Hartcourt Chairman Reviews Operations and Corporate Planning With Shareholders
LOS ANGELES, April 3 /PRNewswire/ -- The Hartcourt Companies Inc. (OTC Bulletin Board: HRCT; Frankfurt: HCT), (www.hartcourt.com) today sent the following letter to its shareholders:
Dear Shareholders:
Oliver Wendell Holmes once said, "The greatest thing in this world is not so much where we are, but in what direction we are moving." I remember that quotation well, because where we are right now is not pretty. And compared to a year ago, it can be a bit depressing, especially if you bought into HRCT or other tech stocks at the market's highs.
As we begin a new quarter in our operations, I would like to convey my belief that while these recent developments will likely cause delays of many pre-planned ventures in China, I believe that large over-extended multi- national and mid-cap corporations will be impacted to a greater degree than the activities of Hartcourt, and may even contribute to additional opportunities being available to those companies nimble enough to act quickly and work within the existing environment.
Our business expansion will continue and I will be traveling to China later this week to seek out new opportunities while taking steps to close some of the transactions we have announced over the past months.
In short, I am as optimistic and confident as ever of achieving our company mission and its objectives. Let me summarize my reasons for this optimistic stance:
1. In contrast with the US, Japan and other countries, China's GNP is
expected to grow at a 7% pace in 2001. The spending in technology
solutions is still going strong; therefore, its tech sector is not
expected to suffer from the earning malaise experienced by US
technology companies.
2. The Chinese stock markets are still appreciating thanks to the opening
of B-shares to local residents. Our SinoBull subsidiaries should do
well in this environment.
3. Due to the slowing economic growth in the US, Japan and Europe, many
multi-national companies that might have posed strong competition to
our ventures have shelved their plans to enter the China market.
Therefore our subsidiaries and strategic investment partners should
enjoy another year of dominance thanks to their current market
penetration.
4. All Hartcourt subsidiaries and strategic partnerships in Greater China
have substantial cash on hand and incur relatively low expenses from
their operations. Even if the economy takes a turn for the worst, they
appear to have sufficient cash flow from operations to sustain them for
the foreseeable future.
5. The plan for monetizing our assets is in place and we expect it to
proceed according to schedule, despite the lower forecasts for the
stock markets. Consequently, I have little doubt that HRCT
shareholders will be holding shares in three additional companies by
this time next year.
6. Our overall management team continues to attract new talent. We are
focused, determined and mentally unshakable. We believe we will be
successful because we are always prepared to take the extra step and do
more than what is required of us. We continue to aim for the top of
the mountain.
During the investor meetings we conducted in March, we answered many questions regarding the purchase of shares in some of the holdings we plan to spin-off through IPOs, as well as the distribution of dividend shares. Let me again share with you our plan:
a. Most of the IPO shares are pre-sold by underwriters to institutional
investors. However, to have a successful IPO with over-subscription,
we need your participation in the subscription to purchase shares.
Even though the amount of money involved is small, the psychological
impact of US and European investors in the IPO process will boost the
level of confidence in the market place. We appreciate your support in
this effort.
b. Hartcourt remains committed to distribute shares of SA, SinoBull and
ETNS to our shareholders. We shall structure the distribution schedule
of these dividends so as to provide the greatest benefit to long-term
shareholders. The distribution of any future dividends is not intended
to be a one-time event, but rather a process that will be completed
over the next two years. Of course, the schedule might be adjusted to
lessen tax consequences or to comply with other legal constraints.
c. It is likely that you will receive these proposed dividends as shares
listed on a foreign stock market. Before we can apply for American
Depository Receipts (ADRs), it is best that you open an international
account with your broker enabling you to trade these issues. Better
yet, you could open an account with Koffman Securities and support our
investment there too. Koffman's applications can be requested through
our office in Los Angeles.
Overall, we are moving steadily in the right direction. The vision is clear, the plan is essentially unchanged and the execution continues. We might have run into a heavy storm, but our ship is sturdy and we plan to arrive at our port as expected. While my feelings are that the next six months will be a difficult period for the financial markets, I also believe that afterwards it will be "Tech Stocks, Act II," and I believe Hartcourt will be a marquee player.
China will still be China with its 1.4 Billion people, cutting edge technology will still be the driving force of our modern economy, and Hartcourt will still be one of the leading Internet companies in Asia. My conviction and commitment to victory and success is as solid as ever. My father used to tell me, "Life is like riding a bicycle. You don't fall off unless you stop pedaling." Let me assure you, our legs are strong and we are riding on. The parade is waiting.
Sincerely,
Dr. Alan V. Phan
Chairman
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