iSteelAsia Announces 2004/05 First Quarter Results

(August 13, 2004 ¡V HONG KONG) iSteelAsia Holdings Limited ("iSteelAsia" or the "Group", stock code: 8080) today announced its unaudited consolidated results for the three months ended June 30, 2004.

Affected by the austerity program in China and re-focus on product selection for long term shareholder benefits, turnover in the period under review decreased to approximately HK$238 million, representing 40% drop over the last corresponding period and reported loss attributable to shareholders HK$2.5 million. Loss per share was HK0.16 cents.

Desmond Fu, CEO of iSteelAsia, commented, "Hard hit by the launch of austerity program by the PRC government to cool down the overheated economy, in particular the real estate industry, that led to a divestment of inventories by most domestic distributors. In this connection, domestic construction steel resulted in a sharp price correction in May and June while it was mounting in the rest of the world. As iSteelAsia imports quality steel from around the world, such difficult price environment posted heavy pressure on the Group's turnover and eroded margins. Also, we at that time redesigned our offerings to focus on higher margin products for greater shareholders' return. As a result, the Group's performance and turnover experienced a significant adverse impact in the short run."

Latest trade figures from MEPS (International) Ltd., a leading steel market information supplier, showed that apparent steel consumption in April 2004 was 20% higher than the same period in 2003. Crude steel production in June 2004 was also on the upward trend with 13.8% increased in production. "Based on the information, it is no doubt that there is plenty of room for growth in China's steel usage. The strong demand provides vast business opportunities though it is now under adjustment," Desmond added.

To conclude, Desmond said, "The management team is positive on the Group's prospect and believes that the austerity program would help to shake out those smaller competitors with no distinct competitive advantages in the market. This consolidation creates a more disciplined and stable environment for the industry and as a whole benefiting capable players like iSteelAsia. Again, we will continue to undertake rationalisation of the Group's resources to achieve the best we can to thank our shareholders for their long term support."

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For further information, please contact:

iSteelAsia Holdings Limited
Ms. Betty Jane Leon
Senior Marketing Manager
E-mail: betty.leon@isteelasia.com