Prior to yesterday's plunge, A-Power Energy Generation Systems
I first noted the Chinese power player's budding alliance with General Electric
From those early March lows, however, A-Power shares made a powerful run. The firm began to land some fresh deals in its distributed generation business, but as with solar compatriots like Yingli Green Energy
A-Power's success story hit a plot-hole yesterday. The firm (finally) reported first-quarter results, and revenue came in at just 61% of the average analyst estimate. Per-share earnings were just one-third the anticipated $0.12 figure. So why the big disconnect?
Well, I hope no one was expecting much from the new wind business, because A-Power won't be shipping its first two 2.7 MW turbines until the third quarter. Then again, following the company's rather grandiose claims made in the not-too-distant past, I wouldn't blame the average investor for expecting some sales on the wind side by now.
This is the same company that implied in February 2008 that it would manufacture hundreds of turbines by the end of this year, and talked about producing and recognizing revenue on 10 turbines in the fourth quarter of 2008.
There's plenty to like about A-Power, particularly its distributed power segment, which has generated consistent profits and faces far less competition than we see in the cutthroat solar sector. The valuation is less crazy than those sported by wind players Broadwind Energy
But I'm more than just a bit worried about the company's big promises on the turbine side, and want to see solid execution on that front before I promote this company from the ranks of wind wannabes.
More from The Motley Fool
10 Hilarious Chinese-Stock Red Flags You Need to Know
Want to avoid getting taken for a ride on a Chinese-stock scam? Here are 10 key red flags to look out for.
America's Next Top Growth Stock
Growth stocks can be a fickle bunch, so check out which of these fast growers the CAPS community thinks is poised for greatness.
The Next Act in the Chinese Stock Drama
Everyone should know by now to tread carefully around Chinese reverse-merger companies, but what about larger companies that conducted full IPOs?