China Information Technology (CNIT): A case of multiple personality disorder?

CNIT is a very curious company.  On September 4, 2013 it issued a press release titled “China Information Technology, Inc. Entered Into Exclusive Cooperation Arrangements with Biznest Internet &Software Co.” (see the 6-K filing).  One might be led to believe that Biznest Internet & Software is an independent company.

However, the domain registrations involved with Biznest show email addresses.

Figuring out the Biznest-related domains

The English-version about page of contains a lot of broken Engrish.  It states:

Business nest Internet software co., LTD. (hereinafter referred to as business nest network) with software and the Internet as main business, headquartered in shenzhen, was founded in 2010. Since its establishment. The company is committed to education in China, companies and households to provide perfect space for the cloud service and high quality Internet platform experience, the company aims to become China’s leading application software and Internet service providers.


Presumably the translator meant to say Biznest instead of “Business nest Internet software co., LTD.”.  In the Contact us section further down the page, there is the email address “”.  Presumably, is the main business website for Biznest.

The domain registration for lists the email address  This domain was created on 2010-08-26.
The domain registration for lists the email address  This domain was created on 2013-03-17.

It is interesting that key Biznest domains are controlled by people who use CNIT email addresses.  One might erroneously presume that Biznest and CNIT are the same company.  However, reading the press release gives me the impression that Biznest is a partner of CNIT’s but is not controlled by CNIT.  It is curious that a CNIT email address appears in the domain registration for

A cloud software company that doesn’t register its own domains

Normally, a cloud software company builds very sophisticated websites for its customers.  It is highly likely that the software contractors would also provide web design services and handle the domain registrations for their customers.  Their customers are hiring them because they lack the computer-related expertise.  If the software contractor is smart, they would retain control of the domain registration so they have additional leverage in forcing their customer to pay.  (For similar reasons, web hosting companies often offer discounted domain registration services to their customers.  This makes it more difficult for their customers to switch web hosts.)  Cloud software companies understand the value of controlling their own domain name.  So it is very curious that seems to be controlled by a CNIT employee.

Secondly, software companies will likely need to exchange business emails, contracts, design documents, and computer files with their customers.  It is very curious that Biznest did not register its current domain when it was founded in 2010 and waited 3 years.  Biznest is described in the press release as a company that was founded in 2010:

About Biznest Internet & Software Co., Ltd.

Founded in 2010 and headquartered in Shenzhen, China, Biznest Internet & Software Co., Ltd. (“Biznest”) provides internet application and software development services and specializing in the fields of digital education, smart family, public information distribution (commercial and media) and e-commerce. Biznest has a full suite of cloud-based services and a strong internet platform, providing rich experience for its educational, commercial and family users in China.

A domain registration allows Biznest to have official email addresses such as “” instead of something like “”. email addresses could not have existed before 2013.

If Biznest was previously under a different name, it would be curious that they do not state the former name of the company in the “about us” section.

The history of shows what looked like in 2011:


The website has a CNIT logo plastered in the top left followed by CNIT’s Chinese name.  At the bottom, the Google translation of the original Chinese states that the website is copyright “2006-2010 Wing Software Ltd.”.

Is this multiple personality disorder at work?  How did suddenly morph into something being designed by Biznest?

Corporate structure diagrams

From an investor’s presentation for 1H 2013:


Biznest is not listed above.

From the website (


Biznest is listed above as part of an “Exclusive strategic partnership”.  This is an interesting way of phrasing the relationship between the two companies.  Apparently it is not a related party transaction or a company doing business with itself.

Other curious things about CNIT

  1. Accordingly to, its days sales outstanding have gone from 55 days to 412 days.
  2. The inventory levels seem high for an IT company.  CNIT has a subsidiary (Bocom) that provides display solutions for its customers.  It would make sense for Bocom to have inventory.  However, the inventory levels seem curiously high.
  3. CNIT’s corporate structure is complicated and is constantly changing.  Its VIE contract has changed at least once.  The corporate structure diagrams on the website, in the investor presentations, and in the 20-F are constantly changing.  Subsidiaries are constantly changing their location of incorporation.
  4. Management is currently blaming the company’s poor performance on the recession in China.  CNIT happened to be profitable in the ‘boom years’ of 2008 and 2009.
  5. seems to be the website where end users of CNIT’s GeoGlobe software would go.  For example, has information relating to the GeoGlobe SDK (software development kit) while doesn’t seem to have this information.  Googling “GeoGlobe SDK” yields 0 results. does not seem to have many links to (and vice versa).
  6. There is a different CNIT website at  I don’t understand why the company doesn’t consolidate the two websites into one, having one URL redirect to the other.  It’s like they don’t want the company’s real customers looking at the website geared towards English-speaking investors.
  7. CNIT is constantly issuing shares in acquisitions.

*Disclosure:  Short CNIT common.


How I perform due diligence on a stock.

4 thoughts on “China Information Technology (CNIT): A case of multiple personality disorder?

  1. Pingback: March 2014 portfolio update: Feeling the squeeze… | Glenn Chan's Random Notes on Investing

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  4. Pingback: CNIT resolves multiple personality disorder | Glenn Chan's Random Notes on Investing

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