A Power Energy Generation Systems-(APWR)

A-Power Energy Generation Systems Ltd. is a Northeast China based renewable energy company listed on the NASDAQ under ticker symbol APWR.  They provide onsite energy systems ranging in size from 250MW-400MW for industrial companies and also wind turbines with GE's Drivetrain Technilogies. They design, construct (through subcontractors) , install and test the onsite systems before the customer puts them into use. This is all done using the existing heat and gas previously wasted in production by large energy users.

The are the largest in what is to be a growing industry. Capital intensive and long time investment horizon on a company in this nature is to be expected. Being that this industry surely is to benefit and the economic picture gaining strength from 2009-2010 over the long term this is an industry you want to be in.

Fundamental issue's are it's a Chinese based corporation, heavy capital expenditures, High Beta of 3.3 and the most recent quarters miss on EPS estimates. They also just completed a private placement for
5.78M shares @ $14.37 per share. They also issued warrants for the purchase of 2.89M shares with 2.1M exercisable @ $16.90 and the rest @ $16.91 per share. the dilution and the miss of the earnings surely put downward pressure on the stock.

From a Fundamental long term investment horizon this should be a solid play over time. They are slated to increase earning almost 45% for this fiscal year.

From a Technical basis and the short term the stock has broken all support. The chart trend shows a clear downward move. The RSI is low at 30 but continues to sink further. 50 and 200 day moving averages are falling which is Bearish. The support which was @ $11.91 broke that support level also Bearish.

The question is what to do if you own the stock or considering buying it. One way is to avoid it completely and buy a company like GE that is worldwide for the exposure. Personally I don't typically like owning individual companies in markets like China which do not have the same type of regulations that the U.S and major markets that have been in the business of regulating them for some time. China is still a Communist country with controls unlike most of the world. You should understand this market and how it's regulated if your going to invest in an individual stock within it. I don't so I don't buy them.  An index like the CHII might be a better and safer way to go if you want to participate in that market and sector.

If you wish to learn about that market one of the best books out their on them is by Jim Rodgers who is an expert on China and now lives in Sigapore. He understands it better than most. He has an incredibly successful track record having started and run the Quatum fund with George Soros. He also has a Blog just Google his name.

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