GRR vs MGX, page-7

Since many long bullish shareholders said plenty of good points about GRR here, I think a couple pieces of neutral opinions from me won't do any harm.

It has plenty of net cash, pays dividends and HY generates positive free cash flow. No doubt at the first glance it is undervalued purely in terms of balance sheet.

However in the past 4 years including estimated Q3, the average PB is roughly 0.4.

	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6	Column 7
1		2012/12	2013/12	2014/12	2015/12	2016/Sep	Ave
2	PB	0.400	0.462	0.217	0.419	0.520	0.404

Now in Q3 2016, GRR's PB 0.52 is already 30% premium to that average 0.4.

I think it has properly reflected the fact that the recent iron ore price bounces.

Also, GRR's largest shareholder is Shagang Group which is a steel producing company and GRR is run by Shagang's ex employees or employees. IMHO, Shagang doesn't invest GRR to maximize GRR's value. It invests because it will have a better control about the raw material sourcing I guess. So the good side of this is that GRR generally has a big customer who could kind of guarantee the business.

Not much downside risk in this stock but upside potential could require iron ore price's continuous quicker and stronger recovery or one's good patience to hold on to it.

In general, to me, it is now trading at fair price.