China Power Equipment, Inc. Reports Higher Revenues and Net Income

Outlook Brightened by China's Recently Boosted Energy Policy

Mar 31, 2011, 16:30 ET from China Power Equipment, Inc.

XI'AN, China, March 31, 2011 /PRNewswire-Asia-FirstCall/ -- China Power Equipment, Inc. ("China Power," "China Power Equipment," or the "Company," OTC Bulletin Board: CPQQ), the designer, manufacturer, and distributor of a new generation of energy saving electric transformers and transformer cores in the People's Republic of China, today reported higher revenues and net income for the year ended December 31, 2010.

Year 2010 highlights

  • Net revenues increased 24.3% to $29.7 million in 2010 from $23.9 million in 2009.
  • Gross profit increased 36.7% to $7.8 million in 2010 from $5.7 million in 2009.
  • Net income increased 30.2% to $5.5 million in 2010 from $4.2 million in 2009.
  • Net income applicable to common shares was $5.5 million in 2010 compared with a loss of $4.8 million in 2009 that was due to a deemed dividend from beneficial conversion feature of preferred shares.
  • Basic earnings per share increased 196.9% to $0.31 per share in 2010 from a loss of $0.32 per share in 2009 on 19.4% higher weighted average basic shares outstanding in 2010 than in 2009.
  • Diluted earnings per share increased 178.1% to $ 0.25 per share in 2010 from a loss of $0.32 per share in 2009 on 48.5% higher weighted average diluted shares outstanding in 2010 than in 2009.
  • Earnings conference call and webcast will be held on April 1, 2011 at 8:00 a.m. EDT (New York).

Chairman's comments

Mr. Yong Xing Song, Chairman of the Board of China Power Equipment, said, "Our work in the fourth quarter and the year 2010 resulted in very good increases in operating results and financial performance for China Power Equipment.

"During the year, in operations, we added two independent directors and established Board's audit committee.

"We tripled our capacity for cores by opening our new plant. We also moved most of our equipment from our first factory to the new plant. That expansion increased our ability to qualify for and win much larger orders for cores. It also greatly improved our ability to fill orders quickly.

"We carried out the testing of amorphous alloy strip made by a Chinese technology company and found that it was good for several core models.

"We were granted three new patents in China, and we completed the planning for our new production line for amorphous alloy transformers.

"With those efforts, we believe we can benefit even more from the Chinese government's new plan in November last year to boost the country's energy efficiency.

"Our financial year 2010 was also very good. Our higher net revenues, up 24.3%, came mainly from higher tonnage of amorphous alloy cores and high-capacity transformers sold, with somewhat lower pricing for cores, because we passed along most of our raw material cost reductions to our customers."

In cost of goods sold, Hitachi Metals, the world's largest producer and China Power's main supplier of amorphous alloy strip, reduced prices in 2010 to encourage more rapid adoption of high-performance amorphous alloy transformers, which will help improve energy efficiency and speed their use in China and other parts of the world. China Power passed most of the cost reductions on to its customers. As a result, the average price per metric ton for its amorphous alloy cores was 10.9% lower in 2010 than in 2009.

In July 2010, the Company increased its capacity for transformer cores to 6,500 metric tons from 1,500 tons in 2009, up 333.3%. Higher tonnage produced in the second half of 2010 and reductions in the prices of raw materials were the primary reasons for its higher gross profit margin of 26.3% in 2010 from 23.9% in 2009. Gross profit margin is defined as gross profit as a percent of net revenues.

Net income increased 30.2% to $5.5 million in 2010 from $4.2 million in 2009 mainly due to higher gross profits and good control of higher expenses that were consistent with its growth, partly offset by higher taxes.

Basic earnings per share increased 196.9% to $0.31 in 2010 from a loss of $0.32 in 2009, with weighted average basic shares outstanding 19.4% higher in 2010 than in 2009. Diluted earnings per share increased 178.1% to $0.25 per share in 2010 from a loss of $0.32 per share in 2009 with weighted average diluted shares outstanding 48.5% higher in 2010 than in 2009. The loss in 2009 was created by a deemed dividend from the beneficial conversion feature of preferred stock.

China Power's amorphous alloy cores in 2010 increased 26.2% in revenues and 41.6% in gross profit from 2009. Amorphous alloy transformers in 2010 increased 21.6% in revenues and 26.2% in gross profit from 2009. The Company had no revenues from silicon steel cores and transformers in 2010 because it discontinued that product line to focus on amorphous alloy cores and transformers.

Mr. Song continued, "Our growth outlook was further boosted when China's National Development and Reform Commission and government officials announced "guidance for demand side management" in November 2010 to accelerate the adoption of products and technologies that should dramatically improve the electricity grid's energy efficiency, reduce emissions, and increase the availability of electricity.

"Effective January 1, 2011, China's guidance establishes government specific energy-saving targets for electric grid companies and specifically encourages them to install energy-saving transformers. Supporting the policy guidance, the Chinese government is now providing a series of financial incentives, including surcharges on users, to encourage electric grid companies to adopt new methods to improve energy efficiency.

"We expect this new emphasis to further strengthen the robust growth trend we already expect for energy-efficient amorphous alloy electric transformers, and of course the cores that go in them.

"Although energy efficient transformers like ours are already encouraged in China's energy policy and plans, the boost from this new emphasis should accelerate demand even more. We believe the expected strong upward trend in demand is very likely to continue for several years, assuming that China's energy and industrial policies continue to be favorable toward products like ours.

"With the cash flow from our expanded production of cores, good future operating leverage in transformer cores, completion of our new transformer production line in 2011 and subsequent expected orders, and China's further push to improve energy efficiency sooner, we believe our future continues to look very bright."

Revenues

Audited

Year Ended December 31,

%

2010

2009

change

Revenues

%

Revenues

%

Amorphous Alloy Cores

$ 20,463,541

69.0%

$16,209,389

67.9%

26.2%

Amorphous Alloy Transformers

9,194,305

31.0%

7,558,544

31.7%

21.6%

Traditional Steel Silicon Cores & Transformers

-

0.0%

98,306

0.4%

-100.0%

Total

$ 29,657,846

100.0%

$23,866,239

100.0%

24.3%

Net revenues increased $5,791,607 or 24.3% in 2010 from 2009 primarily due to higher tonnage of amorphous alloy cores and amorphous alloy transformers sold, offset in part by lower average selling prices for amorphous alloy cores. To help fill customers' orders, the Company subcontracted the manufacturing of some cores and transformers to other companies in the first half of 2010 before its new plant began production in July 2010. The revenues from traditional silicon steel cores and transformers were zero in 2010 because the Company has focused on amorphous alloy cores and transformers as its major products and has exited all manufacturing, marketing, and distribution of steel cores and transformers.

In 2010, the average sales price per metric ton of amorphous alloy cores was 10.9% lower than in 2009. The lower average price of amorphous alloy cores per ton was the result of lower prices for amorphous alloy strip, the primary raw material used to make amorphous alloy cores.

The average sales price per metric ton for amorphous alloy transformers was 33.5% higher in 2010 than in 2009 primarily due to more expensive high capacity transformers that were sold in our transformer product mix.

Cost of goods sold

Year Ended December 31,

%

2010

2009

change

COGS

%

COGS

%

Amorphous Alloy Cores

$ 14,885,277

68.1%

$ 12,269,445

67.5%

21.3%

Amorphous Alloy Transformers

6,983,619

31.9%

5,806,964

32.0%

20.3%

Traditional Steel Silicon Cores & Transformers

-

0.0%

91,359

0.5%

-100.0%

Total

$ 21,868,896

100.0%

$ 18,167,768

100.0%

20.4%

Cost of goods sold increased $3,701,128 or 20.4% in 2010 from 2009 primarily due to higher tonnage of amorphous alloy cores and more high-capacity amorphous alloy transformers sold.

The increases in cost of goods sold were partly offset by lower prices for the primary raw material, amorphous alloy strip. In 2010, the average price per ton of amorphous alloy strip decreased 15.4% from 2009. The world's main supplier of amorphous alloy strip has been setting its price for amorphous alloy strip lower to promote sales of amorphous alloy transformers at more affordable prices.

Gross profit and gross profit margin

Year Ended December 31,

%

2010

2009

change

Gross Profit

Gross Margin

Gross Profit

Gross Margin

Amorphous Alloy Cores

$ 5,578,264

27.3%

$ 3,939,944

24.3%

41.6%

Amorphous Alloy Transformers

2,210,686

24.0%

1,751,580

23.2%

26.2%

Traditional Steel Silicon Cores & Transformers

-

n.a.

6,947

7.1%

-100.0%

Total

$ 7,788,950

26.3%

$ 5,698,471

23.9%

36.7%

Gross profit increased $2,090,479 or 36.7% in 2010 from 2009 primarily due to higher revenues of amorphous alloy cores and transformers.

The gross profit margin (gross profit as a percent of total revenues) increased to 26.3% in 2010 from 23.9% in 2009 primarily due to the lower prices for amorphous alloy strip in 2010 than in 2009.

Selling, general, and administration expenses

Year Ended December 31,

2010

2009

% change

Selling, general, and administrative expenses

$ 1,371,183

$ 1,196,629

14.6%

% of Revenues

4.6%

5.0%

Selling, general, and administrative expenses increased $174,554 or 14.6% in 2010 from 2009 mainly due to an increase in shipping expenses of $116,363 resulting from higher revenues, an increase in administrative employee expenses of $60,677, an increase in stock-based compensation of $52,078, and an increase in depreciation and amortization of $56,675 as a result of the additions to plant and equipment, partly offset by lower professional fees and recovery in bad debt.

Selling, general, and administrative expenses as a percent of revenue decreased in 2010 because most of the general and administrative expenses are fixed and do not increase in proportion to increases in revenues.

Gain on investment

Year Ended December 31,

2010

2009

% change

Gain on investment

$ 94,274

$ 89,755

5.0%

Gain on investment in 2010 increased $4,519 or 5.0% from 2009 primarily due to higher earnings from a 20% equity method investment. The Company invested $165,377 (using the exchange rate of RMB 6.591 to $1.00 as of December 31, 2010) or RMB 1,090,000 in Shaanxi Yan An Amorphous Alloy Transformer Co., Ltd. ("Yan An") for 20% of its ownership in 2005. The Company recorded this investment using the equity method because of its significant influence on the entity. At December 31, 2010, it sold the shares of Yan An back to Xi'an Amorphous Alloy Science And Technology Co., Ltd. (Alloy Science) from whom the Company purchased the shares of Yan An in 2005, for its carrying balance of $329,466. The Company sold its investment in Yan An's shares to avoid any potential for conflicts of interest in bidding for new work, as both companies produce and sell alloy transformers.

Income taxes

Year Ended December 31,

2010

2009

Income taxes

$ 1,107,393

$ 763,455

Effective tax rate

16.8%

15.3%

Income taxes in 2010 increased in 2010 from 2009 mainly due to the higher net income before income taxes that resulted from higher revenues. The Company's Chinese operating company, Zhongxi, is subject to a 25% standard enterprise income tax in China. However, due to Zhongxi's high-tech enterprise status, the National Tax Bureau in Xi'an High-Tech Development Zone granted Zhongxi tax exemptions for the years ended December 31, 2005 and 2004, and a reduced tax rate of 15% for as long as Zhongxi meets the high-tech enterprise qualification.

Net income and earnings per share

Net income increased $1,276,145 or 30.2% to $5,496,145 in 2010 from $4,220,000 in 2009. The increase in net income was mainly due to higher revenues and lower raw material prices that were partly offset by higher selling, general, and administrative expenses, impairment loss on equipment, and higher income taxes.

Net income (loss) applicable to common shareholders increased 213.9% to $5,496,145 in 2010 from a loss of $4,825,005 in 2009. The loss resulted from a deemed dividend from the beneficial conversion feature of preferred stock.

Basic earnings per share increased 196.9% to $0.31 per share in 2010 from a loss per share of $0.32 in 2009 on weighted average basic shares outstanding that were 19.4% higher in 2010 than in 2009.

Diluted earnings per share increased 178.1% to $ 0.25 per share in 2010 from a loss per share of $0.32 in 2009 on weighted average diluted shares outstanding that were 48.5% higher in 2010 than in 2009.

Liquidity and capital resources  

The Company has funded its operations and capital expenditures using cash generated from operations and funds raised from issuing convertible preferred stock. It will continue its investment in the development and enhancement of the production facilities for amorphous alloy cores and transformers. Cash generated from operations and funds raised from issuing convertible preferred stock will be used to fulfill such commitments.

China Power Equipment believes its existing cash will be sufficient to maintain its operations at the present level for at least the next 12 months.

The following table summarizes our liquidity and capital resources on December 31, 2010 and 2009.

As of December 31, 2010

As of December 31, 2009

Cash

$ 17,932,447

$ 8,883,188

Working capital

$ 18,544,621

$ 9,793,699

Stockholders' equity

$ 27,865,352

$ 17,141,382

Working capital is defined as current assets minus current liabilities.

The following table summarizes the changes in the sources and uses of cash in 2010 and 2009.

Year Ended December 31,

2010

2009

Net cash provided by operating activities

$ 6,719,135

$  5,380,655

Net cash (used in) investing activities

(2,475,520)

(2,509,214)

Net cash provided by financing activities

4,454,702

4,937,502

Effect of exchange rate changes on cash

350,942

3,207

Net increase in cash

$ 9,049,259

$   7,812,150

Net cash provided by operating activities in 2010 was $6,719,135 and came mainly from net income of $5,496,145 and a change in accounts payable of $546,782.

Net cash used in investing activities in 2010 was $2,475,520 and was mainly used for increases in property, plant, and equipment.

Net cash provided by financing activities in 2010 was $4,454,702 and came mainly from the exercise of outstanding warrants originally issued with the Company's Series A convertible preferred stock.

Financial statements follow.

China Power Equipment, Inc.

Consolidated Statements of Income

Year Ended December 31,

2010

2009

Revenue, net

$

29,657,846

$

23,866,239

Cost of goods sold

(21,868,896)

(18,167,768)

Gross profit

7,788,950

5,698,471

Operating expenses:

Selling, general and administrative expenses

1,371,183

1,196,629

Impairment loss on equipment

161,597

-

Total operating expenses

1,532,780

1,196,629

Net income from operations

6,256,170

4,501,842

Other income (expenses)

Gain on investment

94,274

89,755

Other income

193,188

393,224

Other expenses

(95)

-

Interest income

65,918

12,902

Interest expense

(5,917)

(14,268)

Total other income

347,368

481,613

Net income before income taxes

6,603,538

4,983,455

Income taxes

1,107,393

763,455

Net income

$

5,496,145

$

4,220,000

Deemed dividend from beneficial conversion feature of preferred stock

-

(9,045,005)

Net income (loss) applicable to common shareholders

$

5,496,145

$

(4,825,005)

Earnings (loss) per share - basic

$

0.31

$

(0.32)

Earnings (loss) per share - diluted

$

0.25

$

(0.32)

Weighted average common shares outstanding:

Basic

17,804,357

14,908,313

Diluted

22,135,123

14,908,313

The accompanying notes are an integral part of these financial statements.

China Power Equipment, Inc.

Consolidated Balance Sheets

As of December 31,

2010

2009

Assets

Current Assets

Cash

$

17,932,447

$

8,883,188

Accounts receivable, net

1,552,298

1,949,818

Inventory (Note 3)

645,777

363,312

Prepaid expenses and other receivables

402,637

221,670

Related party receivable (Note 14)

329,466

-

Total Current Assets

20,862,625

11,417,988

Property, plant, and equipment, net (Note 4)

7,110,549

4,593,068

Intangible assets, net (Note 5)

348,483

391,513

Long-term investment (Note 6)

-

282,897

Deposit on contract rights (Note 7)

1,365,498

1,316,328

Deposit for purchase of equipment

503,565

767,858

Prepaid capital lease (Note 9)

109,939

111,482

Total Assets

$

30,300,659

$

18,881,134

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable

$

1,130,368

$

549,065

Other payables and advance from customers

740,927

648,814

Lease payable - current portion (Note 9)

2,473

2,156

Short-term loan (Note 8)

60,689

58,503

Income taxes payable (Note 13)

383,547

365,751

Total Current Liabilities

2,318,004

1,624,289

Long-term Liabilities

Lease payable - non current portion (Note 9)

117,303

115,463

Total Long-term Liabilities

117,303

115,463

Total Liabilities

2,435,307

1,739,752

Stockholders' Equity

Series B convertible preferred stock, $0.001 par value, 5,000,000 shares

 authorized, 4,149,667 and 4,166,667 shares issued and outstanding at

 December 31, 2010 and 2009, respectively (Note 10)

4,150

4,167

Undesignated preferred stock, $0.001 par value, 5,000,000 shares

-

-

 authorized, none issued and outstanding

Common stock: par value $0.001 per share, 100,000,000 shares authorized;

 19,382,013 and 14,908,313 shares issued and outstanding at December

 31, 2010 and 2009, respectively (Note 10)

19,382

14,908

Additional paid-in capital

25,712,227

21,182,026

Statutory surplus reserve fund (Note 12)

1,232,532

642,819

Accumulated deficit

(821,698)

(5,728,130)

Accumulated other comprehensive income

1,718,759

1,025,592

Total stockholders' equity

27,865,352

17,141,382

Total Liabilities and Stockholders' Equity

$

30,300,659

$

18,881,134

The accompanying notes are an integral part of these financial statements.

China Power Equipment, Inc.

Consolidated Statements of Cash Flows

Year Ended December 31,

2010

2009

Cash Flows from Operating Activities

Net income

$

5,496,145

$

4,220,000

Adjustments to reconcile net income to net cash:

Depreciation and amortization expense

433,230

249,592

Stock-based compensation

77,775

25,697

Provision (Recovery) of bad debts

(18,977)

90,594

Impairment loss on equipment

161,597

-

Gain on investment

(94,274)

(89,755)

Changes in operating assets and liabilities:

Accounts receivable

477,579

(22,138)

Inventory

(262,175)

99,416

Prepaid expenses and other receivables

(168,758)

810,289

Accounts payable

546,782

(163,094)

Other payables and advance from customers

66,181

30,220

Income taxes payable

4,030

129,834

Net cash provided by (used in) operating activities

6,719,135

5,380,655

Cash Flows from Investing Activities

Addition in plant and equipment

(2,534,692)

(18,422)

Addition in construction in progress

-

(1,620,844)

Acquisitions of intangible assets

-

(219,270)

Deposit for purchase of equipment

-

(767,445)

Repayment from related parties

-

72,913

Dividend from investment

59,172

43,854

Net cash provided by (used in) investing activities

(2,475,520)

(2,509,214)

Cash Flows from Financing Activities

Principal payments on capital lease

(2,181)

(1,948)

Proceeds from issuing preferred stock

-

4,939,450

Proceeds from warrant exercise

4,456,883

-

Net cash provided by (used in) financing activities

4,454,702

4,937,502

Effect of exchange rate changes on cash and cash equivalents

350,942

3,207

Increase (decrease) in cash and cash equivalents

9,049,259

7,812,150

Cash and cash equivalents, beginning of period

8,883,188

1,071,038

Cash and cash equivalents, end of period

$

17,932,447

$

8,883,188

Supplemental disclosure of cash flow information

Interest paid in cash

$

5,917

$

14,268

Income taxes paid in cash

$

1,103,363

$

633,621

Non-cash investing and financing activities:

Conversion of preferred stock to common stock

$

17

$

-

Construction in progress in lieu of repayment from related party

$

-

$

23,794

The accompanying notes are an integral part of these financial statements.

China Power Equipment, Inc.

Consolidated Statements of Stockholders' Equity

Additional

Preferred Stock

Capital Stock

Paid-in

Shares

Amount

Shares

Amount

Capital

BALANCE, JANUARY 1, 2009

-

-

14,908,313

$ 14,908

$  7,176,041

 Issuance of preferred stock

4,166,667

$  4,167

-

-

4,935,283

 Deemed dividend on preferred stock

-

-

-

-

9,045,005

 Stock-based compensation

-

-

-

-

25,697

 Transfer to statutory reserve

-

-

-

-

-

 Comprehensive income:

 Net income

-

-

-

-

-

 Foreign currency translation adjustment

-

-

-

-

-

 Total comprehensive income

-

-

-

-

-

BALANCE, DECEMBER 31, 2009

4,166,667

4,167

14,908,313

14,908

21,182,026

 Conversion of Series B preferred stock

(17,000)

(17)

17,000

17

-

 Exercise of warrants

-

-

4,456,700

4,457

4,452,426

 Stock-based compensation

-

-

-

-

77,775

 Transfer to statutory reserve

-

-

-

-

-

 Comprehensive income:

   Net income

-

-

-

-

-

   Foreign currency translation adjustment

-

-

-

-

-

 Total comprehensive income

-

-

-

-

-

BALANCE, DECEMBER 31, 2010

4,149,667

$  4,150

19,382,013

$ 19,382

$25,712,227

Retained

Accumulated 

Statutory

Earnings

Other

Total

Surplus

(Accumulated

Comprehensive

Stockholders'

Reserve

deficit)

Income

Equity

BALANCE, JANUARY 1, 2009

$ 202,665

$ (462,971)

$  1,004,575

$ 7,935,218

 Issuance of preferred stock

-

-

-

4,939,450

 Deemed dividend on preferred stock

-

(9,045,005)

-

-

 Stock-based compensation

-

-

-

25,697

 Transfer to statutory reserve

440,154

(440,154)

-

-

 Comprehensive income:

 Net income

-

4,220,000

-

4,220,000

 Foreign currency translation adjustment

-

-

21,017

21,017

 Total comprehensive income

-

-

-

4,241,017

BALANCE, DECEMBER 31, 2009

642,819

(5,728,130)

1,025,592

17,141,382

 Conversion of Series B preferred stock

-

-

-

-

 Exercise of warrants

-

-

-

4,456,883

 Stock-based compensation

-

-

-

77,775

 Transfer to statutory reserve

589,713

(589,713)

-

-

 Comprehensive income:

   Net income

-

5,496,145

-

5,496,145

   Foreign currency translation adjustment

-

-

693,167

693,167

 Total comprehensive income

-

-

-

6,189,312

BALANCE, DECEMBER 31, 2010

$ 1,232,532

$ (821,698)

$  1,718,759

$ 27,865,352

The accompanying notes are an integral part of these financial statements.

Conference call and webcast 

China Power Equipment will host its first earnings conference call and live webcast at 8:00 a.m. Eastern Daylight Time (New York) on Friday, April 1, 2011, which is 8:00 p.m. in China on the same day.

The dial-in details for the live conference call are:

    U.S. toll-free number

1 866 549 1292

    International dial-in number

+852 3005 2050

    Mainland China toll-free number

400 681 6949

    Participant PIN code

156 484#

The live webcast and archive of the conference call will be available on the Investor Relations section of China Power's website at http://www.chinapower-equipment.com. Be sure to log in about 15 minutes before the call starts to download any necessary software.

A telephone replay of the call will be available after the conclusion of the conference call through 9:00 a.m. Eastern Daylight Time, April 8, 2010. The dial-in details for the telephone replay are:

U.S. toll-free number

1 866 753 0743

    International dial-in number

+852 3005 2020

Mainland China toll-free number

800 876 8594

    Conference reference

156 591#

About China Power Equipment, Inc.

China Power Equipment, Inc., is a U.S. corporation, which through its wholly-owned subsidiary, An Sen (Xi'an) Power Science & Technology Co., Ltd. and its affiliated operating company, Xi'an Amorphous Alloy Zhongxi Transformer Co., Ltd., designs, manufactures, and distributes amorphous alloy transformer cores and amorphous alloy core distribution transformers in the People's Republic of China. The Company currently manufactures 59 different products, primarily amorphous alloy cores and amorphous alloy core transformers.

Safe harbor statement

Certain statements in this release concerning our future growth prospects are forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. These forward-looking statements can be identified by terminology such as "anticipates," "believes," "could," "estimates," "expects," "future," "intends," "plans," "should," "will," and similar statements.

The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of the Company's investments, risks and uncertainties regarding fluctuations in earnings, its ability to sustain its previous levels of profitability including on account of its ability to manage growth, intense competition, wage increases in China, its ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, its ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China.

Additional risks that could affect the Company's future operating results are more fully described in its filings with U.S. Securities and Exchange Commission. These filings are available at www.sec.gov.

The Company may, from time to time, make additional written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q, and 8-K, in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on its behalf, except as required under law.

For more information about China Power Equipment please visit its website at www.chinapower-equipment.com.

For more information, please contact:

China Power Equipment, Inc.

Telephone +1 646 623 6999 in the USA

Email: xa-fj@xa-fj.com

or

Christensen

Mr. Tom Myers (English)

Mobile +86 139 1141 3520 in Beijing

tmyers@christensenir.com

Ms. Kathy Li (English and Chinese)

Telephone +1 212 618 1978 in the USA

kli@christensenir.com

www.chinapower-equipment.com

SOURCE China Power Equipment, Inc.



RELATED LINKS

http://www.chinapower-equipment.com