Dear Sen Shumer::

Here is a wake call on how a 600MW wind farm will be built in USA from China. 86% of components will be outsourced to USA firms and 86% of the parts will be made on USA soil to avoid the expensive shipping costs from China. The nacelles will be the only component shipped and made in China and the blades and towers will be USA made with USA jobs. Sometimes in politics and business, its better to know WHAT you are talking about before you open your mouth and show how little you truly know about wind power and green jobs for USA!

John S. Lin, the director and chief operating officer of A-Power, said in an e-mail message that the proposed American plant, costing about $50 million, would not make the turbines for the West Texas wind farm. The company has yet to pick a location for the new plant.

Ed Cunningham, a managing director of the U.S. Renewable Energy Group, said that even the controversial Texas wind farm had always planned to source about 86 percent of its components, measured by weight, from the United States, including the towers and blades. Only the nacelles would come from China, he said. Nacelles are high-value components containing the gearbox at the heart of a wind turbine.

“The biggest parts of the turbine are all wholly made in the U.S.,” Mr. Cunningham said of the Texas project. As for the new plant, it will assemble nacelles for turbines in the United States, he said.

Jan814 has brought to my attention an up and coming China Wind Player called ”’China Wind Systems” and CHWY looks to be on a growth curve for late 2010. As one can see from my study of APWR , it takes TIME and VISION and PATIENCE to make great returns on an up and coming WIND PLAYER and China Wind Systems fits my profile. The 176% Q over Q Wind Revenues caught my eye! My wife owns some CHWY and I am still doing my Due Diligence and awaiting the uplisting to Naz market before I stick my toes in the water. With a LONG PERSPECTIVE, this up and coming wind player in China is going much higher imho and since Jan814 is one of the BEST writers on the Net, he makes a good argument!

Hi all.
Even I was surprised at the strength of CHWYs Q3 results especially since I had projected revenue of $14.25 million and they came in at $16.13 million. That was a hefty 37.1% gain over Q3 of last year and was even up 18.8% sequentially from Q2. My $.09 per share EPS estimate was right on the money but that was because I used fewer F/D shares than Q3 ultimately called for. So I will be refining my Q4 and FY 2010 projections.
The transition from textile revenues to forged product revenues continues. In Q3, the percent of total revenue generated from wind turbine sales was the highest ever at 42.9%. The other numbers were all good especially considering we incurred a “deemed preferred stock dividend” which reduced the net by $.462 million. That “deemed dividend” was a one time charge and a non-cash charge but still impacted the net by a little bit. Also, we continue in a transition phase from textiles to forged products. I liked the increase in cash & cash equivalents and the working capital position. Long term debt is not troublesome at $.665 million.
Here are a few items from the earnings release and conference call.
1) The Company has filed for a major listing and the filing is with NASDAQ.
2) In Q3, wind related forging revenue was up 176% from a year ago.
3) Electro-Slag (ESR) operations will begin mid 2010. The ESR facility will have an annual capacity of 6000 tons and the product will sell for about $4400 per ton which is well above the current price on current products.
4) The $14 million Chingxi Shipyard project is on its delivery schedule (will end in June of 2010). CHWY is negotiating to extend the contract with more product.
5) With the current cash position and with the ESR facility funding in place, CHWY has no immediate need for new funding
6) The textile business, though contributing less revenue than last year, continues to generate positive cash flow, contributes to earnings, and has a stable customer base.
7) Even though China is seeing an excessive supply of end item wind turbines relative to demand, CHWY is not seeing an impact on their components, especially since their components go into gear boxes and yaw bearings which remain in short supply.
As I mentioned a couple of days ago, CHWY has a couple of presentations coming up on November 20th and December 8th, but the next big event at CHWY may be the NASDAQ listing. That could bring a lot of recognition to China Wind Systems. As Rick Pearson said in one of his articles on the uplisting of stocks:
“— the uplisting represents the beginning of the institutions just getting into a newly available stock”
He also says:
“Once the uplist occurs, it is typically too late to get the pre-list value.”

It normally takes four to six weeks after filing, for NASDAQ to approve a new listing.
Since the CHWY filing is already in, we could get a nice Christmas gift from CWHY wrapped in NASDAQ paper complete with green ribbon and a green bow.

All seems well at China Wind Systems and The Shadow agrees.

Jan.