A-Power Energy Generation Systems Ltd said it has signed a deal, to build a wind turbine production facility, with the Chinese city government of Bayan Nur. 2,100 MW of wind power generation in the Bayan Nur region has already been approved by the government and A-Power will be poised to capitalize on this with a turbine production capacity of over 1,800MW by the end of 2009.
The 290,000 square foot plant is set to cost about $20 million and is expected to be completed in July 2009 less than a year away. This will allow A-Power to scale and manufacture wind turbines of 2.5MW and 750kW capacity. Furthermore, the company said that under the deal, the city government has agreed to tax breaks and to coordinate sales with wind farms in and around Bayan Nur region.

Currently analysts Roth Capital and Jessup & Lamont are covering the stock with Buy rating. Further more, the largest institutional holder (over 4.5 million shares) of APWR is hedge fund JLF Asset Management which happens to be a 25 minute drive to APWR US headquarters in San Diego, CA. This is quite important in my mind as I suspect JLF is having quite frequent dialog with APWR on the state of the business when company execs are stateside. I would be looking closely at movement on JLF Asset Management’s holdings as a forward indicator of the stock.

Looking at the fundamentals, APWR has over $100 million in cash and cash equivalents, over $700 in backlog and no debt. Furthermore, the company is on track to earn at least $1.5 per share and 500 million in revenue in FY 2009 giving it a forward PE of less than 20 at its current price of approx $27 per share. This looks like a stock you buy and forget about for a year and you could be well rewarded.

Below is a 3 month chart of APWR

Here is a link to a mention of APWR back in Feb on CNBC