Delong Holdings

Delong Holdings: Latest view from SIAS Research, where House rates INCREASE EXPOSURE with TP of $0.810. SIAS noted that Group reported an uptick of gross margins in 4Q12 of 7.3%, bumping full year gross margin to 5.4% from 4.7% in 9M 2012 and 3.2% in 2011. House remain optimistic of long term margin improvement as the PRC steel industry undergoes restructuring. Also, House notes that Delong is still evaluating potential acquisition targets and has performed some due diligence work on them. From this perspective, there is progress on Delong’s corporate strategy to acquire complementary steel businesses and SIAS continue to await further developments on Delong’s strategy. In the interim, they see Delong continuing to benefit from the improving PRC economy.