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CNIT Hints At Growth Potential

CNIT could be a dark horse in the information technology industry

Daniel Lipson
    Oct 18, 2017 8:30 AM  PT

Investors looking for a hot tech sector in China need look no further than the information technology services industry. Overall, the IT industry has seen incredible growth on a global scale, and analysts forecast that industry to grow a further 16 percent in the coming year. Over the past year, the industry saw immense growth of over 50 percent.

But within the industry, there are some dark horses worth taking a closer look at. China Information Technology Inc (Nasdaq: CNIT) in one. The company, formerly known as China Information Security Technology Inc., specializes in geographic information systems, digital public security, and hospital information services.

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A small-cap information technology company operating in China, currently worth about $47 million, has seen negative growth in the past year. But this may turn in CNIT's favor, as CNIT's stock prices could be well below its tech peers. While those holding onto it may be facing opportunity costs, new investors may be able to capitalize on a potential undervaluation. The company is well ahead of its 52-week low, and is seeing 12-month gains of over 50 percent as of mid-October.

In late September, CNIT announced an expanded investor relations program that it is planning to develop with New York-based Dragon Gate Investment Partners. The expanded program will help bolster the company's financial communications and its presence in the global investment community.

At the same time, CNIT also announced that it entered into a large contract with local advertising agency Guangzhou Taoping New-media Technology Ltd. for the sale of 5,000 cloud-based ad terminals to be installed in office buildings, residential communities, shopping malls, and other outdoor locations throughout Guangzhou.

The contract is expected to generate sales and service revenue of $1.5 million, and marks the 12th such announcement since May 2017. The 12 contracts range in value from $500,000 to $3 million and are expected to pull in revenue from customer use as well as increased exposure for the company.  


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