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A-Power Energy Generation Systems, Ltd. (APWR) Announces Initial Sales Contract for 2.7MW Wind Turbines

A-Power Energy Generation Systems, Ltd. (APWR), China’s largest provider of distributed power systems and a recent entrant into China’s wind energy market, this morning announced that it has signed a sales contract with China National Control System Corp. (“CACS”) for five 2.7-MW wind turbines for delivery during the fourth quarter of fiscal 2008. These wind turbines are destined for China National’s wind farm projects in Gansu and Inner Mongolia, and will be the first produced at A-Power’s new production facility in Shenyang, China, which has an annual production capacity of 300 2.7-MW turbines and 420 750-kW turbines.

“We are excited to announce the first sales contract to come from our previously announced wind turbine LOIs,” said Jinxiang Lu, A-Power’s Chairman and CEO. “These 2.7MW units will be the largest land based wind turbines commercialized to-date in China and, for this reason, we are experiencing a surge of interest from buyers throughout the country. Now that we have determined the pricing and delivery schedule for our wind turbine components, we intend to convert the remainder of our wind turbine LOIs into sales contracts.

“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 375 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.”

Shares of APWR traded down $0.89, or 6.4%, to close at $13.02 today. APWR has traded in a 52-week range of $8.00 – $31.89. With 32.7 million shares, APWR has a market cap of $425 million, a P/S of 2.5, a P/E of 25, and a forward P/E of 6.5. As of August 20, 2008, APWR had a contract backlog of $650 million.

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