Hi All…
Thanks to n tres ed for the synopsis of the LA meeting…
I was not able to sit in most of the meeting because of other obligations but did meet with Dr. Ching and co before the meeting….
Just like to make some additional points…
From my perspective… there is a misconception about Hartcourt Capital… The division has in effect been working for 2 years… just now with a modified strategy, completed projects and an identified unit that can be marketed in Asia and the US…
The services provided to ET, Sinobull, and Ai-Asia will be services that Hartcourt Capital offers and will serve as “portfolio” of Hartcourt’s abilities… The main difference is Hartcourt Capital will provide additional services with more fee based and small equity high margined than the major equity stakes that Hartcourt has taken in the past. (and they hired experience in Dr. Ching)
Hartcourt will still look for investment opportunities as they present themselves through client DD in presenting base services. In short…ET, Sinobull, and AI-Asia are portfolio investments under the Hartcourt Capital umbrella that will be treated as such. As cash is needed or other investment opportunities present themselves Hartcourt will be able to move or leverage a portion of their investment to develop cash to other more attractive areas. The end product is to have the unit’s value higher than Hartcourt’s original investment as is currently taking shape with their ET investment. Of course as market outlook and valuations improve and the portfolio companies more forward in terms of growth and acquisition…this strategy will become more apparent and the gains realized from the past investments. If an investment becomes less attractive...then Hartcourt will have the flexibility to move the investment to an area that they deem more attractive over time.
Second Hartcourt Capital services will be high margin and will be able to absorb and eventually exceed Hartcourt central fixed costs for the first time which has been a non revenue generating and a bottom line drag unit in the past.
Third… because the portfolio companies are/will be public…they are independent companies and will generate their own cash for growth and operational uses taking any possible stress off of Hartcourt from these operating units…
A couple of notes concerning Dr. Ching… My initial impression of him is that he is well informed as to the challenges that Hartcourt faces in 2002 and has a clear no illusion vision of what he wants Hartcourt to be in 2004. I found him very knowledgeable about the business that Hartcourt Capital services are based. I am also convinced that the opportunities for Harcourt Capital services are apparent especially in Shanghai and Beijing. The two recent clients will be a good example of what Hartcourt will be able to attract as China and Hong Kong companies want to go public and raise funds.
I believe that it will not be a straight road for Hartcourt in 2002 coming out of the current market slump, (some projects will take a short term back seat) and the market will have to show improvement before Hartcourt’s past accomplishments and future plans take shape and are recognized by the investment public….but they will get there. Hartcourt is still an “in development company” with 4 in development” unit… 3 which have shown significant progress despite a very difficult environment in the last year. This company is still in the early stages, and has had a learning curve of how to package the company to take advantage of the China environment and image in the US. It is also important to realize that the company is doing business in China and the cultural and regulation difference are significant to the US…both in terms of time, relationships and structure… But once developed…they are Hartcourt’s largest asset…
It was great to see Denis, Jack, Grace and Charlie Yang there still showing support and interested in Hartcourt. All are doing well…and watching Hartcourt's progress…
