A Steel of a Chinese Stock

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Fools, I promise that what follows is devoid of an Olympic theme, having nothing to do with my fascination for sports events currently being contested in China. I do, however, come bearing the name of a company that's headquartered in Beijing, just a stone's throw from the Olympic "Bird's Nest," and it appears worth a look for several reasons.

I won't beat around the bougainvillea, making you guess the company of which I write. It's General Steel Holdings (NYSE: GSI  ) , and it's a holding company that operates a group of steel companies in the People's Republic of China. Its hot-rolled carbon and silicon steel sheets find their way into agricultural vehicles, shipping containers, and other specialty products. Its spiral-weld pipes transport natural gas and oil, and its bars are used in the building of China's expanding infrastructure. Have we found enough major themes to make this company interesting?

How's General Steel doing? Well, if you realize that accounting is sometimes an impediment to judging corporate strength, it's doing nicely, thank you. Not long ago it reported a loss for the June quarter. But if you back out a charge "for the recalculation of the fair value of derivative liabilities" -- a line item that wouldn't be less decipherable if it were written in Chinese -- its net income jumped from $1.9 million to $4.5 million.

Of course, finding thriving steel companies isn't a tough task these days. Indeed, muscular quarters were recently turned in by the likes of U.S. Steel (NYSE: X  ) , Steel Dynamics (Nasdaq: STLD  ) , and Nucor (NYSE: NUE  ) , among others. But with China's growing appetite for all forms of steel, and with transportation costs becoming more important to all manufacturing equations, General Steel's location seems to make it just that much more compelling.

General Steel has generated four stars among the 360 Fools venturing CAPS opinions on the company. Perhaps more interesting: Bill Mann has recommended this stock to his Global Gains subscribers. Try the market-beating international stock service free for 30 days.

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Fool contributor David Lee Smith, Motley's resident geezer, recalls all past Olympic games ... well, make that several of them. He doesn't own shares in any of the companies mentioned. He does welcome your comments. The Fool has a gold medal disclosure policy.

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