In a recent press release, the Hartcourt Companies Inc. (OTC:HRCT) announced
that its joint venture with UAC Online Stock Trading Inc. has signed a contract
with Beijing Telecom, the wholly owned subsidiary of giant China Telecom.
According to the contract, Beijing Telecom will grant UAC five months free of
charge for all the leased lines to be installed at brokerage offices. In addition,
Beijing Telecom will also grant UAC 1,000 NUI numbers free of fixed monthly
charges till the end of the year 2000. With these favorable conditions, Beijing
Telecom wishes to work with UAC to quickly market 162 network in the Beijing
data market. The contract will help UAC to rapidly expand its service in the
Beijing area.
Hartcourt also announced that UAC has received the second government funding
from the Beijing Science & Technology Committee. "UAC 162 network" has been
listed as a torch project (No. 99337), which entitles it to receive free grants,
reduced taxes and research and development support by China Science and
Technology Commission.
UAC operates the first and only nationwide online trading network in China,
connecting investors with their stock brokerage offices via Chinapac, the
nationwide packet switched data network owned by China Telecom. UAC is the
first and only operating agent of China Telecom`s Chinapac system.
In a former press release, the Hartcourt Companies, Inc. announced that the
Joint Venture formed with UAC Online Stock Trading Inc. of China has been
approved by the government. An official Business License and Certificate of
Foreign Investment were issued to the JV. It is a significant development in
affirming the legality of the JV company, especially in view of recent confusion
on foreign investment; and reflecting the desire of the government for a
speedyimplementation of the project. UAC operates the first and the only
nationwide online trading network in China, connecting investors with their stock
brokerage offices.
UAC system has been in operation at two offices of China Securities in Beijing
and 12 additional offices should be wired up during the next few weeks. China
Securities, the second-largest brokerage firm in China, has signed an agreement
to install the UAC system in all of its 98 offices nationwide. As the first and only
CHINAPAC operating agent designated by China Telecom, UAC is in a unique
position to market the services to all brokerage firms in China. At present, there
are 4,000 brokerage offices in China serving 40 million investors. UAC`s mission
is to quickly capture as much market share as possible. Total revenues,
excluding the TV set-top box users segment, are projected to exceed $40 million
by 2004.
UAC is also working with Financial Telecoms Ltd (FTL) of Hongkong to create the
most comprehensive financial portal in Chinese language for the Internet users
of China and Hongkong. The merged entity, with the participation of additional
well-known American and Chinese strategic partners, will proceed with an IPO
planned for the 2nd quarter of 2000.
Dr. Alan Phan, Chairman and CEO of Hartcourt, stated, "We were surprised to
receive the licenses this early. Our Chinese partners have delivered more than
expected. It is a good omen for the future. We are proud of these unique
achievements."
Mr. Shi Zhang, Chairman and President of UAC, said, "Even though the profit
potential of the Joint Venture is tremendous, it is just a first step of our
cooperation. Next on line is the best Chinese financial portal with the same
standards and features like Bloomberg or MarketWatch. We are creating
something unique and spectacular for the Chinese Internet users. Our market
position and our leading-edge technology will ensure our long-term success."
Additional to this great news Hartcourt announced that it has signed a Joint
Venture Agreement with Innostar HiTech Enterprises of China to establish a
nationwide Internet Service Provider (ISP) and IP Phone Service in China.
Innostar has been operating an IP Phone Service in Beijing for the last 14
months, in cooperation with Ji Tong, the national wireless phone company. With
the participation of Hartcourt, Innostar could expand this IP Phone Service to
other cities and provinces in China. Projected revenue from the IP Phone Service
alone would be $2.8 Million in 2000. Net profit is estimated at $1.6 Million.
Innostar also owns the license for a national ISP. The Joint Venture company
will provide high-speed Internet connections to hotels, office buildings and
apartment complexes, using a Chinese sattelite with bi-directional KU bands to
transmit data to these commercial users. It will be a first for China. Both parties
are committed to provide the most sophisticated technology for the system
infrastructure in addition to strong strategic alliances for its marketing program.
The Joint Venture will bring in additional JV partners, well-known American and
Chinese firms to strengthen its unique market position. The national license will
also allow the Joint Venture to engage in E-Commerce activities and other
Internet services.
The Joint Venture will be called INNOSTAR, and should start the operation within
4 months . Innostar will hold 65 percent and Hartcourt will hold 35 percent of
ownership in the Joint Venture.
At present, China has about 4.5 Million Internet users. As the phone charge
keeps getting lower and the basic PC prices are at the $200. level, China
Internet Data Research expect the number of Chinese users to grow to more
than 100 Million by 2005, second only to the US.
Dr. Alan Phan, Chairman & CEO of Hartcourt, said," As we said previously, we
will proceed wholeheartedly with the national ISP project. Innostar is such a
powerful enterprise that we will be ensured of strong support in the telecom
industry. The IP Phone operation is currently profitable, so the cash flow
projection is much better than a new start-up. We could not ask for a better
partner. The synergy created by this ISP project will enhance the likely success
of our financial portal , being created by UAC Online Trading and Financial
Telecoms Ltd. I firmly believe that our focus on Asian Internet is producing the
desired results. "
Dr. Jinsong Zeng, President of Innostar Hi-Tech Enterprises Ltd, said," Hartcourt
has been diligent in pusuing Chinese Internet projects. The imported American
technolgy will help us growing our IP Phone sytems much faster. The high-speed
connection via sattelite will be the wave of the future, as we have witnessed the
success of wireless phone in China. We are happy working with Hartcourt
management and believe that our Joint Venture will be successful."
EVALUATION
The following projections estimated by independent market experts according to
Hartcourt`s revenue projections are based on conservative assumptions. So we
consider these figures to be both very realistic and achievable: With
approximately 17.6 Million shares issued and outstanding Hartcourt is supposed
to be profitable in the year 2000 and to achieve substantial earnings of $0.30
per share in the year 2000. Therefore we confirm our share price target to a
least $9 at a conservatively estimated PER of only 30 which in case of this
tremendous growth potential seems to be even too conservative.
On the whole it may be said that The Hartcourt (HRCT) possibly will be able to
make even more profit in the year 2000 than we expect. Consequently we would
like to mention in advance that Stockreporter.de might have to increase the
profit expectations upon availability of the improved earnings projections.
According to these facts we are strongly convinced that the share of The
Hartcourt Companies (HRCT) currently is drastically undervalued. Therefore we
believe that the Company is one of the most exciting companies to come to our
attention in recent years. Its enormous growth potential is both dynamic and
unlimited.
Based on the foregoing, Stockreporter analysts comment that there is no
question the Hartcourt stock is drastically undervalued at its current price of less
than $1.50 per share. Stockreporter confirms its share price targets of $9 for
the year 2000 and is convinced that this represents an extraordinary opportunity
for investors.
Furthermore The Hartcourt Companies (HRCT) is already listed at the Berlin
Stock Exchange, the major European OTC stock exchange, to increase the
international exposure and to establish new investor relations in Europe (the
securities code is 900 009). All these listings open the door for new major
institutional investments by e.g. national funds and investment bankers and will
reduce the negative influence day traders currently have. For that reason
potential investors have got only now the extremely unique and promising
opportunity to invest in the shares of The Hartcourt Companies (HRCT) on a
more than advantageous share price level.
According to these great news we are strongly convinced that the shares of The
Hartcourt Companies (HRCT) is drastically undervalued at a current price of less
than $1.50 offering a short and mid term potential of more than 600%. For this
reason we believe that the HRCT share still is one of the most exciting and most
promising investment opportunities for both retail and institutional investors and
that the HRCT share is going to be one of the best performing micro cap shares
in the next weeks and months.
This news release contains forward-looking statements with respect to the
results of operations and business of the Company that involves risks and
uncertainties. The Company`s 'actual future results could materially differ from
those discussed. Risks and uncertainties of the Company will be detailed from
time to time in the Company's periodic reports to be filed with the Securities and
Exchange Commission.
