QualityStocks.net News – China Precision Steel, Inc. (CPSL) Reports 231% Increase in Third Quarter Net Income

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We would like to highlight China Precision Steel, Inc. (NASDAQ: CPSL). The company, formerly OraLabs Holding Corp, is a niche and value-added steel processing company principally engaged in the manufacture and sale of high-precision, cold-rolled steel products and in the provision of heat treatment and cutting of medium and high carbon hot-rolled steel strips. The Company conducts its operations principally in China through its wholly owned operating subsidiary, Shanghai Chengtong Precision Strip Co., Limited (Chengtong).

In the Company’s recent news,

China Precision Steel, Inc. (CPSL), a precision cold-rolled steel processing company in the People’s Republic of China listed on the Nasdaq, reports net income of $4.6 million or 10 cents per share for the third quarter of 2008, an increase of 231% from the prior year. Revenues rose 61% year over year to $18.7 million.

”Our strong sales growth in exports of low-carbon, hard-rolled products and subcontracting work significantly increased our total revenue to a record level. We maintained our gross margin and saw a significant improvement in operating margin during the quarter, which flowed through to our bottom line,” commented Dr. Wo Hing Li, China Precision Steel’s Chairman and CEO. ”As our new 1400 cm cold rolled mill ramps up capacity, we are actively developing new products for new markets.”

China Precision Steel intends to spend $20 million worth of capital expenditures in the coming months to install a new continuous annealing line for producing high quality stainless steel. It also plans to install a 1700mm new cold roll mill at its facilities in Shanghai. The company’s existing 1400mm cold roll mill currently operates at 50% capacity utilization, so production on this line can easily ramp up with demand.

‘We continue our strive to find an appropriate sales mix that provides us with improved profitability and stability of cash flows, along with the higher margin provided by high precision and individually customized cold-rolled steel products,” commented Dr. Li. ”With the addition of the continuous annealing line, we will be able to expand our product line to include higher margin, cold-rolled stainless steel. Our strong R&D capabilities and ability to develop precision products provide us with competitive advantages to continue to strengthen our position in the market and improve profitability in the long term.”

Shares of CPSL closed at $4.34 on May 15 and have traded in a range of $2.58 - $12.65 during the past year. With 46 million shares outstanding, CPSL has a market cap of $199 million. Shareholders’ equity as of March 31, 2008 was $111.1 million or $2.56 per share.

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Forward-Looking Statement:

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.