chardan stockholders will
own
less than 23% of HLS if HLS issues the additional shares.  Please
provide the percentage of shares Chardan stockholders will own
assuming all 8,000,000 shares of additional consideration are
issued.

14. Please discuss the conversion rights or the lack of conversion
rights for warrants in the answer to the question "Do I have
conversion right?"

15. Please discuss whether conversion rights that were not
properly
exercised may be remedied subsequently and, if so, how.

16. You state that the funds deposited in the trust account after
consummation for the stock purchase will be retained by HLS for
operating capital subsequent to the closing of the business
combination and for potential use to pay the deferred purchase
price.
Please discuss the "potential use to pay the deferred purchase
price."  Are they in addition to the eight million shares of
possible
additional consideration and the $3 million deferred compensation?

Summary, page 18

HollySys Holdings

17. The organization and origination of "HollySys" is not at all
clear and should be clearly explained in the Summary.  The end
result
of all of the myriad transactions described, including their
relationship to Gifted Time Holdings, should be described.

18. The prospectus reads, "HollySys Holdings was established under
the laws of the British Virgin Islands on September 21, 2005.  On
September 20, 2005 the stockholders of HollySys Holdings entered
into
a reorganization agreement to put 74.11 of the equity interest in
.. .
..."  We also note that the stockholders of Beijing HollySys and
Hangzhou HollySys formed respective British Virgin Islands
companies
to hold their equity interest in Beijing HollySys and Hangzhou
HollySys.  HollySys Holdings then entered into consignment
agreements
with these British Virgin Islands companies.  Please identify the
stockholders of HollySys Holdings and Beijing HollySys and
Hangzhou
HollySys and the entities of the British Virgin Islands companies
they formed.

19. Please explain why HollySys Holdings is also called Gifted
Time
Holdings, Ltd. and give a brief history of Gifted Time Holdings,
Ltd.

20. You state that HollySys Holdings also entered into share
transfer
agreement with two foreign investors in Hangzhou HollySys to
obtain
their equity interest in Hangzhou HollySys.  Please describe this
transaction in greater detail and the business purpose of the
transfer in later parts of the prospectus.  The reorganization
agreement may need to be filed as a material exhibit.

21. The first full paragraph is confusing.  From information
provided
elsewhere in the prospectus, see, e.g., page 64, it appears that
certain persons holding 74.11% of the equity interests in Beijing
HollySys (which directly holds 40% of Hangzhou HollySys) and
certain
other persons holding 60% of the equity interests in Hangzhou
HollySys undertook a reorganization whereby HollySys Holdings was
formed as a British Virgin Islands holding company over the PRC
operating companies.  It further appears that some of the
stockholders organized various BVI companies to hold their equity
interests in HollySys Holdings.  The various companies entered
into
consignment agreement with HollySys Holdings, respectively, thus
giving HollySys Holdings functional control of the equity
interests
in the PRC operating companies.  Please clarify the disclosure
accordingly.

22. In addition, reference is made to the withdrawal of an
investor.
Please explain why its inability to acquire an additional 20%
interest in Hangzhou HollySys led it to withdraw from the
reorganization agreement governing the formation of HollySys
Holdings.  Please also state whether this investor continues to
hold
its interest in Beijing HollySys.

23. The first paragraph also states that HollySys Holdings entered
into "share transfer agreements" with two foreign investors in
Hangzhou HollySys to obtain their equity interests in that
company.
It appears that the two foreign investors are Team Spirit
Industrial
Limited and OSCAF International Limited.  See, e.g., page 64.
Please
confirm and state the amount of their respective equity interests
in
Hangzhou.  Please describe the terms and conditions of the share
transfer agreements and state whether these agreements are valid
and
enforceable under the laws of the PRC in the opinion of counsel
for
the two investors.  Please explain why the stock in question was
not
subject to transfer restrictions under PRC law.  We note that the
prospectus states elsewhere, see, e.g., page 64, that the stock
consignment agreements provide for the control of the shares of
both
Beijing HollySys and Hangzhou HollySys.

24. The remaining minority equity interests in Beijing HollySys
and
Hangzhou HollySys appear to be 25.89% and 10.36%, respectively.
See
page 19 and page F1-10.  Please confirm and identify the holders
of
these interests.  Please also state whether HollySys Holdings/HLS
has
sought or intends to seek control of these minority interests.

25. The third HollySys Operating Company, Beijing HollySys Haotong
Science & Technology Development Co., Ltd., is mentioned at page
18.
Please provide further information concerning this company.
Elsewhere, at page 93, the prospectus states that Beijing HollySys
owned 70% of this company as of December 31, 2005; and at page 82,
Beijing HollySys is identified as the majority owner of the
company.
However, at page FII-8, note 1 to the consolidated financial
statements indicates that on December 31, 2002, Beijing HollySys
purchased the remaining 30% interest in Haotong that it had not
previously acquired, thus giving it a 100% ownership interest in
this
operating company as of that date.  Please clarify.  Include in
your
explanation a discussion of how HollySys Holdings holds its
interest
in Haotong.

26. The second full paragraph states that the businesses of the
HollySys Operating Companies began in 1993.  However, the
prospectus
states at page 93 that Beijing HollySys was established in
September
1996 and Hangzhou HollySys in September 2003; Note 1 to the
consolidated financial statements of Gifted Times Holdings Limited
states at page FII-8 that the Board of Directors of Beijing
HollySys
made their first acquisition of an interest in Beijing Haotong in
May
2002.  Please address the inconsistency.

27. We note that voting-together agreements with Dr. Wang are
mentioned at page 19.  Elsewhere, Note 1 to the consolidated
financial statements of Gifted Time Holdings Limited states at
FII-7
that ". . . there was a voting-together agreement among the owners
of
74.11% interest in Beijing HollySys and a voting-together
agreement
between the two owners of 60% interest in Hangzhou HollySys.
Furthermore, these two executed voting-together agreements have
given
the voting control to the same individual, who is the founder of
Beijing HollySys.  Therefore, there is a control group which has
voting control over both entities."   Please identify the parties
to
the voting-together agreements and explain why the agreements give
voting control to the same individual.  Please also identify the
individual in question.

28. Please revise your disclosure here and throughout your filing
to
include your additional 29.64% ownership of Hangzhou HollySys as
disclosed on page 93.

The Business Combination

29. We note the disclosure on page 20.  Please explain more
clearly
how and when the variable portion of the cash payment will be
determined.  If that amount is dependent on the amount of funds
remaining in the trust account in the event that any of Chardan`s
stockholders exercise their conversion rights, how will Chardan
pay
for the deferred portion?

Approval of the HollySys Stockholders, page 21

30. Indicate the number of beneficial HollySys stockholders.

Stock Ownership, page 22

31. Indicate the percentage represented by the 1,250,000 shares.

Interests of Chardan Directors and Officers in the Stock Purchase,
page 22

32. Please describe the principal terms of the agreement between
HollySys and Chardan Capital, LLC.  Please clarify whether the
agreement is between HollySys and Chardan Capital or HLS and
Chardan
Capital.

33. Please clarify the term, "HollySys Parties."

Material United States Federal Income Tax Consequences of the
Stock
Purchase, page 25 and 52

34. Please revise discussion of material tax consequences on page
25
and page 53 to clearly state that it is the opinion of named
counsel
for each tax consequence being opined upon.

Selected Historical Financial Data, page 26

35. Reconcile the "HollySys Holdings Historical Financial Data"
with
the financial statements "contained elsewhere".  Explain the
reasons
for the two different entities and clearly indicate that the
financial statements contained elsewhere fully represent the
financial condition and operations of the companies whose shares
are
being offered in this registration statement.

36. Please revise to include separate line items for income (loss)
from continuing operations per share and cash dividends declared
per
common share in accordance with Item 301 of Regulation S-K.

37. Tell us how you determined the weighted average common shares
outstanding for each period presented considering you disclose the
number of outstanding common shares as 50,000 on the balance sheet
presented on FII-3.  The information presented here should be
based
on historical data.  Please advise or revise.

38. Please reconcile the amounts presented for operating income
and
total current assets with those presented in your financial
statements (e.g. differences were noted in December 31, 2005 and
June
30, 2005).  Revise accordingly.

Selected Unaudited Pro Forma Combined Financial Information, page
27

39. Please revise to include a separate line item for cash
dividends
declared per common share.

Comparative Per Share Information, page 28

40. It appears the amounts representing the historical net income
per
share for HollySys in June 2004 and 2005 ($.20 and $.58,
respectively) are based on the assumed number of shares to be
issued
in the merger.  Please revise to accurately reflect the actual
(historical) net income per share for all periods presented
(including December 31, 2005) and revise note (2) to your table to
clarify how the historical amounts were computed.

Market Price Information, page 29

41. Indicate the name of the "one holder of record of the units"
and
the names of the "six holders of record of the common stock. . ."
and
explain the relationships between the record holders and the
beneficial owners.

Risk Factors, page 30

42. Please consider disclosing a risk factor stating that a
fairness
opinion was not obtained and discuss the potential liability of
not
having a fairness opinion.

43. The subheadings of several of your risk factors merely state
facts or uncertainties and do not adequately reflect the risks
that
follow.  Please revise your subheadings to succinctly state the
risks
you discuss in the text.  For example, please refer to risk
factors
3, 5-7, 10,11, 13, 14,16, 18, 25, 27, 28, 33, and 38.

44. To the extent possible, please avoid the generic conclusions
you
reach in several of your risk factor subheadings and risk factor
discussions that the risk could cause your sales or business to
"suffer" of could "negatively affect," "adversely affect" or have
an
"unfavorable affect" on business, revenues or other similar
matters.
Instead, replace this language with more specific disclosure of
how
your financial condition would be affected and place the risk in
context by making the magnitude of the risk clear.  For instance,
see
risk factors 1, 4, 10, 11, 12, 13, 14, 15, 17, 23, 25, 29, 30, 31,
and 32.  Please describe specifically the impact that the risks
mentioned might have on your business.

45. We note that HLS will be a foreign private issuer after the
redomestication merger.  Please discuss any consequences thereof
as a
material risk factor in this section.

46. Risk factors 8 and 9 appear to be similar; risk factors 31 and
32
appear to similar.  Please discuss the risk only once.

47. In risk factor 9, where you state that the risk of a
catastrophic
failure is relatively small, please provide the context and the
basis
of the statement.  You state that you may not be able to obtain
adequate insurance coverage to protect it. Please discuss your
current insurance coverage later in the prospectus.

48. Risk factors 16 and 17 appear generic and are equally
applicable
to all companies and should be deleted.

49. Please briefly but clearly discuss the consignment agreements
and
the risk that the stock consignment agreements may be
unenforceable.
This is an important risk that should be discussed at the
beginning
of the Risk Factor section.  Please revise.

50. We bring your attention to risk factor 24.  Please explain the
import to the operations of HLS of the discussion at page 36 of
Notice 75 of SAFE and Overseas Special Intention Companies.
Please
also identify the OSIC(s) that will exist following the stock
purchase.

51. In addition, it appears that the discussion of Notice 75
involves
a different risk than the effect of PRC foreign exchange
regulations
upon the ability of the HollySys operating companies to pay
dividends
in foreign currency or to conduct other foreign exchange
transactions.  If so, please create a new risk factor in
connection
with Notice 75.
52. Risk factors that are important and most material for
investors
to make decisions should be discussed at the beginning of the Risk
Factor section.  Risk factors 26-33, 35, and 36 are some of most
material risk factors and should be discussed at the beginning of
the
Risk Factor section.  Please revise.

Special Note Regarding Forward-Looking Statements, page 40
53. Please delete this section, which duplicates the section that
follows it.

The Chardan Special Meeting, page 41
54. Please clearly spell out whether and how invalidly exercised
or
non-exercised conversion and/or appraisal rights may be remedied
before or after the shareholder meeting.
55. Please clearly state how abstained votes and proxies relating
to
street name shares that are returned to Chardan but marked by
brokers
as "not voted" will be cast in this section.
56. Please explain whether the exercise of conversion rights or
appraisal rights for common stock will affect the warrants held by
the investors.
57. Please succinctly explain in the prospectus the differences
between choosing appraisal rights and conversion rights.  We note
that only one right may be elected in respect of the shares.

Background of the Stock Purchase, page 45

58. On page 18, you state that $29.8 million was placed in the
trust
account.  Inconsistently, you state that approximately $25.8
million
was placed in a trust account.  Please reconcile the discrepancy.

59. Please clearly identify the parties to the stock purchase
agreement, including Shanghai Jinquiaotong Industrial Development
Co., Team Spirit Industrial Limited, and OSCAF.  Please also
provide
a brief history of the parties.

60. CNCAC and Chardan are used interchangeably.  Please use one
consistently throughout the prospectus.

61. You state on page 46 that Chardan representatives first met
with
HollySys` President, Dr. Wang Changli and Chairman, Madame Qiao
Li,
on August 17, 2005 and again on August 22, 2005, for preliminary
discussions about a potential business combination.   Please
describe
when and how Chardan and HollySys learned of each other.

62. Please clarify whether Greatace was or will be compensated for
locating companies for Chardan.

63. Please disclose the date the company or any affiliates of the
company had initial contact with Greatace or its principals to
provide services for Chardan.  Please describe the negotiations
between Greatace and Chardan or its affiliates in engaging
Greataces`s services including the timing of those negotiations.
Please disclose when any agreements, preliminary or otherwise,
were
entered into between Greatace and Chardan or its affiliates and
describe the principal terms of the agreements.

64. Please disclose when Greatace first began seeking possible
acquisition targets and when it first presented possible
acquisition
companies to Chardan or its affiliates.  Please describe the
process,
including dates, from when Greatace first mentioned or presented
any
acquisition companies to Chardan or its affiliates.

65. We note that the principals of Greatace have been known to Mr.
Huang, an officer and director for Chardan, for many years.
Please
elaborate on the relationship between Mr. Huang and Greatace`s
principals, including how and when they knew each other.  Is
Greatace
an affiliate of Mr. Huang or any of his affiliates?  If not,
please
clearly state so.

Chardan`s Reasons for the Stock Purchase and Recommendation of the
Chardan Board, page 48

66. We note that parts of this section and the "HollySys` and the
HollySys Operating Companies` record of growth and expansion and
high
potential for future growth" section appear promotional, rather
than
factual, and should be revised to remove all promotional
statements.
No speculative information should be included, unless clearly
labeled
as the opinion of management of the company along with disclosure
of
the reasonable basis for such opinions or beliefs.  For example we
note the statements on page 48 such as "extensive experience in
performing due diligence."  Please provide reasonable support for
the
promotional statements in the prospectus.  If a reasonable basis
cannot be provided, the statements should be removed.

67. On page 49, we note the disclosure that "[t]ransfer of record
ownership is subject to the directions of the consignee, in this
case
HollySys Holdings, so long as it is a permitted transfer and
transferee is acceptable under PRC law."  Please explain this
statement; specifically, explain what transfer and transferee are
acceptable and not acceptable under PRC law.  Please also explain
whether one would need to apply for permission or whether there is
any regulatory requirement for transfers.  Please consider whether
a
risk factor should be added, and if not, why not.

68. You state that "the stock purchase agreement provides for
opinions of PRC counsel on the validity and enforceability of all
the
agreements by the HollySys Stockholders."  However, you do not
disclose here the opinion on validity and enforceability of the
agreements in the prospectus.  Please do so.  We note on page 64
you
state that the stock consignment agreements are subject to
enforceability and limitations of the laws and rules of PRC.
Please
discuss the limitations.

69. Also describe whether the board of directors received an
opinion
from the appropriate Chinese authorities that the control
agreements
were valid under Chinese law.  Also explain how this is an
acquisition or ownership of the companies when it appears to only
provide contractual control over the companies.  Please consider
whether a risk factor should be added and if not, why not.

70. You disclose that transfer of record ownership is "subject to
the
directions of the consignee."  Please explain how that is done
procedurally if one consignee decides to transfer the record
ownership to another party.

71. Please move the disclosure on page 64 and 65 under sections
"stock consignment agreement" and "protections of shareholders
against the loss of consigned and assigned assets" immediately
after
this discussion.

72. We note that PRC law does not permit transfers in amounts in
excess of 25% of the person`s holdings annually during the
incumbency
period.  Please explain to us on a supplemental basis the purpose
of
such record ownership restriction when a consignee can have all of
the beneficial ownership without any limitations.  We may have
further comments.

73. Dr. Wang Changli, who is subject to the restriction, owns
14.23%
of the outstanding shares of Beijing HollySys.  Please disclose
whether any other record owners of Beijing HollySys and Hangzhou
HollySys are subject to this restriction.  Please also explain why
Dr. Want doesn`t intend to transfer 25% of his ownership to
HollySys
Holdings simultaneously with the completion of the redomestication
merger and agree to transferring the subsequent 75% within the
next
three years.

74. Please provide the full name of OSCAF and explain Team Spirit
and
OSCAF`s ownership in HollySys.

75. Please file all validly executed consignment agreements as
exhibits.  We note that HollySys stockholders have entered into
voting-together agreements with Dr. Wang and they have also
consigned
their equity interest in Beijing HollySys to HollySys Holdings.
Please clarify whether they have each entered into separate
consignment agreements.

76. It appears that none of the stockholders other than Dr. Wang
is
subject to the record ownership stock restriction.  Please explain
why do they not simply transfer their record ownership to HollySys
Holdings.

77. Please clarify whether there are any rights that a consignee
does
not have toward his or her beneficial ownership of the stocks
consigned other than title to record ownership.

78. Please explain the statement, "[t]he agreements are subject to
force majeure limitations."

79. We note that "in the event of a breach, in which event the
non-
breaching party may cancel the consignment agreement after notice
and
a reasonable cure period."  Please discuss whether there is any
deterrent for the breach on the consignors part, whether there is
penalty for the breach, and what remedial measure the consignees
can
take after the breach.

80. We bring your attention to the paragraph, "[i]n the event that
the consignment agreements are cancelled sometime in the future,
then
HLS would lose the control of the companies to the extent that the
stock was not previously transferred to it.  Such transfer due to
termination would likely be for no value . . . there are no real
obligations for HollySys Holdings under the agreement."  Please
add a
risk disclosure in the beginning of the risk factor section
discussing this risk.

81. We note that the company registers its name solely as HLS
Systems
International, Ltd. in the Memorandum of Association and Articles
of
Association.  Neither of the above documents refers to Gifted Time
Holdings Limited.  However, we also note that the stock
consignment
will be entered with Gifted Time Holdings Limited, without
mentioning
HLS Systems International of HollySys; the Stock Purchase
Agreement
will be between Chardan and Shanghai Jingquiaotong Industrial,
among
other parties, without mentioning Gifted Time Holding or HollySys.
Please disclose whether the stock consignment and the stock
purchase
agreement will be enforceable by HLS or HollySys.

82. Section 2 of the Stock Consignment Agreement stipulates that
as
consideration for the consignment of the rights incidental to
beneficial ownership of the stocks, Gifted Time will pay the
consignor by issuance of common stock.  Please clearly discuss
this
payment arrangement in the prospectus.  Moreover, please revise
the
relevant sections as appropriate, such as sections "Certain
Relationships and Related Transactions" and "Beneficial Ownership
of
Securities."

83. Section 5 of the Stock Consignment Agreement stipulates that
in
case of default, the cap for the defaulting party`s liability
shall
not exceed the amount of economic loss that defaulting party could
anticipate or should anticipate as of the date of this Agreement.
Please clearly state the anticipated amount of the date of the
Agreement.  Please discuss this provision in the prospectus.

84. The Stock Consignment Agreement further stipulates that legal
actions may be initiated in a "competent jurisdiction."  Please
explain in this section of the prospectus to which jurisdictions
you
refer.   Is the U.S. federal court a competent jurisdiction?

85. The Stock Consignment does not spell out the "Shares
Consignment
Rights."  Will that be specified in one of the appendices?  Please
file all of the appendices to the Stock Consignment Agreement as
exhibits.  Please file validly executed agreements before
effectiveness.

Conditions to the Completion of the Acquisition, page 61

86. One of the conditions is that Chardan must have received a
legal
opinion, dated as of the closing, from Guantao Law Firm.  Please
clarify the nature of the legal opinion.

Extension; Waiver, page 63

87. You state that at any time prior to the consummation of the
stock
purchase, Chardan and the HollySys Stockholders may extend the
time
for the performance of any of the obligation or other acts, waive
any
inaccuracies in the representation and warranties or waive
compliance
with any of the conditions.  Please clarify whether any of the
conditions may be waived or changed after the shareholder meeting.
We
may have further comments.

Employment Agreements, page 64

88. Please disclose the principal terms of the employment
agreements,
including the annual salary.  Please file executed employment
agreements as exhibits.

Stock Consignment Agreements, page 64

89. As a related matter, a table of parties to consignment
agreements, provided at page 64, shows five parties.  Please state
whether there are five consignment agreements, each concerning the
five respective percentages specified at page 64, and five BVI
companies that are parties to the agreements with HollySys
Holdings.

Protections of Shareholders Against the Loss of Consigned and
Assigned Assets, page 65

90. Please explain the distinction between consigned and assigned
assets, and describe the assigned assets, if any, to which
reference
is made.

91. The last sentence in the fourth full paragraph states that,
"PRC
law provides for enforcement of minority rights in respect of
corporations which are intended to protect against improper
dealings
by the majority to the detriment of the minority shareholders."
Please explain what is contemplated.  It appears that the minority
shareholders in question would be, initially, the former Chardan
shareholders, which will hold approximately 23% of the outstanding
common stock of HLS following the redomestication merger.  Please
discuss.

92. Please clarify the effects of termination of the consignment
agreements, discussed in the fifth full paragraph.  Please explain
in
particular the statement that, "Such transfer due to termination
would likely be for no value, and could be as a result of a breach
by
HollySys Holdings, although there are no real obligations for
HollySys Holdings under the agreements."

Chardan Redomestication Merger, page 66

93. Please discuss any material downside redomesticating to BVI.

94. Please explain the differences between appraisal rights and
conversion rights and how each one is to be exercised properly and
whether they may be remedied and how.

95. You state to exercise appraisal rights, stockholders must not
vote in favor of the merger. Is this different from exercise of
conversion rights that stockholders must vote against the merger?

96. We note that the stockholders who exercised appraisal rights
must
then file a petition in the Delaware Court of Chancery demanding
that
the Chancery Court determine the fair value of the shares and if
they
did not file the petition within 120 days from the effective date,
they may lose their rights of appraisal.   Please discuss in what
situations the stockholders "may" still have a right to the
appraisal
after 120 days.  Please disclose how the stockholders will be
informed of the effective date.

97. Please briefly describe compliance with "Section 262."

Rights of Minority Shareholders, page 74

98. We bring your attention to the statement, "[u]nder the law of
the
British Virgin Islands, there is little statutory law for the
protection of minority shareholders . . .."  Please clearly state
this in the beginning part of the risk factor section and discuss
the
risks discussed under the "Rights of Minority Shareholders"
section.

Chardan 2006 Equity Plan, page 75

99. Please include the following information:
* If determinable, please include the table as described in Item
10(a)(2) of Schedule 14A.
* If determinable, please include the information required by Item
10(b)(2)(ii) of Schedule 14A.

Information about the HollySys Operating Companies, page 82

100. See our comment above concerning promotional and speculative
statements regarding much of the discussion on page 85.

101. Clarify the term "BASF" and that it has designated HollySys
as a
"potential qualified Distributed Control Systems . . .."

102. Please convert all amounts in RMB to dollars.

103. Please explain all technical terms such as, "I/O signal
processing technology," "network protocol interface," "distributed
control systems platform," "MES and system integrated solutions,"
"ESD," "CTC," "SCADA," "PLC," and "kernel technologies."

104. Please provide the disclosure required by Item 101(c)(iv) of
Regulation S-K.

105. Your disclosure in the third paragraph of page 87 indicates
HollySys spends approximately 2-4% of annual revenues on research
and
development.  Based on the disclosures in your statements of
operations (FII-4), it appears that less than 1% of revenues have
been spent on research and development costs.  Please advise or
revise to clarify.

106. Please explain what is meant by "standard setting process"
and
"e-government" at page 85.

107. Please explain what is meant by "prophase" and "agencies" in
the
description of the Programmable Logic Controller products.


Properties, page 91
108. Please provide the disclosure required by Item 102 of
Regulation
S-K regarding your facilities and offices.
Management`s Discussion and Analysis of Financial Condition and
Results of Operation, page 93
Results of Operations

General
109. Please revise your disclosure for each period to describe and
quantify underlying material activities that generate income
statement variances between periods for each financial statement
line
item.  Your revised disclosures should provide information that
would
assist an investor in making a well informed investment decision.
This can be achieved by providing information (in a comparative
format), such as key performance indicators or key metrics that
you
utilize in evaluating your business, and including a detailed
discussion of the year over year variances.  Since contracts may
overlap reporting periods, additional disclosure above the change
in
the number of contracts is necessary.  An example might be revenue
and costs attributed to each sector and the change between
periods.
Also consider discussing your revenue backlog between periods

Business Overview
110. You indicate that you are the sole "qualified" domestic
provider
of automated control systems for the nuclear power generating
industry.  Please support this statement or delete it.
111. Please explain "minority interest."

Comparison of Six Months Ended December 31, 2005 and 2004, page 96
112. We note your attributed the increase in cost of products sold
to
an increased level of purchases from outside vendors versus
internally produced equipment.  This change was made to "better
satisfy customers` needs."  Please expand your discussion to
support
this statement (e.g. quality of product, timing of delivery,
etc.).

Certain Relationships and Related Transactions, page 127
113. Please name the promoters and provide the disclosure required
by
Item 404(d) of Regulation S-K.
114. At page 114, you state that Chardan is obligated, commencing
August 2, 2005, to pay to Chardan Ventures a monthly fee of $7,500
for general and administrative services.  Is this the same fee as
the
$7,500 per-month administrative fee payable to Chardan`s officers?
If so, please clarify and clearly state whether the fee is pad to
Chardan`s officers or Chardan Venture, an affiliate of the
Chardan`s
officers.  If not, please include a discussion in this section.
Furthermore, please disclose the affiliation between Chardan
Venture,
Chardan Capital, LLC, and Chardan Capital Markets, LLC.

Beneficial Ownership of Securities, page 129

115. For Sappling LLC, please provide the name(s) of the natural
person(s) with voting or dispositive control over such company.

116. Please revise the beneficial ownership table to include the
warrants exercisable within 60 days of the merger.

Price Range of Securities and Dividends, page 132

117. There appears to be an error in the entry of high and low
prices
for the Chardan Units for the first quarter of 2006.

Dividends,

118. You disclose here that Chardan has not paid any dividends on
its
common stock to date.  However, on page 127, you disclose that
effective July 22, 2005, the board of directors authorized a stock
dividend of 0.25 shares of common stock for each outstanding
shares
of common stock.  Please reconcile.

Shares Eligible for Future Sale, page 133

119. Please explain to us supplementally how there will be 30.5
million shares of common stock outstanding and how that 7 million
will be registered and freely tradable "without securities law
restriction."

Where You Can Find More Information, page 136

120. Please update SEC`s address.

Gifted Time Holdings Limited Financial Statements
Notes to Consolidated Financial Statements

General

121. Please disclose that the interim financial statements have
not
been audited by an independent certified public accountant.
Unaudited financial statements that are included in documents
filed
with the Commission must include all adjustments, which in the
opinion of management, are necessary so the financial statements
are
not misleading.  An affirmative statement that the financial
statements have been so adjusted must be provided.  Please revise.

122. Please revise the financial statements for each period
presented
to include earnings per share information and related disclosure
in
accordance with SFAS 128.  Update the Comparative Per Share
Information disclosure (page 28) and your Pro Forma Income
Statements
(pages 121 and 122) accordingly.

123. Tell us whether your two revenue categories (i.e. integrated
contracts and product sales), your industry sectors (i.e. nuclear
power plants, rail transportation, etc.) or each of your
subsidiaries
represent separate operating segments as defined in paragraph 10
of
SFAS 131 and the basis for your determination.  If they represent
separate operating segments, please revise to include the
disclosures
required by paragraphs 25 - 28 of SFAS 131.  In this connection,
please expand MD&A to analyze sales, profitability and the cash
needs
of each segment.  Refer to Section 501.06.a of the Codification of
Financial Reporting Policies.

Note 2 - Summary of Significant Accounting Policies
Revenue Recognition, FII-10

124. We noted from your website that you provide your customers
with
lifelong maintenance services and parts (i.e. postcontract
customer
support).  Please revise your revenue recognition policy to
clarify
the specific types of services you are currently providing in your
contracts and whether the contract involves the sale of hardware,
software and other goods or services.  Disclose the policies for
accounting for multiple elements under the arrangement (consider
the
guidance of SOP 97-2 and EITF 00-21). Also, ensure your revised
revenue recognition policy discloses how each of the four criteria
of
SAB 104 specifically applies to each of your revenue streams (e.g.
maintenance agreements, training, hardware sales, etc.).  Disclose
the significant contract terms and conditions, including any
customer
acceptance provisions, warranties and other post-delivery
obligations
and the related accounting policies (consider the guidance of SFAS
48).  Your MD&A should include a discussion of these critical
accounting policies and their impact on the financial statements.
Accounts Receivable, Other Receivable and Concentration of Credit
Risk, FII-11

125. We note you allowance for doubtful accounts of billed
accounts
receivable has been accrued in accordance with an age analysis
method.  Please expand your disclosure here to describe in detail
the
age analysis method.  To enhance a readers understanding of your
billed receivables and the correlation with the allowance for
doubtful accounts, disclose in tabular format (here or MD&A) your
aging analysis that depicts your aging criteria (for example, less
than 30 days, 30 to 60 days, etc.) or some other reasonable
presentation.

126. We noted that you do not include shipping freight on your
invoices for revenue recognition purposes.  Disclose your policy
for
how you account for these costs and disclose the amount of such
costs
and the line items on the financial statements that include them.
See EITF 00-10, Accounting for Shipping and Handling Fees and
Costs.

Note 5 - Long-Term Investments, FII-17

127. We noted three entities (Shenzhen HollySys - 52%, HollySys
Zhonghao - 89.11%, and Beijing TechEnergy - 50%) where you have
ownership interest at or exceeding 50% however you do not appear
to
be consolidating such entities.  Although we understand in two
instances (Shenzhen and Zhonghao) you have either ceased or are
winding-down operations, this does not preclude you from
consolidation.  Tell us how your accounting treatment (i.e. not
consolidated) is consistent with GAAP and cite the specific
authoritative literature you used to support your conclusion.  In
your response, please address the applicability of ARB 51, FIN
46(R),
and SFAS 144.  Please advise or revise accordingly.

Note 6 - Warranty Liability, FII-18

128. We noted from your disclosure in the last paragraph on page
107
(Working Capital) that your provision for warranty liabilities is
charged to selling expense.  Tell us why the provision is not
recorded as a cost of revenue.  Please advise or revise
accordingly.

129. In addition to the comment above, tell us how your accounting
for warranty liabilities impacts your revenue recognition policy
(that is, how this impacts your percentage of completion on your
projects).  If there is no impact to your percentage of
completion,
tell us why not.

Note 8 - Long-Term Loans, FII-20

130. Please provide the disclosure required by paragraph 10 of
SFAS
47.

Other Regulatory

131. Please provide current consents, and update your financial
statements in accordance with Rule 3-12 of Regulation S-X.

Part II

Undertakings, page II-4
132. Please provide the undertakings required by Item 512(a) of
Regulation S-B.

Exhibits
133. Pursuant to Item 601(b)(2) of Regulation S-K please file a
list
briefly identifying the contents of all omitted schedules or
similar
supplements and Exhibits.  In addition, please file an agreement
to
furnish the staff with a copy of any omitted schedule upon
request.
The agreement to furnish the staff with copies of omitted
schedules
may be included in the exhibit index to the registration
statement.
After reviewing this list, we may have further comments.
134. Please explain why exhibits required by numbers 9, 11, 12,
13,
15, 21 are not filed.
135. Although the exhibit list indicates that exhibit 10.5 Opinion
re
Consignment Agreements of Guantao Law Firm is filed, it is not in
the
Edgar system.  Please file.
136.  Please file an opinion of counsel as to material tax aspects
of
the offering.  See Item 601(b)(8) of Regulation S-K.
137. Please file executed copies of the following agreements:
Stock
Purchase Agreement; Memorandum of Association; and Articles of
Association.

Tax Opinion
138. In the last paragraph on page two of the tax opinion, please
remove the words "generally applicable" and state that you discuss
all material tax consequences.

Signatures
139. It appears that the registration statement should be signed
by a
majority of HLS`s board of directors.  See Signatures, Instruction
1
on Form S-4.  Please revise in your next amendment.

Form 10-KSB for the year ended December 31, 2005 and Form 8-K
filed
on February 2, 2006
140. Please revise the disclosure to comply with the comments
issued
on the Form S-4, as applicable.
141. We note your disclosure that your management concluded that
your
"disclosure controls and procedures are effective . . . to ensure
that  information required to be disclosed by us in reports that
we
file or submit under the Securities Exchange Act of 1934 is
recorded,
processed, summarized and reported ... "   Revise to clarify and
add,
if true, that your officers concluded that your disclosure
controls
and procedures are effective to ensure that information required
to
be disclosed in the reports that you file or submit under the
Exchange Act is accumulated and communicated to your management,
including your chief executive officer and chief financial
officer,
to allow timely decisions regarding required disclosure and that
the
Company`s disclosure controls and procedures are effective to give
reasonable assurance that the information required to be disclosed
by
the Company in reports that it files under the Exchange act is
recorded, processed, summarized and reported within the time
periods
specified in the rules and forms of the SEC.  See Exchange Act
Rule
13a-15(e).


* * * * *

      As appropriate, please amend your registration statement in
response to these comments.  Provide us with marked copies of the
amendment to expedite our review.  Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested supplemental information.  Detailed cover letters
greatly facilitate our review.  Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

      Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:

* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;


* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and

* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.

      You may contact Brian Bhandari at (202) 551-3390 or Hugh
West
at (202) 551-3872 if you have questions regarding comments on the
financial statements and related matters.  Please contact H. Yuna
Peng at (202) 551-3391 or M. Cathey Baker at (202) 551-3326, or
Don
Rinehart, who supervised the review of your filing, at (202) 551-
3235
with any other questions.

Sincerely,


      John Reynolds, Assistant Director
      Office of Emerging Growth Companies

cc: 	Douglas J. Rein
	Fax (858) 677-1401
Li Zhang
HLS Systems International Ltd.
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