Monday, January 28, 2013

What's New?

In my earlier post I discussed a potentially renewed interest in China Information Technology, Inc., or CNIT, who, not surprisingly, provides IT solutions in China. The company is headquartered in Shenzhen, one of the big commercial hubs of mainland China, and was the result of a reverse merger that was, at least in part, one of the reasons US investors started retreating in the past year. With the latter in mind, I've decided to start re-examining CNIT as it is, in my personal opinion at least, still potentially worthy of some interest.

In this post I want to talk a little about news around CNIT.

If you were to Bing or Google "CNIT", you'd find their Chinese language website and the English version. I don't speak Chinese, and I expect most readers probably don't either, so we'd end up reading the English site. In the "News and Events" section, you'd find that the latest press release was from 11/12, announcing quarterly results (which were far from great by the way), while in company news you'd see nothing since 7/5/12, and you'd probably be unhappy that the "media coverage" section showed nothing new since January 2011.

Ok, so for potential investors, no news on a foreign microcap that's been dropping in value for a year isn't a very good thing. However, I thought this was worth a second look.

On the Chinese version of the website, you instantly notice that there's more information (and that's in addition to the fancy Kanji that instantly make the page look busier...). For one thing there are more options in the top navigation bar, and also if you look carefully the news section has items from 2013!

Thanks to today's nifty modern browsers, I translated the page to get a sense for what was going on. So without further ado, here's the most recent company news on CNIT's website, with some automated browser help for the translation...:

  • 1/21/2013: "I believe that we will work miracles": this is an account of a "Chinese New Year Gala" hosted in part by CNIT, where CNIT Chairman and CEO Jianghuai Lin makes an opening statement. He mentions the progress of projects begun in 2012 for various areas of investment including medical technology, geographic information, and education. He makes various mentions about the value of great employees at CNIT, and talks about making organizational improvements to better motivate and focus employees in 2013. He also talks about making further investments in cloud infrastructure in this coming year. The ceremony continues with awards for excellence and more mentions of the importance of a strong team at CNIT. Of course, given that this is a celebration of the Chinese New Year, cultural festivities ensue, and final remarks talk about the challenging year ahead, where with "energy", "solidarity", and a "tenacious struggle", the company will continue to build products that accrue to the brand values.
  • 1/08/2013: "The Yongtai transit through the acceptance of the National Innovation Fund": this is a short press release to announce that the Yongtai transit project achieved acceptance from the Ministry of Science and a panel of technology SMEs.
If you ask me, it's reassuring to see there's news coming out of CNIT. Now of course we want more program acceptance and business partnerships, and more positive results and progressive restructuring, but a motivational celebration and the confirmation of a project under way are also good.

Earlier today, the stock was up 2.02% with over 330k shares trading hands, which is 25+ times greater than the daily average of the last 30 days.

In after hours trading, which was pretty much nonexistent in the past few months, the stock is up nearly another 4% on 9k shares traded. Sure, it isn't much, but given the lack of liquidity in the stock, even a little AH trading can be meaningful.

With that, please do remember all the caveats and risks of trading small foreign stocks with scarce information. Tread cautiously, but also don't let fear drive you to total inaction.

Happy (belated) New Year CNIT!

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