General Steel Holdings (NYSE: GSI) is in a Possible Position for Growth

29 Feb, 2016

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General Steel Holdings, Inc. (NYSE: GSI) is a Chinese based company registered in Nevada, United States, and is the only Chinese company in the iron and steel industry that is listed on the NYSE.

General Steel Holdings has been attracting more attention recently, after announcing major restructuring plans for its business operations, with the goal of diversifying its portfolio. The reason for the divestiture, which includes a sale of its steel manufacturing business, is a continues heavy losses the company has suffered over the last several years. The losses are a result of terrible market conditions for the steel industry in China, which are not expected to get better any time soon. The restructuring process, the company hopes, will result in a diverse portfolio of businesses, which includes logistics and the Internet-of-Things.

The company expects to receive a net working capital injection of $1 million after completion of the trial, and in the process realize a reversal of equity deficiency of about $1.6 billion which will come as a result of a reduction of the company’s total liabilities.

Earlier in February, the Board of Directors of General Steel Holdings announced a change in directors. The company’s previous Chief Executive Officer, Ms. Yunshan Li, is temporarily replaced with Henry Yu, the Chairman of the Company until a permanent successor will be announced.

General Steel Holdings is a small company with a roughly 18 million market cap, which has struggled to reach its potential due to the falling demand of the Chinese steel market, but with their new business ventures like the logistics market and the consistently growing Internet of Things industry, the company has potential to grow in China’s vibrant economy.

China is the leader in deployment of the Internet-of-Things according to a report by GSMA. The market value of China’s Internet of Things industry is estimated at $ 80.5 billion in 2015, which is an increase of from $32.2 in 2010, according to the Ministry of industry and information technology.