A-Power lands $44M for energy alliance as stock plummets

Shenyang, China-based A-Power Energy Generation Systems (Nasdaq:APWR) had a fourfold announcement today, including the Shenyang government’s plans to invest RMB 300 million ($44 million) in an industry alliance lead by A-Power and other unnamed clean energy players.

The positive announcement didn’t appear to boost the company’s stock, which closed at $9.98, down nearly 24 percent. The company’s stock has been trading at a 52-week high of $31.89 and a low of $3. 

A-Power, with its China-based subsidiaries, is the largest provider of distributed power generation systems in China. The company makes wind turbines in China’s largest wind turbine manufacturing facility (see A-Power completes first phase of wind turbine facility and A-Power opens 1GW wind turbine plant in China).

In the company’s first quarter 2009 financial results, also reported today, A-Power’s revenue is down at $31.2 million, compared to $32.3 million in the first quarter 2008. However, A-Power raised its revenue guidance for the year from $290 million to $320 million, and its net income guidance from $29 million to $32 million.

“The first quarter is typically slow for us due to seasonality and weather conditions in the northeast region of China,” said A-Power CEO Jinxiang Lu in a news release.

The recent government seed capital is expected to help Shenyang Power Group, the newly formed alliance, to go after large-scale electricity generation projects in and outside of China. The city of Shenyang plans to grant RMB 200 million of the total through a government-owned asset management firm, giving the municipality a 20 percent stake in the alliance. The government plans to provide the rest of the funds through a RMB 100 million subsidy, paid in installments by 2011, to Shenyang Power Group. As the lead investor in Shenyang, A-Power owns 60 percent of the alliance.

In another announcement today, A-Power signed a RMB 96 million contract with Sanmenxia New Energy Bio-Electricity to build electricity-generation systems using biomass as a fuel in the Henan province of China. Under the contract, a biomass plant, being designed and constructed by A-Power, is expected to be completed and operating by October 2010.

A-Power also signed a contract for an undisclosed sum with Jinzhou Jinxia New Energy to supply two units of A-Power’s wind turbines, with the capacity to generate 2.7 megawatts, to a wind power generation plant in the city of Jinzhou by the end of July.

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