Baosteel Group is conducting due diligence on the net assets and equities of Guangzhou Iron and Steel Group (Guangzhou Steel) and Shaoguan Steel Group as part of efforts toward a substantial merger with the latter two companies into Guangdong Iron and Steel Group (Guangdong Steel). Although Guangdong Steel was set up last June to prepare to build Zhanjiang Iron and Steel Project, Guangzhou Steel and Shaoguan Steel are currently being operated individually and their assets have not yet been transferred to Baosteel since the Zhanjiang project is still awaiting the approval from the central government. Baosteel wants to speed up the consolidation activities by making use of the recent financial crisis that could help hold down the price bidding for the relevant assets.