China Precision Steel Inc. (CPSL, Financial) filed Quarterly Report for the period ended 2011-09-30.
China Precision Steel Inc. has a market cap of $24.2 million; its shares were traded at around $0.5201 with and P/S ratio of 0.2.
Sales volume increased by 3,035 tons, or 7.1%, period-on-period, to 45,548 tons for the three months ended September 30, 2011, from 42,513 tons for the three months ended September 30, 2010 and as a result, sales revenues increased by $8,270,388, or 24.4%, period-on-period, to $42,166,843 for the three months ended September 30, 2011, from $33,896,455 for the three months ended September 30, 2010. The increase in sales revenues period-on-period is mainly attributable to the increase in demand for low-carbon cold-rolled products during the 2011 quarter.
There were different trends of demand across various product categories during the three months ended September 30, 2011. Low-carbon cold-rolled steel products accounted for 79% of the current sales mix at an average selling price of $898 per ton for the three months ended September 30, 2011, compared to 62% of the sales mix at an average selling price per ton of $897 for the three months ended September 30, 2010. The increase in demand in this category during the quarter was a result of increased domestic demand for steel used in the production of home appliances, roofing and food packaging products as a result of growing domestic consumer spending. Low-carbon hard-rolled steel products accounted for 1% of the current sales mix at an average selling price of $919 per ton for the three months ended September 30, 2011, compared to 8% of the sales mix at an average selling price per ton of $772 for the three months ended September 30, 2010, due to a decrease in demand in the export market period-on-period as a result of our less competitive prices in the global market caused by the continued strengthening of the Renminbi against the US dollar during the period. High-carbon cold-rolled steel products accounted for 10% of the current sales mix at an average selling price of $995 per ton for the three months ended September 30, 2011, compared to 15% of the sales mix at an average selling price of $939 for the three months ended September 30, 2010. The products in this category are mainly used in the automobile industry and the decrease in sales volume period-on-period was a result of the slowing demand for automobiles in the PRC market. Subcontracting income revenues accounted for $1,032,321, or 2%, of the sales mix for the three months ended September 30, 2011, decreased from $3,145,202, or 10%, of the sales mix for the three months ended September 30, 2010.
Cost of sales increased by $10,592,703, or 33.6%, period-on-period, to $42,105,073 for the three months ended September 30, 2011, from $31,512,370 for the three months ended September 30, 2010. Cost of sales represented 99.9% of sales revenues for the three months ended September 30, 2011, compared to 93.0% for the three months ended September 30, 2010. Average cost per unit sold increased to $924 for the three months ended September 30, 2011, compared to $741 for the three months ended September 30, 2010, representing an increase of $183 per ton, or 24.7%, period-on-period.
Gross profit in absolute terms decreased by $2,322,315 or 97.4%, period-on-period, to $61,770 for the three months ended September 30, 2011, from $2,384,085 for the three months ended September 30, 2010, and gross profit margin decreased to 0.1% for the three months ended September 30, 2011, from 7.0% for the three months ended September 30, 2010. The decrease in gross profit margin is mainly attributable to an increase in average cost per unit sold of 24.7% period-on-period offset by a 16.2% period-on-period increase in average selling prices.
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China Precision Steel Inc. has a market cap of $24.2 million; its shares were traded at around $0.5201 with and P/S ratio of 0.2.
Highlight of Business Operations:
During the quarter ended September 30, 2011, we sold a total of 45,548 tons of products, an increase of 3,035 tons from 42,513 tons a year ago, due to an increase in demand in the domestic market as well as the addition of our third mill, which will increase our total annual production capacity ultimately to 260,000 tons when it reaches its full design capacity in the next two to three years. Such increase was mainly driven by increases in domestic demand for steel home appliances, roofing and food packaging products in connection with growing domestic consumer spending during the quarter ended September 30, 2011. Despite the growing consumption and the period-on-period sales volume growth, average cost per unit sold increased 24.7% while average selling prices increased only 16.2%, period-on-period. We were not able to fully pass on the increased cost to our customers as our products mainly compete with imported products and the strengthening of the RMB over the recent years has made the price of such imports more competitive. Increased volume and sales coupled with rising costs have led to a gross profit of $61,770 and a net loss of $1,079,095 for the three months ended September 30, 2011. Total Company backlog as of September 30, 2011 was $19,922,102.Sales volume increased by 3,035 tons, or 7.1%, period-on-period, to 45,548 tons for the three months ended September 30, 2011, from 42,513 tons for the three months ended September 30, 2010 and as a result, sales revenues increased by $8,270,388, or 24.4%, period-on-period, to $42,166,843 for the three months ended September 30, 2011, from $33,896,455 for the three months ended September 30, 2010. The increase in sales revenues period-on-period is mainly attributable to the increase in demand for low-carbon cold-rolled products during the 2011 quarter.
There were different trends of demand across various product categories during the three months ended September 30, 2011. Low-carbon cold-rolled steel products accounted for 79% of the current sales mix at an average selling price of $898 per ton for the three months ended September 30, 2011, compared to 62% of the sales mix at an average selling price per ton of $897 for the three months ended September 30, 2010. The increase in demand in this category during the quarter was a result of increased domestic demand for steel used in the production of home appliances, roofing and food packaging products as a result of growing domestic consumer spending. Low-carbon hard-rolled steel products accounted for 1% of the current sales mix at an average selling price of $919 per ton for the three months ended September 30, 2011, compared to 8% of the sales mix at an average selling price per ton of $772 for the three months ended September 30, 2010, due to a decrease in demand in the export market period-on-period as a result of our less competitive prices in the global market caused by the continued strengthening of the Renminbi against the US dollar during the period. High-carbon cold-rolled steel products accounted for 10% of the current sales mix at an average selling price of $995 per ton for the three months ended September 30, 2011, compared to 15% of the sales mix at an average selling price of $939 for the three months ended September 30, 2010. The products in this category are mainly used in the automobile industry and the decrease in sales volume period-on-period was a result of the slowing demand for automobiles in the PRC market. Subcontracting income revenues accounted for $1,032,321, or 2%, of the sales mix for the three months ended September 30, 2011, decreased from $3,145,202, or 10%, of the sales mix for the three months ended September 30, 2010.
Cost of sales increased by $10,592,703, or 33.6%, period-on-period, to $42,105,073 for the three months ended September 30, 2011, from $31,512,370 for the three months ended September 30, 2010. Cost of sales represented 99.9% of sales revenues for the three months ended September 30, 2011, compared to 93.0% for the three months ended September 30, 2010. Average cost per unit sold increased to $924 for the three months ended September 30, 2011, compared to $741 for the three months ended September 30, 2010, representing an increase of $183 per ton, or 24.7%, period-on-period.
Gross profit in absolute terms decreased by $2,322,315 or 97.4%, period-on-period, to $61,770 for the three months ended September 30, 2011, from $2,384,085 for the three months ended September 30, 2010, and gross profit margin decreased to 0.1% for the three months ended September 30, 2011, from 7.0% for the three months ended September 30, 2010. The decrease in gross profit margin is mainly attributable to an increase in average cost per unit sold of 24.7% period-on-period offset by a 16.2% period-on-period increase in average selling prices.
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