A-Power: Boundless Energy Demand in China Gives It a Boost

Nov.24.09 | About: A-Power Energy (APWR)

By Paul Goodwin

My stock idea for today is a company that’s working in the cracks in the Chinese power grid. A-Power Energy Generation (OTC:APWR) is a small company that builds distributed power generating systems but is moving quickly into the Green energy sector.

A typical A-Power project might be a small (less than $50 million) coal-fired power plant that’s adjacent to a factory or industrial park and provides power to the local area. The plant may or may not be connected to the national power grid, but for its local users, it will certainly eliminate the brownouts and outages that plague China’s national larger grid.

A-Power has a nice backlog of orders in China, and is working to broaden its geographic footprint (soliciting contracts in India) and its product line (making wind turbine components from licensed technologies).

Demand for power in China is virtually boundless, and the government is also working hard to get a handle on pollution, which puts A-Power at a very favorable intersection.

The stock has just broken out of a long, rising base that began forming in June when it was trading at 7. After tightening up in October, the stock broke out on November 17 on news of a big secondary order for wind turbine components. And news of plans to build a plant in the U.S. to serve turbine customers in North and South America only add to the stock’s potential.

Disclosure: none