December 4th, 2003 at 6 am EST
Hartcourt and its subsidiary Huaqing Acquired Pengyang Computer Co., a Major Notebook Retailer in Shanghai, China
Los Angeles, CA, December 4th -- /MarketWire/ -- The Hartcourt Companies, Inc. (OTC Bulletin Board: HRCT) (Frankfurt: 900009), www.hartcourt.com , China's fastest growing IT distribution and retail company, announced today that it has signed an agreement to purchase 100 percent of Pengyang Computer Co., Ltd. a major notebook computer retailer and marketer based in Shanghai, China.
The purchase price for 100 percent of outstanding shares of Pengyang is 14.85 Million RMB (US$1.8Mil) payable in 1,530,000 restricted common shares of Hartcourt, calculated at $0.60 a share, and 6.2% of ownership of Huaqing. After the acquisition, Pengyang will be fully integrated into the operations of Huaqing, of which Hartcourt will continue to hold a 51% interest.
Pengyang owns and operates 12 retail stores in Shanghai area specializing in notebook computers. The company is major distributor and retailer for HP, IBM, BENQ, ASUS and Compower. The stores also carry notebooks and accessories of Samsung, Fujitsu, Compaq, Toshiba, and Intel.
According data from IDC, China has experienced strong growth in its notebook PC market and is expected to outperform global growth rate. For the first 3 quarters of 2003, total units shipped increased 83% over the same period last year. Market potential is greatest with consumer market thanks to rising in income and urbanization. The low penetration of notebook PC in China (11% of the total PC sales comparing to 26% world-wide) and the fast industrial output would mean faster growth curve for notebook PC.
More details on Pengyang could be found on its online shop, www.shtip.com.cn.
Mr. David Chen, Hartcourt's CEO and interim Chairman, comments "Pengyang, the latest addition to the Hartcourt PC distribution network, is expected to be fully integrated into Huaqing operation from day one. This post-merger process demonstrates our successful effort to streamline our organization, expand our product lines, leverage our resources, obtain greater revenue and save operational costs. With the help of other subsidiaries, Huaqing and Pengyang will expand its notebook business aggressively in 2004. Meanwhile, Hartcourt is expecting more similar transactions to fully explore our synergies".
The Hartcourt Companies, Inc. is one of China's fastest growing companies in the IT distribution and retail services sector. Hartcourt's growth strategy is to acquire controlling interests in profitable companies with proven management within this sector in key geographical areas of China. Recent acquisitions of Hartcourt included four major IT distribution and retail services companies in Eastern and Southern China (amongst the highest GDP-per-capita in China). Detailed information on Hartcourt can be obtained from: www.hartcourt.com.
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. Cathy Kuang Tel: 8621 5213 0673 Fax: 8621 5213 0664