China Growth Stocks

[Potse]

AEPW (.06)...electrical power systems......

52M shrs outstanding
$3.1M market cap
$3M cash
$11.9M Book Value: .23/shr
2009 revenues expected to be $18.7M (based on 2Q guidance)

Picked up some shares of AEPW as a speculative play. AEPW designs and manufactures systems to monitor/control electrical energy (switchgears, circuit breakers, etc.).

Some of the lower-quality types of China stocks often get neglected as money pours into the upper-tier names, but that can provide some opportunities. Eventually, some of the more speculative stocks out there can have their moments in the sun and produce nice percentage gains (SNPY and CHFR are two examples that have moved nicely off their 52-week lows).

AEPW does have a $1.5 million floor-less convertible note with an existing minority shareholder. However, the note can not be converted until the maturity date of December 31, 2010. Gross margins are slim so I don't see AEPW becoming wildly profitable any time soon, but there are some encouraging indications regarding anticipated revenue. Guidance in the 2Q report calls for $12M in the next 6 months, which would compare favorably to the $6.7M in the first 6 months of 2009.

An item of interest from the 10-K filed on 4/15/2009......

We endeavor to enhance our product line by improving exiting products and/or introducing new products to the marketplace. We have developed and are currently testing a gas insulated switchgear to be used in the power distribution system of power plants and sub-stations, as well as an enhancement to an existing switchgear which would afford applicability to other markets, such as power plants. We expect to introduce both products during the fourth quarter of 2009. These new products will allow us to enter new markets and attract new customers.

AEPW websites.....

http://www.greghetrick.com/AEP2/about.asp (from around the time the company went public)

http://www.aepe.biz/cn/