with or without the upcoming Texas wind farm for 1.5 billion, APWR is going UP. With the 1.5 billion Texas deal, APWR surges immediately the second the Texas financing is arranged. However, even if APWR does NOT get the Texas deal, there are plenty of huge, large CHINA wind farm contracts to win and get parts and pieces of to fill up the Shenyang Wind Turbine Factory. Its all good owning APWR long term for end of 2011. Another below Jan814_1999 post on estimates and guidance. IMHO, Jan814 is too high by a few million but trying to model APWR is one of the toughest jobs and estimates out there cause the model is so dynamic and changing by the minute with Solar, Hydro, Geothermal, Biomass and Wind Power always in motion. Jan814 one of the best writers on the net!

The 57 million shares are yearend F/D shares and include shares from options, shares from warrants including the new January 21 warrants, the January 21 financing shares, and the CEOs one million 2009 bonus shares. The 57 million shares also include five million future financing shares to help pay for the new Nevada plant , the Evatech China plant, and more turbine components, but do not include the two million 2010 CEO bonus shares because even though those shares are probable they are not yet guaranteed.
Now if we add 80 2.5MW turbines for the Texas wind farm in 2010, the revenue goes to $1.131 Billion, net income in dollars is $102.00 million, and EPS is $1.79. The Texas wind farm makes a difference.
As to what kind of a PE ratio we might apply to these earnings, consider the following.
1) Yahoo has APWR in the Electric Utilities industry and the average PE for those 63 public companies is 14.90. But there are many boring companies in that industry and APWR is more than a utility company. In fact it kind of stands out among those 63 companies because its’ year over year quarterly revenue growth is the sixth highest in the entire group. But a PE of 14.90 gives us a start.
2) APWRs current ttm PE is 15.75 even after the recent drop in price.
3) The average PE of China Analyst U.S. listed China stocks with a growth rate of 20-25% (APWR is 23%) is 22.34.
4) If the above estimates are close to reality, the various 2009 to 2010 growth rates come in as follows:
Without any Texas wind farm revenue:
Revenue growth will be 153% ($811 million versus $320 million). Earnings growth in dollars will be 145% ($76.40 million versus $31.20 million) . EPS growth will be 61% ($1.34 versus $.83).
With revenues from the Texas wind farm:
Revenue growth will be 253% ($1131 million versus $320 million). Earnings growth will be 227% ($102.00 million versus $31.2 million). EPS growth will be 116% ($1.79 versus $.83).
5) As of 1/29/10, Goldwind in China and a key competitor of APWR is trading at a 25.75 PE despite their recent announcement of a $1.5 billion share offering in Hong Kong.

With the new disclosure rules, I must disclose that I have picked up a corporate sponsor for a month and we all will drive traffic to each other as folks who are searching “”Jobs in Wind Power” will find my blog and advice on buying APWR for long term stock price appreciattion.

Please tell a freind about APWR, Jobs in Wind Power, and the Green Energy Revolution!

Remember that when Obama signed the American Recovery and Reinvestment Act of 2009, over $75 billion was earmarked for renewable energy investments. So despite an uptick in spending by the big boys, there is a lot more to go. But the real opportunity is still in the overlooked, and under-appreciated small-cap companies that have the potential to see their sales explode as federal incentives spur investment, and demand.

This includes A-Power Energy Generation Systems (Nasdaq: APWR), a Chinese wind turbine manufacturer that recently announced plans to build a manufacturing facility here in the U.S. to supply turbines to North American projects. A-Power’s stock has traded off its recent high of $20.55 and is now trading at only $12.21 a share and with a forward PE of less than 10. This is a great value for a company expected to increase EPS by 53% next year on a 77% increase in revenue.

Jan814_1999 provides the best free analysis of APWR future guidance and future earnings one will ever read over the internet for free………..Jan’s numbers are higher than mine but its all about APWR delivering in the wind turbine factory during 2010. Guidance from APWR management will be coming later in the spring but looking forward, APWR is going to go up in stock price using my numbers, Jan814’s numbers, or APWR conservative management guidance.

I have taken a look at what the coming revenue and earnings numbers might look like, not only to include the recent financings, but also to reflect the failure of APWR to generate any revenue from turbine sales in Q4 of 2009. For FY 2010, I looked at the possibilities in two ways. First, I excluded all revenue from the Texas wind farm just in case that project does not materialize. Second, and separately, I included the Texas wind farm in the study, but moved the wind farm schedule to the right with 80 turbines being delivered in 2010 (total will eventually be 240).
But let’s start with Q4.
Without getting into a lot of detail, my Q4 Non-GAAP EPS is now $0.37 and FY2009 is $0.83. I doubt if too many folks are going to care too much about Q4 despite it being a record quarter, because all eyes will be on FY2010 and the emergence of APWR as a significant player in the wind turbine business. The delivery of those first ten turbines was like a breath of fresh, pleasurable, air.
Let’s look at FY2010, WITHOUT any contribution from the Texas wind farm.
I have increased DPG revenue by 20% to $384 million. DPG net margin is 11%.
On the wind turbine side I have APWR shipping 100 2.7mw turbines, 20 2.5mw units to the Saiwusu Wind Farm in Inner Magnolia (5 already shipped), 8 to the Rixhao Donggang Wind Farm in eastern China (5 shipped), and 72 of the big turbines to CACS (that 380 LOI is still good through 2010) or other customers. That 100 units is just 33% of the Shenyang first line plant capacity (without the 30% plant expansion).
Turning to the smaller turbines, I have APWR shipping 10 of the 1.5mw units in 2010 (they planned to ship 10 in 2009) and 30 of the 750kw units (they had hoped to ship 30 in 2009). These smaller units will total 40 which is 9.5% of the second line capacity at the Shenyang plant.
The prices of all the turbines are $.5 million for the 750KWs, $1.5 million for the 1.5MWs and $4.0 million for each of the 2.5/2.7MW units, recognizing that the big turbines for Texas will sell for closer to $5 million but the high shipping and handling costs of those Texas units may mean that 20% (or $1 million of the $5 million) may not contribute to net margin. Net profit margins are 8% for all turbines.
Total revenue for FY2010 comes out to $811 million, net income is $76.40 million, and EPS is $$1.34 on 57 million shares.

China pays its highly skilled wind turbine assembly workers an average of $4100 per year per worker……..compare this to the starting salary of $45,000 per worker at the Vestas new wind turbine plants in Colorado…………

APWR and anything else Chinese and green energy is going to go UP over time, the low cost advantage almost guarantees future success ………..

Also, China has a lot less developed energy market than the U.S., which gives it enormous room for growing its renewable energy industry.

China furthermore has the killer advantage of extremely cheap labor, relative to the U.S. Some Chinese wind-turbine workers make $4,100 a year. That isn’t a typo.

A key passage from the NYT:

China’s top leaders are intensely focused on energy policy: on Wednesday, the government announced the creation of a National Energy Commission composed of cabinet ministers as a “superministry” led by Prime Minister Wen Jiabao himself.
Regulators have set mandates for power generation companies to use more renewable energy. Generous subsidies for consumers to install their own solar panels or solar water heaters have produced flurries of activity on rooftops across China.
China’s biggest advantage may be its domestic demand for electricity, rising 15 percent a year. To meet demand in the coming decade, according to statistics from the International Energy Agency, China will need to add nearly nine times as much electricity generation capacity as the United States will.
So while Americans are used to thinking of themselves as having the world’s largest market in many industries, China’s market for power equipment dwarfs that of the United States, even though the American market is more mature. That means Chinese producers enjoy enormous efficiencies from large-scale production.
In the United States, power companies frequently face a choice between buying renewable energy equipment or continuing to operate fossil-fuel-fired power plants that have already been built and paid for. In China, power companies have to buy lots of new equipment anyway, and alternative energy, particularly wind and nuclear, is increasingly priced competitively.
Interest rates as low as 2 percent for bank loans — the result of a savings rate of 40 percent and a government policy of steering loans to renewable energy — have also made a big difference.
As in many other industries, China’s low labor costs are an advantage in energy. Although Chinese wages have risen sharply in the last five years, Vestas still pays assembly line workers here only $4,100 a year.
Again, what kind of approach can U.S. policymakers come up with that would even come close to moving the needle away from all these Chinese advantages and at the very least level the playing field for U.S. green energy manufacturers? It’s hard to imagine how you get there from here.

categories: Energy