2008 marked another major milestone in A-Power’s history. Despite the challenging conditions in the global market, our DG business continued to demonstrate accelerated growth as Chinese industrial plants embraced our electricity-generation systems to conserve energy and reduce pollution, Mr. Jinxiang Lu, A-Power’s chairman and chief executive officer commented. We are very pleased that we have nearly tripled our net income and almost doubled our revenue in the fourth quarter. We continue to prove our ability to win customers, improve profitability, and strengthen our balance sheet.

Lu continued, In 2008, we also successfully solidified our partnerships with European wind turbine makers Fuhrlander and Norwin, and established our relationship with General Electric to prepare for our expansion in the Chinese wind turbine market. In addition, we recently completed our general assembly facility for wind turbines in Shenyang, China and now have the largest production capacity for one single location in China. After China posted robust growth rates in wind turbine installation from 6GW in 2007 to 12GW in 2008, the Chinese government recently unveiled another ambitious plan to invest $11.7 billion (RMB 80 billion) in expanding the wind energy market to 30GW and requiring utility companies to generate 15% of their power from wind by 2010. As we believe many Chinese domestic wind turbine producers are facing technological barriers and component shortages in their mega-watt class turbine production, A-Power, with its European and U.S. relationships, is well positioned to gain market share.

Fourth Quarter 2008 Results

For the fourth quarter of 2008, A-Power’s revenues rose 93.5% to $81.4 million from the fourth quarter of 2007, reflecting the strong growth of DG orders year-over-year.

Gross profit rose 207.5% to $14.5 million from the fourth quarter of 2007. Gross margin was 17.8%, compared with 11.2% in the fourth quarter of 2007.

General and administrative (G&A) expenses were $3.7 million, compared with $1.0 million in the fourth quarter of 2007. G&A as a percentage of revenue was 4.6%, compared with 2.5% in the fourth quarter of 2007. The higher G&A expenses were mainly because of the costs of being a public company and business expansion.

Operating income increased 192.6% to $10.8 million from the fourth quarter of 2007.

Net income rose 197.8% to $10.0 million from the fourth quarter of 2007.

Diluted earnings per share were $0.30, compared with $0.25 in the fourth quarter of 2007. For the fourth quarter of 2008, the weighted average number of shares on a fully diluted basis was 33.1 million as compared to 13.7 million in the same period of 2007.

2008 Results

Gross profit increased 79.4% to $36.9 million from 2007. Gross margin was 13.9%, compared with 13.5% in 2007.

G&A expenses were $8.7 million, compared with $3.5 million in 2007. The higher G&A expenses were mainly because of the costs of being a public company and business expansion.

Operating income increased 65% to $28.2 million from 2007.

Diluted earnings per share were $1.01, compared with $2.23 in 2007. For the year 2008, the weighted average number of shares on a fully diluted basis was 28.2 million, compared with 6.8 million in 2007.

Balance Sheet Highlights

As of December 31, 2008, A-Power had cash and cash equivalents of $43.5 million, compared with $59.7 million at September 30, 2008.

Working capital as of December 31, 2008 was $97.0 million, compared with $95.8 million at September 30, 2008.

Current ratio as of December 31, 2008 was 3.06 compared with 2.91 at September 30, 2008.

Total shareholders’ equity rose to $155.3 million at December 31, 2008, from $143.9 million at September 30, 2008.

As of December 31, 2008, the Company recorded no short-term or long-term bank loans.

Recent Developments

On March 5, 2009, the company has announced that it had signed agreements for GE Drivetrain Technologies to supply A-Power with 2.7 megawatt (MW) wind turbine gearboxes and to establish a joint venture partnership for a wind turbine gearbox manufacturing plant in China.

On January 11, 2009, the company has launched its first wind turbine production facility with a ribbon-cutting ceremony. Strategically located in Shenyang, one of China’s largest industrial hubs, the facility is the largest wind turbine production plant in China, with total annual production capacity of over 1,125 MW. Among the guests at the opening ceremony were various provincial and local government officials, GE Drivetrain executives, the management from German Fuhrlander, from which the Company has an exclusive licensing agreement in China for 2.7MW wind turbines, as well as various investors in the Company.

Business Outlook

The company expects revenues and net income for 2009 to be around $290 million and $29 million, respectively. These targets are based on the company’s current DG backlogs, which are subject to change when the company signs new DG contracts and/or recognizes revenues from wind turbine sales during 2009.

Lu concluded, Entering 2009, we expect continued growth in our DG business as our strong track record attracts more industrial companies to use our systems to improve their electricity power management and utility cost control. On the wind turbine generator front, we want to fully leverage our technology partnerships with global wind technology leaders like Fuhrlander, Norwin and GE. Although our wind power business is still in its infancy, we see strong demand from the market for our 2.7MW wind turbines, as China is graduating from the Kilo-Watt class and moving towards Mega-Watt wind turbines. With our engineers and technicians completing training in Germany, our top priority is to secure components and ramp up production to satisfy the growing market demand.