One company that has been catching the attention of small-cap investors is China Gengsheng Materials. China Gengsheng is known for developing and marketing a broad range of industrial material product and has grown into a market leader by offering state-of-the-art customized solutions.
Today, the young company made the announcement that they have renewed full service contracts for refractory products with 3 major steel companies for another year. The companies included in these contracts are: Changjiang Steel, Heilonjing Steel and Laiyuan Aoya Steel. These contracts will be paid in monthly installments and are worth an estimated $7.3 million.
When asked about the effect of these contracts, China Gengsheng CEO Shunquing Zhang was quoted as saying, “I am encouraged by the renewal of these refractory contracts. Full service programs typically enjoy higher gross margins than straight sales and they ensure stable customer relations.”
The renewal of these contracts has the potential to boost China Gengsheng due to the impressive nature of the steel companies China Gengshang is providing the services for and the ever-growing population of China. Investors are starting to discuss the company and it may only be a matter of time before institutional investors start placing this company into their portfolio.
Currently, China Gengshang is trading in the $2.00 range. With strong contracts in place, China Gengshang may become friend to the savvy investors in the near future.