In the first three quarters of 2011, the operating revenue of Baoshan Iron and Steel Co., Ltd.(600019.SH) was RMB16.73 billion, up 12.2% YoY, while the total profit was RMB8.229 billion, down 40.42% YoY.

In Q3, 2011, its operating revenue hit RMB56.18 billion, up RMB4.97 billion YoY, while the total profit was RMB1.44 billion, down RMB1.53 billion YoY. The increased revenue and declined profit were caused by the high iron ore price. Because the company reduced the steel price, and its gross margin was only 5.34%, down 2.74 percentage points from 8.08% in Q2.

 Growth of Operating Revenue and Total Profit of Baoshan Iron and Steel, 2008-Jan.-Sept.2011

Source: Baoshan Iron and Steel; ResearchInChina

 In addition, expense rate of Baoshan Iron and Steel slid to 3.26% in 2011Q3, down 0.12 percentage points QoQ, wherein financial expense rate reduced by RMB120 million, down 164% QoQ. The decline was due to the increased financing scale, as well as the enhanced exchange earning caused by boosted appreciation of RMB against UD dollar compared to the same period of last year.