2. Safe Harbor
This presentation includes or incorporates by reference statements that constitute "forward-looking statements"
within the meaning and protections of Section 27A of the Securities Act of 1933, as amended and Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include
statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions,
estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other
factors, which may be beyond our control, and which may cause the actual results, performance, capital,
ownership or achievements of the Company to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements. All statements other than statements of
historical fact are statements that could be forward-looking statements. You can identify these forward-looking
statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate,"
"would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could,"
"intend," "target" and other similar words and expressions of the future. All written or oral forward-looking
statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without
limitation, those risks and uncertainties described in our annual report on Form 20-F for the year ended
December 31, 2011 and otherwise in our SEC reports and filings, including the final prospectus for our offering.
Such reports are available upon request from the Company, or from the Securities and Exchange Commission,
including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake
to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective
dates on which any such statements otherwise are made.
2
3. Capital Markets Summary
Price (9/11/12): $2.02
Revenues (ttm): $338.5 million
Net Income (ttm) (1): $58.2 million
Diluted EPS (ttm) (1): $1.01
Market Capitalization: $117.6 million
Price/Book (ttm): 0.37x
2012E P/E (2): 2.69x
PEG Ratio (3): 0.38
(1)1Figures are adjusted for the one-time warrant exercise expenses incurred in the first quarter of 2011.
(2) Analyst FY2012E EPS guidance of $0.75 per share.
(3)GGrowth rate provided by Thomson One.
3
4. Company Overview
The Leading High-Precision Steel Processing Company in China
Raw Cold Rolled Steel
Materials End
Processing Manufacturers
Hot Rolled Applications
Steel (Narrow + Wide Strip)
China Gerui is a leading niche and high-value added metal processing
company that utilizes advanced technology to produce specialty, cold-rolled
steel products in China
● Headquartered in Zhengzhou, Henan Province, China
● Approximately 1,100 employees as of June 2012
● Annual capacity of 500K tons by Q2 of 2012, including 50% chromium plating capacity
● Serves over 200 customers in China in consumer spending and construction industries
4
5. Investment Highlights
1 Focus on customized, high value-added, high margin steel production
2 Leading position in robust niche market in China
3 Unique business model with defendable barriers to entry
4 Proven track record of strong financial performance and profitability
5 Defined long-term growth strategy
6 Seasoned management with local market knowledge
7 Diversification of revenue stream via new technologies and exports
5
6. In-House Value Chain
Finished Product
Cold Rolled
Chromium
Level of Complexity
Steel Strips
Plated Steel
(Narrow + Wide)
Temper
Rolling/
Stretching
Annealing
Cold
Rolling
Acid
Initial Pickling
Hot Cutting
Rolled
Coil
Production Process
Input
Value Creators
Factor 6
7. Defining Our Market
● For CRS products, the thickness can range between 0.05mm up to 7.5mm
● China Gerui specializes in ultra-thin, high precision products with
thicknesses mostly from 0.05mm to 0.5, width up to 1200mm, tolerance +/-
0.003mm
● Typical thickness of CHOP raw material HRC: 3mm
● Five series and over twenty types of high precision strip steel products
0.05mm 0.5mm 7.5 mm
CHOP Commodity-type producers
7
8. Revenue by Industry Application
China Gerui produces high precision steel products tailored
to meet exact customer specifications
Telecom
Telecom
2010 wires and 2011
wires and cables
cables Electrical 8%
8% appliances
6%
Electrical
appliances
24%
Food and Food and
industrial industrial
packaging packaging
49% 52%
Construction Construction
and and
household household
decorations decorations
materials materials
19% 34%
8
9. Economics of CHOP’s Business Model
Customer Secure Raw Receive 30% High Inventory Turnover
Survey/Order Material down payment
70% Balance
Low A/R
Collected Upon Processing
Delivery
No Long-Term Debt
Made- to- order production
Cost-plus method of pricing
● Not a commodity business: focused on customized high margin steel production
● Products meet stringent performance and specification requirements
● Supplier of choice when our existing customers develop new products
9
10. Outpacing the Competition
● Limited domestic supply because PRC manufacturers lack the equipment and expertise to
produce high end specialty cold rolled steel
● Steel industry is highly capital intensive: Capital requirements prevent newcomers or
smaller players without sufficient funds from entering the market
International Domestic
CHOP
Companies Companies
Strategic Focus
First Mover Advantage
Brand Recognition
Nationwide Distribution
Local Market Knowledge
High Product Quality
Financial Resources
10
12. Healthy Balance Sheet
Condensed Balance Sheet June-30-2012 December-31-2011
(USD 000’s) (Unaudited) (Audited)
Cash $282,840 $246,601
Restricted cash 144,919 118,130
Accounts receivable 3,650 6,383
Inventories 23,516 24,463
Current assets 539,767 445,186
Total assets 688,553 601,076
Notes Payable 246,183 204,881
Term Loan 46,907 44,170
Current liabilities 369,270 302,648
Total liabilities 369,270 302,648
Total stockholders’ equity 319,282 298,428
Working capital 170,497 142,538
Inventory turnover days 15.3 14.0
Days sales outstanding 3.9 6.8
12
13. Attractive Valuation
2012E P/E TTM Gross Margins
20.0
18.0 17.4x 29.9%
30.0%
16.0 25.9%
24.6%
14.0
20.4% 20.0%
12.0 Mean: 11.6x 11.2x 20.0% Mean: 19.0%
10.4x 10.0x
10.0 8.9x 15.6%
8.0
6.0 10.0%
7.3%
4.0
2.7x
2.0
(a) 0.0%
0.0 CHOP WOR MUSA RS ZEUS CAS AKS
CHOP WOR MUSA RS ZEUS CAS AKS
US Metals Processors US Metals Processors
Notes: US Metals Processors consist of Worthington Industries, Metals USA Holdings, Reliance Steel & Aluminum,
Olympic Steel, Castle and AK Steel. All pricing information is of 9/11/12; all financial information is of 6/30/12 except for
WOR which is 5/31/12.
(a) Negative EPS
Source: Company Filings, Thomson One 13
14. Disciplined Growth Strategy
Expand Market Share
Expand sales channels
Pursue Acquisitions & and product offerings
Strategic Partnership
Develop disciplined acquisition strategy
and pursue strategic partnership with
Improve Efficiency
industry leaders
Expand technical expertise and control cost
Broaden Product
Portfolio
Broaden product portfolio and mix by
expanding into plated steel production
Double Capacity Double capacity to 500K tons with 50%
chromium plating capabilities
14
15. Production Capacity to
Double by 2012
500K
150K tons in Q2 2011 with 75%
500 400K utilization within six months
450 Wide Strip
250K
400 250 100K tons added in Q4 2011
100% Utilization with 75% utilization within six
350 150
months
Tons (000)
300
250
Narrow Phase I Capex $42M
200
Strip Phase II Capex $12M
150 250 250 250 - all provided for
100
50
0
2010 2011 2012
250K 250K
250
Increase of Chromium plating
200 capacity from 50K tons to
Chromium 250K tons or 50% of total
200
Tons (000)
150 Plating capacity today
250
Capacity
100 50K
50
50 50
0
2010 2011 2012 15
16. Seasoned Management Team
● Mingwang Lu, Chairman of the Board and Chief Executive Officer
– Over 20 years of steel industry experience
– CEO of the Company since 2000
– Held various management positions at Zhengzhou No.2 Steel Plant from 1995 to 2000
– Elected as a member of the 9th, 10th and 11th National People’s Congress in Henan Province
– Awarded Excellent Director/Manager in Henan Province, National Excellent Township
Entrepreneur and Expert in Steel Industry of Henan Province
● Edward Meng, Chief Financial Officer
– Joined China Gerui in April 2009, residing in Zhengzhou, China
– Former CFO/Director of the Board of a number of U.S.-listed companies
– Former CFO of MNCs in China (Shell/Koch/Terex)
– Georgetown University MBA, U.S. CPA, experienced in PRC & U.S. GAAP
16
17. Investment Highlights
1 Focus on customized, high value-added, high margin steel processing
2 Leading position in robust niche market in China
3 Unique business model with defendable barriers to entry
4 Proven track record of strong financial performance and profitability
5 Defined long term growth strategy
6 Seasoned management with local market knowledge
17
18. Contact Information
Company Contact: CCG Investor Relations:
Email: investors@geruigroup.com David Rudnick, Account Manager
Website: www.geruigroup.com Phone: 1-646-626-4172
Email: david.rudnick@ccgir.com
This Presentation of China Gerui Advanced Materials Group Limited was developed by the Company and CCG and is intended solely for informational purposes
and is not to be construed as an offer to sell or the solicitation of an offer to buy the Company’s stock. This presentation is based upon information available to the
public, as well as other information from sources which management believes to be reliable, but is not represented by China Gerui Advanced Materials Group
Limited or CCG as being fully accurate nor does it purport to be complete. Opinions expressed herein are those of management as of the date of publication and
are subject to change without notice.
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