Dutton Associates Announces Investment Opinion: General Steel Holdings Speculative Buy In Initiating Coverage By Dutton Associates

Business Wire, Nov 5, 2007

EL DORADO HILLS, Calif. -- Dutton Associates initiates coverage of General Steel Holdings (AMEX:GSI) with a Speculative Buy rating and a price target of $16.38 The 28-page report by Dutton senior analyst Stanley Ng is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals.

General Steel, through its three principal operating subsidiaries, is engaged in the manufacturing of hot-rolled carbon and silicon steel sheet used in the production of agricultural vehicles, reinforced bar steel and round-bar steel used in the construction industry and double spiral-weld pipes used in the oil and gas industry. We see sustaining strong demand for these steel products in the coming years. However, the more the exciting growth prospects of GSI stem from its ability to take advantage of the ongoing consolidation in China's steel industry, which provides ample opportunities to increase its production capacity through acquisitions. In recent years, the Chinese government has followed the global trend of consolidation of the steel industry with objectives to reduce both production over-capacity and environmental pollution, and improve energy efficiency. It has targeted to consolidate the steel industry of up to 50% of total production (418 million tons in 2006) into the hands of the top ten players by 2010. In our view, the opportunities arising from the industry consolidation, along with General Steel's unique position as both a foreign and domestic company, access to foreign capital, strong industry experience and relationships with targeted companies, deep understanding and sensitivity to the target company's concerns will enable General Steel to successfully execute its acquisition plan. We estimate revenue of $746 million and net income of $16.5 million in 2007 rising to revenue of $1,298 million and net income of $37.1 million in 2008. EPS in 2007 are estimated at $.50 rising to $.91 in 2008.

About Dutton Associates

Dutton Associates is one of the largest independent investment research firms in the U.S. Its 30 senior analysts are primarily CFAs, and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.

The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. The Firm does not accept any equity compensation. We received $35,000 from the Company for 4 quarterly Research Reports with coverage commencing on 11/05/2007. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.