General Steel Holdings, Inc. operates a diverse portfolio of Chinese steel companies. With 4.8 million tons aggregate production capacity, their companies serve various industries and produce a variety of steel products including rebar, hot-rolled carbon and silicon sheets, spiral-weld pipe and high-speed wire. The company is headquartered in China, and has steel operations located throughout all of China in Shaanxi province, the Inner Mongolia autonomous region, the Tianjin municipality, and Guandong Province.
The company intends to become one of the largest and most profitable non-government owned steel companies within China. Their principal activity is manufacturing hot rolled carbon and silicon steel sheets that are mainly used on tractors, agricultural vehicles and in other specialty markets. The company’s “Qiu Steel” is the registered trademarked name under which they sell their products. General Steel sells their products primarily to distributors, service centers or manufacturers who further process these products.
General Steel looks to acquire government-owned steel companies and selected entities that show outstanding potential, and increase their profitability and efficiencies by infusing the applied western management practices, advanced production technologies and capital resources. Their investment strategy is to actively participate in the privatization of state-owned steel companies in China. They aim to acquire assets from large state-owned enterprises at attractive prices, by leveraging their relationship with certain key people and local governments. Their controlling interest positions in joint ventures with the Baotou Steel Group, the Shaanxi Longmen Steel Group, and Maoming Hengda Steel Group, Ltd. are examples of their working strategy.
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The maturity of the U.S. economy has forced steel out of the limelight, but emerging economies continue to appreciate the importance of this essential material resource for GDP growth. One of the features of the growth story of China is its amazing advance to the vanguard of world steel production. The country is witness too much jockeying for leads by domestic manufacturers of all sizes. That is why the Chinese steel industry places so much collective importance on trade with the United States. The Washington administration perceives this as a threat to indigenous interests, and has placed crippling tariff barriers in the way of steel imports from China. However, domestic demand for steel in China is large and growing, so manufacturers have plenty of room to expand.
This small-capital steel manufacturer, the stock of which is available for retail trade in the United States, has additional safeguards for its business growth and profits. It focuses on specialized products for agricultural implements, tractors, and for the oil and gas industry as well. It also has a significant business in steel supplies for shipping containers. The company is therefore able to rise above the competitive pressures of selling entirely generic products.
The Most Recent Quarter has seen very impressive business results. Quarterly net revenue, which was less than $0.5 million a year ago, has climbed to over $2 million this time. Some of this progress is due to inorganic and derivative gains, but the management has shown definite capabilities. The enhanced cash inflow comes at an appropriate juncture in any event.
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Oceans of business opportunities drench this stock. It is a small capital corporation from Beijing, China. It is listed on the NYSE. This is an exceptional investment opportunity for US citizens; with it, you can take part in the amazing economic growth of China from the shelter of a professionally regulated stock exchange.
This company is an illustrious member of the Construction-Supplies & Fixtures Industry. The company makes special kinds of steel sheets. The latter are used to make tractors, containers, special kinds of pipes, bars, and wires. The company is a key supplier for conventional energy and petrochemical industries, apart from its deep roots in agricultural equipment. It has a prominent place in the most rapidly growing and durable of enterprises in China. The latter is the largest steel producer and consumer in the world.
The stock has been available during April 2008 for less than $10 a unit. It appears set to cross the 52-week high of $9.59. The market capitalization exceeds $300 million. The Price to Earnings Ratio is less than 14. The management has declared intentions to improve profitability, and Return on Average Equity has topped 66% over the last four quarters.
Another major initiative is to expand production, using a combination of organic and acquisition strategies. This will utilize management and infrastructure capacities better, with positive effects on Net Profits. Market observers expect superior future business prospects for this stock, as it is free of the recession fears that stalk much of the domestic investment scene.
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