In the first three quarters of 2011, operating revenue and total profit of Zhongyuan Special Steel increased by 33.1% and 7.9% YoY respectively to RMB1.34 billion and RMB72.2 million. In Q3, 2011, its operating revenue hit RMB442 million, up 27.44% YoY, but down 18.10% QoQ.

Growth Rates of Operating Income and Total Profit of Zhongyuan Special Steel, 2008-Jan.-Sept. 2011

Source: Zhongyuan Special Steel; ResearchInChina

During January to September of 2011, growth of operating revenue mainly sourced from the increased sales generated by launch of new products, while the QoQ decrease of its revenue was caused by sluggish demand as well as and the price fall due to fierce competition.

 In addition, substantial price rise of raw materials and fuels and limited cost shifting ability of Zhongyuan all lead to the continuous drop of gross margin.