We would like to highlight A-Power Energy Generation Systems, Ltd. (NASDAQ: APWR). The company is engaged in designing, constructing, installing and testing distributed power generation and micro power grids for various customers in the steel, chemical, ethanol, cement and food industries.
In the company’s recent news,
A-Power Energy Generation Systems, Ltd. reported second quarter financial results. Revenues increased 21.5% to $65.7 million, compared to $54.1 million for the same period in 2007. Net income increased 3.9% to $6.2 million, compared to $6.0 million. Excluding stock-based compensation expense of $0.28 million, non-GAAP net income was approximately $6.5 million, or 20 cents per share. Gross margin declined to 12.1% from 14.5% as a result of costs incurred during construction of a wind turbine facility in Shenyang. Four analysts surveyed expected consensus earnings of 20 cents per share on revenues of $62.13 million.
“During the first six months of 2008, power supply shortages continued throughout China and Southeast Asia and widespread blackouts and brownouts occurred even more frequently than in the previous periods,” said Jinxiang Lu, A-Power’s Chairman and CEO. “This reflects the need now, more than ever, for local power generation to create an efficient and cost-effective power supply throughout China and Southeast Asia. With this substantial market opportunity and our proven success in China, and now in the international market, we feel our distributed power generation business will continue to accelerate.
“In the second quarter of 2008, we received a $150 million contract to develop a 300MW distributed power generation system in Thailand and just last month signed a binding MOU for what is expected to be our largest distributed power generation contract to-date, a $300 million contract to develop a 600 MW distributed power system in Thailand. We feel these new opportunities in Thailand are only the beginning of our international market presence and we are well positioned to win additional distributed power generation contracts of similar size throughout China and Southeast Asia in the near future.
“We also continue to make great progress in our wind turbine business. In July, we completed the construction of our 310,000 square foot facility in Shenyang, China and announced our plan to commence construction in October of this year on our second wind turbine production facility – a 290,000 square foot facility strategically located in Bayan Nur City, in the heart of Inner Mongolia’s wind belt. We expect to complete the construction of this facility in July 2009. These two facilities will have a combined annual capacity to produce over 1,800 MW of wind turbines. With this capacity, our licensed foreign technology and our strong government support, we expect to become one of the leading wind turbine producers in China.”
A-Power Energy reaffirmed fiscal 2008 earnings guidance of $35 - $45 million, or $1.08 - $1.38 per share. Backlog as of August 20, 2008 was $650 million. Shares of APWR closed sharply lower yesterday at $17.98, a loss of 13%, on four times normal daily volume. Shares have traded in a 52-week range of $7.40 - $31.89. With 32.7 million shares outstanding, APWR has a market cap of approximately $588 million.
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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.
