Buying ACEI @ .20. 10q yesterday. Look hard at this folks.
May 15, 2001. Hello Members! In our search for companies that will benefit
from our new energy dependent economy, we have made what we believe is a
major discovery. We present you an excellent company with the ability and
foresight to capitalize within this new format for growth and profitability
in the Electrical Power Components segment...
American Champion Entertainment, Inc.
OTCBB: ACEI
Price: $.17 (05-14-01)
Shares Outstanding: 25.2M (approx.)
Float 10.6M (approx.)
Market Cap: $4.2M (approx.)
Insider Ownership 58% (approx.)
WEBSITE: americanchamp.com
AmericanChampion Entertainment, Inc. (ACEI), based in Hayward California, is
in transition from a media company to an international manufacturer and
marketer of devices, such as electric meters, for the utility industries.
The Company also owns a cable infrastructure building company in China.
Management believes ACEI could generate approximately $76 million in 2001
revenues:
-$26 million from purchase contracts of 100,000 units of the MTC meter.
-$20 million from exclusive Asia licensing of Remote Access meter reading
hardware and software.
-$25 million from merging Holley's sales and sourcing division into ACEI.
-$600 thousand per year in Entertainment Operations.
-$6 million - Beijing Wisdom Network Technology Company, Ltd. (BA Network)
an ACEI subsidiary
Attaining This Goal
Holley intends to revitalize ACEI by utilizing ACEI to obtain specialty
electric components in the U.S., customize these into products that Holley
can integrate in to its business, and distribute them in Asia. Holley has
identified two product areas for ACEI to enter. One is owned by Metering
Technology Corporation, P.A. (MTC) in Scotts Valley, California. MTC
produces an electric industrial-use meter. Based on obtaining the critical
components from MTC, ACEI has signed a contract for the development and
delivery of up to 1,000,000 units of electronic, three-phase, multi-function
meters to Holley over the next five years. The contract calls for 100,000
units to be delivered within 2001 at an average sale price of $255 per unit,
thereby producing approximately $26 million in revenues for the Company this
year.
The Company's second product area is wireless access meter reading. There
are twenty-one companies in the U.S. that manufacture this type of device.
After extensive research Holley identified a company as having the best
product design. MTC ACEI would be responsible for the casing, wiring,
assembly and calibration. Holley anticipates that wireless access meter
reading could generate pretax profits of $1.5 million to $2 million on
approximately $20 million of annual revenues.
Holley's management believes it has identified the company with the best
wireless access meter reading technology. MTC This company should sign in Q1
Q2 an agreement with ACEI, paying it $1 million for the Asian marketing
rights plus $0.50 per year per user. ACEI intends to buy the core meter, add
periphery parts, and sell the meters to Holley for about $80 per meter. MTC
ACEI should generate 10-15% margins plus have a $0.20 per year per user
residual. The Company anticipates that this product could generate revenues
of approximately $20 million per year and pretax profits of at least 10%.
Management believes that the Chinese government will eventually mandate the
installation of the wireless technology. Early applications are expected in
Zhejiang province with 10 million users and also the City of Shanghai with
10 million users. There are over 60 million households in China.
In addition, ACEI's entertainment arm is active as well. WorldChannel, Inc.
has signed a five-year, $3 million worldwide licensing agreement with ACEI
for the distribution and merchandising of "ADVENTURES WITH KANGA RODDY." The
Company could receive $600,000 per year under this contract.
The Company is in negotiations with a major American film studio to produce
a movie for TV for the students in the first to fifth grades using the Kanga
Roddy format. The movie is estimated to cost about $6million with the film
studio picking up half the cost. The film studio would have the TV rights
while ACEI would have the foreign rights and the rights to product and
licensing sales. The purpose of the film would be to entertain while
teaching emotional intelligence.
BA Network Division
Beijing Wisdom Network Technology Company, Ltd. (BA Network) has signed a
contract with a luxury residential complex to provide Broadband Internet
hookup and service to users with DDN lines at connection speed upwards of 15
times that of 56K modems. Upon completion of the systems installation for
the residential complex, BA Network owns the exclusive right to operate the
line leases for a period of 70 years.
This division, established in 1998, develops, installs and manages the
communications infrastructure to provide voice, video and Internet services
to businesses in China. BA Network is one of the fastest growing leaders of
Internet installation with over 20% of the current market share in Beijing.
The 80% of BA was acquired for $300,000 cash plus 800,000 shares of stock
and future, performance based compensation.
Management projected 2001 revenues as $6 million.
These transitions are being driven by Holley Group Co., Ltd., a Company
domiciled in China, which recently made two $2 million investments in
American Champion. The first traunch was used to acquire the outstanding
convertible debt and convert it into 12.6 million shares of common stock and
the second $2 million investment was to acquire additional stock at $0.16
per share. Holley owns approximately 70% of the roughly 43 million fully
diluted common shares outstanding. Thus the free trading float of ACEI is
estimated at 12,900,000 shares.
The Holley Group Co., Ltd.
The Holley Group is a Chinese conglomerate owning 16 manufacturing
enterprises in China. The Company's primary focus is electrical instruments
and meters, electric power automation and related products. The Holley Group
is the largest manufacturer of meters in China with assets of $200 million.
Its manufacturing facilities are located in the provinces of Hangzhou,
Yuhang, Chongqing, Guangzhou, Beijing, Sheyang and Haikou. Holley generated
net income of $35 million on revenues of $300 million in the year 2000,
exclusively in China.
A BRIEF LOOK AT THE DIRECTORS
Holley Group Co., Ltd recently named three new directors to the Board of
Directors. These include: Licheng Wang, Chairman, Yuanhao Li, President,
Alan Mok and George Chung.
Licheng Wang
Mr. Wang has been the Chairman of the Holley Group Co. Ltd. since 1991 and
is instrumental in growing the company to over $200 million in assets and
over 6,000 employees. He started with Holley in 1978 as a factory manager.
He is also currently the Chairman of Chongqing Holley Holding Co. Ltd. which
has assets of $1.2 billion and trades on the China Shenzhen Exchange (stock
no. 0607). Mr. Wang is a graduate in Electrical Engineering from the
Zhejiang University.
Yuanhao Li
Mr. Li has been the Deputy President (Executive Vice President) of the
Holley Group since 1997 and his strength lies with business development and
acquisitions. Under his guidance, the Holley Group has successfully acquired
and restructured two publicly traded companies in China, which makes
Holley's latest investment into ACEI their third such transaction. Mr. Li is
a graduate in Physics from China's Northwest Institute. He is also appointed
to be the new President of ACEI.
Alan Mok.
Mr. Mok is the President, CEO and founder of World Channel, Inc. His
dedication has brought his company from an idea fifteen years ago to a
multimillion dollar enterprise for the Chinese entertainment industry in
North America. He launched the first nationwide 24-hour satellite Chinese
Movie Channel early last year and his company holds the exclusive
distribution rights to many programs from China. He graduated in Statistics
and Computing Science from North London University and has been awarded a
Certificate of Honor for his outstanding service and leadership from the
Governor of California.
Anthony K. Chan. Mr. Chan has served as President, Chief Executive Officer,
and a Director of the Company since February 1997, and as Chief Executive
Officer and Chief Financial Officer of America's Best Karate since 1991.
From 1985 to 1990, Mr. Chan served as the Director of Chinese Affairs for
the Eisenberg Company, a diversified business enterprise, where Mr. Chan's
principal duty was to negotiate contracts in the People's Republic of China.
Prior to 1985, Mr. Chan was employed by the Bank of America NT & SA as an
economic forecaster. Mr. Chan received his MBA from the University of
California at Berkeley. Mr. Chan's martial arts training began in 1968 in
Hong Kong. He was the first American allowed to train as a professional in
the People's Republic of China. He is a published author and has been
featured in newspapers, magazine covers, television and motion pictures. He
was inducted into the Black Belt Hall of Fame in 1981.
George Chung. Mr. Chung has served as Chairman of the Board and a Director
of the Company since February 1997 and as President of America's Best Karate
since 1991. From 1981 to 1991, Mr. Chung owned and operated a karate studio
in Los Gatos, California. Mr. Chung was inducted into the Black Belt Hall of
Fame in 1983. He is regarded in the martial arts industry as a pioneer in
the modernization of what is known as contemporary martial arts training,
which includes the use of music in both training and performance. He has
been featured in magazines, books, television and motion pictures. He is a
published author and wrote "Defend Yourself," a worldwide published
self-defense system for Sybervision Systems. In 1995, he was awarded a
"Superbowl Ring" from the San Francisco 49ers in recognition for his
outstanding martial arts work with their championship football team.
Certain information and statements included herewith constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties, and other factors, which may
cause the actual results, performance, or achievements of the company to be
materially different from any results, performance, or achievements
expressed or implied in such forward-looking statements. |
