A-Power Energy Generation Sys (MM) (NASDAQ:APWRU)
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A-Power Energy Generation Systems, Ltd.
(NASDAQ:APWR)(NASDAQ:APWRW)(NASDAQ:APWRU) ("A-Power")
announced today that its Chinese operating subsidiary, Liaoning GaoKe
Energy Group (“GaoKe”),
has entered into an agreement with Norwin A/S of Denmark (“Norwin”)
that gives GaoKe the exclusive right to produce and sell Norwin’s
750 kW and 225 kW wind turbines in China.
Mr. Jinxing Lu, A-Power's Chairman and CEO, commented, “We
are excited to become the exclusive partner of Norwin in China and this
agreement marks a significant step in our strategic plan to become the
leading clean energy solutions company in Asia. As a natural adjunct to
our rapidly expanding distributed power generation business, we are
adding this leading wind technology to our repertoire of potential
energy sources. The market demand for renewable energy in Asia is
surging. China’s wind energy market alone is
expected to grow to over 50 GW of output by 2020, up from just 1.2 GW in
2005. We look forward to playing a major role in that growth.”
As part of the agreement with Norwin, a joint venture company will be
established in Shenyang, China that is 80% owned by GaoKe. This JV will
begin selling the 750 kW and 225 kW wind turbines later in 2008, after
construction is completed on the first phase of GaoKe’s
new wind turbine production facility.
GaoKe and Norwin will also establish a joint research and development
facility in Shenyang to develop new wind turbine technology for both the
China and the international markets.
To secure these rights, GaoKe has agreed to pay Norwin a license fee of
$3.5 million. The sales price of the 225 kW wind turbine has not yet
been determined, but the 750 kW wind turbine is expected to sell for RMB
3.4 to 3.7 million ($0.46 to $0.51 million) with approximately 8 to 12%
gross margins. GaoKe will have the capacity to produce a maximum of 420
units of 750 kW wind turbines and 400 units of 225 kW wind turbines on
an annual basis after the first phase of its wind production facility is
completed later this year. This product will complement the 2.5 MW wind
turbines that GaoKe has also acquired rights to from Germany-based
Fuhrlander AG and, when combined, will create a wind turbine portfolio
that will give GaoKe the ability to accommodate the varying wind
conditions across China.
About A-Power
A-Power Energy Generation Systems, Ltd., formerly Chardan South China
Acquisition Corp., through its PRC operating subsidiary, Liaoning GaoKe
Energy Group Co., Ltd., is the largest provider of distributed power
generation systems in China and will enter into China’s
wind energy market in 2008. The Company is also focused on developing
and commercializing additional renewable energy technologies and has
strategic relationships with both, Tsinghua University and the China
Sciences Academy in Guangzhou.
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, about
A-Power and GaoKe. Forward-looking statements are statements that are
not historical facts. Such forward-looking statements, based upon the
current beliefs and expectations of A-Power’s
and GaoKe’s management, are subject to risks
and uncertainties, which could cause actual results to differ from the
forward looking statements. The following factors, among others, could
cause actual results to differ from those set forth in the
forward-looking statements: business conditions in China; continued
compliance with government regulations; legislation or regulatory
environments, requirements or changes adversely affecting the businesses
in which GaoKe is engaged; cessation or changes in government incentive
programs: potential trade barriers affecting international expansion;
fluctuations in customer demand; management of rapid growth and
transitions to new markets; intensity of competition from or
introduction of new and superior products by other providers of
distributed power generation and other energy generation technology;
timing, approval and market acceptance of new product introductions;
general economic conditions; geopolitical events and regulatory changes,
as well as other relevant risks detailed in A-Power’s
filings with the Securities and Exchange Commission. The information set
forth herein should be read in light of such risks. Neither A-Power nor
GaoKe assumes any obligation to update the information contained in this
press release.