Welcome to the China Power Equipment board.
China Power Equipment, Inc.(OTCBB:CPQQ), through its subsidiary, Xi'an Amorphous Zhongxi Co., Ltd., utilizes proprietary, patented technology to produce 10kV and 35 kV traditional transformers, amorphous alloy cores and 10kv amorphous alloy transformers, which are a new generation of energy saving transformers. The Company produces 55 different models of transformers in four product series which are sold throughout China.
The Company was formed in 2005 as a U.S. corporation, and in February 2006, was granted a license as a privately held, Wholly-Owned Foreign Enterprise, or "WOFE", by the Chinese government.
The Company currently has two patents for the production technology of amorphous alloy transformers and one patent for equipment for the production of amorphous alloy cores in China. Leveraging the properties of amorphous alloy materials and its advanced manufacturing process, China Power's transformers reduce up to 80% of the no-load loss generated by transformers with a silicon steel core.
As China continues its rapid transition from an agricultural to an industrial economy the drain on the nation's existing power grid is substantial. In response to this and the PRC's increasing attempt to reduce its impact on the environment, the Chinese government has issued a series of measures demanding improved efficiency and decreased emissions from its corporations, thus making it a priority to use energy-saving products and equipment. These regulations specify new energy codes for the manufacturers and sale of transformers and require enterprises which utilize transformers required to give priority to energy-saving transformers, such as those produced by the Company.
Meanwhile, the Company is the only enterprise that can manufacture amorphous products in the western region on a large-scale.
China Power Equipment, Inc. Reports Record Revenue and Net Income
--Energy Efficient Transformer Manufacturer Earns $0.11 Per Share in the First Six Months of 2009 as Compared to $0.06 in the Prior Year
NEW YORK, Aug 18, 2009 /PRNewswire-Asia-FirstCall via COMTEX/ -- China Power Equipment, Inc. ("China Power") (OTC Bulletin Board: CPQQ) today reported its operating results for the second quarter of 2009.
Net revenues for the six months were $8,590,671, an 88% increase over the first six months of 2008. Net income for the period nearly doubled to $1,634,383, or $0.11 per share, as compared to $822,141, or $0.06 per share for the first six months of 2008. These improvements were largely due to the Company's strong performance in the second quarter. Revenue for the period was $5,888,375, more than double the $2,236,584 earned in the second quarter of 2008. Net income for the second quarter of 2009 was $1.3 million, or $0.09 per share, as compared to $310,746, or $0.02 per share, for the same period in 2008.
The increases to net income as a percent of sales reflect a decrease in the selling, general and administrative expenses, which were 4% of revenues in the second quarter of 2009 as compared to 8% of revenues for the same period in 2008.
Yong Xing Song, Chairman of the Board of the Company, stated, "We are quite pleased with the Company's performance during the second quarter. The improved results reflect the investment we have made in our product line and sales effort. We expect these trends will continue as China's economy continues to expand, and with it, the demand for efficient, clean transfer of energy. We look forward to building on the strong foundation we have built with many of the regional utilities and government agencies as they continue to increase and improve China's power grid."
461,634 Prepaid expenses and other receivables 320,256 257,700 Total Current Assets 5,841,874 4,575,084 Related party receivables 23,781 97,248 Property, plant and equipment, net 3,693,776 3,116,422 Intangible assets, net 423,388 220,742 Long-term investment 244,245 236,384 Deposit on contract rights 1,314,867 1,313,064 Prepaid capital lease 114,106 116,694 Total Assets $11,656,037 $9,675,638 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $943,584 $710,480 Accrued liabilities and other payables 499,359 409,040 Advance from customers 33,242 142,156 Lease payable - current portion 1,947 1,944 Note payable 58,439 58,358 Value-added tax payable 72,609 64,686 Income taxes payable 348,550 235,262 Related party payable 1,169 1,167 Total Current Liabilities 1,958,899 1,623,093 Long-term Liabilities Lease payable - non current portion 117,489 117,327 Total Long-term Liabilities 117,489 117,327 Stockholders' Equity Preferred stock: par value $0.001 per share, 10,000,000 shares authorized; None issued and outstanding at March 31, 2009 and December 31, 2008 -- -- Common stock: par value $0.001 per share, 100,000,000 shares authorized; 14,908,313 shares issued and outstanding at June 30, 2009 and December 31, 2008 14,908 14,908 Additional paid in capital 7,176,041 7,176,041 Statutory surplus reserve fund 202,665 202,665 Retained earnings/(Accumulated deficit) 1,171,412 -462,971 Accumulated other comprehensive income 1,014,623 1,004,575 Total stockholders' equity 9,579,649 7,935,218 Total Liabilities and Stockholders' Equity $11,656,037 $9,675,638 China Power Equipment, Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended, Six Months Ended, June 30, June 30, 2009 2008 2009 2008 Revenue, net $5,888,375 $2,236,584 $8,590,671 $4,566,249 Cost of goods sold -4,510,872 -1,727,023 -6,663,451 -3,312,075 Gross profit 1,377,503 509,561 1,927,220 1,254,174 Selling, general and administrative expenses 224,650 176,589 425,217 335,793 Net income (loss) from operations 1,152,853 332,972 1,502,003 918,381 Other income (expenses) Gain on investment 21,409 40,045 51,373 62,253 Other income 350,881 -- 350,881 13,936 Interest income 1,441 235 5,815 2,467 Interest expense -- -56,214 -117 -79,516 Foreign exchange loss -- -- -- -2,712 Total other income 373,731 -15,934 407,952 -3,572 Net income before income taxes 1,526,584 317,038 1,909,955 914,809 Income taxes 220,222 6,292 275,572 92,668 Net income after income taxes $1,306,362 $310,746 $1,634,383 $822,141 Earnings per share - basic $0.09 $0.03 $0.11 $0.08 Earnings per share - diluted $0.09 $0.02 $0.11 $0.06 Weighted average common shares outstanding: Basic 14,908,313 10,886,413 14,908,313 10,879,246 Diluted 14,908,313 14,908,313 14,908,313 14,901,146
ABOUT CHINA POWER EQUIPMENT, INC.
China Power Equipment, Inc., through its wholly-owned subsidiary, Xi'an Amorphous Zhongxi Co., Ltd., has developed a proprietary, patented technology to produce a new generation of energy saving transformers and transformer cores. The Company currently manufactures 55 different models of transformers in four product series which are sold throughout China. The Company was formed in 2006 as a U.S. corporation, and in November 2006, formed a Chinese subsidiary which was granted a license as a privately held, Wholly-Owned Foreign Enterprise, or "WOFE", by the Chinese government.
Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our 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 our future operating results are more fully described in our United States Securities and Exchange Commission filings, including our Prospectus dated November 7, 2008, and 10-K filed on March 31, 2009 and our other recent filings. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.
For More Information on China Power Equipment, Inc., visit the website at: http://www.chinapower-equipment.com
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SOURCE China Power Equipment, Inc.
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