Choppir may 2014 ppt_final

NASDAQ: CHOP

China Gerui Investor Presentation

May 2014

This presentation includes or incorporates by reference statements that constitute "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties

described in our annual report on Form 20-F for the year ended December 31, 2013 and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.

Safe Harbor

Capital Markets Summary

LTM = last twelve months

Price (5/29/14) 0.90

2013 Revenues 165.83 MM

2013 Net Income/(Loss)(LTM) (14.14) MM2013

Diluted EPS/(LPS) (LTM) (0.24)

Market Capitalization 53.75 MM

Price/Book Value 0.19

Book Value Per Share 4.81

Net Cash Per Share 1.14

China Gerui is a leading niche and high-valueadded metal processing company that utilizesadvanced technology to produce specialty,cold-rolled steel products

Headquartered in Zhengzhou, Henan Province, China.

Approximately 1,100 employees as of December 2013.

Annual capacity of 500K tons including 50% chromium plating capacity and 30K tons laminating capabilities.

Serves over 200 customers in China in consumer spending and construction industries.

Began export of products to customers in

Turkey and India in 2012 with additional

customers expected in the U.S. and other

emerging markets.

Company Overview

Raw Materials Hot Rolled

Steel

Cold Rolled Steel Processing

(Narrow + Wide Strip)

ManufacturersEnd

Applications

Investment Highlights

1 Focus on customized, high value-added, high-margin steel production

2 Leading position in robust niche market in China

3 Unique business model with defendable barriers to entry

4 Positive cash flow despite challenging macroeconomic conditions

5 Defined long-term growth strategy

7

Seasoned management with local market knowledge

Diversification of revenue stream via new technologies and exports

6

In-House Value Chain

Hot Rolled

Coil

Initial Cutting

Acid Pickling

Cold Rolling

Annealing

Temper Rolling/

Stretching

Cold Rolled Steel Strips

(Narrow + Wide)

Chromium Plated and Laminated

Steel

Production Process

Leve

l of

Co

mp

lexi

ty

Finished Product

Input Factor

Value Creators

China Gerui specializes in ultra-thin, high-precision products with thicknesses mostly from 0.05mm to 0.5mm, widths up to 1200mm, tolerance +/- 0.003mm.

For CRS products, the thickness can range between 0.05mm up to 7.5mm.

Typical thickness of China Gerui raw material HRC: 3mm.

Five series and over twenty types of high-precision strip steel products.

Defining Our Market

0.05mm 0.5mm 7.5 mm

ChinaGerui

Commodity-type producers

Food and Industrial Packaging

53%

Construction and Household Decoration

40%

Electrical Appliances

4%

Telecom Wire & Cable

3%2013

Revenue by Industry Application

China Gerui produces high-precision steel products tailored to meet exact customer specifications

Food and Industrial Packaging

51%

Construction and Household Decoration

23%

Electrical Appliances

17%

Telecom Wire & Cable

9%

2012

Not a commodity business: focus on customized high-margin steel production.

Products meet stringent performance and specification requirements.

Supplier of choice when our existing customers develop new products.

Economics of China Gerui’s Business Model

Made-to-Order Production

High Inventory Turnover

Low A/R

No Long-Term Debt

Customer Survey/Order

Secure Raw Material

Receive 30% Down Payment

Processing 70% Balance

Collected Upon Delivery

China

Gerui

International

Companies

Domestic Companies

Strategic Focus

First Mover Advantage

Brand Recognition

Nationwide Distribution

Local Market Knowledge

High Product Quality

Financial Resources

Limited domestic supply because PRC

manufacturers lack the equipment and

expertise to produce high-end specialty

cold rolled steel.

Steel industry is highly capital intensive:

Capital requirements prevent newcomers

or smaller players without sufficient funds

from entering the market.

Strategic Advantages

Financial Performance

FYE 2014Guidance

Revenue

$175 MMto

$180 MM

USD million

Total Revenue

Net Profit/Loss Adjusted EBITDA

USD million USD million

USD million

Gross Profit

Note: EBITDA is adjusted for one-time warrant expenses of $570,000 in 2011 and, stock-based compensation expense of $3.7mm in 2012, stock-based compensation expense of $32,891 in 2013

253.9

341.8

265.5

165.8

0

50

100

150

200

250

300

350

400

2010 2011 2012 2013

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

-20

-10

0

10

20

30

40

50

60

70

2010 2011 2012 2013

Net Profit Net Margin

70.6

98.2

57.6

7.0

0

20

40

60

80

100

120

2010 2011 2012 2013

47.163.2

26.1

-14.1

18.6%

9.8%

(8.5%)

18.5%

76101.6

56.9

4.1

-8.0%

-3.0%

2.0%

7.0%

12.0%

17.0%

22.0%

27.0%

32.0%

0

20

40

60

80

100

120

2010 2011 2012 2013Gross Profit Gross Margin

29.9%29.7%

21.4%

2.5%

Healthy Balance Sheet

Condensed Balance Sheet(USD 000’s) Dec.30, 2013 Dec.31, 2012

Cash 237,060 228,861

Certificates of Deposit 24,200 16,372

Restricted cash 114,804 145,414

Accounts receivable 2,694 2,276

Inventories 17,497 22,763

Current assets 454,062 495,040

Total assets 626,558 673,370

Notes Payable 225,812 259,546

Term Loans 50,300 57,463

Current liabilities 314,404 343,302

Total liabilities 327,430 343,302

Total stockholders’ equity 299,129 330,067

Working capital 139,658 151,738

Inventory turnover per year 9.25 9.16

Days sales in inventory 39.46 39.84

China Cold Rolled Steel Industry

From January to November 2013, China’s total cold-rolled sheet production was 26.942 million tons, an increase of 12.8% compared with 2012.

Cold-rolled products suffered low pricing.

Most demand for China cold-rolled products are from the automobile and appliance industries.

Since early 2013 , steel mills have put more resources to the end of supply chain, causing the middle parts’ demand being digested, resulting in demand for cold rolled steel being squeezed.

Source: IBIS World

Challenges & Opportunities in the Next 5 Years

2012 Global Outlook on Steel Consumption and Capacity

Over CapacitySlower Industry Development

Increasing Industry

Consolidation

Out-dated Technology in

Small Steel MillsPollution Issues

Slow New Technology Adoption

• Develop disciplined acquisition strategy and pursue strategic partnership with industry leaders.

• Expand sales channels and product offerings to replace imported steel products.

• Expand technical expertise and control cost.

• Broaden product portfolio and mix by expanding into plated and laminated steel production.

• Double capacity to 500K tons with 50% chromium plating capabilities and added 30K tons laminating capacity.

Disciplined Growth Strategy

Pursue Acquisitions & Strategic Partnership

Expand Market Share

Improve Efficiency

Broaden Product Portfolio

Double Capacity

50 50

250

200

0

50

100

150

200

250

300

2010 2011 2012T

on

s (

000)

250 250 250

150

250

0

100

200

300

400

500

600

2010 2011 2012

To

ns (

000)

• Added 30K tons of laminated production capacity in 2013

Production Capacity Doubled in 2012

250

100% Utilization

400

500

Wide Strip Narrow Strip

250 250

Chromium Plating Capacity

50

Mingwang Lu

Chairman of the Board and Chief Executive Officer

Over 20 years of steel industry

experience.

CEO of the Company since 2000.

Held various management positions

at Zhengzhou No.2 Steel Plant from 1995 to 2000.

Elected as a member of the 9th,

10th and 11th National People’s Congress in Henan Province.

Awarded Excellent Director/Manager

in Henan Province, National Excellent Township Entrepreneur and Expert in

Steel Industry of Henan Province.

Edward Meng

Chief Financial Officer

Joined China Gerui in April 2009,

residing in Zhengzhou, China.

Former CFO/Director of the Board of a number of U.S.-listed companies.

Former CFO of MNCs in China

(Shell/Koch/Terex).

Georgetown University MBA, U.S.

CPA, experienced in PRC & U.S. GAAP.

Seasoned Management Team

Company

Email: [email protected]

Website: www.geruigroup.com

Grayling

Vivian Chen, Managing Director

Phone: 1-646-284-9427

Email: [email protected]

Contact

This Presentation of China Gerui Advanced Materials Group Limited was developed by the Company and Grayling and is intended solely for informational purposes and is not to be construed asan offer to sell or the solicitation of an offer to buy the Company’s stock. This presentation is based upon information available to the public, as well as other information from sources whichmanagement believes to be reliable, but is not represented by China Gerui Advanced Materials Group Limited or Grayling as being fully accurate nor does it purport to be complete. Opinionsexpressed herein are those of management as of the date of publication and are subject to change without notice.

NASDAQ: CHOP

China Gerui Investor Presentation

May 2014