Enormous excitement has surrounded proposed Internet ventures in China despite substantial government restrictions. While not directly an Internet company, Tengtu will be a facilitator and content provider, and that role could widen. In addition, we see a large potential market for electronic publishing in China and elsewhere in Asia, and hope Tengtu will move into this market from its base in educational publishing. The latter is an educational software firm with a strong presence in Canada. Iconix was marginally unprofitable last fiscal year, but has now moved into the black.
Management believes there is good potential for penetrating the U.S. market.
A Chinese version of Iconix UserNet software is being bundled with the computers being installed in Chinese schools. Tengtu was a penny stock until recently. It s up in a big way, but the advance seems justified by the progress in China and the Microsoft deal. The market cap is still very low relative to other China ventures. A few of these have gone up 50 or 100 for one.