SHENZHEN, China, March 1, 2011 /PRNewswire/ -- Cogo Group, Inc. (Nasdaq: COGO), a leading gateway for global semiconductor companies to access the industrial and technology markets in China, today announced a wind turbine contract win since the acquisition of MDC Tech in late January. The contract was signed in February with key customer, DongFang Turbine Co., Inc., and is valued at approximately $1.5 million. It is expected that shipments will commence and that Cogo will begin recording revenue in the third quarter of 2011.
Cogo will provide extensive design, logistical and engineering services and technical support over the life of the contract, utilizing key components and technology from a leading global European technology solution supplier for clean-tech technologies. This contract, along with other wind turbine contracts signed by MDC with DongFang in the last twelve months, will be included in this year's revenue. The Company is currently pursuing other wind turbine customers and sees promising growth potential in this end market.
Jeffrey Kang, CEO of Cogo, said, "I am delighted that the acquisition of MDC Tech is already beginning to pay significant dividends and has put us in the 'sweet spot' of approximately $300 billion in Smart Grid spending in the next five years. This far reaching contract gives me increased confidence that we will reach the guidance for $15-20 million in revenue in the first 12 months after the closing of the MDC acquisition on January 30, 2011."
Mr. Kang said, "This contract with DongFang Turbine Co. is moving Cogo upstream to encompass design, logistics and engineering services and the relatively large size of the contract will improve the visibility of our overall order book. We are confident that we will see many more contracts in the field of energy production and expect to quickly add new customers and new clean-tech energy businesses beyond wind very soon."
Mr. Kang continued, "I believe that we will soon begin to see further benefits of MDC Tech as we leverage these new assets across our 1,600-strong customer base. I am very pleased with the overall order book for Cogo across all end markets thus far in 2011, with particular strength in our Industrials business. Consequently, I am confident about our visibility into delivering another year of high revenue growth."
About Cogo Group, Inc.:
Cogo Group, Inc. (Nasdaq: COGO) is the leading gateway for global semiconductor companies to access the rapidly growing Industrial and Technology sectors in China. Through its unique business-to-business services platform, Cogo designs customized embedded solutions using technology from suppliers including Intel, Broadcom, Xilinx, SanDisk, Freescale, Atmel and others for a customer base of over 1,600 Chinese OEMs/ODMs. Cogo's customer list includes approximately 100 blue-chip companies, including ZTE, BYD and NARI, as well as over 1,400 Small and Medium Enterprises (SMEs). The Company serves a broad list of rapidly growing end-markets in China, including 3G Smartphones, Tablets, Automotives, High-Speed Railway, Smart Meter/Smart Grid, Healthcare and High Definition Television "HDTV". Cogo's fastest growing end-market is Industrial business, which constituted close to 18% of total company sales at the end of 2010. Cogo has approximately 560 employees, with about 280 focused on engineering and 100 in direct sales.
Safe Harbor Statement:
This press release includes certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include statements about our proposed discussions related to our business or growth strategy such as growth in industrial application businesses and businesses with DongFang Turbine Co., which are subject to change. Such information is based upon expectations of our management that were reasonable when made, but may prove to be incorrect. All such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. For further descriptions of other risks and uncertainties, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings,. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at www.sec.gov.
SOURCE Cogo Group, Inc.