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China Precision Steel Inc. Reports Operating Results (10-Q)

May 17, 2010 | About:

10qk

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China Precision Steel Inc. (CPSL) filed Quarterly Report for the period ended 2010-03-31.

China Precision Steel Inc. has a market cap of $87.54 million; its shares were traded at around $1.88 with a P/E ratio of 94 and P/S ratio of 1.15.

Highlight of Business Operations:

Except as otherwise indicated by the context, all references in this Quarterly Report to (i) the “Group,” the “Company,” “we,” “us” or “our” are to China Precision Steel, Inc., a Delaware corporation, and its direct and indirect subsidiaries; (ii) “PSHL” are to our subsidiary Partner Success Holdings Limited, a BVI company; (iii) “Blessford International” are to PSHL s subsidiary Blessford International Limited, a BVI company; (iv) “Shanghai Blessford” are to Blessford International s subsidiary Shanghai Blessford Alloy Company Limited, a PRC company; (v) “Chengtong” are to PSHL s subsidiary Shanghai Chengtong Precision Strip Company Limited, a PRC company; (vi) “Tuorong” are to PSHL s subsidiary Shanghai Tuorong Precision Strip Company Limited, a PRC company; (vii) “SEC” are to the United States Securities and Exchange Commission; (viii) “Securities Act” are to the Securities Act of 1933, as amended; (ix) “Exchange Act” are to the Securities Exchange Act of 1934, as amended; (x) “RMB” are to Renminbi, the legal currency of China; (xi) “U.S. dollar,” “USD,” “US$” and “$” are to the legal currency of the United States; (xii) “China,” “Chinese” and “PRC” are to the People s Republic of China; and (xiii) “BVI” are to the British Virgin Islands.

During the three months ended March 31, 2010, we sold a total of 36,953 tons of products, an increase of 25,953 tons from 11,000 tons during the same period a year ago, due to an increase in demand in a gradually improving market as well as the addition of our 3rd mill which increases our total annual production capacity from 120,000 tons to 160,000 tons during its first year of operation and ultimately to 220,000 tons when it reaches its full design capacity in the next three to four years. We believe that such increase was mainly caused by increases in demand from the auto and home appliance products due to PRC government subsidies to encourage consumer spending in these segments during the period ended March 31, 2010. Increased volume and sales have led to a gross profit of $3,429,875 and a net income of $2,011,354 for the three months ended March 31, 2010. Total company backlog as of March 31, 2010 was $36,752,762.

Sales volume increased by 25,953 tons, or 236%, period-on-period, to 36,953 tons for the three months ended March 31, 2010 from 11,000 tons for the three months ended March 31, 2009 and, as a result, sales revenues increased by $22,367,387, or 293%, period-on-period to $29,990,596 for the three months ended March 31, 2010 from $7,623,209 for the three months ended March 31, 2009. The increase in sales revenues during the three months ended March 31, 2010 is attributable to increase in demand across all product segments especially our high-carbon cold-rolled products used in automobile components production and our low-carbon cold-rolled products used in home appliances production both due to favorable government policies and subsidies to encourage consumer spending, as well as increase in demand in subcontracting work during the period.

Read the The complete Report

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