China Gerui Advanced Materials (NASDAQ:CHOP)

ZHENGZHOU, China, November 21, 2015 /PRNewswire/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high-precision, cold-rolled strip steel producer inChina, today announced that on November 16, 2015, it received a written notice from the Listing Qualifications department of the Nasdaq Stock Market ("Nasdaq Staff") indicating that the Company is not in compliance with the Nasdaq Stock Market's ("Nasdaq") filing requirements set forth in Listing Rule 5250(c)(1) (the "Rule") because it had not filed its Form 20-F for the fiscal year ended December 31, 2014 (the "Annual Report") during the grace period granted by Nasdaq Staff, which ended on November 11, 2015.

Unless the Company requests an appeal of this determination to a Hearings Panel, trading of the Company's Ordinary Shares will be suspended from The Nasdaq Global Select Market at the opening of business on November 25, 2015, and a Form 25-NSE will be filed with the Securities and Exchange Commission (the "SEC"), which will remove the Company's securities from listing and registration on The Nasdaq Stock Market.

The Company currently does not plan to appeal the Nasdaq's Staff's determination. As a result, following the suspension of trading on Nasdaq, the Company's ordinary shares are expected to be quoted on the OTC Markets - OTC Pink Tier. No assurance, however, can be made that trading in the Company's ordinary shares on the OTC Markets will commence or be maintained.

ZHENGZHOU, China, August 26, 2015 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high-precision, cold-rolled steel producer in China, today announced that on August 19, 2015, it received a written notice (the "Notice") from the Listing Qualifications department of The Nasdaq Stock Market ("Nasdaq") indicating that the Company is not in compliance with the Nasdaq Listing Rule 5450(b)(1)(c) because the market value of publicly held shares ("MVPHS") of the Company's ordinary shares has fallen below the minimum $5,000,000 requirement for continued listing for a period of at least 30 consecutive business days. However, the Nasdaq Listing Rules ("Nasdaq Rules") also provides the Company a compliance period of 180 calendar days, or until February 16, 2016, to regain compliance. If at any time before February 16, 2016, the MVPHS of the Company's ordinary shares is at least $5,000,000 for a minimum of 10 consecutive business days, the Company will regain compliance with this rule.

In the event the Company does not regain compliance with the Nasdaq Rules prior to the expiration of the 180-day compliance period, it will receive written notification from Nasdaq that the Company's ordinary shares are subject to delisting. Alternatively, Nasdaq may permit the Company to transfer its ordinary shares to The Nasdaq Capital Market if, at that time, the Company satisfies the Nasdaq Capital Market's continued listing requirements.

At present, China Gerui will strategically review its business outlook and determine whether and how it can regain compliance during the initial 180 day compliance period and will actively monitor its performance with respect to the listing standards. The Notice has no immediate effect at this time on the listing of the Company's ordinary shares, which will continue to trade on the Nasdaq Global Select Market under the ticker symbol "CHOP."

ZHENGZHOU, China, May 27, 2015 /PRNewswire/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high-precision, cold-rolled steel producer in China, announced today that the Company received a written notice (the "Notice") of non-compliance to meet NASDAQ Listing Standard Rule 5250(c)(1) related to its failure to timely file its Form 20-F.

The Notice requires China Gerui to submit a plan within sixty calendar days or by July 20, 2015 that addresses the details of the Company's plan to regain compliance with the Nasdaq Listing Rules. If NASDAQ accepts the plan, an exception will be granted of up to 180 calendar days from the due date of the filing of Form 20-F, or until November 11, 2015, to regain compliance.

The Company intends to file a compliance plan and remediate disclosure deficiencies, but there is no assurance that it will be successful in doing so or that the Company's plan to regain compliance with the NASDAQ Listing Rule will be accepted.

ZHENGZHOU, China, April 28, 2015 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (CHOP) ("China Gerui," or the "Company"), a leading high- precision, cold-rolled steel producer in China, today announced that it has regained compliance with listing requirements of The NASDAQ Global Select Market that require a market value of publicly held shares ("MVPHS") to be at least $5,000,000 and maintenance of a minimum $1.00 per share bid price.

As previously announced on March 2, 2015 and March 10, 2015, China Gerui received written notices (the "Notices") from the Listing Qualifications department of The NASDAQ Stock Market ("NASDAQ") indicating that the Company was not in compliance with Rule 5450(b)(1)(c) and 5450(a)(1) (collectively the "Rules") because the MVPHS fell below $5,000,000 and the minimum bid price requirement of $1.00 per share was not met for continued listing for a period of at least 30 consecutive business days.

On April 23, 2015, China Gerui received a letter from NASDAQ stating that because the Company maintained a MVPHS of at least or greater than $5,000,000 and a closing bid price of its Ordinary Shares equal to or in excess of $1.00 per share for the last 10 consecutive trading days, between April 9, 2015 and April 22, 2015, they determined that China Gerui was in compliance with both the MVPHS and minimum bid price requirement.

ZHENGZHOU, China, March 11, 2015 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high- precision, cold-rolled steel producer in China, today announced that on March 4, 2015, it received a written notice (the "Notice") from the Listing Qualifications department of The Nasdaq Stock Market ("Nasdaq") indicating that the Company is not in compliance with the minimum bid price requirement of $1.00 per share set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Select Market.

The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price for the 30 consecutive business days ended March 3, 2015, the Company did not meet this requirement. China Gerui has been provided a 180 day period, or until August 31, 2015, to regain compliance. During this period, the closing bid price of China Gerui's ordinary share must be at least $1.00 for a minimum of ten consecutive business days to regain compliance.

In addition, following the initial 180 day period, China Gerui may be eligible for an additional 180 day period to regain compliance, subject to China Gerui, at that time, transferring its securities to The Nasdaq Capital Market and satisfying certain other requirements.

At present, China Gerui will strategically review its business outlook and determine whether and how it can regain compliance during the initial 180 day compliance period and will actively monitor its performance with respect to the listing standards. The Notice has no immediate effect at this time on the listing of the Company's ordinary shares and will continue to trade on the Nasdaq Global Select Market under the ticker symbol "CHOP."

ZHENGZHOU, China, March 3, 2015 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high- precision, cold-rolled steel producer in China, today announced that on February 24, 2015, it received a written notice (the "Notice") from the Listing Qualifications department of The Nasdaq Stock Market ("Nasdaq") indicating that the Company is not in compliance with the Nasdaq Listing Rule 5450(b)(1)(c) because the market value of publicly held shares ("MVPHS") of the Company's ordinary shares has fallen below the minimum $5,000,000 requirement for continued listing for a period of at least 30 consecutive business days. However, the Nasdaq Listing Rules ("Nasdaq Rules") also provides the Company a compliance period of 180 calendar days, or until August 24, 2015, to regain compliance. If at any time before August 24, 2015, the MVPHS of the Company's ordinary shares is $5,000,000 for a minimum of 10 consecutive business days, the Company will regain compliance with this rule.

In the event the Company does not regain compliance with the Nasdaq Rules prior to the expiration of the 180-day compliance period, it will receive written notification from Nasdaq that the Company's ordinary shares are subject to delisting. Alternatively, Nasdaq may permit the Company to transfer its ordinary shares to The Nasdaq Capital Market if, at that time, the Company satisfies the Nasdaq Capital Market's continued listing requirements.

At present, China Gerui will strategically review its business outlook and determine whether and how it can regain compliance during the initial 180 day compliance period and will actively monitor its performance with respect to the listing standards. The Notice has no immediate effect at this time on the listing of the Company's ordinary shares and will continue to trade on the Nasdaq Global Select Market under the ticker symbol "CHOP."

Third Quarter 2014 Financial Results

• Revenue decreased 90.0% to $3.1 million in the third quarter of 2014 from $30.9 million in the third quarter of 2013.
• Net loss was $33.0 million in the third quarter of 2014, or $0.56 loss per fully diluted share, compared to a net loss of $4.4 million, or $0.07 loss per fully diluted share in the third quarter of 2013.

"We witnessed a culmination of events that adversely affected our operational performance in the third quarter of 2014. Steel prices for both hot-rolled and cold-rolled prices reached a year low during the third quarter, the credit situation further deteriorated for private enterprises and the prolonged downtime of several of our production lines resulted in impairment charges of fixed assets while simultaneously, we faced bank loan defaults and working capital shortages. While we are pleased to announce positive adjusted EBITDA of $0.8 million for the nine months ending September 30, 2014 and a net book value per share of $4.31 (before one-for-ten reverse stock split) for the three months ended September 30, 2014, our management recognizes the need to i) actively defend our brand, markets, pricing strategy; ii) seek alternative avenues to support working capital and iii) restore confidence in our business model," commented Mingwang Lu, Chairman and Chief Executive Officer of China Gerui Advanced Materials Group.

2014 Financial Guidance

The Company is revising its full year 2014 revenue guidance to approximately $68 million. The Company may adjust such guidance as changing macroeconomic conditions and operational and competitive challenges dictate.

ZHENGZHOU, China, November 24, 2014 /PRNewswire/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high-precision, cold-rolled steel producer in China, today announced that it has regained compliance with listing requirements of The NASDAQ Global Select Market that require maintenance of a minimum $1.00 per share bid price, following the recent one-for-ten reverse stock split.

As previously reported on June 6, 2014, China Gerui received a written notice (the "Notice") from the Listing Qualifications department of The NASDAQ Stock Market ("NASDAQ") indicating that the Company was not in compliance with the minimum bid price requirement of $1.00 per share set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Select Market.

Also as previously reported on November 6, 2014, China Gerui's Board of Directors approved a one-for-ten reverse stock split which was intended to increase the per share trading price of the Company's outstanding ordinary shares.

On November 21, 2014, China Gerui received a letter from NASDAQ stating that because the Company maintained a closing bid price of its ordinary shares equal to or in excess of $1.00 per share for the last 10 consecutive trading days, between November 7, 2014 and November 20, 2014, they determined that China Gerui was in compliance with the minimum bid price requirement.

Board of Directors Approve of One-for-Ten Reverse Stock Split

On November 6, 2014, the Company's Board of Directors approved a one-for-ten reverse stock split of the Company's issued and outstanding Ordinary Shares. It is expected that the Company's Ordinary Shares will begin trading on the NASDAQ Stock Market on a split-adjusted basis when the market opens on November 7, 2014. The Company's Ordinary Shares will continue to trade under the symbol "CHOP" but with a new CUSIP number.

The reverse stock split is intended to increase the per share trading price of the Company's Ordinary Shares to satisfy the $1.00 minimum bid price requirement for continued listing on the NASDAQ Stock Market.

As a result of the reverse stock split, every 10 issued and outstanding shares at the effective time will automatically be combined into one issued and outstanding share without any change in par value of those shares. In lieu of issuing fractional shares, the Company will round fractions of shares up to the nearest whole share.

Once the reverse stock split becomes effective, stockholders holding shares through a brokerage account or held in "street name" will have their shares automatically adjusted to reflect the 1-for-10 reverse stock split. Existing stockholders holding certificates of Ordinary Shares will receive a letter of transmittal from the Company's transfer agent, Continental Stock Transfer & Trust, with specific instructions regarding the exchange of shares. All outstanding stock options, warrants and other rights to purchase the Company's Ordinary Shares will be adjusted proportionately as a result of the reverse stock split. This will reduce the number of outstanding Ordinary Shares of the Company from approximately 59.3 million to approximately 5.9 million. However, the number of total authorized Ordinary Shares of the Company will not be changed as a result of the reverse split. Please direct any questions to your broker or the Company's Transfer Agent, Continental Stock Transfer & Trust, by calling 212-845-3277.

"We hope the reverse stock split will raise the visibility for our stock to a broader range of institutional investors, while satisfying requirements to continue to list on NASDAQ without fundamentally changing stockholder value or the Company's market capitalization," said Mingwang Lu, Chairman and Chief Executive Officer of China Gerui Advanced Materials Group.

Second Quarter 2014 Financial Results

• Revenue decreased 24.1% to $32.7 million in the second quarter of 2014 from $43.1 million in the second quarter of 2013.
• Net loss was $1.4 million in the second quarter of 2014, or $0.02 per fully diluted share, compared to a net loss of $0.8 million, or $0.01 per fully diluted share in the second quarter of 2013.

"As part of our midyear strategic review, we focused our efforts on strengthening our working capital and cash management cycles while streamlining the Company's operation through stringent cost management and optimization of product mix which has yielded measurable improvements in gross margins and EBIDTA in the second quarter when compared to the first quarter of 2014," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui.

While this will continue to be our focus as we turn to the second half of the year, we recognize that the continued challenges we face, including industry-wide excess capacity, weak demand, a more tightened credit environment, and weak capital markets posed risks to our core business. As a result, we have engaged in a new strategy to enter into the fast growing Chinese antiquities market to more rapidly increase our return on capital, fortify our future cash and alleviate the pressure of fixed assets and working capital generated from the metals processing business. "We remain encouraged over the potential growth opportunities over the next 12 months. We have created competitive advantages with our innovative new and broad line of products to meet the needs of our diverse and growing customer base. We are better positioned with our broad product line today than at any time in our Company's history to capture share in the high-margin markets when the environment improves. We also believe our entrance into a growth market will help to support our core operations, maximize shareholder return and strengthen our future cash position," Mr. Lu concluded.

"We remain encouraged over the potential growth opportunities over the next 12 months. We have created competitive advantages with our innovative new and broad line of products to meet the needs of our diverse and growing customer base. We are better positioned with our broad product line today than at any time in our Company's history to capture share in the high-margin markets when the environment improves. We also believe our entrance into a growth market will help to support our core operations, maximize shareholder return and strengthen our future cash position.," Mr. Lu concluded.

ZHENGZHOU, China, June 7, 2014 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high- precision, cold-rolled steel producer in China, today announced that on June 2, 2014, it received a written notice (the "Notice") from the Listing Qualifications department of The Nasdaq Stock Market ("Nasdaq") indicating that the Company is not in compliance with the minimum bid price requirement of $1.00 per share set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Select Market.

The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price for the 30 consecutive business days ended May 30, 2014, the Company did not meet this requirement. China Gerui has been provided a 180 day period in which to regain compliance. During this period, the closing bid price of China Gerui's ordinary share must be at least $1.00 for a minimum of ten consecutive business days to regain compliance.

In addition, following the initial 180 day period, China Gerui may be eligible for an additional 180 day period to regain compliance, subject to China Gerui, at that time, transferring its securities to The Nasdaq Capital Market and satisfying certain other requirements.

At present, China Gerui will work to regain compliance during the initial 180 day compliance period and will actively monitor its performance with respect to the listing standards. The notification letter has no effect at this time on the listing of the Company's ordinary shares and will continue to trade on the Nasdaq Global Select Market under the ticker symbol "CHOP."

ZHENGZHOU, China, June 7, 2014 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high- precision, cold-rolled steel producer in China, today provided an update of its share repurchase program.

As of the market close on Thursday, June 5, 2014, the Company has repurchased 2,194,201 of its ordinary shares at an average price of $2.88 per share for a total repurchase price of approximately $6.3 million.

"The continued execution of our share repurchase program reflects management's belief that the Company is severely undervalued in the equity markets and considers the execution of the share repurchase to be an effective use of near-term cash with a book value of $4.81," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui. "We will continue to focus on new product introductions that will enable China Gerui to return to profitability and view share repurchases as on important element in our ongoing efforts to maximize shareholder value."

In April 2011, the Company announced that its Board of Directors had approved a six-month share repurchase program to repurchase up to an aggregate of $10 million of its ordinary shares. The Company's Board of Directors subsequently extended the program from six months to an indefinite period or until the program is completed. The volume and timing of repurchases depend upon market conditions, share price and other factors. They are also subject to, and are intended to be in compliance with, the conditions of Rule 10b-18 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, blackout periods that restrict repurchases at certain times in compliance with Section 10(b) and Rule 10b-5 of the Exchange Act, and other relevant rules and regulations under the U.S. securities laws.

ZHENGZHOU, China, May, 29, 2014 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high- precision, cold-rolled steel producer in China, today announced that Chairman and Chief Executive Officer Mingwang Lu has informed the Company of his intention to use his personal funds to purchase the Company's ordinary shares on the open market for up to one percent of the outstanding shares of the Company's approximately 59,522,910 shares over the next twelve months, in accordance with Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

"The share purchase plan demonstrates my confidence in the long-term prospects of China Gerui's business. I believe that our Company's shares are currently undervalued in the capital markets, and I am planning to invest my own funds at a book value of $4.81 per share," commented Mr. Lu. "I expect 2014 to be a transitional year for China Gerui, and believe that our management has the appropriate strategies to weather challenging market conditions while positioning us for future growth. I look to fully capitalize on our new product launches and in particular, look to take advantage of the industry challenges by focusing on innovation, new markets and new product applications. I look forward to keeping the capital markets apprised of our future developments over time."

ZHENGZHOU, China, May 28, 2014 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high-precision, cold-rolled steel producer in China, today announced that it has resumed its share repurchase program effective May 27, 2014.

"The resumption of the share repurchase program reflects management's belief that the Company is severely undervalued in the equity markets and considers the share repurchase to be an effective use of cash with a book value of $4.81 per share," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui. "While management continues to focus on new product contributions and optimizing its future product mix, we do view share repurchases as an important element in our ongoing commitment to maximize the long-term value of our Company for our shareholders."

In April 2011, the Company announced that its Board of Directors had approved a six-month share repurchase program to repurchase up to an aggregate of $10 million of its ordinary shares. The Company's Board of Directors subsequently extended the program from six months to an indefinite period or until the program is completed. The volume and timing of repurchases depend upon market conditions, share price and other factors. They are also subject to, and are intended to be in compliance with, the conditions of Rule 10b-18 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, blackout periods that restrict repurchases at certain times in compliance with Section 10(b) and Rule 10b-5 of the Exchange Act, and other relevant rules and regulations under the U.S. securities laws. As of the market close on Thursday, May 22, 2014, the Company had repurchased 2,010,918 of its ordinary shares at an average price of $3.06 per share for a total repurchase price of approximately $6.1 million.

First Quarter 2014 Financial Results

• Revenue decreased 42.0% to $26.4 million in the first quarter of 2014 from $45.6 million in the first quarter of 2013.
• Net loss was $4.2 million in the first quarter of 2014, or $0.07 per fully diluted share, compared to a net loss of $0.1 million, or nil per share in the first quarter of 2013.

"As we had previously announced, first quarter financials reflected the tumultuous performance of the steel sector in China as well as a seasonally slow first quarter due to various national holidays that impacted normalized operations. Despite challenging macroeconomic headwinds affecting China's steel industry and tightened credit policies, we are reiterating China Gerui's $175 - $180 million revenue guidance for fiscal year 2014. Our financial guidance includes our expectations for sequential improvement in the second through fourth quarters," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui. "We are closely monitoring current market conditions and we believe we have realistic strategies and competitive advantages to capture additional market share, regain profitability and improve shareholder value."

"We are focused on our near-term growth opportunities with new products and new markets and believe this strategy will enable us to regain profitability as a leading premium steel processor," said Mr. Lu. "We remain cautiously optimistic about opportunities to continue to grow the business in 2014 and are committed to take any appropriate actions to further bolster near-term shareholder value."

2014 Financial Guidance

The Company is reiterating full year 2014 revenue guidance in the range of $175 million to $180 million predicated on the launch of its laminated steel products as scheduled and slightly improved pricing power with an expanded portfolio of specialty products. The Company may adjust such guidance as changing macroeconomic conditions and operational and competitive challenges dictate.

ZHENGZHOU, China, May 7, 2014 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high- precision, cold-rolled steel producer in China, today announced preliminary unaudited first quarter 2014 revenues of approximately $26 million and reiterated 2014 revenue guidance of $175 - $180 million.

"Despite challenging macroeconomic headwinds affecting China's steel industry and tightened credit policies, we are reiterating China Gerui's $175 - $180 million revenue guidance for fiscal year 2014. Our financial guidance reflects a seasonally slow first quarter due to various national holidays but also includes our expectations for sequential improvement in the second through fourth quarters," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui. "We are closely monitoring current market conditions and we believe we have realistic strategies and competitive advantages to capture additional market share, regain profitability and improve shareholder value."

China's steel industry has undergone the worst quarter since 2000, according to the China Iron and Steel Association (CISA). Its top steelmakers recorded a combined loss of $379 million in the first quarter, with over 45 percent of Chinese steel companies suffering losses, 15 percent higher than the first quarter of 2013.

In the face of hampered macroeconomic conditions due to oversupply and extreme price volatility, China Gerui is leveraging its high-end niche, cold-rolled specialty processing capabilities to look ahead to new product introductions and new markets to weather through this cycle and create a path for progressive improvement in operational performance for the duration of 2014.

China Gerui's laminated production line began commercial production in the second quarter of 2014 as planned, enabling the Company to provide its customers within the food and beverage packaging and home decoration industries with innovative, environmentally friendly material solutions through the more comprehensive portfolio of high-value, specialty steel niche products. As the new laminated products roll out, the Company believes it will regain limited pricing power to avoid selling at a loss to retain market share as it had in Q4 2013. The Company expects to compete in the higher growth steel market, provide better solutions for customers, and further obtain larger market share.

While the credit situation continues to tighten and local Chinese banks stop granting new facilities or reduce existing loan facilities to small and medium enterprises in industries with excess capacity such as steel, cement, flat glass, aluminum and shipbuilding, China Gerui is tightening its internal fiscal policy to undertake cash investments and corporate actions that will only generate near-term positive returns on investment.

"We are focused on our near-term growth opportunities with new products and new markets and believe this near-term strategy will enable us to regain profitability as a leading premium steel processor," said Mr. Mingwang Lu, Chairman and Chief Executive Officer of the Company commented. "We remain cautiously optimistic about opportunities to continue to grow the business in 2014 and are committed to take any appropriate actions to further bolster near-term shareholder value."

Fourth Quarter 2013 Financial Results

• Revenue for the fourth quarter was  $46,211,805 vs. last years quarter of $63,889,524
• (Net loss)/Earnings per share basic and diluted was $(0.15) vs. last years $(0.01)

Fourth Quarter 2013 Financial Results

• Revenue decreased 27.7% to $46.2 million in the fourth quarter of 2013 from $63.9 million in the fourth quarter of 2012.
• (Net loss)/Earnings per share $(0.10) vs last years comparison quarter of $(0.01).

"We are pleased that we met our revenue guidance for the fiscal year 2013 although the fourth quarter's results reflected the ongoing challenging macroeconomic conditions that began more than two years ago," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui. "We continue to monitor the market conditions affecting the steel industry's performance to maintain our cold-rolled steel operations and further deploy our specialized steel lines to optimize our return on investment and improve our market position. We expect market conditions to improve over 2014 and beyond as the central government's policies and objectives are driving a restructuring of the steel industry. China Gerui is well positioned to benefit from these changes with its position as a leader in high-precision cold-rolled steel and innovative new steel products to capture customers and market share as the restructuring unfolds."

The Company achieved another year of positive cash flow with $7.0 million in EBITDA with reasonably stable volumes given this highly challenging environment. For 2013, net cash from operations generated $37.5 million. The depressed steel processing market in China over the last two years forced many companies to compete on price, and to incur heavy losses or go out of business. The China Iron and Steel Association ("Association") reported that for the year 2013, its members reported an average gross margin of only 2.9%, and 16 member companies were unprofitable versus 26 companies that reported a loss in 2012.

The Company esimates that the sequential utilization of its wide- and narrow-strip cold-rolled steel capacity was 67% in the fourth quarter of 2013 compared with approximately 44% during the third quarter of 2013. The Company's utilization of its chromium-plating production lines was approximately 49% in the 2013 fourth quarter compared to 38% during the third quarter of 2013. The Company plans to further deploy its more specialized steel lines in 2014 to capture market share as market conditions improve.

"We are continuing with our strategy of providing a greater range of cold-rolled steel and specialized steel products to provide current customers with more solutions, attract new customers and compete with higher-priced imports. As evidenced by our fourth quarter financial performance, we are not immune to the macroeconomic price fluctuations but believe we have realistic strategies to continue to capture opportunistic market share and source additional future growth," commented Chairman Mingwang Lu.

"We are well positioned to benefit as a premier high-end specialty steel producer from the Government's restructuring plans for the steel industry and have put in place strategies to capture growth. First, we are committed to accelerating China Gerui's business into new higher margin steel sectors including laminated processed steel, which completed trials in 2013 and will commence commercial production during the second quarter of 2014. As we build our comprehensive portfolio of steel products and demonstrate new product applications, we believe we are becoming a more powerful competitor especially compared with the many similar or smaller steel producers who are losing market share and lack the ability to regain their momentum. Second, we continue to foster our export business and have seen interest from new markets such as Taiwan during the fourth quarter of 2013 that will expand our end-user applications and geographic reach. We expect our export business to eventually account for 35-45% of global revenues over the next five years. Lastly, we continue to actively evaluate opportunities of viable mergers and acquisitions or strategic partnerships that will enable positive contribution to cash flow, broaden end-user applications, provide R&D innovation and complement our product portfolio. As we enter into 2014, we will build upon these strategies and continue to make progress and add value to China Gerui's growth and profitability profile in order to better deliver value to our shareholders," concluded Mr. Minwang Lu, Chairman and CEO of China Gerui.

2014 Financial Guidance

Given current market conditions, volatility of raw material costs and the slower than anticipated price recovery for premium processed steel, the Company is providing its full year 2014 revenue guidance in the range of $175 million to $180 million. However, the Company may adjust such guidance as macroeconomic conditions, operations and the competitive landscape change.

ZHENGZHOU, China, March 15, 2014 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high-precision, cold-rolled strip steel producer in China, today announced preliminary financial results for the year ended December 31, 2013. Based on the Company's current expectations for the full year 2013, revenue is anticipated to be $165.8 million.

Mr. Mingwang Lu, Chairman and Chief Executive Officer of the Company commented, "China Gerui is pleased to announce that preliminary full year 2013 revenues are in-line with the company's previously announced guidance range despite a challenging year for China's steel sector. However, profitability in the fourth quarter was lower than anticipated, as it was largely impacted by delays in pick-up from customers and the inability to mitigate deflating average selling prices. Steel volumes improved during the fourth quarter due to a strategic release of capacity as the Company witnessed steady demand from its customers. We believe our segment of the steel industry continues to restructure and we are committed to accelerating China Gerui's business into new higher-margin steel sectors through additional product offerings, including laminated processed steel, which completed trials in 2013. This enhanced capability is consistent with our strategy to improve our competitive profile in order to reach a wider range of customers with an expanded portfolio of products and materials. With the central government actively reducing overcapacity and smaller players exiting the market, we believe we are taking the right strategic steps in this environment to facilitate long-term growth."

ZHENGZHOU, China, January 27, 2014 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high precision, cold-rolled steel producer in China, today commented on the Chinese Government's recent accelerated initiatives to restructure its steel industry.

"The planned restructuring of the steel industry places China Gerui in a beneficial position by regaining a much needed supply-demand equilibrium in the sector which would stabilize pricing over the long-run," said Mr. Mingwang Lu, Chairman and CEO of China Gerui. "We believe that as a high-end niche cold-rolled specialty steel producer, we will have the opportunity to enter new markets with improved raw material availability and cost structure which will ultimately result in improved gross margins over time."

China's 12th Five-Year Plan is emphasizing merger and acquisition activity in the steel industry to create larger, more efficient steel companies with a greater emphasis on high-end steel products. China's steel industry is the world's largest, but its estimated oversupply of approximately 100 to 200 million tons and fragmented structure has resulted in its inability to win pricing concessions from large international iron ore producers. Following the third Plenary Session of the 18th CPC Central Committee held in November 2013, China has accelerated its initiatives in restructuring the steel industry with the objective to reduce overall steel production capacity by 80 million tons before 2018. The government's determination has been evidenced by the recently announced capacity reduction in Hebei Province whose total output accounts for approximately twenty-five percent of the national output.

The Government's new policy is to merge smaller producers or to shut them down completely, which will also have the effect of strengthening the bargaining position of Chinese steel companies with the industry's large international iron ore raw material suppliers. It can be expected that as the steel supply-demand ratio moves into equilibrium, steel prices will recover from historical lows and combined with lower negotiated material costs, higher profitability and margins should result for remaining Chinese steel producers.

Further, according to China's Ministry of Information and Information Technology, approximately 400 million tons of steel producing capacity in China out of a total production capacity of 970 million never received full approval from the national Development and Reform Commission or fulfilled other legal requirements such as permission to access loans among other necessary requirements. It is likely that while some of this illegal capacity will be allowed to become legal, other operations will be terminated.

The planned consolidation of the steel industry is focused on the upper stream of the value chain, which will beneficially impact raw material suppliers to companies like China Gerui. The resulting higher raw material costs should eliminate low efficiency, poorly capitalized cold-rolled steel producers which would provide an opportunity for China Gerui to capture additional market share. With its high-technology, high-end cold- rolled steel products, the Company looks to be a beneficiary of the planned changes and is well-positioned to penetrate new markets to generate substantial future growth.

Mr. Mingwang Lu, Chairman and CEO of China Gerui, commented, "We are in the enviable position of being a premier high-end specialty steel producer where our business objectives are completely aligned with the Government's restructuring plans. Once the Chinese steel industry begins to regain its supply-demand balance, our broad portfolio of high-value, specialty steel niche products will enable us to focus on high-growth steel markets, increase the utilization of our capacity and generate greater profitability. We are confident that a rational operating environment will allow us to more fully realize our revenue growth and earnings capabilities enabled by the successful execution of our strategic growth plan."

Third Quarter 2013 Financial Results

• Revenue decreased 44.9% to $30.9 million in the third quarter of 2013 from $56.1 million in the third quarter of 2012.
• Net loss was $4.4 million in the third quarter of 2013, or nil per fully diluted share, compared to a net profit of $2.4 million, or $0.04per share in the third quarter of 2012.

"Although the third quarter's results were below expectations due to the continued challenging macroeconomic conditions impacting China's steel sector, we are confident that our previously issued guidance for the full fiscal year ended 2013 will be met," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui. "We continue to be highly attentive to market conditions and we are being especially disciplined and strategic in terms of how we deploy our specialized steel lines so as to balance our well-earned market share with overcapacity in the sector resulting from intense competition. We continue to be well-positioned to bring to market a portfolio of new steel products in a strategic manner that we believe will optimize our return on investment."

"Our revenue guidance for the full fiscal year 2013 was $165 million to $170 million and we expect our financial results for the year to fall within these parameters. Despite our third quarter results which reflected lower margins than that recorded historically, stemming from overcapacity that negatively impacted pricing in the sector, and which substantially lowered our average selling price, we believe that steel pricing could be at an inflection point due to likely changing fundamentals in our sector. In addition, based on the Company's preliminary operating results for the fourth quarter 2013, we believe that market demand for our products is gradually ramping, although it may still be some time before we see substantial margin improvement."

"We achieved another quarter of positive cash flow with $0.7 million in EBITDA with reasonably stable volume given this highly challenging environment. Revenue from the sale of approximately 8,000 tons of cold-rolled steel was not recognized in the third quarter as two customers delayed their third quarter pickup which will now fall into the fourth quarter. The China Iron and Steel Association ("Association") reported that for the first nine months of 2013, its members reported an average gross margin of only 0.41%while for the month of September, 34% of members of the Association reported net losses due to decreasing steel prices."

"The Company estimates that the utilization of its wide- and narrow-strip cold-rolled steel capacity was 44% in the third quarter of 2013 compared with approximately 47% during the second quarter of 2013. The Company's utilization of its chromium-plating production lines was approximately 38% in the 2013 third quarter compared to 43% during the second quarter of 2013. Based on the preliminary production schedule for the fourth quarter of 2013, the Company will see overall capacity utilization at approximately 65% on a blended basis, more similar to how the Company performed in the first quarter of 2013. The Company plans to deploy its more specialized steel lines as market conditions dictate."

"Our investment thesis continues to be strong as we offer a greater range of cold-rolled steel products to the market that can compete with higher-priced imports, and we can now provide steel solutions to new customers we could not service before. Our more comprehensive steel product line differentiates us from many smaller steel producers who do not have the technology, financial resources, or customer relationships to effectively compete with us," concluded Chairman Mingwang Lu.

2013 Financial Guidance Update

The Company is pleased to reiterate its full year 2013 revenue guidance in the range of $165 million to $170 million given the currently challenging market conditions. These conditions are characterized primarily by the volatility of raw material costs, overcapacity in the steel sector and slower than anticipated price recovery for premium processed steel. However, the Company may adjust such guidance as changing macroeconomic conditions and operational and competitive challenges dictate.

Second Quarter 2013 Financial Results

• Revenue decreased 43.9% to $43.1 million in the second quarter of 2013 from $76.8 million in the second quarter of 2012.
• Gross profit decreased 82.2% to $3.5 million in the second quarter of 2013 from $19.8 million in the same quarter of 2012. Gross margin was 8.2% in the second quarter of 2013 compared to 25.8% in the second quarter of 2012.
• Net loss was $0.64 million in the second quarter of 2013, or nil per fully diluted share, compared to a net profit of $10.3 million, or$ 0.18 per share in the second quarter of 2012.

Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui, commented, "Second quarter results reflected the continuing weakness in demand for steel in China and the pricing pressure resulting from the over-capacity of steel production inChina. Our average selling price declined by 15.7% year-over-year in the 2013 second quarter, which exceeded the reduction in our raw material prices. The highly competitive pricing environment prevented us from increasing prices, which resulted in a lower 8.2% gross margin due to lower selling prices in the second quarter of 2013 compared with the same quarter in 2012. We continue to market our steel products on their premium performance qualities, but price sensitivity has become a factor with our customers.

"However, we believe we are maintaining our market share as all production lines are in operation and we are outperforming most of our competitors. The China Iron and Steel Association ("Association") reported that for the first 6 months of 2013, its members reported a revenue increase of 0.94% with an average gross margin of 0.13%. For the month of June, members of the Association reported their first monthly net loss totaling RMB699 million due to decreasing steel prices. In contrast, we achieved another quarter of positive EBITDA with more stable volumes in this challenging environment. This temporary period of oversupply has forced us to postpone using our full production capacity, and to more aggressively introduce new products, to protect our pricing structure for the future.

"We remain optimistic for our chromium-plated steel and new laminating steel lines as we are building their presence in the steel markets. New products carry higher margins that will improve our average gross margin as sales grow in the future. The Company believes the utilization of its wide- and narrow-strip cold-rolled steel capacity was 46%-48% in the second quarter of 2013 compared with approximately 68%-72% during the first quarter of 2013. The Company's utilization of its chromium-plating production lines was approximately 43% in the second quarter of 2013 compared to 62% during the first quarter of 2013.

"With these new products, we offer a greater range of cold-rolled steel products to our current customers that can compete with higher-priced imports, and we can now provide steel solutions to new customers we could not service before. Our more comprehensive steel product line differentiates us from many smaller steel producers who do not have the technology, financial resources, or customer relationships to effectively compete with us.

"Our steel volume has been stable at approximately 62,000 tons per quarter over the first half of 2013. We have avoided increasing production to prevent more aggressive pricing being necessary. We expect recent pricing concessions are reversible when the market improves. Our specialty steel products continue to receive more interest and we remain optimistic that exports will become a more meaningful growth channel. We are seeking accretive acquisitions and partnerships to become a larger, more powerful global metals processor in the future, and to generate substantial positive cash flow which will translate into greater shareholder value for our investors," Mr. Lu concluded.

2013 Financial Guidance

Given current market conditions, volatility of raw material costs and the slower than anticipated price recovery for premium processed steel, the Company revised its full year 2013 revenue guidance to the range of $165 million to $170 million. The Company may adjust such guidance as changing macroeconomic conditions and operational and competitive challenges dictate.

First Quarter 2013 Financial Results

• Revenue decreased 33.6% to $45.6 million in the first quarter of 2013 from $68.7 million in the first quarter of 2012. 
• Gross profit decreased 75.8% to $5.2 million in the first quarter of 2013 from $21.5 million in the same quarter of 2012.  Gross margin was 11.4% in the first quarter of 2013 compared to 31.3% in the first quarter of 2012, but was higher than the 10.7% of the fourth quarter of 2012. 
• Net loss was $0.10 million in the first quarter of 2013, or nil per fully diluted share, including the impact of a one-time, stock-based compensation expense of $32,891, compared to a net profit of $14.0 million, or $0.24 per share in the first quarter of 2012.
• Non-GAAP adjusted EBITDA was $5.1 million in the first quarter of 2013, or 11.1% of revenue, compared to $22.0 million, or 32.0% of revenue, in the first quarter of 2012. Non-GAAP adjusted EBITDA is defined as earnings before net interest expense, taxes, depreciation, amortization, and a one-time, stock-based compensation expense incurred in the first quarter of fiscal year 2013.*

Mr. Mingwang Lu, Chairman and Chief Executive Officer, commented, "First quarter revenues reflected the weakness in demand for steel and the lowest number of operating days in the year due to both the calendar New Year and Chinese New Year holidays. Our first quarter results are indicative of the ongoing weak domestic demand for steel, the over-capacity of China steel production and intense pricing pressures. Raw materials costs in the 2013 first quarter remained above the level in last year's same quarter and we were unable to pass the higher cost on to our customers due to the competitive environment. While customers remain price sensitive, we continued with our current marketing model to avoid selling our steel based primarily on price, but rather we sold our products based on our reputation for high-quality, precision cold-rolled steel and our close customer relationships. During the first quarter we achieved two important production highlights to expand our product portfolio as both our wide-strip production lines are now operating at commercial production rates and the newly launched laminated steel line started trial production, so we can offer a wider range of cold-rolled steel to our customers that many smaller competitors cannot duplicate. With these new capabilities, we are now better positioned to serve our current customers by providing them with domestically manufactured products to potentially replace imports of similar products. Our new products also carry higher gross margins to enhance our operating profitability when sales ramp up. We believe with the new installment of central government leadership, the Chinese economy may begin to grow faster in the second half of 2013 and we are well positioned in our industry segment to gain from any strengthening of domestic demand for high-quality, cold rolled steel.

"We are optimistic that global markets represent strong growth opportunities for our growing line of specialized steel products. During the first quarter of 2013, we began making regular shipments of chromium-plated steel to three international customers for our high-end and narrow-strip steel. Based on current order levels, these three international customers represent an estimated demand for approximately 3,000 tons annually of this higher-margin product. Three additional potential customers, including one in the U.S., began trials to test our steel products during the first quarter as well. To help us quickly take advantage of these global opportunities, we retained Cambelle-Inland, an investment firm led by Craig T. Bouchard, to help strategically plan our expansion into the global markets. Mr. Bouchard has a track record of success in building companies in steel and related industries. We look forward to becoming a larger company and a global supplier through both organic growth and accretive acquisitions to build greater value for shareholders," Mr. Lu concluded.

2013 Financial Guidance

Given current market conditions and the volatility of raw material costs, the Company is reiterating full year 2013 revenue guidance in the range of $280 million to $290 million. The Company may adjust such guidance as changing macroeconomic conditions and operational and competitive challenges dictate.

ZHENGZHOU, China, May 13, 2013 /PRNewswire/ -- China Gerui Advanced Materials Group Limited (CHOP) ("China Gerui, or the "Company"), a leading high-precision, cold-rolled steel producer in China, announced today it has retained Cambelle-Inland, an investment firm led by Craig T. Bouchard, to advise the Company on strategic planning and its expansion into global markets.

Craig T. Bouchard has a track record of success in building companies in steel and related industries.  Until February 2013, Mr. Bouchard was the CEO, and later the Chairman of Shale-Inland, a company he founded in 2010 and a leading U.S. specialty master distributor of pipes, valves and fittings to the energy industry. From July 2003 to August 2008, Mr. Bouchard was the president of Esmark Inc., a company he co-founded that grew from $4 million to $3.5 billion in revenue over four years. While at Esmark, Mr. Bouchard's team acquired nine steel companies and completed the first and only hostile reverse tender merger in Wall Street history, which eventually became public on the NASDAQ.  Esmark was one of the highest appreciating stocks on either the NASDAQ or the NYSE for the full year 2008.

"We plan to globalize our business through accretive acquisitions while continuing to focus on organic growth opportunities that will deliver additional value to our shareholders," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui. "During the next few years, we will create a blend of revenues across a broader customer base, both domestically in China and internationally. We have long communicated to the marketplace that acquisitions and potential joint ventures that will capture market share in materials processing and broaden our end-user applications were a part of our long-term growth strategy and we feel now is the appropriate time to expand our footprint internationally and welcome the support of Cambelle-Inland and the expertise of Mr. Bouchard in this next phase of our growth."

"We are excited about participating in the globalization of China Gerui," added Craig T. Bouchard, CEO and Chairman of Cambelle-Inland.  "We have been following and investing in the company for the past two years, and are strong supporters of its entrepreneurial leader, Mingwang Lu.  The Company's operating margins in recent years have been among the best in the industry, and even in today's turbulent China marketplace, China Gerui's business remains profitable and strong.  We look forward to working with Mr. Lu and his team to lead China Gerui into its next stage of development."

NEW YORK, May 13, 2013 /PRNewswire/ -- China Gerui Advanced Materials (Nasdaq: CHOP), a leading high precision, cold-rolled steel producer in China, today engaged Cambelle-Inland, the China investment vehicle of Craig T. Bouchard to advise it on strategic planning and expansion in North America and around the world.

"We plan to globalize our business through accretive acquisitions while continuing to focus on organic growth opportunities," said Mr.Mingwang Lu , Chairman and Chief Executive Officer of China Gerui Advanced Materials Group.  "During the next few years, we will create a blend of Chinese, American and European revenues, and a large and loyal international customer base. We feel now is the appropriate time to expand our footprint internationally and welcome the support of Cambelle-Inland and Mr. Bouchard in this next phase of our growth."

"We are excited about participating in the globalization of China Gerui and using it as our platform in China," added Craig T. Bouchard, Chairman of Cambelle-Inland.  "We have been following and investing in the company for the past two years, and are strong supporters of its entrepreneurial leader Mingwang Lu .  The company's operating margins in recent years have been among the best in the industry, and, even in today's turbulent China marketplace, China Gerui's business remains profitable and strong.  We look forward to working with Mr. Lu and his team to lead China Gerui into its next stage of development.

ZHENGZHOU, China, April 22, 2013 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high precision, cold-rolled steel producer in China, today announced that it has made steady progress in marketing internationally with three customers placing regular commercial orders for its high-end and narrow-strip steel. Since the international marketing initiatives began in June 2012, the Company has captured three new customers, with two customers in India and one customer located in Turkey.  Additionally, three potential customers are currently engaged in trials with China Gerui's specialized steel products in three other countries.

Two of the three initial customers began testing China Gerui's products before committing to becoming ongoing, regular customers. The current three customers are purchasing both wide- and narrow-strip high-precision, chromium-plated, cold-rolled strip steel. The initial application is for insulating wire and cable manufactured for the telecommunications industry with an average thickness of 0.15 mm and with widths ranging from 610 mm to 810 mm. Based on current order levels, it is estimated that the annual order requirements will total approximately 3,000 tons of this higher-margin product.

India and Turkey are both viewed as growth markets for steel. The World Steel Association indicated steel demand is expected to increase in India by 5.9% to 75.8 million tons in 2013 following 2.5% growth in 2012. Further, the Turkish Iron & Steel Producers Association (DCUD) stated steel consumption in Turkey is expected to rise 5.3% to 30 million tons in 2013 compared with 2012. The management of China Gerui believes its specialized, high-quality steel will meet limited competition and achieve a foothold in both markets.  

"With a focus on balancing our business mix from the current heavy concentration in the Chinese market, and to build our presence in higher-growth markets, our strategic shift to enhance our exports is expected to broaden our customer base, strengthen our capacity utilization, and increase our return on investment to build value for our shareholders. We anticipate that exports will be the fastest growth driver of sales over the next few years with a long-term goal of exports potentially matching domestic sales levels over time," commented Mr. Mingwang Lu , Chairman and Chief Executive Officer of China Gerui. "Exports represent another opportunity to leverage our products' value-to-price ratio both in emerging and well-developed markets as we increase our customers' profitability and competitiveness.  Emerging markets are ideal targets for China Gerui as they possess limited domestic production of high-precision, cold rolled products requiring imported products, and our high-quality, diversified product line offers more comprehensive solutions. On the other hand, well-developed markets present the opportunity to quickly take advantage of our lower cost and pricing structure to generate relatively larger orders and improve our customers' success."

Two potential customers, one in Thailand and one in Armenia, have placed orders to test the Company's high precision, chromium-plated, cold-rolled strip steel for application in the local telecommunications industry. Another U.S.-based potential customer is intensively testing the Company's products for application in the large food and beverage packaging industry, another higher-margin segment for China Gerui that could facilitate higher volume demand.

Sales terms to new export customers are consistent with the current domestic model whereby an initial cash deposit is pre-paid when an order is signed and the outstanding receivable is backed with a letter of credit upon product delivery.

Mr. Lu continued, "In addition, we have been adding new products such as laminated steel and chromium-plated steel, to our product portfolio to provide broader solutions to meet more of our customers' requirements and improve our competitiveness in both the domestic and foreign markets. We are also adding personnel and support resources to build our export marketing programs into a powerful brand building and sales tool.  We believe these initiatives will enable China Gerui to evolve into a world-class, international metals processor committed to building shareholder value."

ZHENGZHOU, China, April 22, 2013 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high precision, cold-rolled steel producer inChina, today announced that it has made steady progress in marketing internationally with three customers placing regular commercial orders for its high-end and narrow-strip steel. Since the international marketing initiatives began in June 2012, the Company has captured three new customers, with two customers in Indiaand one customer located in Turkey. Additionally, three potential customers are currently engaged in trials with China Gerui's specialized steel products in three other countries.

Two of the three initial customers began testing China Gerui's products before committing to becoming ongoing, regular customers. The current three customers are purchasing both wide- and narrow-strip high-precision, chromium-plated, cold-rolled strip steel. The initial application is for insulating wire and cable manufactured for the telecommunications industry with an average thickness of 0.15 mm and with widths ranging from 610 mm to 810 mm. Based on current order levels, it is estimated that the annual order requirements will total approximately 3,000 tons of this higher-margin product.

India and Turkey are both viewed as growth markets for steel. The World Steel Association indicated steel demand is expected to increase in India by 5.9% to 75.8 million tons in 2013 following 2.5% growth in 2012. Further, the Turkish Iron & Steel Producers Association (DCUD) stated steel consumption in Turkey is expected to rise 5.3% to 30 million tons in 2013 compared with 2012. The management of China Gerui believes its specialized, high-quality steel will meet limited competition and achieve a foothold in both markets.

"With a focus on balancing our business mix from the current heavy concentration in the Chinese market, and to build our presence in higher-growth markets, our strategic shift to enhance our exports is expected to broaden our customer base, strengthen our capacity utilization, and increase our return on investment to build value for our shareholders. We anticipate that exports will be the fastest growth driver of sales over the next few years with a long-term goal of exports potentially matching domestic sales levels over time," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui. "Exports represent another opportunity to leverage our products' value-to-price ratio both in emerging and well-developed markets as we increase our customers' profitability and competitiveness. Emerging markets are ideal targets for China Gerui as they possess limited domestic production of high-precision, cold rolled products requiring imported products, and our high-quality, diversified product line offers more comprehensive solutions. On the other hand, well-developed markets present the opportunity to quickly take advantage of our lower cost and pricing structure to generate relatively larger orders and improve our customers' success."

Two potential customers, one in Thailand and one in Armenia, have placed orders to test the Company's high precision, chromium-plated, cold-rolled strip steel for application in the local telecommunications industry. Another U.S.-based potential customer is intensively testing the Company's products for application in the large food and beverage packaging industry, another higher-margin segment for China Gerui that could facilitate higher volume demand.

Sales terms to new export customers are consistent with the current domestic model whereby an initial cash deposit is pre-paid when an order is signed and the outstanding receivable is backed with a letter of credit upon product delivery.

Mr. Lu continued, "In addition, we have been adding new products such as laminated steel and chromium-plated steel, to our product portfolio to provide broader solutions to meet more of our customers' requirements and improve our competitiveness in both the domestic and foreign markets. We are also adding personnel and support resources to build our export marketing programs into a powerful brand building and sales tool. We believe these initiatives will enable China Gerui to evolve into a world-class, international metals processor committed to building shareholder value."

Second Quarter 2012 Results

• Revenue decreased 10.8% to $76.8 million in the second quarter of 2012 from $86.1 million in the second quarter of 2011. The decrease in revenue was primarily due to an, 18.2% decrease in the Company's average selling price of $821 per ton for the second quarter of 2012 as compared to an average selling price of $1,004 for the same period of 2011 partially offset by a 9.2% increase in sales volume to approximately 93,500 tons for the second quarter of 2012 as compared to approximately 85,600 tons for the same period of 2011.
• Gross profit decreased 16.0% to $19.8 million in the second quarter of 2012 from $23.6 million in the same period of 2011. Gross margin was 25.8% in the second quarter of 2012 compared to 27.4% in the same period of 2011. The decrease in gross margin was due to market driven price declines and an associated profit margin contraction as China's economic growth continued to slow in 2012, as well as the testing associated with the continued ramp-up and improved precision production of the added 100,000-ton wide-strip production line.
• Operating income decreased 19.5% to $16.8 million in the second quarter of 2012, or 21.9% of revenue, from operating income of $20.8 million, or 24.2% of revenue, in the same period of 2011. The decrease in operating income in the second quarter 2012 as compared to operating income in the comparable year-ago period is primarily due to the corresponding decrease in gross profit and relatively higher operating expenses as a percent of revenue in the second quarter of 2012 compared to the same period of 2011.

Net income was $10.3 million in the second quarter of 2012, or $0.18 per fully diluted share, compared to $14.0 million, or $0.24 per fully diluted share in the same period of 2011.

2012 Guidance Revision

As previously announced, for the year of 2012 China Gerui has decreased its revenue guidance to be in the $290 million to $305 million range, below its previously announced revenue guidance range of $395 million to $410 million. The Company has also lowered its earnings per share guidance range for 2012 to $0.75 to $0.85 per share, below its previously announced guidance range of $1.32 to $1.37 per share.

ZHENGZHOU, China, August 13, 2012 /PRNewswire-Asia-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high precision, cold-rolled strip steel producer in China, today announced that it will be revising its fiscal 2012 revenue and earnings per share guidance and providing a strategic update as to its recent export activities.

2012 Guidance Revision

For the fiscal year 2012, China Gerui has lowered its revenue guidance to be in the $290 million to $305 million range, below its previously announced revenue guidance range of $395 million to $410 million. The Company has also lowered its earnings per share guidance for 2012 to be in the $0.75 to $0.85 range, below its previously announced earnings per share guidance range of $1.32 to $1.37.

Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui, commented, "Our lowered guidance reflects the industry wide reduction in steel prices which has led to a decrease in the Company's average selling price primarily due to slowing macroeconomic conditions in China. Although the Company's sales volume, a key indicator of demand, has been sustainable so far in 2012, our cost-plus pricing methodology was unable to offset raw material cost declines which has caused our average selling price to decline significantly."

"Despite the currently challenging market environment, we are confident that our value-added capabilities in the high-end specialized steel segment will enable us to succeed in our segment in the long-term as we leverage our new production capabilities to develop new market opportunities over time," Mr. Lu continued.

2012 Strategic Update

As noted in the Company's first quarter earnings release, the Company experienced a contraction in its average selling price relative to previous quarters attributable to the slowing growth of the Chinese economy. Among several strategies that the Company intends to deploy to address the current market environment is to diversify its customer base and revenue on a global basis and pursue opportunities to penetrate the high-end cold-rolled steel sector worldwide. As a step in this direction, the Company recently announced that it began to export its high end specialized steel products to customers located in Turkey and India in the second quarter.

In today's further announcement, China Gerui recently received a purchase order from a leading U.S. packaging company for its high precision cold-rolled steel strip products. The order stipulates that the finished wide-strip steel will have a width up to 915 mm and thickness of approximately 0.155 mm which is intended to be used as cable wrap after further value-added processing by the U.S. customer. We note that the purchase order is for testing and trial purposes by the customer, which is a fairly standard buying procedure, and the Company believes that the purchase order, while not immediately having a material impact on operating results, will lead to regular and continuous orders going forward.

"The leading industry position of this U.S. company is testimony to China Gerui's growing reputation in terms of both our product quality and enhanced specialization capabilities," Mr. Lu stated. "Our adoption by a wider customer base fits our strategy of being a global specialized steel producer with the objective to reach new markets and fully optimize our new capacity and technologies."

ZHENGZHOU, China, June 26, 2012 /PRNewswire-Asia-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high-precision, cold-rolled strip steel producer in China, today announced the Company has begun to export its high-end wide- and narrow-strip steel to customers located in Turkey and India.

"We are pleased to initiate exports to Turkey and India, as they represent emerging growth countries with high potential growth in one of our primary end-user applications, the telecommunications sector," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "The commencement of exporting activities serves as testimony to the quality and brand awareness of our products and serves as an important outlet for our recently-added enhanced production capabilities."

Products exported to date include both wide- and narrow-strip high precision chromium-plated cold-rolled strip steel, to be used as insulation steel tape for wire and cable manufacturing.  The products' average thickness is 0.15 mm with a width ranging from 610 mm to 810 mm.  Virtually all of the Company's revenue had previously been derived from customers located in China.  China Gerui's exporting activities, which began in the second quarter of this year, are intended to diversify its revenue base with the objective of helping the Company gain worldwide exposure to its custom quality products and capabilities.

The terms of sale to the new export customers are generally similar to those of the Company's domestic Chinese customers.  Such terms include the requirement that an initial deposit is pre-paid by a customer when the customer contract is signed and the remainder of the customer's payment is received in cash upon delivery.

China Gerui believes that its strategic focus on high-end specialized steel products and increased production capacity has enabled it to extend its reach beyond the domestic market and sees its commencement of exporting activities as an effective means to continue to provide attractive returns on invested capital. The Company plans to pursue additional strategies to optimize the utilization of its value-added in-house production technology and penetrate the high-end cold-rolled steel sector worldwide.

ZHENGZHOU, China, June 18, 2012 /PRNewswire-Asia-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high precision, cold-rolled steel producer in China, today provided an update of its share repurchase program.

As of the market close on Friday, June 15, 2012, the Company has repurchased 1,423,101 of its ordinary shares at an average price of $3.58 per share for a total repurchase price of $5,090,919.

"The continued execution of our share repurchase program reflects confidence in our Company and our view that the Company's public equity is undervalued at current equity market levels," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "We anticipate sound long-term growth prospects for our business and view share repurchases as an important element in our ongoing commitment to maximize the long-term value of our company for our shareholders."

In April 2011, the Company announced that its Board of Directors had approved a six-month share repurchase program to repurchase up to an aggregate of $10 million of its ordinary shares. The Company's Board of Directors subsequently extended the program from six months to an indefinite period or until the program is completed. The volume and timing of repurchases depend upon market conditions, share price and other factors. They are also subject to, and are intended to be in compliance with, the conditions of Rule 10b-18 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, blackout periods that restrict repurchases at certain times in compliance with Section 10(b) and Rule 10b-5 of the Exchange Act, and other relevant rules and regulations under the U.S. securities laws.

First Quarter 2012 Results

• Revenue increased 9.6% to $68.7 million in the first quarter of 2012 from $62.7 million in the first quarter of 2011.
• Adjusted net income in the first quarter of 2012 was $0.24 compared to $0.20 in first quarter 2011

"We achieved sound financial performance in the first quarter and an increase in gross profit and gross margin from the same period of 2011," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "Our first quarter saw further utilization of our 250,000 tons of chromium-plating capacity, and a steady ramp-up of production from our recently added highly specialized cold-rolled steel capacity."

"Consistent with our strategy in 2011, we continue to monitor closely the macroeconomic conditions in China and strive to optimize our product mix which is tailored to the evolving demand change of our end markets, including food and industrial packaging, construction and household decoration materials, electrical and home appliances, and telecommunications wire and cable," Mr. Lu continued. "While the market environment has been challenging, we believe that our competitive advantages as a premium producer and ability to customize production to meet our customers' needs will enable us to generate continued solid results and an advantageous return on investment from our new capacity."

Mr. Lu concluded, "The strength of our balance sheet and fluid nature of our business model has enabled us to better adapt to market conditions than most of our competitors, even as we add new capacity and capabilities to our product and service platform. We anticipate that we will continue to effectively compete in the high-end spectrum of the specialized steel segment despite current macroeconomic challenges."

For fiscal year 2012, China Gerui continues to expect revenue of between $395 million and $410 million and diluted earnings per share of between $1.32 and $1.37. The Company will continue to provide updates of its 2012 outlook in view of the uncertainties associated with macroeconomic conditions in China and other risk factors.

ZHENGZHOU, China, May 9, 2012 /PRNewswire-Asia-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high precision, cold-rolled strip steel producer in China, today provided supplemental information regarding the Company's cash balances as of its 2011 fiscal year end.

In response to a request from The NASDAQ Stock Market ("NASDAQ"), the Company had its cash balances independently verified as of December 31, 2011 by its independent registered public accounting firm (the "Audit Firm") and reported its findings directly to NASDAQ. From February 8, 2012 to February 21, 2012, the Audit Firm independently verified, in connection with its 2011 fiscal year audit, the Company's cash balances held in financial institutions in China where the Company maintains its bank accounts (the "Accounts"). "Independently verified" means that the Audit Firm visited each of the financial institutions and physically observed bank employees printing or otherwise preparing or completing documentation which substantiated the cash balances of the Accounts. It does not mean that the Audit Firm relied solely on documentation completed and returned by bank personnel by mail or facsimile.

Based on the Audit Firm's independent verification, the verified cash balances of the Accounts in aggregate represent substantially all the cash and restricted cash amounts as stated in the Company's financial statements for the fiscal year ended December 31, 2011 as reported in the Company's annual report on Form 20-F filed with the SEC on May 7, 2012. The Audit Firm also confirmed that 96.8% of the Company's cash balances were held by Chinese banks, where 100% of such confirmation was independently verified, and 3.2% of the cash balances were held outside of China.

The Company was informed that NASDAQ has reviewed the cash balance submitted and has no further comments.

"The recent independent verification of our cash balances demonstrates added transparency into our Company and one that can instill confidence in the investment community," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "Investors may have assurance in our solid balance sheet as it enables us to capitalize upon the substantial growth opportunities in our sector and generate strong returns on capital."

Fourth Quarter Results

• Revenue increased 39.0% to $91.9 million 
• Gross profit increased 42.5% to $28.0 million 
• Gross margin was 30.4%
• Operating income increased 42.1% to $24.0 million 
• Net income was $18.2 million, or $0.31 per diluted

"We are very pleased to report a record year in terms of revenues and profits as our expanded cold-rolled steel production capacity drove record levels of sales volume in 2011. Our specialized steel precision product offerings were further enhanced with the year's increase in chromium plating capability to 250,000 tons per year which is applicable to both our wide- and narrow-strip steel products," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "The construction and equipment installation of 100,000 tons of annual cold-rolled steel capacity has been completed as of the first quarter of 2012 and is undergoing testing and fine-tuning of its production processes. This added capacity now aggregates to a total of 500,000 metric tons of both wide- and narrow-strip cold-rolled steel production per year."

"We believe that the new capacity will enable us to better service our existing customers as well as to secure new business as we are better positioned than ever to offer one-stop shopping in the specialized high-end cold-rolled steel sector. Our objective in 2012 is to continue building upon our strong capabilities so as to further penetrate our specialized steel sector and build market share. Our in-house production processes have contributed to China Gerui's excellent reputation as a high-quality steel producer in China as we continue to experience strong demand for our end-use products across a variety of industries," Mr. Lu continued. "Although our fourth quarter results were lower than we expected primarily due to macroeconomic issues, following the ramp-up of our new production lines, we believe that our cost-plus pricing strategy and business model of specialized customization of our products will continue to contribute towards positive results in the years ahead."

Business Outlook

The Company executed a substantial capacity expansion plan in fiscal year 2011 and the first quarter of fiscal year 2012. The plan was implemented in two phases: Phase I involved the construction of two new cold-rolled, wide-strip steel production lines with 150,000 tons of total annual capacity and a new chromium plating production line capable of processing an additional 200,000 tons of cold-rolled steel per year. These lines began normal operations as of July 2011 and are currently running at an approximate 65% utilization rate, reflecting a gradual increase in utilization consistent with the Company's quality control standards. Phase II of the expansion plan involved the addition of 100,000 tons of cold-rolled steel production capacity per year which occurred during the first quarter of 2012, which resulted in a total of 250,000 tons of total additional annual capacity.

For fiscal year 2012, China Gerui expects revenue of between $395 million and $410 million, and diluted earnings per share of between $1.32 and $1.37. The Company may adjust this guidance as changing macroeconomic issues and operational and competitive challenges dictate.

ZHENGZHOU, China, March 12, 2012 /PRNewswire-Asia-FirstCall/ -- On November 10, 2011, China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company") issued a press release regarding its third fiscal quarter of 2011. After further discussion with the Company's independent registered public accounting firm, certain items relating to the Company's financial statements have been reclassified. On the Consolidated Balance Sheets, the "Other Receivables" line item had formerly included $5 million which was attributable to a potential joint venture between the Company and a prospective partner. These funds were deposited in a separate bank account by a related party for this purpose. We have adjusted the presentation of these funds and they are now categorized in the line item "Deposit Potential Business Initiatives Program-Related Party". We have also adjusted the Consolidated Statements of Cash Flows to properly classify these funds. The original press release follows with corrected information in the financial statements and body of the press release indicated by bold italicized text. Other than the noted changes, the financial results from the November 10, 2011 press release remain otherwise unchanged.

Third Quarter 2011 Results

• Revenue increased 63.4% to $101.1 million in the third quarter of 2011 from $61.9 million in the third quarter of 2010.
• Net income increased 76.2% to $21.4 million in the third quarter of 2011 from $12.1 million in the same period of 2010. Net income per diluted share in the third quarter of 2011 increased to $0.37 from $0.25 per diluted share in the same period of 2010, which factors in the significant increase of number of shares outstanding from the warrants exercised by March 21, 2011.

"We achieved a record increase in revenues in the third quarter and a substantial increase in operating profits resulting from our ability to meet further customer demand from the utilization of our new production capacities," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "Our third quarter saw a ramp-up in the utilization of our 400,000 tons of annual specialized steel production capacity, which included a substantial revenue contribution from our much-anticipated new wide-strip production line capable of annual volume of 150,000 tons. We are experiencing continued robust demand for both narrow and wide-strip cold-rolled steel products in China across a variety of industries. We believe that our new large-scale chromium-plating capacity and precision wide-strip cold-rolled steel products will enable an expansion in our operating margins in the quarters ahead."

"The final phase of our expansion plan will result in an additional 100,000 tons of cold-rolled steel per year by the fourth quarter of 2011," Mr. Lu continued. "The addition of wide-strip production lines and chromium plating capacity better diversifies our capabilities which will enable us to optimize our production mix. We plan to continue to capitalize upon our competitive advantage to meet the strong demand of the high growth domestic China market place."

Outlook

For fiscal year 2011, China Gerui will maintain guidance of revenue between $330 million and $345 million, gross profit of between $115 million and $120 million, adjusted net income* of between $70 million and $75 million, and adjusted diluted earnings per share* of between $1.20 and $1.25.

Second Quarter 2011 Results

"We achieved a strong rise in revenues in the second quarter and a solid rise in operating profits resulting from continued strong customer demand and the addition and utilization of our new production capacity," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "Our second quarter saw the addition of 200,000 tons of new chromium plating capacity which began normal operations in late March 2011, bringing our total chromium plating capacity up to 250,000 tons. This is already being used to complement our existing 250,000 tons of cold-rolled, narrow-strip steel capacity as well as our newly added 150,000 tons of cold-rolled, wide-strip steel. Due to our positioning in this specialized niche, we expect that strong customer demand will drive the utilization of our new wide-strip capacity to at least 75% of capacity by the end of the 2011."

"The final phase of our expansion plan will result in an additional 100,000 tons of cold-rolled steel per year by the end of 2011," Mr. Lu continued. "With the addition of added wide strip lines and chromium plating capacity, we have become a one-stop shopping source for many of our existing customers while new customers might also seek to capitalize upon the advantages attributable to the distinct customized nature of our business."

Revenue increased 34.4% to $86.1 million in the second quarter of 2011 from $64.0 million in the second quarter of 2010. The increase in revenue was primarily due to both a 23.3% increase in the Company's average selling price to $1,004 per ton for the second quarter of 2011 compared to $814 per ton for the same period of 2010, and an 8.9% increase in sales volume to approximately 85,600 tons for the second quarter of 2011 as compared to approximately 78,600 tons for the same period of 2010.

Net income increased 16.3% to $14.0 million in the second quarter of 2011 from $12.1 million in the same period of 2010. Net income per diluted share in the second quarter of 2011 decreased to $0.24 from $0.26 per diluted share in the same period of 2010, which is primarily due to the significant increase of number of shares outstanding from the warrants exercised by March 21, 2011.

Business Outlook

As previously disclosed, the Company's expansion plan is being implemented in two phases. Phase I involved the construction of two new cold-rolled, wide-strip steel production lines with 150,000 tons of total annual capacity and a chromium plating line capable of processing 200,000 tons of cold-rolled steel per year. These lines began normal operations as of June 2011. The Company expects an estimated 50% capacity utilization for the new wide-strip steel production lines in the third quarter, which is expected to rise to approximately 75% by the end of 2011. Phase II of the expansion plan involves the addition of 100,000 tons of cold-rolled steel production capacity per year by first quarter of 2012. This will bring the Company's total production capacity up to 500,000 tons of specialized steel.

Mr. Lu concluded, "Our value-added capabilities enable us to customize according to precise customer requirements in a variety of industry sectors. The completion of our new facility during the second quarter is a major milestone in our strategic growth plan as it heightens our product platform and enables us to be the steady source of supply to our customers, produce higher margin products as well as develop new, high-end technology products. We expect to see our production costs stabilize and experience margin improvements from our additional capacity in the second half of 2011 so as to reach sustainable gross margins in the 30% range."

For fiscal year 2011, China Gerui expects revenue of between $330 million and $345 million, gross profit of between $115 million and $120 million, adjusted net income* of between $65 million and $70 million, and adjusted diluted earnings per share* of between $1.10 and $1.15.

ZHENGZHOU, China, June 21, 2011 /PRNewswire-Asia/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) (the "Company" or "China Gerui") today provided an update on its previously announced $10 million share repurchase program.

As of June 20, 2011, the Company has repurchased 780,273 ordinary shares at an average price of $3.82 per share for a total share repurchase to date of approximately $2.98 million.

Mr. Mingwang Lu, Chairman and Chief Executive Officer, stated, "We believe the repurchase of our shares represents a sound investment decision for our Company given recent trading prices. Our Board of Directors approved a share repurchase program that has been designed to comply with applicable securities laws and we commenced open market purchases of our shares in mid-May of 2011. If the price of our shares remains at or around the current market price level, we plan to continue to buy back our shares in accordance with the economic parameters of the repurchase program and subject to the legal limitations of the program, as approved by our Board."

We believe that our future capital expenditures will be incurred primarily in connection with (i) purchases of property, plant and equipment and construction of our facilities, (ii) leasehold improvements, (iii) investment in equipment, technology and operating systems, and (iv) capitalized interest. Our planned capital expenditures for 2011 and 2012 are for (i) the second phase of our capacity expansion program, in which 100,000 metric tons of processing capacity will be added by the first quarter of 2012, resulting in total capacity of 500,000 metric tons of cold-rolled steel processing, out of which 50% can be further plated with chromium, zinc or tin; (ii) upgrade our existing narrow strip acid pickling line for acid regeneration and environment control; and (iii) potential acquisitions or strategic partnership initiatives. We expect to finance these capital expenditures from cash on hand, future internal cash flows, short-term bank borrowings, and funds raised from capital markets.

Rodman and Renshaw on CHOP                          5/11/2011

Maintain Outperform Rating Despite a Slightly Below-Expectation 1Q11 Performance

1Q11 Results Slightly Below Expectations

China Gerui Advanced Materials Group (“Gerui”, Ticker: CHOP, Market Outperform) reported 1Q11 results that slightly missed our expectations. Revenue for the quarter increased 1.4% YoY to $62.7 million, a touch shy of our $63.5 million estimate. Average selling price increased 4.5% YoY to $909 per ton in 1Q11; however this was partially offset by a 3.0% YoY decrease in sales volume to approximately 69,000 tons in the quarter. Gross profit decreased 3.8% YoY to $18.0 million, representing a gross margin of 28.7%, below our respective estimates of $19.4 million and 30.5%. It should be noted that the pressure on gross profit and margin was partially attributable to costs incurred from the testing process for the company’s new chromium plating facility. This should be a one-time expense item and we expect Gerui’s gross margin will bounce back next quarter. SG&A as a percentage of revenue was 3.5%, below our estimate of 3.8%. Adding back the one-time $5.7 million expense item related to the warrant exercise, non-GAAP net income in 1Q11 was $9.7 million, or $0.20 per diluted share, below our respective estimates of $11.4 million and $0.22 EPS.

As of March 31, the company had $210.1 million in unrestricted cash and $83.1 million in restricted cash with no long-term debt. Working capital stood at $133.1 million and shareholder’s equity was $239.7 million. Accounts receivable was $3.8 million.

Updated 2011 Guidance

Gerui provided an updated 2011 guidance. Management continued to expect $330-$345 million of revenue and $115-$120 million of gross profit for the year. However the updated $65-$70 million net income and $1.10-$1.15 diluted EPS expectations were down $5 million and $0.10 from their respective figures provided by management a month ago.

Maintaining Market Outperform Rating and $11 Price Target

We have tweaked our model to reflect the updated 1Q11 financials and revised outlook. For 2Q11, we now estimate revenue, gross profit, and non-GAAP net income will reach $84.9 million, $28.0 million, and $17.0 million, respectively. The respective figures for full year 2011 are: $339.4 million, $114.1 million, and $69.1. We are reiterating our Market Outperforming rating on the shares of Gerui as well as our $11 price target. Our price target of $11 is based on Gerui shares trading at 9x our 2011 EPS estimate of $1.22, representing a PEG ratio of 0.4.

Risks

Major Risks include macroeconomic risk, steel price volatility, competition, customer concentration, and execution risks, as well as country and political risks related to operating in China.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

First Quarter Results:

"We achieved a strong increase in operating cash flow in the first quarter of 2011 as a result of improved working capital management, while our sales growth increased slightly, constrained by our production capacity limitations as we continued to run our production facilities at near full capacity," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "Our first quarter profitability was negatively impacted by three expenses that we believe are of a non-recurring nature.  Firstly, our chromium-plating line was in test runs in the first half of the first quarter and raw materials used for testing purposes were included in the cost, thereby impacting our gross margin.  In addition, we incurred one-time interest expenses as we took out additional bank facilities during the quarter because we did not have certainty on the amount of cash proceeds that we would receive from the warrant exercise.  Finally, we incurred one-time expenses related to recent warrant exercises of $5.7 million.  As such, we are reporting certain non-GAAP numbers with this quarter's earnings release that we believe more appropriately reflect the fundamental health and profitability of our business."  

• Revenue increased 1.4% to $62.7 million in the first quarter of 2011 from $61.8 million in the first quarter of 2010
• Adjusted net income, which excludes the aforementioned one-time warrant exercise expenses, was $9.7 million, or $0.20 per diluted share.*
• For fiscal year 2011, China Gerui expects revenue of between $330 million and $345 million, gross profit of between $115 million and $120 million, adjusted net income of between $65 million and $70 million, adjusted diluted earnings per share of between $1.10 and $1.15. Adjusted net income and adjusted diluted earnings per share exclude one-time warrant exercise expenses incurred in the first quarter of 2011.  

Rodman and Renshaw on CHOP                            4/8/2011

4Q10 Review; Share Buyback and Removal of Warrant Overhang Positive; Increasing PT to $11

Q4 Results mostly in-line with our expectations

China Gerui Advanced Materials Group (“Gerui”, Ticker: CHOP, Market Outperform) reported 4Q10 results that were by and large in-line with our expectations. Total revenue increased 15.6% YoY to $66.1 million, above our estimate of $64.3 million. During the quarter, the company sold 75,551 tons of products at an average selling price of $875 per ton. Gross profit increased 15.4% YoY to $19.6 million, slightly higher than our estimate of $19.3 million; however actual gross margin of 29.7% was a touch shy of our expectation of 30.0%. Operating expenses continued to be weighed by new hires and training in anticipation of the expanded capacity. As a result, net income for the quarter was $11.3 million, missing our expectation by $1 million. And diluted EPS for 4Q10 was $0.23, one penny shy of our $0.24 estimate.

At the end of 2010, Gerui had $119.5 million of unrestricted cash and an additional $66.5 million of restricted cash, against zero long-term debt.

New 2011 guidance

For 2011, Gerui now expects to realize $330-$345 million of revenue, $115-$120 million of gross profit, and $70-$75 million of net income, translating to diluted EPS between $1.20 and $1.25. We believe this guidance is achievable, as we expect the company will start normal production of its two new cold-rolled, wide-strip steel lines with 150,000 tons of annual capacity in 2Q11, after the successful production launch of its chromium plate line last month. We also anticipate some margin expansion as the new wide-strip and chromium plated products could bring in higher gross margins (somewhere between 35-40%) than the existing thin-strip products that typically offer gross margins of around 30%.

$10 million share buyback plan announced

In conjunction with the earnings release, the company announced a share repurchase plan to buy back up to $10 million of its common stock. While no details were provided regarding the specific timing and amount, we believe the announcement should serve as a positive signal indicating management’s confidence in the company as well as expressing their view on the current share price. In addition, with the ample cash on hand (especially after the recent warrant conversion) and strong capability to generate operating cash, we believe the company has sufficient ammunition to announce further buybacks in the future if needed.


Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

ZHENGZHOU, China, April 7, 2011 /PRNewswire-Asia-FirstCall/ -- China Gerui Advanced Materials Group Limited today announced that its Board of Directors has approved the repurchase of up to an aggregate of $10 million of its Ordinary Shares.  

"Based on current market prices, we believe that the repurchase program is in the best interests of our shareholders," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "The board's decision to implement this buyback reflects our firm belief that our shares are presently undervalued in the marketplace and represent a sound investment decision at recent trading prices.  Our board of directors believes that the repurchase program is an effective use of cash to enhance value for our shareholders and demonstrate our confidence in the long-term health and future financial performance of our business."

Third Quarter 2010 Highlights (From November 15,2010)

• Revenue increased 4.4% to $61.9 million compared to the same period last year
• Gross profit increased 2.3% to $18.6 million
• Operating income increased 1.8% to $16.5 million
• Net income increased 5.6% to $12.1 million, or $0.25 per diluted share vs.

"There continues to be robust demand for high precision steel in China supported by the country's fast growing economy," said Mr. Mingwang Lu, Chairman and Chief Executive Officer.  "There is a limited domestic supply of this type of product in China because Chinese manufacturers lack the equipment and expertise to produce high end specialty cold rolled steel.  As a result, even though China is a net exporter of crude steel, the country is actually a net importer of cold rolled narrow strip steel. Our business has benefited from an increasing movement toward import replacement in China.  Domestic Chinese customers are turning to our high-end precision steel products because our products are more competitively priced and, equally important, are also of the same quality as the premium priced imported products that domestic Chinese customers have historically relied on.

"As a result of this robust demand, our current production facility continues to operate at near-full capacity and we very much look forward to having our additional capacity come online.  Despite existing capacity constraint, we were able to increase our production volume slightly year-over-year which was the main driver of our revenue growth.  Our average selling price during the third quarter was lower than last year but higher than in the second quarter of 2010, mirroring the pricing trends in the raw steel market.  Rising steel prices mean higher revenues for our company due to the fact that we have adopted a cost-plus pricing strategy and we can pass on the raw material increase to our customers while maintaining a gross margin equivalent to our current 30% level, if not higher.  The decline in our operating margin was the result of our additional staffing and training costs as we prepare for the opening of our new production facility.  With our new capacity coming online, we will be able to offer our customers new, higher value-added products, such as chromium and zinc coated products and wide strip products.  Our customers are asking us to produce these products so we are confident the demand will be there once our new production capacity comes online.  These products will increase our sales and our profitability as they are higher margin than the products we make now."

Outlook from December 9, 2010

For fiscal year 2010, China Gerui expects

• revenues of $252 million
• net income of $48 million.

For fiscal year 2011, China Gerui expects

• revenues of between $330 million and $345 million
• gross profit of between $115 million and $120 million
• net income of between $70 million and $75 million
• capital expenditures to complete its previously announced expansion plan of between $12 million and $15 million.

Mr. Mingwang Lu, Chariman and Chief Executive Officer, commented, "Our current production facility continues to operate at near-full capacity and we very much look forward to having our additional capacity come online. By December 2011, we plan to double our existing production capacity to 500,000 tons per annum, and increase our chromium plating capability to 250,000 tons per annum, covering 50% of our total annual steel production capacity.

Phase I of the expansion plan involves the construction of two new cold-rolled, wide-strip steel production lines with 150,000 tons of total annual capacity and a chromium plating line capable of processing 200,000 tons of cold-rolled steel per annum. We expect that the two new cold-rolled production lines will be completed by January 2011, to be followed by test production runs and a full launch of production operations by March 2011. We expect a relatively quick ramp-up after the full launch of production operations begin with an initial capacity utilization of the two new cold-rolled wide-strip steel production lines of approximately 50% rising to approximately 75% by September of 2011. Phase II of the expansion plan involves the construction of a third cold-rolled wide strip steel production line with 100,000 tons of capacity by the end of the third quarter of 2011.

"We expect demand in China for the type of high precision steel that we produce to continue to grow at a healthy pace due to the continuing improvement of the standard of living in the country and the growth of the Chinese middle class, who are the ultimate end-users of our products. In addition the Chinese government is continuing to encourage domestic consumption throughout the economy. With our new capacity coming online, we will be able to offer our customers new, higher value-added products, such as chromium and zinc coated products and wide strip products. Our customers are asking us to produce these products so we are confident the demand will be there once our new production capacity comes online. These products will increase our sales and our profitability as they are higher margin than the products we make now."

Rodman & Renshaw on CHOP

3Q10 Results Slightly Below Expectations 

China Gerui Advanced Materials Group (“Gerui”, Ticker: CHOP, Market Outperform) reported 3Q10 results that slightly missed our top and bottom line projections. Total revenue increased 4.4% YoY to $61.9 million, but below our estimate of $64.8 million and Street consensus of $64.0 million. Gross profit grew 2.3% YoY to $18.6 million, representing a gross margin of 30.0%, slightly below our respective estimates of $19.6 million and 30.2%. SG&A as a percentage of revenue was 3.4%, above our estimate of 2.9%, largely due to increases in additional salary and training expenses from hiring new employees in anticipation of the opening of the new production facility. Net income increased 5.6% YoY to $12.1 million, a touch shy of our estimate of $12.4 million, but higher than Street consensus of $11.9 million. Diluted EPS for the quarter was $0.25, in-line with our estimate, higher than Street consensus of $0.24. At the end of the quarter, the company had $110.7 million in cash and $73.1 million in restricted cash with no long-term debt. Accounts receivable was $4.2 million, down $0.6 million from the end of last year. 

Our Take 

We believe Gerui’s 3Q10 results as a whole were more or less within the range of our expectations. Demand for the company’s high-precision cold-rolled steel remained robust, however the company’s revenue and profit growth continued to be constrained by its capacity bottleneck, as it has been operating near full capacity for over a year. Average selling price during the quarter was slightly higher than 2Q10, but noticeably lower than 3Q09, mirroring that of the general raw steel pricing trend. There was an important development regarding the company’s capacity expansion, however. Due to severe flood in Henan earlier this summer, construction for the company’s two new cold-rolled wide strip lines were delayed. The company now expects completion date in 1Q11 instead of 4Q10. On the bright side, Gerui’s chromium-coating line will come online in Q4 as previously scheduled. 

Adjusting Estimates 

We are adjusting our model in light of the quarterly results and revised outlook. Since the two wide strip lines will not be completed until next year, for 4Q10, we now expect the company will realize $64.3 million of revenue, $19.3 million of gross profit, and $12.3 million of net income. We expect sales volume for the quarter will be more or less in line with the past quarter. Due to the launch of the new chromium plating line, we estimate ASP will increase slightly from the Q3 level. Looking forward to 2011, we expect the wide strip line will start to contribute the company’s top and bottom lines as early as in Q1, and by Q4, we expect Gerui’s phase II expansion will start to generate revenue. For the whole year, we now estimate revenue, gross profit, and net income will reach $324.3 million, $98.7 million, and $63.3 million, respectively.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.

We may offer, issue and sell from time to time our ordinary shares, preferred shares, debt securities, warrants, or units up to $100,000,000 or its equivalent in any other currency, currency units, or composite currency or currencies in one or more issuances.

Second Quarter 2010 Summary:

• Revenue increased 15.5% to $64.0 million compared to the same period last year.
  
• Gross profit increased 13.0% to $19.1 million.
  
• Gross margin decreased 60 basis points to 29.9%.
  
• Net income increased 5.8% to $12.1 million, or $0.26 per diluted share vs. $0.33 per diluted share in the prior year comparable quarter.
  
   "Our second quarter results were driven by increased sales volume as compared to the same period last year," said Mr. Mingwang Lu, Chairman and Chief Executive Officer.  "During the quarter, we fulfilled large orders for some of our lower margin products.  This enabled us to post a double-digit increase in sales as well as higher net income, but also resulted in a decrease in our margins.  We continue to see strong demand for our products and as our new production lines focused on higher priced, higher margin products commence production later this year, we expect to achieve sustained increases in sales, margins, and earnings performance."

Business Outlook:

 As previously announced, by December 2011, the Company plans to double its existing production capacity to 500,000 tons per annum, and increase its chromium plating capability to 250,000 tons per annum, covering 50% of its total annual steel production capacity. Phase I of the expansion plan involves the construction of two new cold-rolled, wide-strip steel production lines with 150,000 tons of total annual capacity and a chromium plating line capable of processing 200,000 tons of cold-rolled steel per annum. The Company expects total capital expenditures for Phase I to be $42 million, of which approximately 65% has been spent to date. The foundation for the building housing the two new cold-rolled steel production lines was completed in August 2010 and the building will be completed by mid-September 2010. 

The two cold-rolling machines are expected to be completed by October 2010. The acid pickling, annealing, and temper rolling facilities relating to the Company's new steel production lines are expected to be completed by the end of September 2010. As for the chromium plating line, the building to house this line was completed in August 2010; installation is currently underway; testing is scheduled for mid-September 2010; and the line is expected to be ready to begin production in mid-October 2010. The chromium plating line can handle both narrow and wide-strip cold-rolled steel. 

For Phase II of the project, the Company expects to construct a third cold-rolled wide strip steel production line with 100,000 tons of capacity by the end of the third quarter of 2011. The Company expects the capital expenditures for Phase II to total $12 million.  
 
Mr. Lu commented, "Our expansion project remains on track and we look forward to bringing this new capacity online later this year.  Our business outlook remains strong as the sale of our products are driven by domestic purchasing power in China, which continues to rise, and the import replacement trend in our industry.  With our new facility we will be able to produce both narrow and wide-strip cold-rolled steel for a wider range of high-end applications than we do currently.  We see the demand in the market and are confident in our ability to ramp up production once our expansion is complete."   

Rodman & Renshaw initiating coverage of China Gerui Advanced Materials Group Ltd. (“Gerui”, Ticker: CHOP) with a Market Outperform/Speculative Risk rating and a price target of $10. Based in Zhengzhou, China, the company is the largest manufacturer of high-precision and high-strength cold-rolled narrow strip steel products in China, with customers in diverse industries ranging from food packaging to construction materials, telecommunication equipment, and electrical appliances.

We believe Gerui enjoys a favorable market position, in spite of the overall sluggish Chinese steel market. The company operates in the high-end precision strip segment, in which the Chinese demand, driven by large addressable and fast growing end-markets, still far exceeds supply. With limited domestic competition due to high entry barriers, Gerui’s business enjoys significant competitive advantages over foreign imports as the company can offer lower prices coupled with comparable product quality and faster local services. Gerui is also very much of a steel processor and not a steel maker. With a “cost plus” pricing strategy, it effectively passes through most of the steel price fluctuations to its customers, allowing the company to maintain margins during periods of market volatility. 

 With a solid track record and an experienced management, the company is poised to achieve significant growth in the near future. Gerui has been operating near full capacity since the beginning of last year and has one of the most efficient operations in the Chinese steel industry. After the recent two rounds of capital financing, the company is in the process of doubling its strip steel production capacity within one and half years and expanding its margin-improving chromium-plating capability. With such capacity increases, we expect the company will realize $357.5 million of revenue and $70.5 million of net income in 2011, up 37% and 42% from 2010, respectively. 

 Compelling valuation The shares of Gerui are currently trading at 5.5x and 4.6x our respective 2010 and 2011 EPS estimates, below its respective peer averages of 11.9x and 9.1x. This in our view represents an attractive valuation for this company. We believe Gerui, as the national leader in its market segment and with a favorable market environment, should command a forward P/E multiple that is at least in-line with its steel company comparables. Our 12-month price target of $10 is thus based on Gerui shares trading at 9x our 2011 EPS estimate of $1.15, representing a PEG ratio of 0.5. 

 Risks Major risks include macroeconomic risk, steel price volatility, competition, customer concentration, and execution risks, as well as country and political risks related to operating in China.

Last week, GeoInvesting Contributor Zack Buckley had the chance to interview Mr. Edward Meng, CFO of China Gerui Advanced Materials Group (CHOP). Here is the full transcript, the abbreviated transcripts can also be found on thestreet.com and seekingalpha.com.

Zack: Can you give me some background on your company?

Edward: China Gerui is the largest producer of high precision cold-rolled narrow strip steel products in China, with a market share of 12.5%. We started back in 2000 and over the last 10 years we have continuously been adding to our capacity to meet the increasing demand from the China market for the high-end cold rolled steel products that we produce. We are in the sweet spot where there is limited supply of the high-end products that we produce, which puts us in a great position. The company came from a SPAC background. The SPAC merger was completed in March 2009. In November 2009, we completed a follow-on offering and were upgraded to NASDAQ. Our current production is 250,000 tons of cold rolled narrow strip steel. In view of the long-term cold-rolled steel market growth in China, which is primarily driven by rising domestic consumption, we are currently in the process of expanding capacity because we have reached close to full utilization on the existing capacity, which admittedly is a good problem to have. We cannot churn out our product fast enough to meet the high demand. By the end of 2010 we will add about 150,000 tons of cold rolled wide strip capacity. By end of 2011 we will be adding another 100,000 tons, achieving a total production capacity of 500,000 tons, which is two times the capacity we have now. This is one of the major reasons we did the latest capital raise of $18.8 million.

Zack: What is the price per ton for your product?

Edward: The average selling price of our products ranged between $870 to $890 per ton over the last 12 months, depending on the then prevailing price of commodity hot-rolled steel. Due to our cost-plus pricing strategy, we have been able to pass on any increase in raw material prices to our customers.

Zack: Where do you see the company in 5 years? 10 years?

Edward: From 2004-2008, we added capacity year on year and funded this all through our own internally generated cash flow. Going forward, we will be adding capacity to meet market demand. We have always been able to stay one step ahead of our competitors. When everyone got into hot rolled coil, we got into cold rolled steel. When cold rolled steel got competitive, we went to high-end steel. Now we are focusing on adding to and optimizing our overall product mix. Our high-end products are of the same quality as products that are currently being imported into China except our products are sold at a much more competitive price, so we have had great success in enhancing our growth by replacing products that were until now imported into the country. In the next 5-10 years, we will continue to strengthen our market leadership while optimizing our product mix with high end products.

Zack: What are the various segment lines of the company?

Edward: Our core business is cold-rolled steel production and we have no other businesses. High precision cold rolled narrow strip steel is the primary business of the company for now. With the additional expanded capacity of 250,000 tons before the end of 2011, we will start serving the cold-rolled wide strip steel market with high-end, higher margin products.

Zack: Can you explain the different steel products?

Edward: Cold rolled steel – Cold rolled sheet products are used in a wide variety of end applications such as food & beverage packaging, construction and decoration materials, electrical and home appliances and fiber optic cable. Cold rolled sheet products are used in these and many other areas of manufacturing. To meet the various end user requirements, cold-rolled sheet products are metallurgically designed to provide specific attributes such as high formability, deep drawability, high strength, high dent resistance, good magnetic properties, enamel ability, and paintable. These are the types of products that we make. They are specialized, high-end, high-margin, non-commodity products.

Hot rolled steel – Hot-rolled steel is the commodity raw material that goes into our production process of cold-rolled steel. Hot-rolled steel cost is impacted primarily by the cost of iron ore. China Gerui purchases hot-rolled steel from the open, commodity market, and then turns this steel into high-end cold-rolled steel products by leveraging our proprietary production process and advanced high-precision machines. We do not make hot rolled steel. We are not a commodity steel producer.

Zack: Who are your main competitors?

Edward: The cold-rolled steel market in China is highly segmented. Our competitors are both state-owned and private sector companies. We are the largest player in the cold-rolled narrow steel strip market with about 12.5% market share. The top five players in this segment of the market accounted for about 36% of the market, with the rest of the market consisting of over 200 smaller and private players.

Zack: Why do your customers choose you over the competition?

Edward: Customers will choose us over our competitors for a number of reasons

1. We have a strong brand name and reputation in China in our industry. Our products are known for their high quality and precision. We have strong technical capabilities.
2. We have proven that we are able to customize contracts for our customers based on the specific attributes they required for the intended end-use application. As such, they have seen us do it successfully before, so they keep coming back since they know we are reliable and can meet their specifications.
3. We have strong R&D capabilities and we continue to offer new product offerings that our clients are interested in.
4. We are able to adjust our operations to meet different size orders. Our contract sizes range from over 2,000 metric tons for some companies to as little as 500 tons.

Zack: Will the margins stay the same on the new facilities?

Edward: Historically we have been able to continuously improve on our profit margins. Our gross margins are approximately 30%. With the new 250,000 ton capacity that will be released from the expansion program by 2011, we expect to improve on this profitability level going forward. Our ability to enhance our margin performance is primarily due to our cost-plus method of pricing, our ability to optimize our product mix (with higher margin chromium-plating accounting for an increasing percentage of total capacity going forward), and our ability to continuously offer new products to the market.

Zack: How is the growth in the overall industry? In China?

Edward: We serve over 200 customers and they primarily come from 4 industries. Food and beverage packaging, construction and decoration materials, electrical and home appliances as well as telecom. The first three industries are all driven by the increase in the consumption power of the Chinese economy, which we expect to continue to rise. Over the next three years, we expect to see double digit annual growth in our industry. The telecom industry in particular should continue to benefit from the Chinese government's policy on expanding broadband and 3G networks in both rural and urban areas, which in return, provides for increased demand for China Gerui's product in the manufacturing of fiber optic cables.

Zack: Who are your main customers? May I speak with them?

Edward: Our main customers come from those industries mentioned above. For example, one customer is a producer for telecom operators in China. Other customers are food and beverage packaging and home appliance producers in China.

Zack: Do you expect your revenue by industry to stay stable in the next few years? Where will your additional capacity go to?

Edward: The food and beverage packaging industry contributes almost 50% of the revenue for our company. Going forward, we see increasing revenue contribution from the telecom industry and construction decoration materials, along with growth in revenue from food & beverage packing.

Edward: Our additional capacity will go toward more coated products and wide strip products.

Zack: What will be the return on capital? What is the output?

Edward: We estimate the payback period for this capacity expansion program to be about 2.5 years. This is for both phases combined. The total additional output will be 250,000 tons, 150,000 for phase 1 and 100,000 for phase 2. The expected capex for phase 1 will be 42 million, while the capex for phase 2 is expected to be 12 million.

Zack: How will you finance both phases?

Edward: The capacity expansion program has been financed with internally generated cash, proceeds from the conversion of warrants, and accessing the capital markets. We are confident the expansion program will be executed successfully and production will start as per the original schedule. Our business generates strong free cash flow. We currently have approximately 16 million warrants outstanding and the majority of the warrants get converted by March of next year. We anticipate this warrant conversion can yield an additional $75 million plus to finance our expansion and future business and capacity expansion All of these resources together will help finance Phase 2 of our expansion, serve us well in terms of our overall working capital needs and put us in a competitive position for future business development.

Zack: What will the private placement be used for?

Edward: We plan to use the net proceeds from the private placement to finance the previously announced expansion of the Company's high-precision cold-rolled steel production capacity, accelerate the build-out of a chromium-plating production line of 200,000 metric tons that was originally scheduled for 2011, as well as for general working capital purposes related to the expanded production capacity.

Zack: If you had to invest in a small cap US listed publicly traded Chinese company other than your own, what would it be?

Edward: Looking at the overall spectrum of Chinese companies that trade in the U.S., I would encourage investors to look at companies that will benefit, the way China Gerui has and expects to continue to benefit, from the growing purchasing power of the Chinese consumer and middle class.

Zack: If you had a golden bullet, where you could eliminate one competitor, who would it be?

Edward: We don't think we need a golden bullet to compete in our market. We believe we will continue succeed in penetrating China's cold-rolled steel market as well as replacing high-end imports. We are focused on maximizing our operating efficiency and optimizing our product mix. We expect to continue to increase our market share in China. Overall we are optimistic about our business prospects. We expect continued growth in both our top and bottom line for the rest of the year.

Disclosure: No Position

Profile

GeoTeam Contributor Zack Buckley is CEO of Uncoveringalpha.com and a research analyst at Geoinvesting.com. He developed his investing methodology by synthesizing the ideas from the best investors of all time, based on their track record. This led him to closely follow Warren Buffett, Peter Lynch, Seth Klarman and Benjamin Graham. Using a value approach, he pursued the most undervalued companies he could find, which led primarily to companies in China. Buckley will be spending three months this year in China visiting companies that are exciting investment opportunities.

****Follow him on his blog, Uncoveringalpha.com, , as he travels across China touring factories and interviewing management.**

Added to the GeoSpecial list on 11/11/2009 @ $5.25

    Catalyst: High margin leader in its industry; repricing of risk premium.
    Peak performance: Reached a high of on $8.20 on 3/10/2010
    Current Price: $5.58

    Current road block: Dilution, 2010 eps growth is expected to be negative before growing 20% in 2011. Operating at full capacity, leading us to believe they will need to tap the equity markets again.

    Removing from  GeoSpecial list.

"We are pleased with our fourth quarter and full year results," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "Our top line growth was driven by our ability to increase the volume of our sales to meet continued robust customer demand and rising average selling prices for our products. The majority of our revenues come from the domestic consumer market in China, which we believe will continue to exhibit growth. Additionally, our continued focus on operational efficiency and cost controls helped us increase our gross and operating margins and achieve strong bottom line performance. We continue to improve the overall utilization rate of our production capacity and better mobilize existing resources towards higher-margin product offerings to further increase our profitability."

Mr. Lu added, "Our immediate focus for 2010 is increasing our production capacity and expanding our product portfolio into higher margin coated steel and wide strip products. We also expect to continue to benefit from the sustained rise in the purchasing power of the Chinese consumer, who is the ultimate buyer of the products our customers produce. Another market trend that we expect to benefit from is the continuing movement toward import replacement in our industry. Our customers are increasingly turning to our high-end precision steel products, which are more competitively priced but of the same quality as the premium priced imported products that they have historically relied upon."

 For the first quarter of 2010, the Company expects to achieve revenues of between $54 million and $56 million and net income of between $10.5 million and $11 million. The Company expects to file its Annual Report on Form 20-F for the fiscal year ended December 31, 2009 on or before April 30, 2010.

Source: PR Newswire (March 10, 2010)