HRCT NEWS!!!Hartcourt Acquires NewHuaSun Group, a Major PC Marketer and Distributor in Southern China
Wednesday April 30, 8:22 am ET
LOS ANGELES, April 30 /PRNewswire-FirstCall/ -- The Hartcourt Companies, Inc. (OTC Bulletin Board: HRCT, Frankfurt: 900009), www.hartcourt.com , today announced that it has signed a definitive agreement to purchase 45 percent of Guangdong NewHuaSun Computer Co. Ltd., a major PC distributor and marketer based in Guangzhou, China. Furthermore, Hartcourt has obtained a voting proxy for an additional 10 percent of outstanding shares of NewHuaSun to effectively control the Board of Directors.
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The purchase price for the 45 percent acquisition is RMB$27.26 Million (US$3.3Mil) payable in restricted common shares of Hartcourt at US$0.24 per share. The share price was fixed 2 months ago at the start of negotiation.
In 2002, NewHuaSun recorded sale revenue of 455 Million RMB (US$55 Million) and a net profit of 9.7 Million RMB (US$1.2 Million). It was recently voted by PC Online as the Top Computer Marketer in Southern China, occupying a 26.7 percent share of the local market ( www.pconline.com.cn ). NewHuaSun, founded in 1998, specializes in the marketing and distribution of PC and other digital products. The company owns and operates 5 flagship stores and service centers, as well as 60 affiliated stores in Guangdong, Guangxi, Fujian, Hunan and Hainan provinces, serving customers with latest computer hardware, software, technical services and digital products.
NewHuaSun's business model is exactly the same as HuaQing, another Hartcourt subsidiary. Recently acquired by Hartcourt, HuaQing recorded a US$65 Million in sales and $1 Million in net profit in 2002. The two companies are complementary in their geographic coverage that includes the 6 richest areas in China. Their combined revenue should give Hartcourt over $125 Million in sales for the next 12 months. Despite being in the center of the SARS epidemic last few months, NewHuaSun obtained RMB$97 Million (US$ 11.82 Million) in sales for Q1 of 2003.
China has experienced explosive growth in PC sales for the last 10 years from 670,000 PCs sold in 1994 to 7,260,000 in 2001. IDC predicts China's PC sales will grow at 18-22% for the next 5 years, with sales reaching 19,800,000 PCs in 2006 (global PC sales is 131,800,000 in 2002 vs. China's 9,280,000). Experts believe the huge market potential will come from the low PC penetration in home uses (5% in China compared to 49% in the US), as well as demand from technology upgrades and adoption of information technology by SMEs (small medium enterprises) and government sectors.
More details on NewHuaSun and the PC market in China could be obtained from Hartcourt Website, www.hartcourt.com or NewHuaSun website, www.newhuasun.com.cn .
Mr. X.M Kan, Chairman and President of NewHuaSun, comments, "We look forward to a bright future under Hartcourt's leadership. The synergy of HuaQing- NewHuaSun will enable us to improve our profit margin and to expand more easily with our combined purchasing power and marketing budget. If Hartcourt could carry out its plan to purchase additional companies with more geographical coverage as well as our major competitors in the next 12 months, we shall be the third largest PC marketer in China, after Legend and Founder."
About Hartcourt
The Hartcourt Companies, Inc. is an investment holding and developing company specializing in the acquisition and development of private companies within high-growth industries in China. Hartcourt's business strategy is to add substantial value in terms of financial restructuring and corporate governance to enable these subsidiaries goes public via IPO or reverse merger. Detailed information on Hartcourt can be obtained via the company's Web site: www.hartcourt.com .
Forward-looking statements
The statements made in this press release, which are not historical facts, contain certain forward-looking statements concerning potential developments affecting the business, prospects, financial condition and other aspects of the company to which this release pertains. The actual results of the specific items described in this release, and the company's operations generally, may differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of management of the company as of the date of this release, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the company's dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the company. The company disclaims any obligation to update information contained in any forward-looking statement.
Contact: Ms. Wenny He Tel: 8621 5213 0673, Fax: 8621 5213 0664 Email: wenny.he@hartcourt.com .
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