SOURCE: China Crescent Enterprises, Inc.

China Crescent Enterprises, Inc.

November 24, 2009 13:46 ET

China Crescent Enterprises, Inc. Outlines Enhanced Milestone ROI Potential and Improved Long-Term Viability in Letter to Shareholders

DALLAS, TX--(Marketwire - November 24, 2009) - China Crescent Enterprises, Inc. (OTCBB: CCTR) today announced that Founder and Board Member Philip Verges has released a letter to shareholders addressing recent shareholder questions and discussing the potential for a short-term and long-term return on investment. The letter to shareholders is included in its entirety below:

Dear Shareholders --

China Crescent posted positive revenue and net income results through the first nine months of 2009, but its share price dipped down after filing its 3rd quarter financial report. The Company has received shareholder emails and calls regarding the issued and outstanding reported in the 3rd quarter report compared to the 2nd quarter. One recurring suggestion in the recent shareholder communications is that the share price dip following the 3rd quarter report is related to the increased issued and outstanding.

Increased Trading Volume

In addition to the share price dip since the 3rd quarter report, the volume of trading has been higher than usual. In reaction to the increased volume and share price performance, one question raised in the emails asks, "Who is doing all the selling?" We can only speculate as to the source of sales or purchases of stock. However, few seem to be speculating in regard to the source of purchases. While we have received questions and comments regarding the sale of stock in reaction to the share price dip, we have not received any questions regarding purchases. There cannot be any sales without corresponding purchases. If shareholders are selling in reaction to a perceived reduction in value resulting from the increased issued and outstanding, why would some other party be buying?

Shareholder Profits from Periodic Increases in Share Price

Included regularly within the Company's communications is the message that we believe an ongoing disconnect exists between the underlying fundamental financial performance of over-the-counter quoted companies and the corresponding price per share. To offset the disconnect, we regularly discuss the idea of supplementing a long-term investment strategy with small, short horizon stock purchases to enable profit taking when the share price periodically increases in reaction to a milestone success. Trading volume might not be sufficient to enable the liquidation of a large investment when the share price experiences a periodic peak.

Long-Term Returns from Long-Term Sustainable Operational Success

In our communications we characterize long-term return on investment potential as a function of operational success, not share price performance. We discuss our belief that long-term share price appreciation of over-the-counter quoted securities is unlikely. We believe long-term return on investment is absolutely possible, but will more likely be realized directly from the operation rather than from trading of stock. For instance, cash received from the future potential sale of an operation might be issued in a dividend to shareholders.

Long-Term Potential Enhanced Through Bolstered Financial Position

China Crescent's third quarter report is a demonstration of management's focus on developing the opportunity for shareholders to realize a potential long-term return on investment from the success of the operation. Management has issued stock since the second quarter to bolster the financial position of the Company's operating business and improve the potential for the operation to deliver long-term value. Revenue is up, net income is at record levels, debt has been reduced and earnings per share are stable. The Company's Chief Financial Officer discusses the issue of stock to bolster the Company's financial position in more detail in an on-demand Webcast. A link to the on-demand Webcast is available on the corporate website homepage www.chinacrescent.com titled 'China Crescent 3rd Quarter Review.'

Over-the-counter Share Price Volatility and Potential for Dramatic Returns

The over-the-counter markets are well-known for share price volatility. The price of over-the-counter securities can go up and down dramatically in terms of percentage change. A share price under $0.10 can easily double, creating an opportunity for a 100% return on investment. The share price can similarly go the other way. It is not unusual for such share prices to go up and down repeatedly. As mentioned above, there cannot be a sale of stock without a corresponding purchase. Even when the share price is declining, some party is purchasing the stock at a declining share price. Accordingly, it is reasonable to conclude that money is being made on one side of the transaction or the other whenever the share price is increasing or decreasing.

China Crescent Return Potential on the Horizon

Within 2009, the share price of China Crescent has seen periodic increases in share price as well as periodic decreases. Each decrease refreshes the opportunity to potentially benefit from a future periodic increase. Each increase is likely to be met with a periodic decrease. Again, we can only speculate as to the cause for the most recent decrease. Regardless of the reason for the decrease, the Company has posted a positive financial report in addition to communicating potential upcoming milestone events that have a likelihood of occurring before the end of the year. With the volume of stock that has been purchased at a lower than average share price, in combination with the positive financial results and potential upcoming milestones, China Crescent has the potential to experience yet another increase in share price before year-end.

Small Equity Initiative

I and others here are dedicated to improving the opportunity for self-directed retail investors to profit from over-the-counter investments and for entrepreneurs to gain better access to capital for their business plans. Our first initiative is to improve the collective understanding by investors and entrepreneurs as to how the over-the-counter market really works. It is our position that conventional efficient market wisdom is flawed when it comes to the over-the-counter markets. We nevertheless firmly believe the over-the-counter markets can deliver compelling returns for investors and be a consistent source of investment capital for entrepreneurs if approached from the right perspective. We will continue to provide shareholder communications similar to this one in our ongoing effort to improve the collective understanding as to how the over-the-counter market really works. We have also taken part in launching a not-for-profit organization called the Small Equity Initiative to further the long-term improvement of the over-the-counter markets for self-directed retail investors and entrepreneurs. Look for more news on the Small Equity Initiative in the near future.

Best Regards,
Philip Verges
China Crescent Board Member and Founder

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About China Crescent Enterprises, Inc. (www.chinacrescent.com)

China Crescent Enterprises, Inc. reported over $40 million in profitable revenue in 2008. The Company is a technology leader in the rapidly developing Chinese market specializing today in software engineering, high quality software development and digital multimedia outsourcing services delivered to customers globally. At the same time, the firm is a systems integrator and value added reseller of major global hardware brands in the Chinese domestic market.

Headquartered in Dallas with operations in Shanghai and Beijing, China Crescent bridges the gap between Western and Eastern business cultures to assist Western clients in realizing the advantages of the high quality, low cost technology products and services available from China. China Crescent also assists Western clients in localizing products and services to realize the tremendous growth potential available by expanding into the Chinese Market.

"SAFE HARBOR STATEMENT" UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release contains forward-looking statements that involve risks and uncertainties. The statements in this release are forward-looking statements that are made pursuant to safe harbor provision of the Private Securities Litigation Reform Act of 1995. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements. These statements involve known and unknown risks and uncertainties, which may cause China Crescent's actual results in future periods to differ materially from results expressed or implied by forward-looking statements. These risks and uncertainties include, among other things, product demand and market competition. You should independently investigate and fully understand all risks before making investment decisions.

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