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Sutor Technology Group

Sutor Technology Group. Investor Presentation May 2010.

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Sutor Technology Group

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  1. Sutor Technology Group Investor Presentation May 2010

  2. This presentation includes certain statements that are not descriptions of historical facts, but are forward-looking statements. Such statements include, among others, those concerning our new production lines, our expected financial performance and strategic and operational plans, our future operating results, our expectations regarding the market for our steel finishing fabrication products, our expectations regarding the continued growth of the steel market, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause our actual results to differ materially from those anticipated, expressed or implied in the forward-looking statements. These risks and uncertainties include, but not limited to, the factors mentioned in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended June 30, 2009 and other risks mentioned in our other reports filed with the Securities Exchange Commission, or SEC. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at www.sec.gov. The words “believe,” “expect,” “anticipate,” “project,” “targets,” “optimistic,” “intend,” “aim,” “will” or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. The Company assumes no obligation and does not intend to update any forward-looking statements, except as required by law. Safe Harbor Statement

  3. Equity Snapshot NASDAQ: SUTR FYE: June 30 Price ( as of 3/13/10) $2.58 Basic Shares Outstanding 40.7 MM Market Cap $105.0 MM Enterprise Value $147.6 MM Cash + Restricted Cash (as of 3/31/10) $65.0 MM Net Debt (Incl. restricted cash, as of 3/31/10) $42.6 MM Total Assets (as of 3/31/10) $318.9 MM Net Tangible Asset per Shares (as of 3/31/10) $4.02 Street CY 2010E EPS Estimates $0.51 Diluted EPS (TTM) $0.24

  4. Investment Highlights Large market opportunity in growing industry Favorable economic and business environment Strategically located near strong customer base Innovation-focused strategy to ensure future growth Integrated service strategy – difficult to duplicate Strategicpartnership with supplier and customers

  5. Company Overview • Leading China-based fine finished steel manufacturer • Key products – hot-dip galvanized steel; pre-printed galvanized steel; cold rolled steel; acid pickled steel; and welded steel pipes • Founded in 2002 • Capacity of 2.0 million metric tons per year; 10 major production lines • Headcount: R&D 70, Manufacturing 565, Head Office 65 • Key Verticals – Green energy (solar heaters); Household appliances; Autos; Infrastructure; Casting parts.

  6. Sutor’s Business Sutor Technology Group Limited (SUTR) Ningbo Zhehua Heavy Steel Pipe Manufacturing Co., Ltd. (PRC) Changshu Huaye Steel Strip Co., Ltd. (PRC) Jiangsu Cold-Rolled Technology Co., Ltd. (PRC) • 400,000 MT capacity • Longitudinal double submerged-arc welded steel pipe • Small & large diameter and spiral seamed • 300,000 MT Capacity HDG (Hot-Dip Galvanized Steel Strip) • 200,000 MT Capacity PPGI (Pre-Painted Galvanized Steel Strip) • 500,000 MT Capacity AP Steel (Acid Pickled Steel Strip) • 250,000 MT Capacity Cold-rolled Steel • 400,000 MT Capacity HDG

  7. Key Products Acid Pickling Cold Rolling HDG PPGI Ningbo Zhehua Steel Pipe Pipeline Hot Coiled Rolls

  8. Growth Drivers Government Policies • $586 billion government stimulus package directly flows to infrastructure • Rural & trade-in policy for household appliances • 13% tax rebate for exported value add steel products Market Forces • Industrial upgrading requires high-end steel products • China’s urbanization trend spurs demand of welded steel pipe in natural gas transmission, water supply and sewage, etc. • Fixed asset investment expected to grow by 25% in 2010

  9. Key Verticals Diversified product offering reduces operational risk and enhances growth potential Selected SUTR infrastructure projects • Airport construction • Piling applications for bridge construction (Hangzhou Bay Bridge) • China West-East Natural Gas Transmission

  10. Harbin Changchun Shenyang Beijing Urumqi Tianjin Yinchuan 50 Sales Professionals 67 Agents Jinan Shijiazhuang Xining Qingdao Nanjing Lanzhou Shanghai Xian Zhengzhou End Users Chengdu Wuhan Hangzhou Chongqing Nanchang Changsha Fuzhou Guangzhou Kunming Nationwide Sales Network Focus on developed Eastern China • Direct sales force consists of approximately 50 sales & marketing professionals as of June 30, 2009 • Indirect sales channel consists of about 67 agent companies covering all major cities in China as of June 30, 2009 • Sales through related party Shanghai Huaye Iron & Steel Group

  11. Product Quality R&D efforts and equipment importation ensures high product quality • Compliance with major international standards • Approved supplier for Midea, Hitachi, Sunrain, and LG • API certification (American Petroleum Institute) • “National & Provincial High-Tech Brand” and “Jiangsu Well-known Brand” recognition • Ningbo Zhehua is a qualified supplier for CNPC, Petro China, and Sinopec

  12. Innovation-focused Strategy • Only R&D center that focuses on fine finished steel technology in Jiangsu Province • In-house intellectual property: 20 self-developed patents (10 invention, 3 Utility model, 7 appearance-design) • JCOE, an advanced technology in the welded steel pipe industry, can offer high-end welded steel pipe for gas & oil transmission projects • Strategic alliance with Mid-South University: China’s leading institute in steel technology research • New product initiatives: anti-bacteria steel products approved by industry experts Anti-Corrosion Wall Anti-Static Workstand Anti-Scrape Door

  13. Integrated Service Strategy Diversified Product Offering Sales and Distribution Post-sales Customer Services Processing • Acid Picking • Cold Rolling • HDG • PPGI • Welded Steel Pipe • Customized logistic solution • Ten production lines • Customized Processing Services • Distribution Channel • Direct Sales One Stop Solutions  Value Added Services  Customer Loyalty • Sutor has vertically integrated services model • One stop solutions to address clients’ specific needs • Customized processing services to address preliminary processing services • Customize our products according to the specifics provided by our customers

  14. Competitive Advantages SUTR Private-owned Competitors • Highly automated facilities • Vertical integration model • Portfolio of wide range of products • Provincial level R & D Center • Customized R&D for solar water heater manufacturers • Low-ended products • Limited product portfolio • Small size & capacity State-owned Competitors SUTR • Shorter lead time • Higher flexibility • Lower cost • Customer-oriented service • Quick order disposal • Longer lead time • Less flexibility • Higher cost • Non-customer oriented SUTR Foreign invested Competitors • Mature procurement channels • Competitive price • Highly integrated logistics system • Strong sales network • Higher production cost • Higher price • Higher transportation cost

  15. Increase Capacity From 2.0M Tons to Approx. 6.0M Tons via Acquisitions Improve Capacity Utilization of The New 400k Ton HDG Lines Develop New Products Expand Sales Channels into New Markets Build New High-impact Production Facilities Growth Strategies

  16. Net Income ($MM) and Net Margin Revenue ($MM) and Gross Margin Company Performance

  17. Balance Sheet

  18. Management Team Lifang, Chen Chairperson & CEO • Founder and Chairperson of Sutor Technology Group • Director of civil administrative bureau of Xiaoshan District, Hangzhou from 1993 to 2001 • Extensive experience in enterprise management in fine finished steel industry Yongfei, Jiang CFO, Treasurer & Secretary • CFO, Treasurer and Secretary since February of 2007 • Former CFO of Changshu Huaye • Finance manager of Guangzhou Huaye Trading Co., Ltd. from 2002 to 2005 Xun, Zhang CTO • CTO since June of 2007 • Previously worked as Chief Project Engineer • Deputy Chief Engineer at Baoshan Iron & Steel Co., Ltd. from 1995 to 2005 Eric Zhou, Ph.D., CFA • VP Finance since February 2010 • 15 years of capital market and industry experiences • B.Sc. In Petroleum Engineering from China Petroleum University • MBA and Ph.D. from The University of Texas at Austin

  19. Board of Directors • Served as Chairman of Audit Committee and Director for Sutor from Jan. 2010. • President and CEO of SC Financial Group, LLC • Director, Finance of Heritage Management Consultants, Inc. • Senior Financial Analyst of Intel Corporation • MBA from Chicago University • Certified Public Accountant Gerard Pascale Audit Committee Chairman & Independent Director • Executive Director of China Metallurgical Industry Planning & Research Institute since 2008 • Vice Chief Engineer of China Metallurgical Industry Planning & Research Institute since 1998 • Vice Director and Chief Engineer of China Metallurgical Industry Planning & Research Institute since 2002 • Master’s degree in Business Administration from Fordham University and Beijing University. Xinchuang Li Governance Committee Chairman & Independent Director • Chairman of Fortis Haitong Investment Management Company since 2002 • President of Haitong Fund Management since 2002 • Secretary of Party Branch of Changchun Normal University from 1991 to 1994. • Vice President of Economics Department Party Branch of Jilin University from 1975 to 1991. GuoyouShao Compensation Committee Chairman & Independent Director

  20. Contact Information Company Sutor Technology Group Ltd Investor Relations ICR Brian M. Prenoveau, CFA 441 Lexington Avenue, 4th Floor New York, NY (203) 682-8200 brian.prenoveau@icrinc.com Eric Zhou – VP Finance 12F, Building B, World Trade Center 45 North Haiyu Road, Changshu, China 215500 (86) 137 7305 0023 Cell ericzhou@sutorcn.com Auditor Baker Tilly International Hansen, Barnett, & Maxwell LLC Legal Counsel Pillsbury Winthrop Shaw Pittman LLP Robert Brown 5 Triad Center, Suite 750 55 North 300 West Salt Lake City, UT (801) 532 2200 rbowen@hbmcpas.com 2300 N Street, NW Washington, DC 20037 (202) 663 8158

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