UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   -----------
                                   FORM 10-QSB

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934.

                  For the quarterly period ended June 30, 2005

(X)  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934


For the transition period from __________ to __________


                          GENERAL STEEL HOLDINGS, INC.
                 (Name of Small Business Issuer in Its Charter)

                          NEVADA                                  412079252
            (State or Other Jurisdiction of                   (I.R.S. Employer
            Incorporation or Organization)                   Identification No.)

10th Floor, Building A, Haitong Plaza, No.3 Nanlishi Ave.        100037
                     Xicheng District
                      Beijing, China
         (Address of Principal Executive Offices)               (Zip Code)

                              Incorp Services Inc.
                             6075 S. Eastern Avenue
                     Suite 1, Las Vegas, Nevada, 89119-3146
                               Tel: (702) 866-2500
           (Name, address and telephone number for Agent for Service)

                               + 86 (10) 68000346
                           (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:  none
Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                                (Title of Class)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements for the past 90 days.
Yes [X] No [ ]

The  number of  shares  of Common  Stock  outstanding  on  August  11,  2005 was
31,250,000
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]



<PAGE>
<TABLE>
<CAPTION>

         Certain financial  information  included in this annual report has been
derived from data originally  prepared in Renminbi ("RMB"),  the currency of the
People's  Republic  of China  ("China"  or "PRC").  For  purposes of this annual
report,  a  conversion  rate of  US$1.00  to RMB 8.3 was  utilized.  There is no
assurance that RMB amounts could have been or could be converted into US dollars
at that rate.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                  GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS AMERICAN CONSTRUCTION COMPANY)

                           CONSOLIDATED BALANCE SHEETS
                    AS OF JUNE 30, 2005 AND DECEMBER 31, 2004

                                     ASSETS
                                     ------
                                                                                June 30      December 31,
                                                                                  2005            2004
                                                                             -------------   -------------
                                                                              (Unaudited)      (Audited)
                                                                             -------------   -------------
<S>                                                                          <C>             <C>
CURRENT ASSETS:
   Cash                                                                      $   8,302,503   $   5,547,810
   Restricted cash                                                               2,904,986       3,597,480
   Accounts receivable, net of allowance for doubtful accounts of $1,371
        and $1,371 as of June 30, 2005 and December 31, 2004, respectively         166,121         523,398
   Notes receivables                                                            12,535,003         374,955
   Other receivables                                                               201,817         214,905
   Inventories                                                                  14,811,171      12,826,561
   Advances on inventory purchases                                               5,364,773      13,469,984
   Short-term investment                                                            36,300          36,300
                                                                             -------------   -------------
        Total current assets                                                    44,322,674      36,591,393
                                                                             -------------   -------------

PLANT AND EQUIPMENT, net                                                        13,754,253      14,100,324
                                                                             -------------   -------------
OTHER ASSETS:
   Intangible assets - land use right, net of accumulated amortization           2,133,734       2,277,279
                                                                             -------------   -------------

                   Total assets                                              $  60,210,661   $  52,968,996
                                                                             =============   =============
                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

CURRENT LIABILITIES:
   Accounts payable                                                          $     364,220   $     293,348
   Short term loans - bank                                                      27,067,700      25,748,800
   Short term notes payable                                                      5,880,600       6,776,000
   Other payables                                                                  686,124         400,110
   Other payable - related party                                                   180,000       1,011,012
   Accrued liabilities                                                             340,599         393,532
   Customer deposits                                                             6,050,051       2,009,313
   Deposits due to sales representatives                                         1,472,570       1,231,780
   Taxes payable                                                                 2,599,125       1,879,615
                                                                             -------------   -------------
        Total current liabilities                                               44,640,989      39,743,510
                                                                             -------------   -------------

MINORITY INTEREST                                                                4,786,824       4,015,108
                                                                             -------------   -------------
SHAREHOLDERS' EQUITY:
   Common Stock, $0.01 par value, 75,000,000 shares authorized,
        31,250,000 shares issued and outstanding                                    31,250          31,250
   Paid-in-capital                                                               6,871,358       6,871,358
   Retained earnings                                                             3,725,446       2,152,976
   Statutory reserves                                                              154,794         154,794
                                                                             -------------   -------------
        Total shareholders' equity                                              10,782,848       9,210,378
                                                                             -------------   -------------
                   Total liabilities and shareholders' equity                $  60,210,661   $  52,968,996
                                                                             =============   =============
</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>
<TABLE>
<CAPTION>

                  GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS AMERICAN CONSTRUCTION COMPANY)

        CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004

                                                     Three months ended               Six months ended
                                                ----------------------------    ----------------------------
                                                          June 30                         June 30
                                                ----------------------------    ----------------------------
                                                    2005            2004            2005            2004
                                                ------------    ------------    ------------    ------------
                                                 (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)
                                                ------------    ------------    ------------    ------------
<S>                                             <C>             <C>             <C>             <C>
REVENUES                                        $ 25,290,342    $ 20,227,033    $ 45,989,076    $ 34,490,149

COST OF SALES                                     21,448,304      19,206,187      40,276,856      32,376,169
                                                ------------    ------------    ------------    ------------

GROSS PROFIT                                       3,842,038       1,020,846       5,712,220       2,113,980

SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES        587,172         356,291       1,240,643         771,362
                                                ------------    ------------    ------------    ------------

INCOME FROM OPERATIONS                             3,254,866         664,555       4,471,577       1,342,618

OTHER EXPENSE, NET                                  (444,649)       (251,485)       (860,395)       (555,542)
                                                ------------    ------------    ------------    ------------

INCOME BEFORE PROVISION FOR INCOME TAXES
    AND MINORITY INTEREST                          2,810,217         413,070       3,611,182         787,076

PROVISION FOR INCOME TAXES                           972,294         149,488       1,266,996         303,161
                                                ------------    ------------    ------------    ------------

NET INCOME BEFORE MINORITY INTEREST                1,837,923         263,582       2,344,186         483,915

LESS MINORITY INTEREST                               571,896          79,128         771,716         145,228
                                                ------------    ------------    ------------    ------------

NET INCOME                                         1,266,027         184,454       1,572,470         338,687

OTHER COMPREHENSIVE INCOME (LOSS):
    Foreign currency translation adjustment             --              --              --              --
                                                ------------    ------------    ------------    ------------

COMPREHENSIVE INCOME                            $  1,266,027    $    184,454    $  1,572,470    $    338,687
                                                ============    ============    ============    ============

WEIGHTED AVERAGE NUMBER OF SHARES                 31,250,000      31,215,000      31,250,000      31,215,000
                                                ============    ============    ============    ============

EARNING PER SHARE, BASIC AND DILUTED            $       0.04    $       0.01            0.05    $       0.01
                                                ============    ============    ============    ============
</TABLE>



The accompanying notes are an integral part of these statements.

<PAGE>
<TABLE>
<CAPTION>

                  GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS AMERICAN CONSTRUCTION COMPANY)

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004


                                                              Number           Common          Paid-in       Statutory
                                                            of shares          stock           capital        reserves
                                                          -------------    -------------    -------------   -------------
<S>                                                       <C>              <C>              <C>             <C>
BALANCE, January 1, 2004 restated in
  in accordance with acquisition agreement, AUDITED          31,215,000    $      31,215    $   6,871,218   $        --
  Net income
  Cash received                                                    --               --               --              --
                                                          -------------    -------------    -------------   -------------
BALANCE, June 30, 2004, UNAUDITED                            31,215,000    $      31,215    $   6,871,218   $        --

  Net income
  Adjustment to statutory reserve                                  --               --               --           154,794
  Stock issued for services                                      35,000               35              140            --
                                                          -------------    -------------    -------------   -------------
BALANCE, December 31, 2004, AUDITED                          31,250,000    $      31,250    $   6,871,358   $     154,794

  Net income                                                       --               --               --              --
                                                          -------------    -------------    -------------   -------------
BALANCE, June 30, 2005, UNAUDITED                            31,250,000    $      31,250    $   6,871,358   $     154,794
                                                          =============    =============    =============   =============

                                                                                             Accumulated
                                                                                                other
                                                             Retained          Stock        comprehensive
                                                             earnings        receivable     income (loss)       Totals
                                                          -------------    -------------    -------------   -------------

BALANCE, January 1, 2004 restated in
  in accordance with acquisition agreement, AUDITED       $   1,392,772    $     (10,000)   $        --     $   8,285,205
  Net income                                                    338,687             --               --           338,687
  Cash received                                                    --             10,000             --            10,000

                                                          -------------    -------------    -------------   -------------
BALANCE, June 30, 2004, UNAUDITED                         $   1,731,459    $        --      $        --     $   8,633,892

  Net income                                                    576,311             --               --           576,311
  Adjustment to statutory reserve                              (154,794)            --               --              --
  Stock issued for services                                        --               --               --               175
                                                          -------------    -------------    -------------   -------------
BALANCE, December 31, 2004, AUDITED                       $   2,152,976    $        --      $        --     $   9,210,378

  Net income                                                  1,572,470             --               --         1,572,470
                                                          -------------    -------------    -------------   -------------
BALANCE, June 30, 2005, UNAUDITED                         $   3,725,446    $        --      $        --     $  10,782,848
                                                          =============    =============    =============   =============
</TABLE>


The accompanying notes are an integral part of these statements.

<PAGE>
<TABLE>
<CAPTION>

                  GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS AMERICAN CONSTRUCTION COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004

                                                                June 30         June 30
                                                                 2005            2004
                                                             ------------    ------------
                                                              (Unaudited)     (Unaudited)
                                                             ------------    ------------
<S>                                                          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                               $  1,572,470    $    338,687
    Adjustments to reconcile net income to cash
      provided by (used in) operating activities:
        Minority Interest                                         771,716         145,228
        Depreciation                                              532,574         473,738
        Amortization                                              143,545          82,881
        Loss on disposal of equipment                              34,205           3,132
        Stock issued for services                                    --               175
      (Increase) decrease in assets:
        Accounts receivable                                       357,277        (504,400)
        Other receivables                                          13,088      (2,224,761)
        Other receivables - related parties                          --           459,800
        Inventories                                            (1,984,610)     (8,683,998)
        Advances on inventory purchases                         8,105,211       1,187,953
        Advances on inventory purchases - related party              --         1,021,824
      Increase (decrease) in liabilities:
        Accounts payable                                           70,872       9,200,338
        Other payables                                            286,014       1,075,945
        Other payable - related party                            (831,012)        990,000
        Accrued liabilities                                       (52,933)       (122,611)
        Customer deposit                                        4,040,738         165,850
        Deposits due to sales representatives                     240,790         (56,870)
        Taxes payable                                             719,510        (233,145)
                                                             ------------    ------------
          Net cash provided by operating activities            14,019,455       3,319,766
                                                             ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Increase in notes receivable                              (12,160,048)     (1,054,757)
    Purchase of equipment                                        (220,708)        (92,206)
    Cash proceeds from sale of equipment                             --               605
                                                             ------------    ------------
          Net cash used in investing activities               (12,380,756)     (1,146,358)
                                                             ------------    ------------

CASH FLOWS FINANCING ACTIVITIES:
    Borrowings, net of payments on short term loans - bank      1,318,900       2,420,000
    (Borrowings) payments on short term notes payable            (895,400)      7,955,750
    Cash received on stock issuance                                  --            10,000
                                                             ------------    ------------
          Net cash provided by financing activities               423,500      10,385,750
                                                             ------------    ------------

INCREASE IN CASH                                                2,062,199      12,559,158

CASH, beginning of period                                       9,145,290       3,703,074
                                                             ------------    ------------

CASH, end of period                                          $ 11,207,489    $ 16,262,232
                                                             ============    ============
</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>

                  GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS AMERICAN CONSTRUCTION COMPANY)

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Background

On March 7, 2005,  General Steel Holdings,  Inc. (the Company)  formally changed
its name from American Construction Company to General Steel Holdings, Inc.

The Company was  established on August 5, 2002 for the purpose of commencing the
business of general construction  contracting.  It is the Company's objective to
provide to its customers  timely and durable  construction of their  residential
and commercial needs. We established our subsidiary for the purpose of achieving
our  above  stated  objectives  in  Saskatchewan,  Canada.  We  established  our
subsidiary to enter the residential and commercial construction industry in this
market.

To  accomplish  the above  objective  the  founder  of our  company,  Jeff Mabry
established American  Construction Company (a Nevada company) on August 5, 2002.
American  Construction  Company  then  established  its  subsidiary,   West  Dee
Construction  Ltd.  (a  Saskatchewan,  Canada  Company)  on  August  8,  2002 by
purchasing 100 shares from its treasury.

On October 14, 2004, American  Construction Company and General Steel Investment
Co., Ltd (referred to as General Steel) and Northwest  Steel  Company,  a Nevada
corporation,  entered  into an  Agreement  and Plan of Merger (the  "Agreement")
pursuant to which American Construction Company acquired General Steel, and it's
70% ownership in its subsidiary Daqiuzhuang Metal Sheet Co., Ltd in exchange for
shares of the  Company's  common  stock,  of which  22,040,000  shares are a new
issuance by the Company,  and 7,960,000 shares are from certain  shareholders of
the  Company,  which  in  aggregate,  constitute  96% of the  total  issued  and
outstanding shares of the Company.

Under  the  terms of the  Agreement,  General  Steel  will  remain a 100%  owned
subsidiary of the Company.  The  transaction  contemplated  by the Agreement was
intended to be a "tax-free" reorganization pursuant to the provisions of Section
351 and  368(a)(1)(A)  of the  Internal  Revenue Code of 1986,  as amended.  The
stockholders  of  General  Steel,  as of the  closing  date  of the  merger  own
approximately  96% of the Company's  common stock  outstanding as of October 15,
2004  (excluding  any  additional  shares to be issued on  outstanding  options,
warrants and other securities convertible into common stock).

The  accounting  for these  transactions  is identical to that  resulting from a
reverse-acquisition,  except  that no  goodwill  or other  intangible  assets is
recorded. Accordingly, the financial statements of General Steel Investment Co.,
Limited are the  historical  financial  statements of the Company,  formerly the
operations of Daqiuzhuang Metal Sheet Co., Ltd.

Daqiuzhuang  Metal  Sheet  Co.,  Ltd.  (referred  to as  Daqiuzhuang  Metal) was
established on August 18, 2000 in Jinghai county,  Tianjin city, Hebei province,
the People's Republic of China (PRC). The Articles of Corporation provides for a
10 year operating term beginning on August 18, 2000 with registered capital of $
9,583,200.  The Company is a Chinese registered limited liability company with a
legal structure  similar to a limited  liability  company  organized under state
laws in the United States of America.


<PAGE>

Tianjin Long Yu Trading  Material  Co.,  Ltd was the majority  owner with 71% of
ownership  interest.  Tianjin Long Yu Trading Material Co., Ltd was incorporated
in 2000 in Tianjin Municipality, Daqiuzhuang County; P.R.C. Mr. Yu Zuo Sheng has
90% of ownership interest in Tianjin Long Yu Trading Material Co., Ltd.

During January 2004, upon the board directors' approval, Tianjin Long Yu Trading
Material Co., Ltd and other minority shareholders sold their interests amounting
to 70% to  Yang Pu  Capital  Automotive  Investment  Limited.  Yang  Pu  Capital
Automotive  Investment Limited is a Chinese registered limited liability company
which is 100% indirectly owned by Mr. Yu Zuo Sheng.

On May 16, 2004,  Company  agreed to purchase  Yang Pu's 70% equity  interest in
Daqiuzhuang   Metal  for  the  amount  of  RMB55.45   million  or  approximately
$6,709,450.  The entire  purchase price is to be paid within one year of the new
business  license  being  issued  which  is June  25,  2004.  Due to the  common
ownership by Mr. Yu Zuo Sheng in both General Steel Investment Co., Ltd and Yang
Pu Capital Automotive  Investment  Limited,  the Company's board of directors by
board resolution dated May 16, 2004 has instructed Mr. Yu Zuo Sheng as the 99.9%
shareholder  of  General  Steel on  behalf  of the  Company  to remit  the total
purchase price to Yang Pu from his personal funds. Mr. Yu Zuo Sheng will receive
no compensation for completing this transaction nor will General Steel reimburse
Mr. Yu Zuo Sheng for the  $6,709,450.  As of December 31, 2004, Mr. Yu Zuo Sheng
has paid  the  entire  purchase  price to Yang Pu.  Because  the  entities  have
essentially  the same owner,  Mr. Yu Zuo Sheng and the entities are under common
control,  the transfer of ownership is accounted for at  historical  costs under
guidance of SFAS No. 141. The Company received a new business license certifying
the new ownership structure as a Chinese Foreign Joint Venture on June 25, 2004.

The purchase of Yang Pu's 70% equity  interest and the issuance of the Company's
common stock have been  accounted  for as a reverse  acquisition  presented as a
recapitalization, except no goodwill or the intangible assets are recorded.

Based on the Company's Plan of Merger with General Steel, the Board of Directors
determined  to  change  the  Registrant's  fiscal  year end from  January  31 to
December 31.

The Company through its subsidiary  Daqiuzhuang Metal principally engages in the
manufacturing  of hot rolled  carbon and silicon  steel  sheets which are mainly
used on tractors,  agricultural  vehicles and in other  specialty  markets.  The
Company sells its products through both retailers and wholesalers.





Note 2 - Summary of significant accounting policies

Basis of presentation
---------------------

The consolidated  financial  statements of General Steel Holdings,  Inc. reflect
the activities of the following subsidiaries:

<PAGE>

                                                                     Pecentage
        Subsidiary                                                  Of Ownership
-----------------------------------------------------------------   ------------
General Steel Investment Co., Ltd.         British Virgin Islands      100.0%
Tianjin Daqiuzhuang Metal Sheet Co., Ltd   P.R.C.                       70.0%


The  consolidated  financial  statements have been presented as if the Agreement
and Plan of Merger of the  subsidiary  occurred  during  the year of 2003 due to
common management and ownership.

The consolidated  financial  statements generally reflect only the activities of
Tianjin  Daqiuzhuang  Metal Sheet Co., Ltd at its historical cost since American
Construction  Company  and General  Steel  Investment  Co.,  Ltd had no material
activities for the six months ended June 2005.

Revenue recognition
-------------------

The  Company  recognizes  revenue  when the  goods are  delivered  and title has
passed.  Sales  revenue  represents  the  invoiced  value  of  goods,  net  of a
value-added  tax (VAT).  All of the Company's  products that are sold in the PRC
are  subject to a Chinese  value-added  tax at a rate of 17% of the gross  sales
price.  This VAT may be offset by VAT paid by the Company on raw  materials  and
other materials included in the cost of producing their finished product.

Foreign currency translation
----------------------------

The reporting  currency of the Company is the US dollar.  The Company uses their
local currency, Renminbi (RMB), as their functional currency.

Results of operations  and cash flow are  translated at average  exchange  rates
during the period,  and assets and  liabilities  are  translated  at the unified
exchange  rate as quoted by the People's Bank of China at the end of the period.
Translation  adjustments resulting from this process are included in accumulated
other comprehensive income in the statement of shareholders' equity. Transaction
gains and losses that arise from  exchange  rate  fluctuations  on  transactions
denominated in a currency other than the functional currency are included in the
results of  operations  as  incurred.  These  amounts  are not  material  to the
financial statements.

Plant and equipment, net
------------------------

Plant  and  equipment  are  stated  at  cost  less   accumulated   depreciation.
Depreciation  is computed  using the  straight-line  method  over the  estimated
useful lives of the assets with 3% residual value. The depreciation  expense for
the six months ended June 30, 2005 and 2004  amounted to $532,574 and  $473,738,
respectively. Estimated useful lives of the assets are as follows:

                                        Estimated
                                       Useful Life
                                       -----------
Buildings                              10-30 years
Machinery and equipment                8-15 years
Other equipment                        5-8 years
Transportation equipment               10-15 years


<PAGE>

Construction  in progress  represents the costs incurred in connection  with the
construction of buildings or new additions to the Company's plant facilities. No
depreciation  is provided for  construction  in progress  until such time as the
assets are completed and are placed into service.

The cost and  related  accumulated  depreciation  of  assets  sold or  otherwise
retired are eliminated from the accounts and any gain or loss is included in the
statements of  operations.  Maintenance,  repairs and minor renewals are charged
directly to expenses as incurred.  Major  additions and  betterment to buildings
and equipment are capitalized.

Long-term  assets of the  Company  are  reviewed  annually  as to whether  their
carrying value has become impaired.  The Company considers assets to be impaired
if the  carrying  value  exceeds the future  projected  cash flows from  related
operations.  The  Company  also  re-evaluates  the  periods of  amortization  to
determine whether subsequent events and circumstances  warrant revised estimates
of useful  lives.  As of June 30, 2005,  the Company  expects these assets to be
fully recoverable.

Plant and equipment consist of the following:

                                                       June 30,     December 31,
                                                         2005           2004
                                                     ------------   ------------
                                                       Unaudited      Audited
                                                     ------------   ------------
Buildings and improvements                           $  5,089,350   $  5,089,350
Transportation equipment                                  261,437        240,847
Machinery                                              12,333,770     12,294,697
Construction in progress                                   93,722           --
                                                     ------------   ------------
       Totals                                          17,778,279     17,624,894
Less accumulated depreciation                           4,024,026      3,524,570
                                                     ------------   ------------
       Totals                                        $ 13,754,253   $ 14,100,324
                                                     ============   ============

Use of estimates
----------------

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  of the United States of America  requires  management to
make estimates and assumptions  that affect the amounts reported in the combined
financial  statements  and  accompanying  notes.  Management  believes  that the
estimates  utilized in preparing its financial  statements  are  reasonable  and
prudent. Actual results could differ from these estimates.

Cash and concentration of risk
------------------------------

Cash includes cash on hand and demand deposits in accounts maintained with state
owned banks  within the  People's  Republic  of China and Hong Kong.  Total cash
(including  restricted  cash  balances)  in these  banks  at June  30,  2005 and
December 31, 2004, amounted to $11,778,950 and $9,256,618, respectively of which
no deposits are covered by insurance. The Company has not experienced any losses
in such accounts and believes it is not exposed to any risks on its cash in bank
accounts.

Restricted Cash
---------------

The Company  through its bank  agreements is required to keep certain amounts on
deposit  that are  subject to  withdrawal  restrictions  and these  amounts  are
$2,906,554   and  $3,597,480  as  of  June  30,  2005  and  December  31,  2004,
respectively.


<PAGE>

Inventories
-----------

Inventories  are  stated  at the  lower of cost or  market  using  the  first-in
first-out basis and consist of the following:

                                                       June 30,     December 31,
                                                         2005           2004
                                                     ------------   ------------
                                                     Unaudited       Audited
                                                     ------------   ------------
Raw materials                                        $  8,248,377   $  9,123,814
Finished goods                                          6,562,794      3,702,747
                                                     ------------   ------------
Totals                                               $  14,811,171  $ 12,826,561
                                                     ============   ============

Inventories  consist of raw materials and finished goods. Raw materials  consist
primarily  of iron and steel  used in  production.  The cost of  finished  goods
included  direct  costs  of raw  materials  as  well  as  direct  labor  used in
production.  Indirect  production  costs such as utilities  and  indirect  labor
related to  production  such as assembly and  delivery are also  included in the
cost of inventory.  No work in process  inventory  existed at June 30, 2005, and
December 31, 2004, as all inventory in process was completed and  transferred to
finished goods prior to the physical inventory count.

The Company  reviews its inventory  annually for possible  obsolete  goods or to
determine if any reserves are necessary for potential  obsolescence.  As of June
30, 2005 and December 31, 2004, the Company has determined  that no reserves are
necessary at year end.

Financial instruments
---------------------

Statement of Financial  Accounting  Standards  No. 107 (SFAS 107),  "Disclosures
about Fair Value of Financial Instruments" requires disclosure of the fair value
of financial instruments held by the Company.

SFAS 107 defines the fair value of financial  instruments as the amount at which
the  instrument  could be exchanged  in a current  transaction  between  willing
parties. The Company considers the carrying amount of cash, accounts receivable,
other receivables,  accounts payable,  accrued liabilities and other payables to
approximate  their fair values  because of the short  period of time between the
origination of such instruments and their expected realization and their current
market rate of interest.

Intangible assets
-----------------

All land in the People's Republic of China is owned by the government and cannot
be sold to any individual or company.  However, the government grants the user a
"land use right" (the Right) to use the land.  The Company has acquired land use
rights  during  the  years  ending  in  2000  and  2003  for a total  amount  of
$2,870,902.  The Company has the right to use this land for 50 years. As of June
30, 2005 and December 31, 2004,  accumulated  amortization  amounted to $737,169
and $593,623. The cost of the rights is being amortized over ten years using the
straight-line method.


<PAGE>

Intangible  assets of the Company  are  reviewed  annually  as to whether  their
carrying value has become impaired.  The Company considers assets to be impaired
if the  carrying  value  exceeds the future  projected  cash flows from  related
operations.  The  Company  also  re-evaluates  the  periods of  amortization  to
determine whether subsequent events and circumstances  warrant revised estimates
of useful  lives.  As of June 30, 2005,  the Company  expects these assets to be
fully recoverable.

Total  amortization  expense  for the six months  ended June 30,  2005 and 2004,
amounted to $143,545 and $82,881 respectively.


Income taxes
------------

The Company has adopted  Statement of Financial  Accounting  Standards  No. 109,
"Accounting  for Income Taxes" (SFAS 109).  SFAS 109 requires the recognition of
deferred  income  tax  liabilities  and  assets  for  the  expected  future  tax
consequences  of temporary  differences  between  income tax basis and financial
reporting basis of assets and liabilities. Provision for income taxes consist of
taxes  currently due plus deferred  taxes.  There are no deferred tax amounts at
June 30, 2005 and December 31, 2004.

The charge for  taxation is based on the  results  for the year as adjusted  for
items, which are non-assessable or disallowed.  It is calculated using tax rates
that have been enacted or substantively enacted by the balance sheet date.

Deferred  tax is  accounted  for using the  balance  sheet  liability  method in
respect of temporary  differences  arising from differences between the carrying
amount  of  assets  and   liabilities  in  the  financial   statements  and  the
corresponding tax basis used in the computation of assessable tax profit.

In principle,  deferred tax liabilities are recognized for all taxable temporary
differences,  and  deferred tax assets are  recognized  to the extent that it is
probably  that  taxable  profit  will  be  available  against  which  deductible
temporary differences can be utilized.

Deferred  tax is  calculated  at the tax rates that are expected to apply to the
period when the asset is realized or the  liability is settled.  Deferred tax is
charged or  credited  in the income  statement,  except when it related to items
credited or charged  directly to equity,  in which case the deferred tax is also
dealt with in equity.

Deferred tax assets and  liabilities are offset when they relate to income taxes
levied by the same  taxation  authority  and the  Company  intends to settle its
current tax assets and liabilities on a net basis.

Under the Income Tax Laws, the Company is generally  subject to an income tax at
an effective  rate of 33% (30% state income taxes plus 3% local income taxes) on
incomes reported in the statutory  financial  statements  after  appropriate tax
adjustments,  unless the enterprise is located in a specially  designated region
for which more favorable effective tax rates are applicable.

The provision for income taxes at June 30 consisted of the following:

                                                            2005         2004
                                                          Unaudited    Unaudited
                                                         ----------   ----------
Provision for China Income Tax                           $1,152,966   $  275,876
Provision for China Local Tax                               114,030       27,285
                                                         ----------   ----------
      Total provision for income taxes                   $1,266,996   $  303,161
                                                         ==========   ==========

<PAGE>

Income taxes (continued)
------------------------

The following table reconciles the U.S. statutory rates to the Company's
effective tax rate for the six months ended June 30:

                                                           2005          2004
                                                        ---------     ---------
U.S. Statutory rates                                         34.0%         34.0%
Foreign income not recoginized in USA                       (34.0)        (34.0)
China income taxes                                           33.0          33.0
                                                        ---------     ---------
      Total provision for income taxes                       33.0%         33.0%
                                                        =========     =========

The  Company's  subsidiary,  Daqiuzhuang  Metal Sheet Co.,  Ltd became a Chinese
Sino-foreign equity joint venture at the time of the merger on October 14, 2004.
Daqiuzhuang Metal Sheet Co., Ltd should be now taxed under the Income Tax Law of
the People's Republic of China (PRC) concerning Foreign  Investment  Enterprises
and Foreign Enterprises and various local income tax laws (the Income Tax Laws).
The  Income  Tax  Law for  Enterprises  with  Foreign  Investments  and  Foreign
Enterprises  states.  "Any enterprise  with foreign  investments of a production
nature scheduled to operate for a period of not less than ten years shall,  upon
examination  and  verification  by the tax  authorities  in the year the company
begins to make a profit,  will be exempted  from  income  taxes in the first and
second years and allowed a fifty percent  reduction in the standard tax rates in
the  third to fifth  years."  Accordingly,  the  Company  is in the  process  of
applying for this tax benefit from the local Chinese tax authority.

Value Added Tax
---------------

Enterprises  or  individuals  who  sell   commodities,   engage  in  repair  and
maintenance  or import and export  goods in the PRC are subject to a value added
tax in accordance with Chinese laws. The value added tax standard rate is 17% of
the gross sales price.  A credit is available  whereby VAT paid on the purchases
of  semi-finished  products  or raw  materials  used  in the  production  of the
Company's  finished  products  can be used to offset the VAT due on sales of the
finished product.

Note 3 - Consolidated financial statements and condensed footnotes

The  interim  consolidated  financial  statements  presented  herein  have  been
prepared by the Company  and include the  unaudited  accounts of the Company and
its subsidiaries.  All significant  inter-company accounts and transactions have
been eliminated in the consolidation.

These  consolidated  financial  statements have been prepared in accordance with
generally  accepted  accounting  principles  in the United  States  for  interim
financial  information  and the  instructions  for Form 10-QSB and Article 10 of
Regulation S-X.


<PAGE>

Certain  information  and footnote  disclosures  that are  normally  included in
financial  statements presented in accordance with generally accepted accounting
principles  have been condensed or omitted.  Management of the Company  believes
the  disclosures  made  are  adequate  to make  the  information  presented  not
misleading.  The condensed  consolidated  financial statements should be read in
conjunction  with the Company's  audited  financial  statements  included in its
Annual Report on Form 10-KSB dated March 30, 2005.

In the opinion of management,  the unaudited  consolidated  financial statements
reflect  all  adjustments  (which  include  only normal  recurring  adjustments)
necessary to present fairly the financial position of the Company as of June 30,
2005  and  December  31,  2004,  and  the  results  of  operations,  changes  in
shareholders'  equity and cash flows for the six months  ended June 30, 2005 and
2004.  Interim results are not necessarily  indicative of full year  performance
because of the impact of seasonal and short-term variations.

Note 4 - Earnings per share

The Company reports earnings per share in accordance with the provisions of SFAS
No. 128,  "Earnings Per Share." SFAS No. 128 requires  presentation of basic and
diluted earnings per share in conjunction with the disclosure of the methodology
used in computing  such earnings per share.  Basic  earnings per share  excludes
dilution and is computed by dividing income available to common  stockholders by
the  weighted  average  common  shares  outstanding  during the period.  Diluted
earnings per share takes into account the potential dilution that could occur if
securities or other contracts to issue common stock were exercised and converted
into common stock.

The weighted  average  number of shares used to calculate EPS for the six months
ended  June  30,  2005  (31,250,000)  and  2004  (31,215,000)  reflect  only the
additional  shares  issue  from the  merger  acquisition  on  October  14,  2004
retroactively starting January 1, 2003.

Note 5 - Supplemental disclosure of cash flow information

Interest  paid  amounted to $883,110  and $546,972 for the six months ended June
30, 2005 and 2004, respectively.

Income tax  payments  amounted to $485,615 and $210,226 for the six months ended
June 30, 2005 and 2004, respectively.


<PAGE>

Note 6 - Notes receivable

This amount  represents  trade accounts  receivable  due from various  customers
where the customers'  bank has guaranteed  the payment of the  receivable.  This
amount is non-interest  bearing and is normally paid within three to six months.
The  Company  has the  ability  to  submit  their  request  for  payment  to the
customer's  bank earlier than the scheduled  payment  date.  However the Company
will incur an interest  charge and a  processing  fee when they submit a payment
request early.  The Company had $12,535,003 and $374,955  outstanding as of June
30, 2005 and December 31, 2004, respectively.

Note 7 - Other payable - related party

The Company has a short term loan from Golden Glister Holdings  Limited.  Golden
Glister  Holdings Limited is incorporated in the territory of the British Virgin
Islands which our president Yu Zuo Sheng is the majority shareholder. The amount
was loaned to General Steel  Investment  Co., Ltd for business  operations.  The
Company had $180,000 and $990,000  outstanding  on this loan as of June 30, 2005
and  December  31,  2004,  respectively.  This amount is  short-term  and is non
interest bearing.

Note 8 - Advances on inventory purchases

Advances on inventory purchases including the related party purchases are monies
deposited or advanced to outside vendors or related parties on future  inventory
purchases.  Due to the high  shortage of steel in China,  most of the  Company's
vendors  require  a  certain  amount  of money to be  deposited  with  them as a
guarantee that the Company will receive their purchases on a timely basis.

This amount is refundable and bears no interest. The Company has a legal binding
contract with their vendors for the guarantee  deposit,  which is to be returned
to the Company at the end of the contract.  The inventory is normally  delivered
within  one month  after the  monies has been  advanced.  The total  outstanding
amount was $5,364,773 and $13,469,984 as of June 30, 2005 and December 31, 2004,
respectively.


Note 9 - Short term loans - bank

Short term loans - bank represent  amounts due to various banks which are due on
demand or normally  within one year.  These loans can be renewed with the banks.
The Company had a total of  $27,067,700  and  $25,748,800  short term bank loans
with various banks as of June 30, 2005 and December 31, 2004, respectively.










<PAGE>
<TABLE>
<CAPTION>

                                                                    June 30,     December 31,
                                                                      2005           2004
                                                                  ------------   ------------
                                                                    Unaudited       Audited
                                                                  ------------   ------------
<S>                                                               <C>            <C>
Loans from China Bank, JingHai Branch, due August, 2005
  Monthly interest only at 6.372% per annum, secured by
  equipment and property                                          $  1,185,800   $  1,185,800

Loans from Agriculture Bank, DaQiuZhuang Branch, due
  various dates from July 2005 to May 2006
  Monthly interest only payments in 2005 ranging from
  from 6.691% to 7.56% per annum, guaranteed by an
  unrelated third party and secured by property and equipment       10,151,900     10,648,000

Loan from Construction Bank of China, JinHai Branch, due August
  22, 2005.  Monthly interst only payment at 6.225% per
  annum, secured by properties                                       1,089,000      1,089,000

Loans from ShangHai PuFa Bank, due various dates from
  July 2005 to March 2006, Monthly interest only
  payments ranging from 5.31% to 6.696% per month,
  guaranteed by an unrelated third party                             6,050,000      6,050,000

Loans from China Merchant Bank, due various dates from
  August 2005 to June 2006, quarterly interest only
  payments, annual interest rate of 5.0445% to 5.86%,
  guaranteed by an unrelated third party                             7,865,000      6,050,000

Loan from Construction Bank of China, due August 22, 2005
  Monthly interest only payment at 8.1576% per annum,
  guaranteed by an unrelated third party                               726,000        726,000
                                                                  ------------   ------------
              Totals                                              $ 27,067,700   $ 25,748,800
                                                                  ============   ============
</TABLE>




Note 10 - Short term notes payable

The Company has the following  short term notes payable  outstanding as for June
30, 2005 and December 31, 2004:

<PAGE>
<TABLE>
<CAPTION>

                                                                    June 30,     December 31,
                                                                      2005           2004
                                                                  ------------   ------------
                                                                    Unaudited       Audited
                                                                  ------------   ------------
<S>                                                               <C>            <C>
China Bank, Jing Hai Branch, various amounts, due dates ranging
  between August to September 2005, restricted cash required
  of 50% of loan amounts, guaranteed by the Company               $  1,694,000   $  1,694,000

Agricultural Bank of China, various amounts, due dates ranging
  between July to November 2005, restricted cash required
  of 50% of loan amount, guaranteed by the Company                   1,452,000      2,057,000

Daqiuzhuang Industrial and Commercial Bank, various amounts,
  due November 2005, restricted cash required of 30% of loan
  amount, guaranteed by the Company                                    314,600        605,000

ShangHai PuFa Bank, due November 2005, restricted cash required
  of 50% of loan balance, guaranteed by the
  Company                                                            2,420,000      2,420,000
                                                                  ------------   ------------
          Totals                                                  $  5,880,600   $  6,776,000
                                                                  ============   ============
</TABLE>


Total  interest  expense for the six months ending June 30, 2005 and 2004 on all
debt amounted to $883,110 and $546,972, respectively.

Note 11 - Customer deposits

Customer deposits represent amounts advanced by customers on product orders. The
product  normally  is shipped  within six months  after  receipt of the  advance
payment and the related sale is  recognized  in  accordance  with the  Company's
revenue  recognition policy. As of June 30, 2005 and December 31, 2004, customer
deposits amounted to $6,050,051 and $2,009,313, respectively.

Note 12 - Deposits due to sales representatives

The Company has entered  into  agreements  with  various  entities to act as the
Company's  exclusive  sales agent in a specified  area.  These  exclusive  sales
agents must meet certain  criteria and are required to deposit a certain  amount
of money with the Company.  In return the sales agents receive  exclusive  sales
rights to a specified area and discounted  prices on products they order.  These
deposits  bear no  interest  and are  required to be returned to the sales agent
once  the  agreement  has  been  terminated.  The  Company  had  $1,472,570  and
$1,231,780 in deposits due to sales  representatives  outstanding as of June 30,
2005 and December 31, 2004, respectively.

Note 13 - Major customers and suppliers

The Company has 5 major customers which represent  approximately  47% and 51% of
the  Company's  total  sales for the six months  ended  June 30,  2005 and 2004,
respectively.

For the six  months  ended  June  30,  2005  and  2004,  the  Company  purchases
approximately 80% and 76%, respectively,  of their raw materials from four major
suppliers; each of these suppliers individually represents as follows:

<PAGE>

                                2005                         2004
Suppliers                % to total purchase          % to total purchase
---------                -------------------          -------------------
    A                            31%                          37%
    B                            28%                          17%
    C                            14%                          16%
    D                             7%                           6%


Note 14 - Minority Interest

Minority interest  represents the outside  shareholders' 30% interest in Tianjin
Daqiuzhuang Metal Sheet Co., Ltd.

Note 15 - Other expense

Other  income  and  expense  for the six  months  ended  June 30  consist of the
following:

                                                            2005         2004
                                                         Unaudited    Unaudited
                                                         ---------    ---------
Finance/interest expense                                 $(886,873)   $(552,754)
Interest income                                             30,504           23
Other nonoperating income                                   12,063         --
Other nonoperating expense                                 (16,089)      (2,811)
                                                         ---------    ---------
Total other expense                                      $(860,395)   $(555,542)
                                                         =========    =========








<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION OR PLAN OF
OPERATIONS

Forward Looking Statements - Cautionary Factors

The following  discussion and analysis  should be read in  conjunction  with the
Company's financial  statements and the notes hereto appearing elsewhere in this
report.  This  report  on Form  10-QSB  and  documents  incorporated  herein  by
reference contain certain "forward-looking statements" as defined by the Private
Securities  Litigation  Reform Act of 1995, which involve  substantial risks and
uncertainties.  When  used in this  report  and in  other  reports  filed by the
Company, the forward-looking  statements are often identified by the use of such
terms and phrases as "anticipates,"  "believes,"  "intends," "plans," "expects,"
"seeks," "scheduled," "foreseeable future" and similar expressions. Although the
Company believes the understandings and assumptions on which the forward-looking
statements  in this  report  are  based are  reasonable,  the  Company's  actual
results,  performance and achievements  could differ materially from the results
in, or implied by, these forward-looking statements.  Certain factors that could
cause or contribute to such  differences  include those discussed in "Management
Discussion and Analysis" and elsewhere herein.

The following is  management's  discussion  and analysis of certain  significant
factors which have affected our financial  position and operating results during
the periods included in the accompanying  consolidated financial statements,  as
well as  information  relating  to the  plans  of our  current  management.  The
following  discussion and analysis  should be read in  conjunction  with and our
consolidated  financial  statements  and the  related  notes  thereto  and other
financial information contained elsewhere in this Form 10-QSB.

Overview

         Following  the  acquisition  of ownership in General  Steel  Investment
Co.,Ltd.,  the  Company has shifted  its main  business  focus to general  steel
products and steel  manufacturing.  As the  core-operating  unit of the Company,
Tianjin  Daqiuzhuang  Metal Sheet Co., Ltd. (herein referred to as "DQ") started
its operation in 1988. DQ's core business is the  manufacturing  of high quality
hot  rolled  carbon  and  silicon  steel  sheets  which are  mainly  used in the
production of tractors,  agricultural vehicles, shipping containers and in other
specialty markets.

         DQ  uses a  traditional  rolling  mill  production  sequence,  such  as
heating, rolling, cutting, annealing, and flattening to process slabs into steel
sheets. The sheet sizes are approximately 2,000 mm (length) x 1,000 mm (width) x
0.75 to 2.0 mm (thickness).  Limited size adjustments are possible to meet order
requirements. "Qiu Steel" is the registered name for the Company's products.

         Since 1998,  DQ has expanded its  operations  to six  production  lines
processing  250,000 tons of 0.75-2.0 mm hot-rolled carbon steel sheets per year,
maintaining  a 40% market  share of all steel sheets used in the  production  of
agricultural  vehicles in China. The Company is building a new plant next to the
existing  facility  with four new  production  lines to increase its  hot-rolled
steel sheet  production  capacity by 150,000 tons.  The new  production  site is
expected to be put in use by January 2006.

         Economic  forecasts  indicate  continued  fast pace  growth in China in
2005. As a result,  the  consumption of our steel products is expected to remain
at a high level.  The Company believes that the highly  competitive  market will
exist throughout  2005, with pressures for shipment volumes and prices.  In view
of the above factor, the main focus of the Company in 2005 will be on:


<PAGE>

         o        Stringent cost control and cash management;

         o        Increasing  customer  base and  breaking  into new  markets by
                  assigning distributorship in more areas, and

         o        Maximizing order load and optimizing product mix.

Results of Operations

         The results of operations  of the Company are largely  dependent on the
level of general  economic  activity  in China.  As  indicated  in the  overview
section,  economic  forecasts  indicate a continued fast pace growth in China in
2005. As a result,  the  consumption of our steel products is expected to remain
at a high level. The Company's sales revenue mainly comes from the sale of metal
sheets in  different  specifications  and steel scrap  generated  in the cutting
process.  The  Company's  cost of sales  includes  the cost of its  primary  raw
materials,  rollers,  energy  cost,  labor  cost,  the cost of  warehousing  and
handling finished steel products and freight costs.

Net sales and gross profit

         Net sales  for the six  months  ended  June 30,  2005 were  $45,989,076
compared  to  $34,490,149  for the  same  period  in  2004,  representing  a 33%
increase.  Shipments  in the first six months of 2005 climbed 16% to 87,995 tons
from 76,147  tons due to overall  increase in  productivity  and market  demand.
Average selling price per ton including sale of scrap has increased to $523 from
$453 as a result of good market demand for our steel products.  Our products are
widely used as the  replacement to the lower-end  cold rolled steel sheets.  The
increasing  demand for cold  rolled  metal  sheets in recent  months also gave a
boost to the  price of our  products.  In  summary,  the  main  reasons  for the
increase in sales revenue is due to an increase in selling price and an increase
in demand for steel products due to the good market conditions.

         Gross profit for the six months ended June 30, 2005 was $5,712,220,  an
increase of 170% or $3,598,240  from  $2,113,980  for the same period last year.
This increase in gross profit is mainly due to the increase in both sales volume
and selling price  outpacing the increase in raw materials  price.  As a result,
our profit margin enjoyed a big increase in the first half of 2005. However, the
management  takes a cautious stand on the continuance of this trend for the rest
of the year.

Cost of sales

         Overall cost of sales went up to  $40,276,856  for the six months ended
June 30, 2005 from $32,376,169 for the same period in 2004. Average cost per ton
were $457 and $425,  respectively  for the six months  ended  June 30,  2005 and
2004. As a result,  the increase in cost of sales is the combined effect of both
increases in production volume and raw material price.

         However,  cost of sales as a percent of sales  decreased from 93.87% to
87.58% due  primarily to the rising  selling price for the six months ended June
30, 2005 compared to the same period in 2004.

Selling, General and Administrative Expenses

         Selling,   general  and  administrative  expenses,  such  as  executive
compensation, office expenses, legal and accounting charges, travel charges, and
various  taxes were  $1,240,643  for the six  months  ended  June 30,  2005.  It
represented  a 61% increase  from  $771,362 for the same period in 2004. A large
component  of the  increase  came  from the  legal  and  accounting  and  public
relations charges for the public listed company.


<PAGE>

Other income (expense)

         Other income  (expense) in the six months ended June 30, 2005 consisted
mainly of finance charges and interest income. Interest expense was $883,110 for
the six months ended June 30, 2005, a $336,138  increase from the same period in
2004.  Outstanding  bank loans increased to $27,067,700  from  $25,748,800 as of
June 30,  2005 and  December  31,  2004,  respectively.  This  increase  in debt
borrowing  is mainly  driven by  management's  decision to increase  the working
capital for the current operation.

Income taxes

         The  Company did not carry on any  business  and did not  maintain  any
branch office in the United States during the six months ended June 30, 2005 and
2004.  Therefore,  no provision for withholding or U.S.  federal income taxes or
tax benefits on the undistributed earnings and/or losses of the Company has been
made.

         Pursuant to the relevant laws and regulations in the People's  Republic
of China,  Daqiuzhuang  Metal,  as a foreign  owned  enterprise  in the People's
Republic of China,  is entitled to an exemption from the PRC  enterprise  income
tax for two years  commencing from its first  profitable year. The Company is in
the process of applying for this tax benefit.  The Company expects to obtain the
approval  from the  government  by the end of 2005 and be  refunded  for all the
income tax paid during the year.

         For the six months ended June 30, 2005 and 2004 the Company's effective
state and local income tax rate was 33%.  Income tax expense was  $1,266,996 for
the six months ended June 30, 2005,  up from $303,161 in the same period of 2004
due to higher pretax income.

Liquidity and capital resources

         Due to the good market  conditions of the steel  industry,  the Company
plans to maintain  higher-than-average  debt to equity ratio to better  position
itself in this fast growing market. The bank loans are considered short-term for
the purpose of the  preparation  of the  financial  statements  because they are
renewable with the banks every year.

Operating activities

         Net cash provided by operating activities for the six months ended June
30,  2005 was $14.02  million  compared  with $3.32  million  used in  operating
activities for the same period of 2004.  Advance on inventory purchase including
payments  to related  parties  increased  by $8.11  million as of June 30,  2005
compared with December 31, 2004. In addition, the Company received $4.04 million
more in customer deposits as of June 30, 2005 compared with December 31, 2004.

Investing activities

         Net cash used in investing  activities  was $12.38  million for the six
months ended June 30, 2005  compared with $1.15 million for the six months ended
June  30,  2004.  This  change  mainly  resulted  from  the  increase  in  notes
receivable.  Our customers  usually pay for our products with  promissory  notes
issued by the banks  which in turn can be used like cash by the  Company  to pay
for its purchases.


<PAGE>

Financing activities

         The bank loans as of June 30, 2005 increased by $1.32 million  compared
with  December  31,  2004.  This is  mainly  because  the  Company  signed a new
agreement with China Merchants Bank to borrow $1,815,000 in the first quarter of
2005.  Notes  payable  decreased  by  $895,400 at June 30,  2005  compared  with
December 31, 2004.

Compliance with environmental laws and regulations

         Based on the equipment,  technologies and measures adopted, the Company
is not considered a high-pollution factory in China. The production process does
not need much water and produces only a minimal amount of chemical pollution. We
use gas-fired reheat furnaces recommended by the State Environmental  Protection
Agency to heat our raw materials and semi-finished products.

         In 2005, the Daqiuzhuang  County will order an  environmental  clean-up
campaign and will require harmless waste water discharge. In order to meet these
requirements,  we are going to invest  $50,000 to remodel our  industrial  water
recycling system to reduce new water consumption and industrial water discharge.
As for the remodeling of gas furnace and desulphurization of discharged gas, the
local  government has not posted any control  measures  currently and we have no
plans to proceed  with this  remodeling  until such time  regulations  have been
implemented.

         The Company  believes  that  future  costs  relating  to  environmental
compliance  will not have a material  adverse effect on the Company's  financial
position.  There is always the possibility,  however,  that unforeseen  changes,
such as new laws or  enforcement  policies,  could  result in  material  adverse
costs.

Impact of inflation

         We are subject to commodity price risks arising from price fluctuations
in the market prices of the raw  materials.  The Company has generally been able
to pass on cost increases  through price  adjustments.  However,  the ability to
pass on these  increases  depends  on market  conditions  driven by the  overall
economic  conditions  in China.  Price risks are managed by the Company  through
productivity  improvements and  cost-containment  measures.  Management does not
believe  that  inflation  risk is  material  to our  business  or our  financial
position, results of operations or cash flows.

Off-balance sheet arrangements

         There are currently no off-balance sheet arrangements.

Risk factors

Risks Related to Our Business

         Competition  within the steel industry is intense.  In the sale of flat
rolled carbon steel and silicon steel,  the Company competes with competitors on
the basis of product quality,  responsiveness to customer needs and price. There
are two types of steel and iron  companies  in China:  State  Owned  Enterprises
(SOEs) and privately owned companies.

         The Company  competes with both state owned and  privately  owned steel
manufacturers. While we believe that our price and quality are superior to other
manufacturers,  many of our competitors are better capitalized more experienced,
and have deeper ties in the Chinese  marketplace.  We may be unsuccessful in our
attempts to compete,  which would have a material adverse impact on our business
and financial  condition.  The Company considers there to be 5 major competitors


<PAGE>

of similar  size,  production  capability  and product line in the market place:
Henan Anyang Metal Sheet Plant, Nanjing Metal Sheet Plant, Tianjin No. 1 Rolling
Steel Plant,  Tianjin  Yinze Metal Sheet Plant and Tangshan  Fengrun Metal Sheet
Plant.  With the PRC's  entry into the World  Trade  Organization  and the PRC's
agreements  to lift many of the  barriers  to foreign  competition,  the Company
believes that  competition will increase in the PRC auto parts market as a whole
with the entry of foreign companies to the market.

         Our limited  operating  history  may not serve as an adequate  basis to
judge our future prospects and results of operations.

         We began our operations in 2000. Our limited  operating history may not
provide a  meaningful  basis on which to evaluate  our  business.  Although  our
revenues have grown rapidly since  inception,  we cannot assure you that we will
maintain our  profitability  or that we will not incur net losses in the future.
We  expect  that  our  operating  expenses  will  increase  as  we  expand.  Any
significant  failure to  realize  anticipated  revenue  growth  could  result in
significant   operating   losses.  We  will  continue  to  encounter  risks  and
difficulties   frequently  experienced  by  companies  at  a  similar  stage  of
development, including our potential failure to:

         o        Implement our business model and strategy and adapt and modify
                  them as needed;

         o        Increase  awareness of our brands,  protect our reputation and
                  develop customer loyalty;

         o        Manage  our  expanding   operations  and  service   offerings,
                  including the integration of any future acquisitions;

         o        Maintain adequate control of our expenses;

         o        Anticipate and adapt to changing  conditions in the auto parts
                  markets  in  which we  operate  as well as the  impact  of any
                  changes in government regulation;

         o        Mergers   and   acquisitions    involving   our   competitors,
                  technological  developments and other significant  competitive
                  and market dynamics.

         If we are not successful in addressing  any or all of these risks,  our
business may be materially and adversely affected.

         Our  inability  to  fund  our  capital  expenditure   requirements  may
adversely affect our growth and profitability.

         Our  continued  growth is dependent  upon our ability to raise  capital
from outside sources. We believe that in order to continue to capture additional
market  share,  we will have to increase  our  production  capacity  through the
purchase of machinery and equipment with a value of  approximately  $10 million.
In the future we may be unable to obtain  the  necessary  financing  on a timely
basis and on acceptable terms, and our failure to do so may adversely affect our
financial position, competitive position, growth and profitability.  Our ability
to obtain  acceptable  financing  at any time may depend on a number of factors,
including:

         o        Our financial condition and results of operations,
         o        The  condition of the PRC economy and the auto industry in the
                  PRC, and
         o        Conditions in relevant  financial markets in the U.S., the PRC
                  and elsewhere in the world.


<PAGE>

         We may not be able to effectively control and manage our growth.

         If our business and markets grow and develop,  it will be necessary for
us to finance and manage expansion in an orderly fashion.  This growth will lead
to an increase in the  responsibilities  of  existing  personnel,  the hiring of
additional  personnel and expansion of our scope of operations.  There can be no
assurance  that we will be able to raise the  required  financing or control and
manage this future growth.

         We depend on large contracts and a concentration of customers.

         Our revenue is dependent,  in large part, on significant contracts from
a limited  number of  customers.  During the second  quarter ended June 30, 2005
approximately  47% of sales  were to five  customers.  We believe  that  revenue
derived  from current and future large  customers  will  continue to represent a
significant  portion of our total  revenue.  Our inability to continue to secure
and  maintain  a  sufficient  number of large  contracts  would  have a material
adverse  effect on our  business,  operating  results and  financial  condition.
Moreover, our success will depend in part upon our ability to obtain orders from
new customers,  as well as the financial  condition and success of our customers
and general economic conditions.

         We may not be able to pass on to  customers  increases  in the costs of
our raw materials, particularly iron and steel.

         The major raw materials  that we purchase for  production  are iron and
steel.  The price and  availability of these raw materials are subject to market
conditions  affecting supply and demand.  Our financial  condition or results of
operations  may be impaired by further  increases in raw  material  costs to the
extent we are unable to pass those higher costs to our  customers.  In addition,
if these  materials are not available on a timely basis or at all, we may not be
able to produce our products and our sales may decline.

Risks Related to Operating Our Business in China

         We face the risk that changes in the policies of the Chinese government
could have  significant  impact  upon the  business we may be able to conduct in
China and the profitability of such business.

         The  economy of China is at a  transition  from a planned  economy to a
market  oriented  economy  subject to five-year  and annual plans adopted by the
government that set down national economic  development  goals.  Policies of the
Chinese  government can have significant  effects on the economic  conditions of
China.  The Chinese  government  has confirmed  that economic  development  will
follow a model of market  economy  under  socialism.  Under this  direction,  we
believe  that the PRC will  continue  to  strengthen  its  economic  and trading
relationships  with foreign  countries  and business  development  in China will
follow market forces. While we believe that this trend will continue,  there can
be no assurance  that such will be the case. A change in policies by the Chinese
government  could  adversely  affect our  interests in by, among other  factors:
changes  in  laws,  regulations  or  the  interpretation  thereof;  confiscatory
taxation;  restrictions on currency conversion,  imports or sources of supplies;
or the expropriation or  nationalization  of private  enterprises.  Although the
Chinese  government has been pursuing economic reform policies for approximately
two decades,  there is no assurance that the government  will continue to pursue
such policies or that such policies may not be significantly altered, especially
in the event of a change in leadership, social or political disruption, or other
circumstances affecting China's political, economic and social life.

         The PRC laws and regulations  governing our current business operations
and  contractual  arrangements  are  uncertain,  and  if we are  found  to be in
violation,  we could be subject to sanctions.


<PAGE>

In addition,  any changes in such PRC laws and  regulations  may have a material
and adverse effect on our business.

         There are substantial  uncertainties  regarding the  interpretation and
application of PRC laws and  regulations,  including but not limited to the laws
and  regulations  governing our business,  or the enforcement and performance of
our  arrangements  with  customers in the event of the  imposition  of statutory
liens, death,  bankruptcy and criminal proceedings.  Our subsidiaries and we are
considered  foreign persons or foreign funded enterprises under PRC laws, and as
a result,  we are required to comply with PRC laws and  regulations.  These laws
and  regulations  are relatively new and may be subject to future  changes,  and
their  official   interpretation   and  enforcement   may  involve   substantial
uncertainty.  The effectiveness of newly enacted laws, regulations or amendments
may be delayed, resulting in detrimental reliance by foreign investors. New laws
and regulations that affect existing and proposed future  businesses may also be
applied retroactively.  In addition, the PRC authorities retain broad discretion
in dealing with  violations of laws and  regulations,  including  levying fines,
revoking business  licenses and requiring  actions necessary for compliance.  In
particular,  licenses, permits and beneficial treatments issued or granted to us
by relevant  governmental  bodies may be revoked at a later time under  contrary
findings  of  higher  regulatory  bodies.  We cannot  predict  what  effect  the
interpretation  of  existing  or new PRC  laws or  regulations  may  have on our
businesses.  We cannot assure you that any such restructuring would be effective
or would not  result in  similar  or other  difficulties.  We may be  subject to
sanctions, including fines, and could be required to restructure our operations.
As a result of these substantial uncertainties, we cannot assure you hat we will
not be found in violation of any current or future PRC laws or regulations.

         A  slowdown  or  other  adverse  developments  in the PRC  economy  may
materially and adversely  affect our customers,  demand for our services and our
business.

         All of our  operations are conducted in the PRC and all of our revenues
are generated  from sales to businesses  operating in the PRC.  Although the PRC
economy has grown  significantly in recent years, we cannot assure you that such
growth will continue.  The automotive  industry in the PRC is relatively new and
growing,  but we do not know how  sensitive  we are to a  slowdown  in  economic
growth or other  adverse  changes in the PRC economy which may affect demand for
cars and  trucks,  and  therefore,  auto parts.  A slowdown in overall  economic
growth, an economic downturn or recession or other adverse economic developments
in the PRC may materially  reduce the demand for our products and materially and
adversely affect our business.

         Inflation  in China  could  negatively  affect  our  profitability  and
growth.

         While the Chinese economy has experienced rapid growth, such growth has
been uneven among various  sectors of the economy and in different  geographical
areas of the  country.  Rapid  economic  growth  can lead to growth in the money
supply and rising  inflation.  If prices for our products rise at a rate that is
insufficient to compensate for the rise in the costs of supplies, it may have an
adverse effect on profitability.  In order to control inflation in the past, the
Chinese  government  has imposed  controls on bank credits,  limits on loans for
fixed assets and  restrictions on state bank lending.  Such an austerity  policy
can lead to a slowing of economic growth.  In October 2004, the People's Bank of
China,  China's central bank, raised interest rates for the first time in nearly
a  decade  and  indicated  in a  statement  that the  measure  was  prompted  by
inflationary  concerns in the Chinese  economy.  Repeated  increases in interest
rates by the  central  bank will likely  slow  economic  activity in China which
could,  in turn,  materially  increase our costs and also reduce  demand for our
products.

         Governmental  control of  currency  conversion  may affect the value of
your investment.



<PAGE>

         The PRC government  imposes controls on the  convertibility of Renminbi
into foreign currencies and, in certain cases, the remittance of currency out of
the PRC. We receive  substantially  all of our  revenues in  Renminbi,  which is
currently not a freely  convertible  currency.  Shortages in the availability of
foreign currency may restrict our ability to remit  sufficient  foreign currency
to pay dividends, or otherwise satisfy foreign currency denominated obligations.
Under existing PRC foreign  exchange  regulations,  payments of current  account
items,  including profit distributions,  interest payments and expenditures from
the transaction,  can be made in foreign  currencies without prior approval from
the PRC State  Administration  of Foreign  Exchange by  complying  with  certain
procedural  requirements.   However,   approval  from  appropriate  governmental
authorities is required where Renminbi is to be converted into foreign  currency
and remitted out of China to pay capital  expenses such as the repayment of bank
loans denominated in foreign currencies.

         The PRC government may also at its  discretion  restrict  access in the
future to foreign  currencies for current account  transactions.  If the foreign
exchange control system prevents us from obtaining  sufficient  foreign currency
to  satisfy  our  currency  demands,  we may not be able to pay  certain  of our
expenses as they come due.

         The  fluctuation of the Renminbi may  materially  and adversely  affect
your investment.

         The value of the Renminbi  against the U.S. dollar and other currencies
may  fluctuate  and is affected  by,  among other  things,  changes in the PRC's
political and economic conditions. As we rely entirely on revenues earned in the
PRC, any  significant  revaluation  of the Renminbi may materially and adversely
affect our cash flows,  revenues and financial  condition.  For example,  to the
extent that we need to convert  U.S.  dollars we receive from an offering of our
securities  into  Renminbi  for our  operations,  appreciation  of the  Renminbi
against the U.S.  dollar could have a material  adverse  effect on our business,
financial condition and results of operations.

         Conversely,  if we decide to convert our Renminbi into U.S. dollars for
the purpose of making  payments for  dividends on our common shares or for other
business purposes and the U.S. dollar appreciates against the Renminbi, the U.S.
dollar  equivalent  of the  Renminbi  we convert  would be  increased.  To date,
however,  we have not engaged in transactions  of either type. In addition,  any
significant  depreciation  of U.S. dollar  denominated  assets could result in a
charge to our income statement and a reduction in the value of these assets. The
Renminbi denominated assets may have higher values in U.S. dollars.

         Since  1994 the PRC has pegged  the value of the  Renminbi  to the U.S.
dollar.  We do not  believe  that this  policy has had a material  effect on our
business.  However,  there have been  indications that the PRC government may be
reconsidering  its monetary  policy in light of the overall  devaluation  of the
U.S. dollar against the Euro and other currencies  during the last two years. In
July 2005,  the PRC  government  revalued  the Renminbi by 2.1% against the U.S.
dollar,  moving from Renminbi  8.28 to Renminbi 8.11 per dollar.  Because of the
pegging of the Renminbi to the U.S.  dollar is loosened,  we anticipate that the
value of the  Renminbi  appreciate  against  the  dollar  with the  consequences
discussed above.

         The PRC legal system has inherent  uncertainties  that could materially
and adversely affect us.

         The PRC legal  system  is based  upon  written  statutes.  Prior  court
decisions may be cited for reference but are not binding on subsequent cases and
have limited value as precedents.  Since 1979, the PRC  legislative  bodies have
promulgated  laws and regulations  dealing with economic matters such as foreign
investment, corporate organization and governance, commerce, taxation and trade.
However, the PRC has not developed a fully integrated legal system and the array
of new laws and  regulations  may not be  sufficient  to cover  all  aspects  of
economic  activities  in  the  PRC.  In  particular,   because  these  laws  and


<PAGE>

regulations  are relatively  new, and because of the limited volume of published
decisions and their non-binding  nature,  the  interpretation and enforcement of
these  laws  and  regulations  involve  uncertainties.  In  addition,  published
government policies and internal rules may have retroactive effects and, in some
cases,  the policies and rules are not published at all. As a result,  we may be
unaware of our violation of these policies and rules until some time later.  The
laws  of the  PRC  govern  our  contractual  arrangements  with  our  affiliated
entities.  The enforcement of these contracts and the interpretation of the laws
governing these relationships are subject to uncertainty.

Risks Related to Our Common Stock

         Our  officers,  directors  and  affiliates  control  us  through  their
positions  and stock  ownership  and  their  interests  may  differ  from  other
stockholders.

         Our officers,  directors and affiliates  beneficially own approximately
96% of our common stock. Mr. Yu, Zuo Sheng our major  shareholder,  beneficially
owns  approximately  96% of our  common  stock  and is the  selling  stockholder
herein.  Mr. Yu can  effectively  control us and his  interests  may differ from
other stockholders

         Because our principal  assets are located  outside of the United States
and all of our directors and officers  reside outside of the United  States,  it
may be difficult for you to enforce your rights based on U.S. federal securities
laws against us and our officers and directors in the U.S. or enforce U.S. court
judgments against us or them in the PRC.

         All of our directors and officers  reside outside of the United States.
In  addition,  Daqiuzhuang,  our  operating  subsidiary,  is  located  in  China
substantially all of its assets are located outside of the United States. It may
therefore be difficult for investors in the United States to enforce their legal
rights based on the civil liability  provisions of the U.S.  federal  securities
laws against us in the courts of either the U.S. and the PRC and,  even if civil
judgments are obtained in U.S. courts,  to enforce such judgments in PRC courts.
Further, it is unclear if extradition  treaties now in effect between the United
States and the PRC would permit effective enforcement against us or our officers
and directors of criminal  penalties under the U.S.  federal  securities laws or
otherwise.

         We have  never paid cash  dividends  and are not likely to do so in the
foreseeable future.

         We  currently  intend  to retain  any  future  earnings  for use in the
operation  and  expansion  of our  business.  We do not  expect  to pay any cash
dividends in the foreseeable future but will review this policy as circumstances
dictate.

         There is only a limited trading market for our common stock.

         Our common stock is now listed on the over-the-counter  Bulletin Board.
There is  currently  limited  trading  market for our common stock and we do not
know if any  trading  market will ever  develop.  You may be unable to sell your
shares due to the absence of a trading market.

         In addition,  broker-dealers  who  recommend our common stock to people
who are not  established  customers or qualifying  investors must follow special
sales procedures, including getting the purchaser's written consent prior to the
sale. Our common stock is also subject to the "penny stock" rules, which require
delivery  of a schedule  explaining  the penny stock  market and the  associated
risks before any sale.  See "MARKET PRICE OF AND  DIVIDENDS ON THE  REGISTRANT'S
COMMON EQUITY AND RELATED  STOCKHOLDER  MATTERS." These requirements may further
limit your ability to sell your shares.


<PAGE>

         Our common stock is illiquid and subject to price volatility  unrelated
to our operations.

         The market price of our common stock could fluctuate  substantially due
to a variety of factors,  including market  perception of our ability to achieve
our planned  growth,  quarterly  operating  results of other auto parts  makers,
trading volume in our common stock, changes in general conditions in the economy
and the financial markets or other developments affecting our competitors or us.

         In addition,  the stock  market is subject to extreme  price and volume
fluctuations.  This volatility has had a significant  effect on the market price
of securities  issued by many companies for reasons unrelated to their operating
performance and could have the same effect on our common stock.


















<PAGE>

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

There has been no legal proceedings issued against or commenced by the company.


ITEM 2.  CHANGES IN SECURITIES

None for the period covered by this report.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None for the period covered by this report.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None for the period covered by this report.

ITEM 5.  OTHER INFORMATION

None for the period covered by this report.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

31.1     Certification of Chief Executive Officer;
31.2     Certification of Chief Financial Officer;
32.1     Certification of Chief Executive Officer; and
32.2     Certification of Chief Financial Officer.

(b)      Reports on Form 8-K

Current report on Form 8-K filed with the Commission on March 4, 2005

         In this report we disclosed  that the Company  appointed  John Chen, as
Chief Financial Officer and Director,  Huancheng Li, as Director,  Guodong Wang,
as Chief Technical Officer and Director and Shengguo Zhao, as Chief Engineer and
Director. We also announced that Jeff Mabry resigned as director.



<PAGE>

SIGNATURES

In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                          General Steel Holdings, Inc.
                                          (Registrant)

Date: August 15, 2005                      /s/ Zuo Sheng Yu
                                          --------------------------------------
                                          Zuo Sheng Yu
                                          Chief Executive Officer and President



                                          General Steel Holdings, Inc.
                                          (Registrant)

Date: August 15, 2005                      /s/ John Chen
                                          --------------------------------------
                                          John Chen
                                          Director and Chief Financial Officer