Beginning Jan 11th, 2009, A Power Energy (APWR=Naz) becomes the largest wind producer in China with over 1125 Megawatts of capacity per year with more coming down the road.  Now, results will be dramatic over time as APWR actually delivers the promised ramp of wind turbines and the actual numbers of wind turbines grows given the aggressive growth plan by APWR management.  In the meantime (between now and end of 2009), a lot of opinions and research papers will be written and circulated about APWR and the future and potential of this very profitable company producing small, distributed electrical power producing plants.  My research is my own and I will acknowledge right up front, I cannot nor anyone else see the future but economics and real numbers and a past history to go on, one can make a model and base predictions about the future up front.  Variables could be earthquakes, world war, global drought, alien invasions, etc etc etc (you get the point, one cannot PROMISE RESULTS, only hypothetically model results given time and history).

The secret about producing small electrical power stations (Distributed Power Generation) is to build small an concise thus not wasting any megawatts in transmission to the national grid.  Here in the USA, we lose about 50% of our power to transmission pushing electrons along the vast , broad grid.  In China and the rest of the world, most underdeveloped countries do not even have a national 24/7/365 grid .  China power needs are great and will develop over time using the cleanest green power available,  wind power.  Most economies of wind power are simple, a 3MW wind turbine costs about 4.5 million and you can cluster a small group around a city or manufacturing complex without spending hundreds of millions to create power.

APWR is in the sweet spot going forward and the global crisis will impact future earnings (SEE previous posts about downgrades and reduced backlogs and future contracts being postponed), but the reality is that APWR has never realized a single penny in revenues and profits from their up and coming future wind business model.  APWR could easily be the sixth largest wind producer in the world by the end of 2010 given size and amount of megawatts APWR is promising to deliver.  China government has committed to spending 70% of its 586 billion stimulus package on inside China companies,  APWR will be the largest in china wind producer starting Jan 11th with the grand opening state of the art wind production facility.   APWR is using existing German and Dutch companies (Furhlandher and Norwin) to advance their wind strategy partnering with Norwin and Furhlandher for turbine design and outsourcing components and technology assistance to further advance APWR aggressive growth model. 

My basis for future results are using Roth Capital forward looking guidance just issued for $1.38 in EARNINGS end of 2009, and a lot for end of 2010 given the global crisis on credit getting better (NO control there for end of 2010 guidance).

APWR is a growth story of future earnings off of newly opened facilities backed by an engineering company who builds small electrical power producing plants.  APWR has completed 13 existing power stations and has 10 more under construction and on backlog of over 800 million going forward.  My guess/analysis is that some of this backlog will be postponed given the credit crisis in global world markets.  However, the cancelled/postponed contracts will be supplemented by future in the distance wind contracts so the 800 million backlog will be solid going forward plus or minus.  

Future earnings predictions of $1.38 given a P/E Factor of 10 makes APWR a $13 stock end of 2009.  My advice is to buy with both hands at the current pricing given the backlog and the story stock of 2010 into green energy and china growth going forward. 

FULL DISCLOSURE::: Author of this blog is LONG APWR !