In Q3 2011, operating revenue of Shanxi Taigang Stainless Steel (000825.SZ) reached RMB 24.96 billion, a rise of 7.66% YoY; while the total profit hit RMB 413 million, up 99.76% YoY. Its performance slightly increased in the first three quarters.

 In Q3 2011, growth of operating revenue was quite modest, which should be attributed to the steady price of steel and slightly increased sales volume of steel, compared to 2010Q3. The significant growth of total profit in 2011Q3 was mainly due to the enhancement of cost control. Gross margin grew 1.59 percentage points YoY in the third quarter to 8.94%. 

Growth Rates of Operating Income and Total Profit of Shanxi Taigang Stainless Steel, 2008-2011

Source: Shanxi Taigang Stainless Steel; ResearchInChina

Currently, backed up by its parent company – TISCO's two iron mines iron, ore self-sufficiency rate of Shanxi Taigang Stainless Steel reaches about 50%. Iron ore is supplied to Taigang Stainless Steel by the CIF price plus 15% freight concessions from Qingdao port to the company, which ensures the cost advantage of Taigang Stainless Steel.