----

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|  ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|-----------------------------------------------------------------------------------------------------|

| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|--------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

|  ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|---------------------------------------------------------------------------------------------|

----

----

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| Title of each class           |   | Name of each exchange on which registered |
|-------------------------------|--------|-------------------------------------------|
| Ordinary Shares, no par value |   | NASDAQ Global Market                      |

----

----

| Large Accelerated Filer  o | Accelerated Filer   o | Non-Accelerated Filer  x |
|--------------------------------------|--------------------------------------|------------------------------------|

| U.S. GAAP  x | International Financial Reporting        |   | Other  o |
|------------------------|------------------------------------------|--------|--------------------|
|                   | Standards as issued by the International |   |               |
|                   | Accounting Standards Board     |   |               |

----

----

----

|   | · | to include a revised Report of Independent Registered Public Accounting Firm of UHY Vocation HK CPA Limited to state that they conducted their audits in accordance with the “standards” of the Public Company Accounting Oversight Board (United States).  The original Report had referenced only “auditing standards” in this respect.  Also included with the Amendment are all information required under Item 18 of Form 20-F and updated Exhibit 12 and Exhibit 13 certifications referencing the Amendment that are currently dated. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 18. | FINANCIAL STATEMENTS |
|----------|----------------------|

| ITEM 19. | EXHIBITS |
|----------|----------|

| Exhibit No. |   | Description                                                                                                                                                                                                                                                                                                                                                                                   |
|-------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1         |   | Amended and Restated Memorandum and Articles of Association, adopted on March 17, 2009 [incorporated by reference to Exhibit 3.1 to the registrant’s Amendment No. 1 to Form 20-F filed on March 23, 2009]                                                                                                                                                                              |
| 2.1         |   | Specimen Ordinary Share Certificate [incorporated by reference to Exhibit 4.7 to the registrant’s Registration Statement on Form S-4/A filed on February 17, 2009  in commission file number 333-155312-01]                                                                                                                                                                   |
| 2.2         |   | Form of Underwriter Representative Warrant [incorporated by reference to Exhibit 4.4 of Amendment No. 3 to the registrant’s Registration Statement on Form F-1 (File No. 333-161924) filed on November 5, 2009]                                                                                                                                                                         |
| 4.1         |   | Form of Voting Agreement [incorporated by reference to Exhibit 10.15 to the registrant’s Registration Statement on Form S-4 filed on November 12, 2008 in commission file number 333-155312-01]                                                                                                                                                                                         |
| 4.2         |   | English Translation of Renminbi Loan Agreement, dated July 16, 2008, between Zhengzhou Branch of China CITIC Bank and Henan Green Complex Materials Co., Ltd [incorporated by reference to Exhibit 10.17.3 to the registrant’s Amendment No. 2 to Registration Statement on Form S-4 filed on January 29, 2009 in commission file number 333-155312-01]                                 |
| 4.3         |   | English Translation of Real Estate Maximum Mortgage Agreement, dated March 26, 2007, between Zhengzhou Branch of Shanghai Pudong Development Bank and Henan Green Complex Materials Co., Ltd [incorporated by reference to Exhibit 10.17.5 to the registrant’s Amendment No. 2 to Registration Statement on Form S-4 filed on January 29, 2009 in commission file number 333-155312-01] |
| 4.4         |   | English Translation of Maximum Mortgage Agreement, dated April 21, 2008, between Xiangyang Credit Union of Zhengzhou Rural Credit Cooperatives and Henan Green Complex Materials Co., Ltd [incorporated by reference to Exhibit 10.17.6 to the registrant’s Amendment No. 2 to Registration Statement on Form S-4 filed on January 29, 2009 in commission file number 333-155312-01]    |
| 4.5         |   | English Translation of Credit Granting Agreement, valid from July 21, 2008, between Guangdong Development Bank Zhengzhou Huanghe Road Sub-branch and Henan Green Complex Materials Co., Ltd [incorporated by reference to Exhibit 10.17.7 to the registrant’s Amendment No. 2 to Registration Statement on Form S-4 filed on January 29, 2009 in commission file number 333-155312-01]  |

----

| Exhibit No. |   | Description                                                                                                                                                                                                                                                                                                                                                                                           |
|-------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.6         |   | English Translation of Agreement, dated September 16, 2003, between Xinzheng City Longhu Town People’s Government and Henan Green Complex Materials Co., Ltd [incorporated by reference to Exhibit 10.17.8 to the registrant’s Amendment No. 2 to Registration Statement on Form S-4 filed on January 29, 2009 in commission file number 333-155312-01]                                   |
| 4.7         |   | English Translation of Lease Agreement for Land Use Right and Buildings, dated November 10, 2008, between Zhengzhou the Second Iron & Steel Co., Ltd. and Henan Green Complex Materials Co., Ltd [incorporated by reference to Exhibit 10.17.9 to the registrant’s Amendment No. 2 to Registration Statement on Form S-4 filed on January 29, 2009 in commission file number 333-155312-01] |
| 4.8         |   | English Translation of Form of Labor Contract for all employees of Henan Green, including executive officers [incorporated by reference to Exhibit 4.15 to the registrant’s Annual Report on Form 20-F filed on July 15, 2009]                                                                                                                                                                  |
| 4.9         |   | Form of Agreement, dated as of September 15, 2009, by and among the registrant, Oasis Green Investments Limited, Plumpton Group Limited, and Honest Joy Group Limited.[incorporated by reference to Exhibit 10.16 to the registrant’s Registration Statement on Form F-1 filed on September 15, 2009 in commission file number 333-161924]                                                      |
| 4.10        |   | Underwriting Agreement, dated November 9, 2009 [incorporated by reference to Exhibit 1.1 to the registrant’s Report on Form 6-K/A filed on November 10, 2009]                                                                                                                                                                                                                                   |
| 4.11        |   | Form of Registration Rights Agreement, by and among the registrant and the purchasers named therein, dated June 4, 2010 [incorporated by reference to Exhibit 4.1 to the registrant’s Report on Form 6-K filed on June 7, 2010]                                                                                                                                                                 |
| 4.12        |   | Form of Securities Purchase Agreement, by and among the registrant and the purchasers named therein, dated June 4, 2010 [incorporated by reference to Exhibit 10.1 to the registrant’s Report on Form 6-K filed on June 7, 2010]                                                                                                                                                                |
| 4.13        |   | China Gerui Advanced Materials Group Limited 2010 Share Incentive Plan [incorporated by reference to Exhibit 10.1 to the registrant’s Report on Form 6-K filed on November 16, 2010]                                                                                                                                                                                                            |
| 4.14        |   | Form of Share Option Agreement for Employees relating to China Gerui Advanced Materials Group Limited 2010 Share Incentive Plan [incorporated by reference to Exhibit 10.2 to the registrant’s Report on Form 6-K filed on November 16, 2010]                                                                                                                                                   |
| 4.15        |   | Form of Share Option Agreement for Directors relating to China Gerui Advanced Materials Group Limited 2010 Share Incentive Plan [incorporated by reference to Exhibit 10.3 to the registrant’s Report on Form 6-K filed on November 16, 2010]                                                                                                                                                   |
| 4.16        |   | Form of Restricted Share Award Agreement relating to China Gerui Advanced Materials Group Limited 2010 Share Incentive Plan [incorporated by reference to Exhibit 10.4 to the registrant’s Report on Form 6-K filed on November 16, 2010]                                                                                                                                                       |
| 8.1         |   | List of the registrant’s subsidiaries [incorporated by reference to Exhibit 8.1 to the registrant’s Annual Report on Form 20-F filed on July 15, 2009]                                                                                                                                                                                                                                    |
| 11.1        |   | Code of Ethics [incorporated by reference to Exhibit 14.1 to the registrant’s Annual Report on Form 20-F filed on July 15, 2009]                                                                                                                                                                                                                                                                |
| 12.1        |   | CEO Certification Pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-1(a) (17 CFR 240.15d-14(a))                                                                                                                                                                                                                                                                                           |
| 12.2        |   | CFO Certification Pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-1(a) (17 CFR 240.15d-14(a))                                                                                                                                                                                                                                                                                           |
| 13.1        |   | CEO Certification Pursuant to Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)                                                                                                                                                                                                    |
| 13.2        |   | CFO Certification Pursuant to Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)                                                                                                                                                                                                    |

----

|               | CHINA GERUI ADVANCED MATERIALS GROUP LIMITED |
|--------------------|----------------------------------------------|
|               |                                         |
|               | /s/ Mingwang Lu                              |   |
|               | Mingwang Lu                                  |
| July 11, 2011 | Chief Executive Officer                      |

----

----

| CONTENTS                                                         |         | Pages  |
|------------------------------------------------------------------|--------------|--------|
|                                                             |         |   |
| Report of Independent Registered Public Accounting Firm          |         | F-1    |
|                                                             |         |   |
| Consolidated Balance Sheets                                      |         | F-3    |
|                                                             |         |   |
| Consolidated Statements of Income                                |         | F-4    |
|                                                             |         |   |
| Consolidated Statements of Changes in Stockholders’ Equity |         | F-5    |
|                                                             |         |   |
| Consolidated Statements of Cash Flows                            |         | F-6    |
|                                                             |         |   |
| Notes to the Consolidated Financial Statements                   |    | F-7    |

----

|                                                                                                                                                                    |   | December 31, 2010 |        |   | December 31, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-------------|--------|-------------------|--------|
| Assets                                                                                                                                                                  |   |              |        |   |              |   |
|                                                                                                                                                                    |   |              |        |   |              |   |
| Current assets                                                                                                                                                          |   |              |        |   |              |   |
| Cash                                                                                                                                                                    |   | $                 | 119,477,298 |   |              | $      | 79,607,369 |   |
| Restricted cash                                                                                                                                                         |   |              | 66,530,303  |   |              |   | 37,498,169 |   |
| Accounts receivable, net                                                                                                                                                |   |              | 4,087,086   |   |              |   | 4,808,184 |   |
| Inventories                                                                                                                                                             |   |              | 7,002,277   |   |              |   | 5,958,880 |   |
| Prepaid expenses and other deposits                                                                                                                                     |   |              | 28,749,680  |   |              |   | 16,473,710 |   |
| Other receivables                                                                                                                                                       |   |              | 2,068,082   |   |              |   | 2,292,133 |   |
| Total current assets                                                                                                                                                    |   |              | 227,914,726 |   |              |   | 146,638,445 |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Non-current assets                                                                                                                                                      |   |              |        |   |              |   |   |   |
| Property, plant and equipment, net                                                                                                                                      |   |              | 85,489,849  |   |              |   | 22,338,210 |   |
| Prepaid machinery deposits                                                                                                                                              |   |              | -           |   |              |   | 13,973,966 |   |
| Land use right, net                                                                                                                                                     |   |              | 15,599,157  |   |              |   | 1,399,026 |   |
| Total non-current assets                                                                                                                                                |   |              | 101,089,006 |   |              |   | 37,711,202 |   |
| Total assets                                                                                                                                                            |   | $                 | 329,003,732 |   |              | $      | 184,349,647 |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Liabilities and stockholders' equity                                                                                                                                    |   |              |        |   |              |   |   |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Current Liabilities                                                                                                                                                     |   |              |        |   |              |   |   |   |
| Accounts payable                                                                                                                                                        |   | $                 | 2,650,689   |   |              | $      | 7,617,953 |   |
| Notes payable                                                                                                                                                           |   |              | 86,227,272  |   |              |   | 41,013,622 |   |
| Term loans                                                                                                                                                              |   |              | 44,090,909  |   |              |   | 33,982,715 |   |
| Land use right payable                                                                                                                                                  |   |              | 10,203,404  |   |              |   | - |   |
| Income tax payable                                                                                                                                                      |   |              | 4,151,665   |   |              |   | 3,817,304 |   |
| Customers deposits                                                                                                                                                      |   |              | 9,686,444   |   |              |   | 8,146,611 |   |
| Accrued liabilities and other payables                                                                                                                                  |   |              | 4,181,347   |   |              |   | 2,728,585 |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Total current liabilities                                                                                                                                               |   |              | 161,191,730 |   |              |   | 97,306,790 |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Total liabilities                                                                                                                                                       |   |              | 161,191,730 |   |              |   | 97,306,790 |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Stockholders' equity                                                                                                                                                    |   |              |        |   |              |   |   |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Common stock,                                                                                                                                                           |   |              |        |   |              |   |   |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Common stock, 100,000,000 shares authorized with no par value; 46,139,053 and 40,692,323 shares outstanding as of December 31, 2010 and December 31, 2009, respectively |   |              | 73,944,243  |   |              |   | 45,261,630 |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Additional paid-in capital                                                                                                                                              |   |              | 6,930,944   |   |              |   | 6,930,944 |   |
| Retained earnings                                                                                                                                                       |   |              | 79,522,406  |   |              |   | 32,438,982 |   |
| Accumulated other comprehensive income                                                                                                                                  |   |              | 7,414,409   |   |              |   | 2,411,301 |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Total stockholders' equity                                                                                                                                              |   |              | 167,812,002 |   |              |   | 87,042,857 |   |
|                                                                                                                                                                    |   |              |        |   |              |   |   |   |
| Total liabilities and stockholders' equity                                                                                                                              |   | $                 | 329,003,732 |   |              | $      | 184,349,647 |   |

----

|                                           |   | For the Year Ended |         |
|------------------------------------------------|--------|--------------------|--------------|
|                                           |   | December 31,       |         |
|                                           |   | 2010               |         |   | 2009 |   |   | 2008 |   |
|                                           |   |               |         |   |   |   |   |   |   |
| Revenue                                        |   | $                  | 253,866,337  |   |   | $ | 218,902,632 |   |   | $ | 196,264,731 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Cost of revenue                                |   |               | (177,869,648 | ) |   |   | (153,095,354 | ) |   |   | (142,407,995 | ) |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Gross Profit                                   |   |               | 75,996,689   |   |   |   | 65,807,278 |   |   |   | 53,856,736 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Operating expenses:                            |   |               |         |   |   |   |   |   |   |   |   |   |
| General and administrative expenses            |   |               | (7,795,722   | ) |   |   | (4,573,512 | ) |   |   | (3,431,745 | ) |
| Selling and marketing expenses                 |   |               | (1,251,091   | ) |   |   | (919,049 | ) |   |   | (831,108 | ) |
| Total operating expenses                       |   |               | (9,046,813   | ) |   |   | (5,492,561 | ) |   |   | (4,262,853 | ) |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Operating income                               |   |               | 66,949,876   |   |   |   | 60,314,717 |   |   |   | 49,593,883 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Other income and (expense):                    |   |               |         |   |   |   |   |   |   |   |   |   |
| Interest income                                |   |               | 1,087,178    |   |   |   | 829,056 |   |   |   | 1,395,121 |   |
| Interest expenses                              |   |               | (5,286,727   | ) |   |   | (3,237,757 | ) |   |   | (3,769,423 | ) |
| Sundry income                                  |   |               | 270,240      |   |   |   | 293,831 |   |   |   | 155,687 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Income before income taxes                     |   |               | 63,020,567   |   |   |   | 58,199,847 |   |   |   | 47,375,268 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Income tax expense                             |   |               | (15,937,143  | ) |   |   | (14,751,569 | ) |   |   | (11,869,735 | ) |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Income before minority interest                |   |               | 47,083,424   |   |   |   | 43,448,278 |   |   |   | 35,505,533 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Net income attributable to minority interest   |   |               | -            |   |   |   | - |   |   |   | (13,920,944 | ) |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Net income attributable to common stockholders |   | $                  | 47,083,424   |   |   | $ | 43,448,278 |   |   | $ | 21,584,589 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Earnings per share                             |   |               |         |   |   |   |   |   |   |   |   |   |
| - Basic                                        |   | $                  | 1.07         |   |   | $ | 1.29 |   |   | $ | 0.72 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| - Diluted                                      |   | $                  | 1.01         |   |   | $ | 1.15 |   |   | $ | 0.72 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding     |   |               |         |   |   |   |   |   |   |   |   |   |
| - Basic                                        |   |               | 43,891,670   |   |   |   | 33,751,844 |   |   |   | 30,000,000 |   |
|                                           |   |               |         |   |   |   |   |   |   |   |   |   |
| - Diluted                                      |   |               | 46,655,721   |   |   |   | 37,675,479 |   |   |   | 30,000,000 |   |

----

|                                                                                       |   | Common Stock, with no Par Value |       |   | Additional |   |       |    |   |   | Accumulated Other |   |   |          |       |   |     |   |      |   |   |
|--------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|------------|--------|------------|---------|--------|--------|------------------------|--------|--------|---------------|------------|--------|----------|--------|-----------|--------|--------|
|                                                                                       |   | Number of                       |       |   |       |   |       | Paid-in |   |   | Subscription           |   |   | Comprehensive |       |   | Retained |   |      | Total  |   |   | Comprehensive |   |
|                                                                                       |   | Shares                          |       |   | Amount     |   |       | Capital |   |   | receivable             |   |   | Income        |       |   | Earnings |   |      | Equity |   |   | Income |   |
|                                                                                       |   |                            |       |   |       |   |       |    |   |   |                   |   |   |          |       |   |     |   |      |   |   |   |   |   |
| Balance, December 31, 2007                                                                 |   |                            | 30,000,000 |   |       | $      | 300        |    |   | $      | 1,834,940              |   |   | $             | -          |   |     | $      | 1,057,886 |   |   | $ | 14,462,559 |   |   | $ | 17,355,685 |   |   | $ | - |   |
| Net income                                                                                 |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | 21,584,589 |   |   |   | 21,584,589 |   |   |   | 21,584,589 |   |
| Foreign currency translation gain                                                          |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | -          |   |     |   | 1,345,661 |   |   |   | - |   |   |   | 1,345,661 |   |   |   | 1,345,661 |   |
| Subscription for ordinary shares                                                           |   |                            | -          |   |       |   | -          |    |   |   | 4,310,087              |   |   |          | -          |   |     |   | -         |   |   |   | - |   |   |   | 4,310,087 |   |   |   |   |   |
| Subscription receivable                                                                    |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | (4,310,087 | )      |     |   | -         |   |   |   | - |   |   |   | (4,310,087 | ) |   |   |   |   |
| Contribution to capital on purchase of minority interest                                   |   |                            | -          |   |       |   | -          |    |   |   | 785,917                |   |   |          | -          |   |     |   | -         |   |   |   | - |   |   |   | 785,917 |   |   |   |   |   |
| Dividend declared                                                                          |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | (51,856,496 | ) |   |   | (51,856,496 | ) |   |   |   |   |
| Dividend allocated to minority interest                                                    |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | 23,325,052 |   |   |   | 23,325,052 |   |   |   |   |   |
|                                                                                       |   |                            |       |   |       |   |       |    |   |   |                   |   |   |          |       |   |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                                                                 |   |                            | 30,000,000 |   |       | $      | 300        |    |   | $      | 6,930,944              |   |   | $             | (4,310,087 | )      |     | $      | 2,403,547 |   |   | $ | 7,515,704 |   |   | $ | 12,540,408 |   |   | $ | 22,930,250 |   |
| Net income                                                                                 |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | 43,448,278 |   |   |   | 43,448,278 |   |   |   | 43,448,278 |   |
| Foreign currency translation gain                                                          |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | -          |   |     |   | 7,754     |   |   |   | - |   |   |   | 7,754 |   |   |   | 7,754 |   |
| Subscription receivable settlement                                                         |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | 4,310,087  |   |     |   | -         |   |   |   | - |   |   |   | 4,310,087 |   |   |   | - |   |
| Issuance of shares in connection with earn-out share agreement accounted for as a dividend |   |                            | 2,850,000  |   |       |   | 18,525,000 |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | (18,525,000 | ) |   |   | - |   |   |   | - |   |
| Issuance of shares for offering (net of expenses amounting to $2,914,056)                  |   |                            | 4,800,000  |   |       |   | 21,085,944 |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | - |   |   |   | 21,085,944 |   |   |   | - |   |
| Issuance of over allotment shares (net of expenses amounting to $288,000)                  |   |                            | 720,000    |   |       |   | 3,312,000  |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | - |   |   |   | 3,312,000 |   |   |   | - |   |
| Shares issuance for warrant conversion                                                     |   |                            | 76,600     |   |       |   | 383,000    |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | - |   |   |   | 383,000 |   |   |   | - |   |
| Balance at December 31, 2009                                                               |   |                            | 40,692,323 |   |       | $      | 45,261,630 |    |   | $      | 6,930,944              |   |   | $             | -          |   |     | $      | 2,411,301 |   |   | $ | 32,438,982 |   |   | $ | 87,042,857 |   |   | $ | 43,456,032 |   |
| Net income                                                                                 |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | 47,083,424 |   |   |   | 47,083,424 |   |   |   | 47,083,424 |   |
| Foreign currency translation gain                                                          |   |                            | -          |   |       |   | -          |    |   |   | -                      |   |   |          | -          |   |     |   | 5,003,108 |   |   |   | - |   |   |   | 5,003,108 |   |   |   | 5,003,108 |   |
| Shares issued for warrant conversion                                                       |   |                            | 2,142,959  |   |       |   | 10,714,795 |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | - |   |   |   | 10,714,795 |   |   |   | - |   |
| Shares issued in private placement net of offering fees of $863,676                        |   |                            | 3,303,771  |   |       |   | 17,967,818 |    |   |   | -                      |   |   |          | -          |   |     |   | -         |   |   |   | - |   |   |   | 17,967,818 |   |   |   | - |   |
| Balance at December 31, 2010                                                               |   |                            | 46,139,053 |   |       | $      | 73,944,243 |    |   | $      | 6,930,944              |   |   | $             | -          |   |     | $      | 7,414,409 |   |   | $ | 79,522,406 |   |   | $ | 167,812,002 |   |   | $ | 52,086,532 |   |

----

|                                                                              |   | For the Year ended December 31 |        |
|-----------------------------------------------------------------------------------|--------|--------------------------------|-------------|
|                                                                              |   | 2010                           |        |   | 2009 |   |   | 2008 |   |
| Cash flows from operating activities:                                             |   |                           |        |   |   |   |   |   |   |
| Net income                                                                        |   | $                              | 47,083,424  |   |   | $ | 43,448,278 |   |   | $ | 21,584,589 |   |
| Add: Net income attributable to minority interest                                 |   |                           | -           |   |   |   | - |   |   |   | 13,920,944 |   |
|                                                                              |   |                           | 47,083,424  |   |   |   | 43,448,278 |   |   |   | 35,505,533 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                           |        |   |   |   |   |   |   |   |   |   |
| Depreciation of property, plant and equipment                                     |   |                           | 3,149,314   |   |   |   | 2,792,547 |   |   |   | 2,447,626 |   |
| Amortization of land use right                                                    |   |                           | 259,438     |   |   |   | 30,827 |   |   |   | 30,280 |   |
| Changes in assets and liabilities:                                                |   |                           |        |   |   |   |   |   |   |   |   |   |
| Accounts receivable, net                                                          |   |                           | 721,098     |   |   |   | 5,496,540 |   |   |   | (128,270 | ) |
| Inventories                                                                       |   |                           | (1,043,397  | ) |   |   | (2,404,567 | ) |   |   | 5,106,310 |   |
| Prepaid expenses and other deposits                                               |   |                           | (12,275,970 | ) |   |   | (5,552,655 | ) |   |   | (949,445 | ) |
| Other receivables                                                                 |   |                           | 224,051     |   |   |   | (1,026,036 | ) |   |   | (630,379 | ) |
| Accounts payable                                                                  |   |                           | (4,967,264  | ) |   |   | 2,278,603 |   |   |   | (547,173 | ) |
| Income tax payable                                                                |   |                           | 334,361     |   |   |   | 1,628,627 |   |   |   | (408,010 | ) |
| Customers deposit                                                                 |   |                           | 1,539,833   |   |   |   | (9,338,097 | ) |   |   | 9,035,743 |   |
| Accrued liabilities and other payables                                            |   |                           | 1,452,762   |   |   |   | (3,565,821 | ) |   |   | 1,005,235 |   |
| Net cash provided by operating activities                                         |   |                           | 36,477,650  |   |   |   | 33,788,246 |   |   |   | 50,467,450 |   |
| Cash flows from investing activities:                                             |   |                           |        |   |   |   |   |   |   |   |   |   |
| Capital expenditures for addition of property, plant and equipment                |   |                           | (65,063,864 | ) |   |   | (5,213,329 | ) |   |   | (6,572,185 | ) |
| Payment of purchases of land use right                                            |   |                           | (3,996,727  | ) |   |   | (14,648 | ) |   |   | - |   |
| Changes in restricted cash                                                        |   |                           | (29,032,134 | ) |   |   | (12,785,820 | ) |   |   | (5,485,798 | ) |
| Changes in prepaid machinery deposits                                             |   |                           | 13,973,966  |   |   |   | (13,336,084 | ) |   |   | 25,126,394 |   |
| Net cash (used in)/provided by investing activities                               |   |                           | (84,118,759 | ) |   |   | (31,349,881 | ) |   |   | 13,068,411 |   |
| Cash flows from financing activities:                                             |   |                           |        |   |   |   |   |   |   |   |   |   |
| Repayment of term loans                                                           |   |                           | (45,984,848 | ) |   |   | (37,269,379 | ) |   |   | (26,662,742 | ) |
| Proceeds from term loans                                                          |   |                           | 56,093,042  |   |   |   | 40,574,191 |   |   |   | 39,985,342 |   |
| Proceeds received from common stock issued and warrant conversion, net            |   |                           | 28,682,613  |   |   |   | 26,736,329 |   |   |   | - |   |
| Proceeds from notes payable                                                       |   |                           | 45,213,650  |   |   |   | 14,102,666 |   |   |   | 6,430,053 |   |
| Repayment of subscription receivable                                              |   |                           | -           |   |   |   | 4,310,087 |   |   |   | - |   |
| Land use right payable                                                            |   |                           | -           |   |   |   | (28,521 | ) |   |   | (125,604 | ) |
| Due to former minority shareholders                                               |   |                           | -           |   |   |   | (4,310,087 | ) |   |   | - |   |
| Due to former owner                                                               |   |                           | -           |   |   |   | - |   |   |   | (61,688 | ) |
| Dividends paid                                                                    |   |                           | -           |   |   |   | (9,601,549 | ) |   |   | (42,254,947 | ) |
| Net cash provided by/(used in) financing activities                               |   |                           | 84,004,457  |   |   |   | 34,513,737 |   |   |   | (22,689,586 | ) |
| Net increase in cash                                                              |   |                           | 36,363,348  |   |   |   | 36,952,102 |   |   |   | 40,846,275 |   |
| Effect on change of exchange rates                                                |   |                           | 3,506,581   |   |   |   | 32,862 |   |   |   | 1,557,778 |   |
| Cash as of January 1                                                              |   |                           | 79,607,369  |   |   |   | 42,622,404 |   |   |   | 218,351 |   |
| Cash as of December 31                                                            |   | $                              | 119,477,298 |   |   | $ | 79,607,369 |   |   | $ | 42,622,404 |   |
| Supplemental disclosures of cash flow information:                                |   |                           |        |   |   |   |   |   |   |   |   |   |
|                                                                              |   |                           |        |   |   |   |   |   |   |   |   |   |
| Cash paid during the year for:                                                    |   |                           |        |   |   |   |   |   |   |   |   |   |
| Interest paid                                                                     |   | $                              | 3,927,906   |   |   | $ | 3,27,757 |   |   | $ | 3,769,423 |   |
| Income tax paid                                                                   |   | $                              | 15,738,892  |   |   | $ | 13,122,287 |   |   | $ | 12,277,745 |   |
| Non-cash paid during the year for:                                                |   |                           |        |   |   |   |   |   |   |   |   |   |
| Dividend paid                                                                     |   | $                              | -           |   |   | $ | 18,525,000 |   |   | $ | - |   |
| Transfer of prepayments and other deposits to property, plant and equipment       |   | $                              | -           |   |   | $ | - |   |   | $ | 2,288,337 |   |
| Acquisition of minority interest with subscription receivable                     |   | $                              | -           |   |   | $ | - |   |   | $ | 4,310,087 |   |

----

| 1. | DESCRIPTION OF BUSINESS AND ORGANIZATION |
|----|------------------------------------------|

----

| 1. | DESCRIPTION OF BUSINESS AND ORGANIZATION (.../Cont’d) |
|----|-----------------------------------------------------------------|

| 2. | REORGANIZATION AND ACQUISITION OF NON-CONTROLLING INTEREST |
|----|------------------------------------------------------------|

----

| 2. | REORGANIZATION AND ACQUISITION OF NON-CONTROLLING INTEREST (.../Cont’d) |
|----|-----------------------------------------------------------------------------------|

| 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|----------------------------------------------------------------------|

|   | (a) | Basis of presentation |
|--------|-----|-----------------------|

----

| 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (.../Cont’d) |
|----|---------------------------------------------------------------------------------------------|

|   | (b) | Foreign currency translation |
|--------|-----|------------------------------|

|   | (c) | Cash |
|--------|-----|------|

----

| 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (.../Cont’d) |
|----|---------------------------------------------------------------------------------------------|

|   | (d) | Accounts receivable |
|--------|-----|---------------------|

|   | (e) | Inventories |
|--------|-----|-------------|

|   | (f) | Property, plant and equipment |
|--------|-----|-------------------------------|

|                                    |   | Estimated Life |
|-----------------------------------------|--------|----------------|
| Land use right                          |   | 43 - 50        |
| Leasehold land improvement              |   | 46.5           |
| Buildings                               |   | 10 - 20        |
| Machinery and equipment                 |   | 5 - 20         |
| Vehicles                                |   | 5              |
| Furniture fixtures and office equipment |   | 5              |

----

| 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (.../Cont’d) |
|----|---------------------------------------------------------------------------------------------|

|   | (g) | Land use right |
|--------|-----|----------------|

|   | (h) | Impairment of long-lived assets |
|--------|-----|---------------------------------|

|   | (i) | Fair value measurements |
|--------|-----|-------------------------|

----

| 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (.../Cont’d) |
|----|---------------------------------------------------------------------------------------------|

|   | (i) | Fair value measurements (.../Cont’d) |
|--------|-----|------------------------------------------------|

|   | Level 1 - | Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.  Valuation adjustments and block discounts are not being applied.  Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 2 - | Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3 - | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
|--------|-----------|---------------------------------------------------------------------------------------------------------|

|   | (j) | Revenue recognition |
|--------|-----|---------------------|

|   | (k) | Income taxes |
|--------|-----|--------------|

----

| 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (.../Cont’d) |
|----|---------------------------------------------------------------------------------------------|

|   | (k) | Income taxes (.../Cont’d) |
|--------|-----|-------------------------------------|

|   | (l) | Commitments and contingencies |
|--------|-----|-------------------------------|

|   | (m) | Earnings per share |
|--------|-----|--------------------|

|                                                            |   | For the Year ended |       |
|-----------------------------------------------------------------|--------|--------------------|------------|
|                                                            |   | 2010               |       |   | 2009 |   |   | 2008 |   |
|                                                            |   |               |       |   |   |   |   |   |   |
| Net income                                                      |   | $                  | 47,083,424 |   |   | $ | 43,448,278 |   |   | $ | 21,584,589 |   |
|                                                            |   |               |       |   |   |   |   |   |   |   |   |   |
| Weighted average outstanding shares of common stock             |   |               | 43,891,670 |   |   |   | 33,751,844 |   |   |   | 30,000,000 |   |
| Dilutive effect of Warrants                                     |   |               | 2,584,713  |   |   |   | 3,659,717 |   |   |   | - |   |
| Dilutive effect of Unit Purchase Option granted to underwriters |   |               | 179,338    |   |   |   | 263,918 |   |   |   | - |   |
| Diluted weighted average outstanding shares                     |   |               | 46,655,721 |   |   |   | 37,675,479 |   |   |   | 30,000,000 |   |
|                                                            |   |               |       |   |   |   |   |   |   |   |   |   |
| Earnings per common stock:                                      |   |               |       |   |   |   |   |   |   |   |   |   |
| Basic                                                           |   | $                  | 1.07       |   |   | $ | 1.29 |   |   | $ | 0.72 |   |
| Diluted                                                         |   | $                  | 1.01       |   |   | $ | 1.15 |   |   | $ | 0.72 |   |

----

| 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (.../Cont’d) |
|----|---------------------------------------------------------------------------------------------|

|   | (n) | Segment information |
|--------|-----|---------------------|

|   | (o) | Economic and political risks |
|--------|-----|------------------------------|

|   | (p) | Recently issued accounting standards not yet adopted |
|--------|-----|------------------------------------------------------|

----

| 4. | CASH |
|----|------|

|                   |   | 2010   |        |   | 2009   |   |
|------------------------|--------|--------|-------------|--------|--------|--------|
|                   |   |   |        |   |   |   |
| Bank balances and cash |   | $      | 186,007,601 |   |   | $      | 117,105,538 |   |
| Less: Restricted cash  |   |   | (66,530,303 | )      |   |   | (37,498,169 | ) |
|                   |   | $      | 119,477,298 |   |   | $      | 79,607,369 |   |

| 5. | ACCOUNTS RECEIVABLE |
|----|---------------------|

| 6. | INVENTORIES |
|----|-------------|

|            |   | 2010   |      |   | 2009   |   |
|-----------------|--------|--------|-----------|--------|--------|--------|
|            |   |   |      |   |   |   |
| Raw materials   |   | $      | 3,395,097 |   |   | $      | 2,152,547 |   |
| Work-in-process |   |   | 1,404,362 |   |   |   | 1,345,715 |   |
| Finished goods  |   |   | 2,202,818 |   |   |   | 2,460,618 |   |
|            |   | $      | 7,002,277 |   |   | $      | 5,958,880 |   |

----

| 7. | PREPAID EXPENSES AND OTHER DEPOSITS |
|----|-------------------------------------|

|                     |   | 2010   |       |   | 2009   |   |
|--------------------------|--------|--------|------------|--------|--------|--------|
|                     |   |   |       |   |   |   |
| Prepaid purchases        |   | $      | 27,772,852 |   |   | $      | 16,411,723 |   |
| Prepaid general expenses |   |   | 976,828    |   |   |   | 61,987 |   |
|                     |   | $      | 28,749,680 |   |   | $      | 16,473,710 |   |

| 8. | OTHER RECEIVABLES |
|----|-------------------|

|                             |   | 2010   |      |   | 2009   |   |
|----------------------------------|--------|--------|-----------|--------|--------|--------|
|                             |   |   |      |   |   |   |
| Advances to staff                |   | $      | 18,916    |   |   | $      | 265,402 |   |
| Loan to customer                 |   |   | 106,060   |   |   |   | 478,248 |   |
| Standby guarantee fund           |   |   | 213,876   |   |   |   | 1,349,453 |   |
| Warrant consideration receivable |   |   | 1,352,180 |   |   |   | - |   |
| Others                           |   |   | 377,050   |   |   |   | 199,030 |   |
|                             |   | $      | 2,068,082 |   |   | $      | 2,292,133 |   |

----

| 9. | PROPERTY, PLANT AND EQUIPMENT |
|----|-------------------------------|

|                           |   | 2010   |        |   | 2009   |   |
|--------------------------------|--------|--------|-------------|--------|--------|--------|
|                           |   |   |        |   |   |   |
| Buildings                      |   | $      | 7,902,125   |   |   | $      | 4,996,924 |   |
| Leasehold land improvement     |   |   | 20,864      |   |   |   | 20,170 |   |
| Plant machinery and equipment  |   |   | 42,367,394  |   |   |   | 23,518,194 |   |
| Vehicles                       |   |   | 2,574,278   |   |   |   | 2,306,841 |   |
| Office equipment               |   |   | 205,479     |   |   |   | 148,652 |   |
| Construction in progress       |   |   | 49,199,036  |   |   |   | 4,977,442 |   |
|                           |   |   | 102,269,176 |   |   |   | 35,968,223 |   |
| Less: Accumulated depreciation |   |   | (16,779,327 | )      |   |   | (13,630,013 | ) |
|                           |   | $      | 85,489,849  |   |   | $      | 22,338,210 |   |

|             |   |       |       |   | Estimated cost                |   |           |
|------------------|--------|------------|------------|--------|-------------------------------|--------|----------------|
|             |   | Balance at |       |   | to complete as ofDecember 31, |   | Estimated time |
|             |   | 2010       |       |   | 2010                          |   | to complete    |
|             |   |       |       |   |                          |   |           |
| Production lines |   | $          | 40,857,868 |   |                          | $      | 19,748,192     |   |  Before May, 2011 |
| Plant            |   |       | 8,341,168  |   |                          |   | 143,680        |   |  Before May, 2011 |
|             |   | $          | 49,199,036 |   |                          | $      | 19,891,872     |   |   |

| 10. | PREPAID MACHINERY DEPOSITS |
|-----|----------------------------|

|                       |   | 2010   |   |   | 2009   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|
|                       |   |   |   |   |   |   |
| Prepaid machinery deposits |   | $      | -      |   |   | $      | 13,973,966 |   |

----

| 11. | LAND USE RIGHT |
|-----|----------------|

|                               |   | 2010   |       |   | 2009   |   |
|------------------------------------|--------|--------|------------|--------|--------|--------|
|                               |   |   |       |   |   |   |
| Land use right, net                |   | $      | 13,455,218 |   |   | $      | 1,399,026 |   |
| Prepaid expenses on land use right |   |   | 2,143,939  |   |   |   | - |   |
|                               |   | $      | 15,599,157 |   |   | $      | 1,399,026 |   |

| December 31, |   |   |       |
|--------------|--------|--------|------------|
| 2011         |   | $      | 305,046    |   |
| 2012         |   |   | 305,046    |   |
| 2013         |   |   | 305,046    |   |
| 2014         |   |   | 305,046    |   |
| 2015         |   |   | 305,046    |   |
| Over 5 years |   |   | 11,929,988 |   |
|         |   | $      | 13,455,218 |   |

----

| 12. | NOTES PAYABLE |
|-----|---------------|

|                                        |   | 2010   |        |   | 2009   |   |
|---------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                        |   |   |        |   |   |   |
| Classified by financial institutions:       |   |   |        |   |   |   |
| China Citic Bank                            |   | $      | 19,696,970  |   |   | $      | 7,470,338 |   |
| Commercial Bank of Zhengzhou                |   |   | 3,030,303   |   |   |   | 6,957,668 |   |
| Minsheng Bank of China                      |   |   | 6,030,303   |   |   |   | 6,152,043 |   |
| Guangdong Development Bank                  |   |   | 12,121,212  |   |   |   | 2,343,636 |   |
| Shanghai Pudong Development Bank            |   |   | 18,939,394  |   |   |   | 13,402,666 |   |
| Shanghai Pudong Development Bank            |   |   | -           |   |   |   | 1,904,204 |   |
| China Merchants Bank                        |   |   | 6,060,606   |   |   |   | 2,783,067 |   |
| China Everbright Bank                       |   |   | 13,636,364  |   |   |   | - |   |
| Bank of Luoyang                             |   |   | 5,166,666   |   |   |   | - |   |
| Bank of Xuchang                             |   |   | 1,545,454   |   |   |   | - |   |
|                                        |   | $      | 86,227,272  |   |   | $      | 41,013,622 |   |
| Additional information:                     |   |   |        |   |   |   |   |   |
| Maximum balance outstanding during the year |   | $      | 102,298,541 |   |   | $      | 48,879,449 |   |
| Finance cost                                |   | $      | 2,510,056   |   |   | $      | 941,644 |   |
| Finance charge per contract                 |   |   | 0.050       | %      |   |   | 0.050 | % |
| Weighted average interest rate              |   |   | 1.43        | %      |   |   | 2.41 | % |

----

| 13. | TERM LOANS |
|-----|------------|

|                                               |   | 2010   |       |   | 2009   |   |
|----------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                               |   |   |       |   |   |   |
| Classified by financial institutions:              |   |   |       |   |   |   |
| China Citic Bank                                   |   | $      | 1,515,152  |   |   | $      | 3,661,930 |   |
| China Merchants Bank                               |   |   | 9,090,909  |   |   |   | 4,394,317 |   |
| Commercial Bank of Zhengzhou                       |   |   | 7,575,758  |   |   |   | 7,323,861 |   |
| Guangdong Development Bank                         |   |   | -          |   |   |   | 2,929,544 |   |
| Minsheng Bank of China Branch                      |   |   | -          |   |   |   | 2,783,067 |   |
| Shanghai Pudong Development Bank                   |   |   | 10,606,061 |   |   |   | 5,859,089 |   |
| Zhengzhou City Rural Credit Cooperative            |   |   | 757,576    |   |   |   | 1,171,818 |   |
| Bank of Communications                             |   |   | 1,515,151  |   |   |   | 1,464,772 |   |
| Bank of Luoyang                                    |   |   | 9,090,909  |   |   |   | 4,394,317 |   |
| Bank of Xuchang                                    |   |   | 3,939,393  |   |   |   | - |   |
|                                               |   | $      | 44,090,909 |   |   | $      | 33,982,715 |   |
|                                               |   |   |       |   |   |   |   |   |
| Additional information:                            |   |   |       |   |   |   |   |   |
| Maximum balance outstanding during the period/year |   | $      | 49,812,171 |   |   | $      | 37,791,123 |   |
| Interest paid during the period/year               |   | $      | 2,434,768  |   |   | $      | 2,266,504 |   |
| Range of interest rate                             |   |   | 0.425-0.84 | %      |   |   | 0.531 - 0.965 | % |
| Weighted average interest rate                     |   |   | 3.02       | %      |   |   | 3.46 | % |

| 14. | ACCRUED LIABILITIES AND OTHER PAYABLES |
|-----|----------------------------------------|

|               |   | 2010   |      |   | 2009   |   |
|--------------------|--------|--------|-----------|--------|--------|--------|
|               |   |   |      |   |   |   |
| Accrued expenses   |   | $      | 2,963,644 |   |   | $      | 1,713,874 |   |
| Other payables     |   |   | 361,548   |   |   |   | 499,046 |   |
| Other tax payables |   |   | 856,155   |   |   |   | 515,665 |   |
|               |   | $      | 4,181,347 |   |   | $      | 2,728,585 |   |

----

| 15. | STOCKHOLDERS’ EQUITY |
|-----|----------------------------|

|   | (a) | Capital |
|--------|-----|---------|

----

| 15. | STOCKHOLDERS’ EQUITY (.../Cont’d) |
|-----|---------------------------------------------------|

|   | (a) | Capital (.../Cont’d) |
|--------|-----|--------------------------------|

----

| 15. | STOCKHOLDERS’ EQUITY (.../Cont’d) |
|-----|---------------------------------------------------|

|   | (a) | Capital (.../Cont’d) |
|--------|-----|--------------------------------|

|                                |   | Warrants |       |   | Exercise Price |   |   | Terms  |   |
|-------------------------------------|--------|----------|------------|--------|---------------------|--------|--------|--------|--------|
|                                |   |     |       |   |                |   |   |   |   |
| Issued on March 17, 2009            |   |     | 17,266,667 |   |                | $      | 5.00   |   |   | 2 years |   |
| Granted                             |   |     | 144,000    |   |                |   | 6.00   |   |   | 41⁄4 years |   |
| Exercised                           |   |     | (76,000    | )      |                |   | 5.00   |   |   | 2 years |   |
|                                |   |     |       |   |                |   |   |   |   |   |   |
| Outstanding as of December 31, 2009 |   |     | 17,334,067 |   |                |   |   |   |   | - |   |
| Exercised                           |   |     | (2,142,959 | )      |                |   | 5.00   |   |   | - |   |
| Outstanding as of December 31, 2010 |   |     | 15,191,108 |   |                |   |   |   |   |   |   |

|   | (b) | Retained Earnings |
|--------|-----|-------------------|

|                       |   | 2010   |       |   | 2009   |   |
|----------------------------|--------|--------|------------|--------|--------|--------|
|                       |   |   |       |   |   |   |
| Retained earnings          |   | $      | 77,939,504 |   |   | $      | 30,856,080 |   |
| Statutory surplus reserves |   |   | 1,582,902  |   |   |   | 1,582,902 |   |
|                       |   | $      | 79,522,406 |   |   | $      | 32,438,982 |   |

----

| 16. | INCOME TAXES |
|-----|--------------|

|                       |   | For the Year ended |       |
|----------------------------|--------|--------------------|------------|
|                       |   | 2010               |       |   | 2009 |   |   | 2008 |   |
|                       |   |               |       |   |   |   |   |   |   |
| Current income tax expense |   | $                  | 15,937,143 |   |   | $ | 14,751,569 |   |   | $ | 11,869,735 |   |

|                                                         |   | For the Year ended |       |
|--------------------------------------------------------------|--------|--------------------|------------|
|                                                         |   | 2010               |       |   | 2009 |   |   | 2008 |   |
|                                                         |   |               |       |   |   |   |   |   |   |
| Income before tax                                            |   | $                  | 63,020,567 |   |   | $ | 58,199,847 |   |   | $ | 47,375,268 |   |
|                                                         |   |               |       |   |   |   |   |   |   |   |   |   |
| Expected PRC income tax expense at statutory tax rate of 25% |   |               | 15,755,141 |   |   |   | 14,549,961 |   |   |   | 11,843,817 |   |
| Income not subject to PRC tax                                |   |               | 56,949     |   |   |   | - |   |   |   | 77,518 |   |
| Effect on exchange rate                                      |   |               | 125,053    |   |   |   | 201,608 |   |   |   | (51,600 | ) |
| Actual income tax expense                                    |   | $                  | 15,937,143 |   |   | $ | 14,751,569 |   |   | $ | 11,869,735 |   |

----

| 17. | SUNDRY INCOME |
|-----|---------------|

|                                                      |   | For the Year ended |    |
|-----------------------------------------------------------|--------|--------------------|---------|
|                                                      |   | 2010               |    |   | 2009 |   |   | 2008 |   |
|                                                      |   |               |    |   |   |   |   |   |   |
| Local government subsidies                                |   | $                  | 227,797 |   |   | $ | 87,844 |   |   | $ | 79,365 |   |
| Transferred from receipts in advance and accounts payable |   |               | 542     |   |   |   | 83,772 |   |   |   | 71,605 |   |
| Subcontracting income                                     |   |               | -       |   |   |   | 69,567 |   |   |   | - |   |
| Others                                                    |   |               | 41,901  |   |   |   | 52,648 |   |   |   | 4,717 |   |
|                                                      |   | $                  | 270,240 |   |   | $ | 293,831 |   |   | $ | 155,687 |   |

| 18. | RELATED PARTY TRANSACTIONS |
|-----|----------------------------|

----

| 19. | SIGNIFICANT CONCENTRATIONS |
|-----|----------------------------|

| 20. | FOREIGN OPERATIONS |
|-----|--------------------|

----

| 21. | OPERATING LEASE COMMITMENTS |
|-----|-----------------------------|

| Years endedDecember 31,  |   | Leasehold |    |   | Reservoir rental |   |    | Total  |   |
|-----------------------------------------|--------|-----------|---------|--------|-----------------------|--------|---------|--------|--------|
| 2011                                    |   | $         | 11,165  |   |                  | $      | 15,152  |   |   | $ | 26,317 |   |
| 2012                                    |   |      | 12,282  |   |                  |   | 15,152  |   |   |   | 27,434 |   |
| 2013                                    |   |      | 13,510  |   |                  |   | 15,152  |   |   |   | 28,662 |   |
| 2014                                    |   |      | 14,861  |   |                  |   | 15,152  |   |   |   | 30,013 |   |
| 2015                                    |   |      | 16,347  |   |                  |   | 15,152  |   |   |   | 31,499 |   |
| Over five years                         |   |      | 384,517 |   |                  |   | 45,456  |   |   |   | 429,973 |   |
|                                    |   | $         | 452,682 |   |                  | $      | 121,216 |   |   | $ | 573,898 |   |

| 22. | COMMITMENTS |
|-----|-------------|

| Contracted, but not provided for:-     |   |   |      |
|----------------------------------------|--------|--------|-----------|
| Acquisition of machinery and equipment |   | $      | 5,560,330 |   |

| 23. | SUBSEQUENT EVENTS |
|-----|-------------------|

----

| 24. | CONDENSED PARENT COMPANY FINANCIAL INFORMATION |
|-----|------------------------------------------------|

|                                       |   | December 31, |        |
|--------------------------------------------|--------|--------------|-------------|
|                                       |   | 2010         |        |   | 2009 |   |
| Assets                                     |   |         |        |   |   |   |
| Cash                                       |   | $            | 5,552,387   |   |   | $ | 5,881,689 |   |
| Prepayment                                 |   |         | 100,000     |   |   |   | - |   |
| Other receivables                          |   |         | 1,352,180   |   |   |   | - |   |
| Investments in subsidiaries                |   |         | 160,813,883 |   |   |   | 81,167,616 |   |
| Total assets                               |   | $            | 167,818,450 |   |   | $ | 87,049,305 |   |
|                                       |   |         |        |   |   |   |   |   |
| Liabilities and Stockholders' Equity       |   |         |        |   |   |   |   |   |
| Current liabilities                        |   |         |        |   |   |   |   |   |
| Accrued liabilities and other payables     |   | $            | 6,448       |   |   | $ | 6,448 |   |
| Total liabilities                          |   |         | 6,448       |   |   |   | 6,448 |   |
|                                       |   |         |        |   |   |   |   |   |
| Stockholders' Equity                       |   |         |        |   |   |   |   |   |
| Common stock                               |   |         | 73,944,243  |   |   |   | 45,261,630 |   |
| Additional paid in capital                 |   |         | 6,930,944   |   |   |   | 6,930,944 |   |
| Retained earnings                          |   |         | 79,522,406  |   |   |   | 32,438,982 |   |
| Subscriptions receivable                   |   |         | -           |   |   |   | - |   |
| Accumulated other comprehensive income     |   |         | 7,414,409   |   |   |   | 2,411,301 |   |
| Total stockholders' equity                 |   |         | 167,812,002 |   |   |   | 87,042,857 |   |
|                                       |   |         |        |   |   |   |   |   |
| Total liabilities and stockholders' equity |   | $            | 167,818,450 |   |   | $ | 87,049,305 |   |

----

| 25. | CONDENSED PARENT COMPANY FINANCIAL INFORMATION (.../Cont’d) |
|-----|-----------------------------------------------------------------------|

|                                |   | For the Year endedDecember 31, |       |
|-------------------------------------|--------|----------------------------------------------------|------------|
|                                |   | 2010                                               |       |   | 2009 |   |   | 2008 |   |
|                                |   |                                               |       |   |   |   |   |   |   |
| General and administrative expenses |   | $                                                  | (2,059,737 | ) |   | $ | (861,388 | ) |   | $ | - |   |
| Equity income of subsidiaries       |   |                                               | 49,143,161 |   |   |   | 44,309,666 |   |   |   | 21,584,589 |   |
| Net income                          |   | $                                                  | 47,083,424 |   |   | $ | 43,448,278 |   |   | $ | 21,584,589 |   |

|                                      |   | For the Year endedDecember 31, |        |
|-------------------------------------------|--------|----------------------------------------------------|-------------|
|                                      |   | 2010                                               |        |   | 2009 |   |   | 2008 |   |
|                                      |   |                                               |        |   |   |   |   |   |   |
| Net cash used in operating activities     |   | $                                                  | (3,511,915  | ) |   | $ | (854,941 | ) |   | $ | - |   |
| Net cash provided by investing activities |   |                                               | (25,500,000 | ) |   |   | (20,000,000 | ) |   |   | - |   |
| Net cash provided by financing activities |   |                                               | 28,682,613  |   |   |   | 26,736,630 |   |   |   | - |   |
| Cash as of January 1                      |   |                                               | 5,881,689   |   |   |   | - |   |   |   | - |   |
| Cash as of December 31                    |   | $                                                  | 5,552,387   |   |   | $ | 5,881,689 |   |   | $ | - |   |

----

| 23. | QUARTERLY CONSOLIDATED FINANCIAL DATA (UNAUDITED) |
|-----|---------------------------------------------------|

|                                           |   | 2010          |        |
|------------------------------------------------|--------|---------------|-------------|
|                                           |   | March 31 |        |   | June 30 |   |   | September 30 |   |   | December 31 |   |
|                                           |   |          |        |   |   |   |   |   |   |   |   |   |
| Revenue:                                       |   |          |        |   |   |   |   |   |   |   |   |   |
| Steel mill flat-rolled products                |   | $             | 61,821,352  |   |   | $ | 64,040,727 |   |   | $ | 61,862,286 |   |   | $ | 66,141,972 |   |
| Cost of revenue                                |   |          | (43,156,824 | ) |   |   | (44,911,879 | ) |   |   | (43,299,966 | ) |   |   | (46,500,979 | ) |
| Gross profits                                  |   |          | 18,664,528  |   |   |   | 19,128,848 |   |   |   | 18,562,320 |   |   |   | 19,640,995 |   |
|                                           |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses                             |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses            |   |          | (1,976,110  | ) |   |   | (1,531,098 | ) |   |   | (1,866,067 | ) |   |   | (2,422,447 | ) |
| Selling and marketing expenses                 |   |          | (395,256    | ) |   |   | (240,295 | ) |   |   | (245,156 | ) |   |   | (370,384 | ) |
|                                           |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total operating expenses                       |   |          | (2,371,366  | ) |   |   | (1,771,393 | ) |   |   | (2,111,223 | ) |   |   | (2,792,831 | ) |
|                                           |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income                               |   |          | 16,293,162  |   |   |   | 17,357,455 |   |   |   | 16,451,097 |   |   |   | 16,848,162 |   |
|                                           |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expenses)                        |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                |   |          | 277,474     |   |   |   | 102,007 |   |   |   | 274,446 |   |   |   | 433,251 |   |
| Interest expenses                              |   |          | (1,084,894  | ) |   |   | (1,292,889 | ) |   |   | (1,087,227 | ) |   |   | (1,821,717 | ) |
| Sundry income                                  |   |          | 84,907      |   |   |   | 91 |   |   |   | 183,728 |   |   |   | 1,514 |   |
| Income tax expense                             |   |          | (4,042,829  | ) |   |   | (4,089,356 | ) |   |   | (3,685,197 | ) |   |   | (4,119,761 | ) |
|                                           |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income attributable to common stockholders |   | $             | 11,527,820  |   |   | $ | 12,077,308 |   |   | $ | 12,136,847 |   |   | $ | 11,341,449 |   |
|                                           |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income per share                           |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                          |   | $             | 0.28        |   |   | $ | 0.28 |   |   | $ | 0.27 |   |   | $ | 0.25 |   |
|                                           |   |          |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                                        |   | $             | 0.25        |   |   | $ | 0.26 |   |   | $ | 0.25 |   |   | $ | 0.23 |   |

----