A-Power Energy (APWR) Announces Huge Contract - Stock Down nearly 30%

Breathtaking... these small cap Chinese stocks simply have no support. A-Power Energy (APWR) announces a massive sale of 50 of their wind turbines which is a significant amount of their capacity and the stock is down 27% as I type this. The stock was down near 50% in 2 weeks through Friday morning. I bought a tad Friday morning, the stock fell 20%. Today it is down nearly 30%. So since Friday morning it's cut 50%, on top of the previous 50%. Amazing.

I am going to buy a bit more here because we are now approaching silly prices.... the company is, again going to make $2-$2.50 in 2009 and this contract pretty much guarantees it. Yet the stock is in the $4s aka 2x 2009 estimates and even on the $1.15 for 2008 it is now trading at 4x earnings. For 50% growth. Again... amazing.

• A-Power Energy Generation Systems, Ltd. (Nasdaq: APWR - News; "A-Power"), announced today that it has signed its second sales contract with China National Automation Control System Corp. ("CACS") (http://www.cacs.com.cn/) for the sale of 50 2.7 MW wind turbines. This is in addition to the previously announced contract with CACS for five 2.7MW units. These units are expected to be delivered by July, 2009.
• These 2.7MW wind turbines will be produced at A-Power's new wind turbine production facility in Shenyang, China with components the company has secured from Fuhrlander AG and other European wind power component suppliers, which will begin arriving in November. This facility consists of two production lines with a designed annual capacity of 300 units of 2.7MW wind turbines and 420 units of 750kW wind turbines, totaling over 1.1GW in annual output.
• CACS, a subsidiary of China National Machinery & Equipment Group, has been a leading provider of power generation solutions to both China and the international markets since 1981. A-Power will supply wind turbines to CACS' wind farm projects in the Gansu province and the Inner Mongolia Autonomous Region.
• We are currently in late-stage discussions to sign additional contracts with CACS and the other parties that had signed letters of intent with A-Power in Q1 2008, which in aggregate provide for an additional 325 wind turbines. In addition, we are in discussions with a number of new potential buyers. Based on these discussions, we expect to announce additional contracts over the coming months for both our 2.7MW and 750kW wind turbine units."

Adding a bit more in the $4.80s but as I've said repeatedly, no amount of fundamental news means anything. Up to a 2.4% stake. I honestly think at these prices, this stock will create a 300% return within 2 years. Not that it matters today. As I wrote Friday when I bought around $8 it could go to $6, $4, or $2. Well the first 2 objectives were reached. We'll wait for $2 or 2x 2008 estimates, and 1x 2009 estimates to buy the next batch.

Again, if on $2.00 EPS in 2009 it can get just a 10 PE = $20. Today it is under $5. That is 300% return. Just ridiculous prices.

Long A-Power Energy in fund and personal account