Shareholder Letter from Dr. Wallace Ching
What’s New...
I have been on the job for a month now. Although you haven’t heard much from me since my last letter, you all can rest assured that I am definitely earning my pay. I have been to Shanghai twice and Guangzhou/Shenzhen numerous times exploring development options for the Chinese divisions of our subsidiaries, while continuing evaluations of new acquisition and investment banking opportunities for Hartcourt and Hartcourt Capital respectively.
My review of our operations is nearing completion and we are implementing a number of initiatives designed to move us more efficiently into high growth markets and to continue the streamlining of our organization through cost reductions and improved margin opportunities. I had placed a temporary delay on press releases until I had finished my preliminary operational review. The status of our pr is now back to active mode and in fact, we are working towards installing a full-time investor relations presence as part of a new program to attract investors. We will be reviewing more information on that front soon.
Hartcourt Capital is rapidly taking shape. The organizational structure of this new Hrct division has been established and we are beginning to staff up. As a matter of fact, we are already in the process of signing up business contracts. You will be receiving additional information on transactions that we are working on as soon as it can be publicly disseminated. I can assure you that this division has the potential to become a flagship operation for Hrct. We are also presenting our Sinobull Media’s proposal to capital sources, and Elephant Talk is about to unveil a new service initiative and additional international routes. Our subsidiaries are making business gains across the board and I am initiating follow through requirements to keep investors informed as these deals begin to generate revenues. The Sinobull/GTCI listing is on track, we are currently providing some additional information that was requested by the SEC and then we just need to acquire the exact listing date and our new trading symbol. The 10k filing for 2001 is on schedule as well.
Our Strategy...
Now, I’d like to again review some basics of Hrct’s operating strategy so investors like yourself will have a better understanding of the process as our business plans unfold.
Our focus is primarily to capture opportunities in China. It is the world’s fastest growing economy and presents enormous untapped corporate and consumer markets. As the post WTO era unfolds more deregulation and liberalization will take place across various sectors, opening up an even wider range of investment and acquisition opportunities for well-positioned foreign companies. The historical and cultural architecture of China’s economy has created high barriers to entry. Hrct has established a broad network of relationships throughout Greater China’s business and government communities. In addition, our ability to provide solutions in this difficult and complex regulatory environment is a much sought after commodity as international corporate interests seek access and entry points to these vast markets. We are structuring Hrct to capitalize on these unique advantages.
We are fine tuning the commerce framework established to create interrelated business opportunities throughout our organization. This cross promotional effort is already producing increases in revenue streams and reductions in expense margins. As we efficiently drive the internal organic growth of each business we will continue to exploit the benefits of synergies existing between our companies and to drive this aspect of our strategy to new levels of revenue production, a higher competitive profile and increased market penetration.
We are establishing clear paths to profitability for our companies and are making hard decisions concerning our operations. Our focus near term is to become EBITDA positive as we re-establish solid fundamentals throughout the organization. We will be making strategic modifications to certain units and considering the sale of maturing and under performing assets while concentrating our efforts on building our stronger businesses. At the same time we will continue to aggressively identify and pursue small industry-leading, profitable, technology companies for acquisition in order to provide impetus and momentum for future growth; and to develop and expand existing and new higher margin business opportunities, such as Hartcourt Capital’s investment banking services. We will, however, monitor and evaluate the growth prospects for each sector and make the appropriate strategic decisions whenever they are warranted. One of the great advantages of our command structure is that it allows quick and effective response to change.
Our Companies...
Hrct’s expanding enterprise consists of a large network of companies engaging in a variety of technologically advanced businesses operating throughout Greater China and HK. The scope of our operations can make the integration of information for investors a little challenging. To make this process easier I have asked the leaders of each division to provide overviews of their businesses so you will have a clearer and more confident understanding of their operations and subsequently, your investment. Since we have just taken our Elephant Talk subsidiary public we’ll begin this week with Mr. Russelle Choi’s review of Elephant Talk. This is excellent work and it will be posted shortly. In my next update we will be taking a look at Sinobull.
In Conclusion...
Two things have jumped out at me as I have evaluated Hartcourt’s organization and contacted potential partners and investors over the last month; the tremendous dedication and work ethic of our employees and the broad scope of opportunity that exists for our companies. It’s not always smooth sailing but we are very well positioned in the worlds largest emerging corporate and consumer marketplace, and we’re moving in the right direction. We all appreciate your support and are working hard to deliver Hartcourt to the next level of success.
Best Regards,
Dr. Wallace Ching
Certain statements in this news release may constitute ``forward looking'' statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Such forward looking statements involve risks, uncertainties and other factors, which may cause the actual results, performance or achievement expressed or implied by such forward looking statements to differ materially from the forward looking statements.
imho, Jerome
