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Record earnings today for GSHO $5.60 close Friday: General Steel Holdings, Inc. Announces Record Financial Results for Second Quarter 2007 & Second Quarter Earnings Call
Monday August 20, 8:30 am ET


BEIJING, Aug. 20 /Xinhua-PRNewswire-FirstCall/ -- General Steel Holdings, Inc. (''General Steel''), (OTC Bulletin Board: GSHO - News), China's first publicly traded steel company in the US, reports record financial results for the second quarter ended on June 30, 2007.

Second Quarter 2007 Financial Highlights
-- Sales Revenue reached a record $121.3 million, up 312% from the second
quarter of 2006
-- Gross Profits reached a record $8.11 million, up 410% from the second
quarter of 2006
-- Net Income reached a record $1.9 million, up 2086% from the second
quarter of 2006
-- Earning per share rose to $0.06 per share, up from $0.003 per share
from the second quarter of 2006

Second Quarter 2007 Achievements
-- Signed 60% Joint Venture agreement with Shaanxi Longmen Iron and Steel
Group, Co., Ltd. and began operations in June 2007
-- Finalized 80% ownership position in a Joint Venture agreement with
Baotou Iron & Steel Group - Full production will begin in third quarter
2007
-- Purchased 30% remaining outstanding shares of Tianjin subsidiary
-- Increased aggregate production capacity from 400,000 tons to 3 million
tons (650%)

''The second quarter was a pivotal point in the growth of General Steel,'' stated Henry Yu, General Steel Chairman and CEO. ''We executed our growth strategy by gaining controlling interest in two targeted joint ventures. This increased our production capacity from 400,000 tons to 3 million tons, widened our product mix and gave us a solid regional presence to better serve the rapidly developing western region. We are especially pleased with results from our new Long Men Joint Venture which started only in June and has already had a great impact on earnings. We look forward to the results we can deliver to investors in the third quarter when all three of our operating units will reflect a full three months of operation.''


New Businesses & Products
General Steel now operates three steel business units.

-- Tianjin Daqiuzhuang Metal Sheet Co., Ltd. operates ten production lines
capable of producing 400,000 tons of hot-rolled carbon and silicon
steel sheets used mainly in the agricultural vehicle market. It has an
approximate 50% market share for steel sheets used in the production of
light agricultural vehicles. General Steel owns 100% of this business
unit

-- Baotou Steel - General Steel Special Steel Pipe Joint Venture Co., Ltd.
received its business license in May 2007. It has four production
lines capable of producing 100,000 tons of spiral-weld pipes used
mainly in the energy sector to transport oil, natural gas and steam.
General Steel owns 80% of this joint venture.

-- Shaanxi Long Men Iron & Steel Co., Ltd. began in June 2007. It is a
joint venture between General Steel and the Shaanxi Long Men Iron and
Steel Group Co., Ltd. The joint venture is a fully-integrated steel
production facility capable of producing 2.5 million tons of crude
steel. It produces a final product mix of rebar and infrastructure
related steel products. General Steel owns 60% of this business unit.

Second Quarter 2007 Financial Results
Note: Financial results include the operations of Tianjin Daqiuzhuang
Metal Co., Ltd. for the full three months and operations from
Shaanxi Long Men Iron and Steel Co., Ltd for only one month. Baotou
Steel - General Steel Special Steel Pipe Joint Venture Co., Ltd. was
in production test mode for most of the quarter and had little
impact on results of the quarter.

Net sales from operations increased to $121.3 million in the quarter, reflecting a 312% increase over the $29.4 million recorded in the second quarter last year. In a close corollary and for the same periods of comparison, shipment volume rose 360% to 304,954 tons from 66,359 tons. The company also saw its cost of sales march upward to $113.1 million, up from $27.8 million from the same quarter of 2006. Quarterly gross profit hit $8.1 million, registering a 410% increase above the $1.59 million recorded in the same period of 2006. General Steel witnessed selling general and administrative expenses rise to $2.84 million from $810,000 in the second quarter of the previous year. Accounts receivable was $20.7 million at the end of the second quarter compared to $17.1 million at the end of 2006. Most notably, net income for the quarter climbed 2086% to $1.9 million, up from $86,598 the same period the year before. This translated into a corresponding jump in earnings per share to $0.06 per share from $0.003 per share in the equivalent three months of 2006.

Conference Call

Management will host a conference call at 9:00 a.m. Eastern Time on August 20, 2007, to discuss results of the second quarter ending June 30, 2007 and allow investors greater visibility into the new operations of the company. Joining Henry Yu, General Steel Holdings Chairman and Chief Executive Officer, on the call will be John Chen, the company's Chief Financial Officer and Ross Warner, a Director with the company. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 1-800-860-2442. The pass code for the call is ''General Steel.''

This conference call will be broadcast live over the Internet and can be accessed by all interested parties through the following URL http://www.videonewswire.com/event.asp?id=41866 . To listen to the live webcast, go to the URL at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call on General Steel Holdings' website http://www.gshi-steel.com .

About General Steel Holdings, Inc.

General Steel Holdings, Inc., headquartered in Beijing, operates a diverse portfolio of Chinese steel companies. With 3 million ton aggregate production capacity, its companies serve various industries and produce a variety of steel products including reinforced bar (rebar), hot-rolled carbon and silicone sheet and spiral-weld pipe. The company has steel operations in Shaanxi province (central China), Inner Mongolia province (northwest China) and Tianjin municipality (northeast China). For more information, visit http://www.gshi-steel.com .

Information Regarding Forward-Looking Statements

This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs about future events and financial, political and social trends and assumptions it has made based on information currently available to it. The Company cannot assure that any expectations, forecasts or assumptions made by management in preparing these forward-looking statements will prove accurate, or that any projections will be realized. Such forward-looking statements may be affected by inaccurate assumptions or by known or unknown risks or uncertainties. Actual results may vary materially from those expressed or implied by the statements herein. For factors that could cause actual results to vary, perhaps materially, from these forward-looking statements, please refer to the Company's Form 10-K, filed with the Securities and Exchange Commission, and other subsequent filings. Forward-looking statements contained herein speak only as of the date of this release. The Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether to reflect new information, future events or otherwise.


GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2007 AND DECEMBER 31, 2006

A S S E T S
June 30, December 31,
2007 2006
CURRENT ASSETS: (Unaudited)
Cash $44,304,703 $6,831,549
Restricted cash 13,545,793 4,231,523
Accounts receivable, net of
allowance for doubtful accounts of
$140,662 and $137,132 as of June
30, 2007 and December 31, 2006,
respectively 20,703,437 17,095,718
Notes receivable 6,784,263 537,946
Other receivables 436,317 268,784
Other receivables - related parties 1,682,400 850,400
Inventories 66,075,563 12,489,290
Advances on inventory purchases 8,934,047 2,318,344
Advances on inventory purchases -
related parties 25,754,327 --
Advance on equipment purchases 1,968,418 --
Prepaid expenses - current 47,340 46,152
Total current assets 190,236,608 44,669,706

PLANT AND EQUIPMENT, net 191,305,061 26,606,594

OTHER ASSETS:
Prepaid expenses - non current 873,052 740,868
Intangible assets - land use right,
net of accumulated amortization 21,197,244 1,804,440
Total other assets 22,070,296 2,545,308

Total assets $403,611,965 $73,821,608

L I A B I L I T I E S A N D S
H A R E H O L D E R S' E Q U I T Y

CURRENT LIABILITIES:
Accounts payable $19,788,769 $3,001,775
Short term loans 113,834,289 30,284,686
Short term notes payable 43,421,300 8,153,520
Other payables 2,631,207 355,142
Other payable - related party 90,979,655 --
Accrued liabilities 9,350,456 1,064,012
Customer deposits 34,126,053 1,093,602
Customer deposits - related parties 7,347,109
Deposits due to sales
representatives 1,743,690 2,051,200
Taxes payable 20,233,032 5,391,602
Investment payable 6,312,000 --
Shares subject to mandatory
redemption 1,950,000 2,179,779
Total current liabilities 351,717,560 53,575,318

MINORITY INTEREST 28,313,565 6,185,797

SHAREHOLDERS' EQUITY:
Preferred stock, $0.001 par value,
50,000,000 shares authorized,
3,092,899 and 0 shares
issued and outstanding as of June
30, 2007 and December 31, 2006,
respectively 3,093 --
Common Stock, $0.001 par value,
200,000,000 shares authorized,
32,444,665 and
32,426,665 shares issued and
outstanding (including 1,000,000
and 1,176,665 redeemable shares)
as of June 30, 2007 and December
31, 2006, respectively 31,445 31,250
Paid-in-capital 15,610,335 6,871,358
Retained earnings 5,154,150 4,974,187
Statutory reserves 1,107,010 1,107,010
Accumulated other comprehensive
income 1,674,807 1,076,688
Total shareholders' equity 23,580,840 14,060,493

Total liabilities and
shareholders' equity $403,611,965 $73,821,608


GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(Unaudited)

Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006



REVENUES $121,254,744 $29,398,358 $158,862,715 $50,040,860

COST OF SALES 113,141,376 27,807,959 149,016,342 47,082,163

GROSS PROFIT 8,113,368 1,590,399 9,846,373 2,958,697

SELLING, GENERAL &
ADMINISTRATIVE
EXPENSES 2,844,411 807,633 3,474,611 1,549,811


INCOME FROM OPERATIONS 5,268,957 782,766 6,371,762 1,408,886


OTHER EXPENSE, NET 1,241,143 587,552 1,461,818 747,693

INCOME BEFORE
PROVISION
FOR INCOME TAXES AND
MINORITY INTEREST 4,027,814 195,214 4,909,944 661,193


PROVISION FOR INCOME
TAXES 1,206,613 -- 1,333,882 --

NET INCOME BEFORE
MINORITY INTEREST 2,821,201 195,214 3,576,062 661,193


LESS MINORITY INTEREST 927,902 108,616 1,207,896 322,190


NET INCOME 1,893,299 86,598 2,368,166 339,003

OTHER COMPREHENSIVE
INCOME:
Foreign currency
translation
adjustments 374,568 61,231 598,119 182,636


COMPREHENSIVE INCOME $ 2,267,867 $ 147,829 $ 2,966,285 $ 521,639

WEIGHTED AVERAGE
NUMBER OF SHARES 31,444,665 31,250,000 31,444,665 31,250,000

EARNING PER SHARE,
BASIC AND DILUTED $ 0.060 $ 0.003 $ 0.075 $ 0.011


GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006

Preferred stock Common stock
Par Paid-in
Shares value Shares Par value capital

BALANCE, January 1,
2006 -- $-- 31,250,000 $31,250 $6,871,358

Net income
Foreign currency
translation
adjustments

BALANCE, June 30,
2006, unaudited -- $-- 31,250,000 $31,250 $6,871,358

Net income
Adjustment to
statutory reserve
Foreign currency
translation
adjustments

BALANCE, December 31,
2006 -- $-- 31,250,000 $31,250 $6,871,358

Net income
Preferred stock
issued for
acquisition of
minority interest,
net of dividend
distribution to
Victory New 3,092,899 3,093 8,370,907
Common stock
issued for
conversion of
redeemable
stock, $1.95/share 176,665 177 344,328
Common stock issued
for service,
$1.32/share 18,000 18 23,742
Foreign currency
translation
adjustments

BALANCE, June 30,
2007, unaudited 3,092,899 $3,093 31,444,665 $31,445 $15,610,335

Accumulated
Retained earnings other
Statutory comprehensive
reserves Unrestricted income Totals

BALANCE, January 1,
2006 $840,753 $4,207,236 $339,188 $12,349,785

Net income 339,003 339,003
Foreign currency
translation
adjustments 182,636 182,636

BALANCE, June 30,
2006, unaudited $840,753 $4,546,239 $ $ 581,824 $12,871,424

Net income 694,205 694,205
Adjustment to
statutory reserve 266,257 (266,257) --
Foreign currency
translation
adjustments 494,864 494,864

BALANCE, December 31,
2006 $1,107,010 $4,974,187 $1,076,688 $14,060,493

Net income 2,368,166 2,368,166
Preferred stock
issued for
acquisition of
minority interest
net of dividend
distribution
to Victory New (2,188,203) 6,185,797
Common stock
issued for
conversion of
redeemable
stock, $1.95/share 344,505
Common stock
issued for
service,
$1.32/share 23,760
Foreign currency
translation
adjustments 598,119 598,119

BALANCE, June 30,
2007, unaudited $1,107,010 $5,154,150 $1,674,807 $23,580,840


GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(Unaudited)

2007 2006

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 2,368,166 $ 339,003
Adjustments to reconcile net income to cash
provided by (used in) operating
activities:

Minority interest 1,207,896 322,190

Depreciation 1,979,184 548,685

Amortization 194,830 147,839

Loss on disposal of equipment 118,528 28,859

Stock issued for services 23,760 --
Interest expense accrued on mandatory
redeemable stock 114,726 229,452
(Increase) decrease in assets:

Accounts receivable 499,590 (3,236,194)

Notes receivable (212,753) (561,164)

Notes receivable-related party -- 995,031

Other receivables (152,646) 18,777

Other receivables - related parties (814,100) (970,000)


Inventories (843,369) (12,971,648)

Advances on inventory purchases 248,632 3,939,998

Advances on inventory purchases - related
parties (25,403,755) --

Prepaid expenses - current (111,573) (108,732)
Increase (decrease) in liabilities:

Accounts payable 14,049,429 3,291,541

Other payables 808,677 242,167


Other payable - related party (13,990,128) (980,000)

Accrued liabilities 7,981,708 763,533

Customer deposits 771,354 674,434

Customer deposits -related parties 7,247,099 --

Taxes payable 14,610,931 910,544
Net cash provided by (used in)
operating
activities 10,696,186 (6,375,685)

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash acquired from subsidiary 426,387 --

Increase in investment payable 6,226,080 --

Advances on equipment purchases (1,941,624) 1,058,435

Deposits due to sales representatives (355,405) 437,416

Cash proceeds from sale of equipment 39,442 --

Purchase of equipment (1,350,225) (5,058,840)
Net cash provided by (used in)
investing activities 3,044,655 (3,562,989)

CASH FLOWS FROM FINANCING ACTIVITIES:

Restricted cash (5,188,741) 256,248
Cash contribution received from minority
shareholders 778,260 --

Borrowings from related parties 25,942,000 --

Borrowings on short term loans - bank 25,727,979 14,125,677


Payments on short term loans - bank (30,165,358) (10,156,530)

Borrowings on short term notes payable 13,437,956 10,542,852


Payments on short term notes payable (8,249,556) (11,041,332)
Net cash provided by financing
activities 22,282,540 3,726,915


EFFECTS OF EXCHANGE RATE CHANGE IN CASH 1,449,773 69,449


INCREASE (DECREASE) IN CASH 37,473,154 (6,142,310)


CASH, beginning of period 6,831,549 8,648,373


CASH, end of period $ 44,304,703 $ 2,506,063



For more information, please contact:

Ross Warner
General Steel Holdings, Inc.
Tel: [phone] (Beijing)
Email: [e-mail]
Skype: ross.warner.generalsteel




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Source: General Steel Holdings, Inc.
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