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APWR Analysis of 2010 Earnings by another Author

|Includes: AMSC, A-Power Energy Generation Systems Ltd. (APWR), FAN, TRN, WGOV

I evaluate everyone's numbers who takes the time and energy to evaluate and try and model the APWR growth story.   (OTC:APWR) is very hard to model because of so many working/moving/growing parts and pieces into China green energy.   With Biomass, Solar, DPG, Hydro, Geothermal, and especially the growing wind side, APWR is one tough amigo to model.   But, however , if you are lucky enough to be along for the ride, the galloping bronco for 2010 probably wont disspapoint U

Jan814_1999 weighs in on future 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.

Author is Long APWR

Disclosure: Author is LONG APWR