Abstract: Using the Residual Income Model, the paper measures the intrinsic value and the bubbles of the steel corporations, and based on the bubble analysis of American stock market, it introduces the criterion to estimate the character, of the stock mrket bubble. We found that the stocks of the majority of steel corporation were traded at a price between below their intrinsic value and rational stock market bubble in the first half of 2007. Accordingly, we can conclude that the viewpoint that the Chinese stock market is full of bubbles in the first of 2007 is incorrect, at the same time, government cannot judge the stock market bubble only by stock index and P/E Ratio.