A-Power Energy Generation: - Up Another 7%
A lot of news out of this name - press releases both Friday and this AM. As outlined in the original thesis (Jun 27: New Position in A-Power Energy Generation Systems to Create Alternative Energy Mini Basket) this company has a very solid core business, but the investor excitement will really be coming in 2009 and forward as the wind business begins to (ahem) fly. At this point, after quite a run last week, the stock is probably a bit ahead of itself as most of the new data points are positives, but positives for the long run and not changing any of the financials in 2008.
Today, a Memorandum of Understanding to construct a new 290K sq foot turbine facility with capacity of 800 MW
- A-Power Energy Generation Systems, Ltd. (NASDAQ:APWR - News) ("A-Power"), announced today that it has entered into a Memorandum of Understanding with the Bayan Nur city government in western Inner Mongolia Autonomous Region to construct a new 290,000 square foot wind turbine production facility with the capacity to produce approximately 800MW of wind turbines each year.
- A-Power intends to produce its 2.5MW and 750kW wind turbines in this facility. Based on market demand and the wind conditions in this region, A-Power also anticipates future production of 1.5MW wind turbines in this facility and is in discussions to license or acquire 1.5MW wind turbine technology.
- As part of the agreement, the Bayan Nur city government will also provide A-Power with tax breaks and coordinate all of the sales efforts for A-Power’s wind turbines with wind farms in Bayan Nur and surrounding areas. Bayan Nur is located in one of the three premium wind belts in China and therefore, significant demand for wind turbines exists from wind farm operators in this region. The PRC central government has recently approved wind farms with a potential 2,100MW of output in Bayan Nur alone.
- "The new facility will be similar in size to the first phase of our facility recently completed in Shenyang and its strategic location will be advantageous to serve this particular part of Inner Mongolia’s wind belt. We plan to begin construction on this facility in October 2008 and it is expected to be completed in July 2009 at a cost of approximately $20 million.
- "The 800MW annual wind turbine production capacity at this new Inner Mongolia facility combined with over 1,000MW from the first phase of our Shenyang production facility will give A-Power an annual wind turbine production capacity of over 1,800MW by the end of 2009.”
Friday, the company announced what is essentially a license agreement to produce a new series of Fuhrlander AG's wind turbines. Also some good news on joint sourcing and training with the established German company.
- A-Power Energy Generation Systems, Ltd. (NASDAQ:APWR - News) ("A-Power"), announced today that it has consummated a Co-operation Agreement with Fuhrlander AG which gives A-Power the right to produce Fuhrlander’s 600kW to 2.7MW series wind turbines in addition to the already agreed upon production of Fuhrlander’s 2.5MW wind turbine.
- The Co-operation Agreement also provides for a joint component sourcing program in Europe and China as well as an expanded training program where A-Power’s technical staff will attend extensive on-site training at Fuhrlander’s facilities in Germany.
Long A-Power Energy in fund and personal account
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