China Power Equipment Updates Progress in its New Plant and Second Alloy Source

April 12, 2010

XI’AN, China, April 12 /PRNewswire-Asia-FirstCall/ — China Power
Equipment, Inc. (“China Power Equipment” or “China Power” or the “Company”)
(OTC Bulletin Board: CPQQ), the manufacturer of a new generation of energy
saving electric transformers and transformer cores in the People’s Republic of
, today updated its progress in its new plant and in a possible second
source for amorphous alloy.

Mr. Yongxing Song, Chairman and Chief Executive Officer of China Power
Equipment, Inc., in his prepared remarks at an investment conference hosted by
Roth Capital Partners, LLC., in Beijing, China on April 10, 2010 said, “We
expect to complete the installation of all the production equipment in our new
plant for manufacturing amorphous alloy transformer cores by April 30.

“That milestone is important because it will help to qualify us further as
a reliable supplier of high-quality cores at high production volumes, which
can influence the government and our customers in granting orders for our
products. The new plant will add 5,000 metric tons of annual capacity for
amorphous alloys cores, bringing our total capacity to 6,500 metric tons per

“Assuming we win the new orders that we believe can be achieved, we could
start delivering amorphous alloy cores for some of those new orders from the
new plant as early as May 2010. Until then, we will shake down the production
line by running pre-production volumes to qualify the line. Once qualified, we
will begin producing amorphous alloy cores in this new second plant for our
current customers in partnership with our first core plant.

“I also will give you an update on the tests of amorphous alloy cores we
have manufactured using test amorphous alloy strip created by Beijing Advanced
Technology & Science Materials Co., Ltd. (“AT&M”).

“Based on the tests run by electric grid companies and by our customers,
one electric grid company, so far, in the Henan province, has signed the first
order with us for an initial production of 52 metric tons of transformer cores,
assuming that AT&M will produce this alloy. We have not disclosed the pricing
in the order, but it is competitive with the pricing for our cores made with
alloy from Hitachi Metals Co., Ltd. (“Hitachi”), our primary supplier.

“So far, the AT&M alloy appears to perform well for certain transformer
applications, based on the initial results in the tests currently being
conducted. If AT&M becomes a qualified high-volume supplier, it would add a
second major supplier to the global market for amorphous alloy. AT&M’s entry
would not cause us to reduce our orders or affect our good relationship with

China Power Equipment was one of the first transformer core makers to
produce an operating core, using the AT&M test alloy, that met China’s
national standard for electricity consumed under operating load.

China Power Equipment received the test amorphous alloy in September 2009.
After five months, China Power had analyzed the performance characteristics of
AT&M’s test alloy, modified China Power’s processing technology, including
annealing, to optimize the alloy’s attributes, and successfully produced
amorphous alloy cores with operating capacities of 315 kilovolt-amperes, 400
kilovolt-amperes, 500 kilovolt-amperes, and 630 kilovolt-amperes, all stepping
down 10,000 volts to 220 volts.

In February 2010, a China Power Equipment transformer core, model
SBH15-M-315KVA, using the AT&M alloy, running at a volume of 315
kilovolt-amperes, consumed 163 watts of electricity, which is 4 percent better
than the Chinese national standard for transformer electricity consumption.
All the other operating parameters of the test core were also good. Units of
this model were provided to transformer makers and electric grid organizations
for test. This transformer size is the most frequently used unit in rural

Mr. Song continued, “I think it is remarkable that we were able to go from
the research and development stage for cores using this test alloy all the way
through to market testing in only five months. Our R&D and production teams,
working closely together, have achieved a major milestone that should give
China additional ability to benefit from amorphous transformers and should
give customers and electric grid organizations an additional choice in
specifying step-down cores and transformers.”

About China Power Equipment, Inc.

China Power Equipment, Inc., is a U.S. corporation, which through its
wholly-owned subsidiary, An Sen (Xi’an) Power Science & Technology Co., Ltd.,
and its affiliated operating company, Xi’an Amorphous Zhongxi Co., Ltd.,
designs, manufactures, and distributes amorphous alloy transformer cores and
amorphous alloy core electricity transformers in the People’s Republic of
. The company currently manufactures 59 different products, primarily
amorphous alloy cores and amorphous alloy core transformers.

Safe harbor statement

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 results are described in our
filings with United States Securities and Exchange Commission. These filings
are available at http://www.sec.gov and at our website at
http://www.chinapower-equipment.com .

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 any obligation to update any forward-looking statement that may
be made from time to time by or on our behalf except as required by law.

For more information about China Power Equipment, please visit our website
at http://www.chinapower-equipment.com .

    For additional information, please contact:

    China Power Equipment, Inc.
     Tel:    +1-646-623-6999 in the USA
     Email:  xa-fj@xa-fj.com

     Mr. Yuanyuan Chen (English and Chinese)
     Mobile: +86-139-2337-7882 in Beijing
     Email:  ychen@christensenir.com

     Mr. Tom Myers (English)
     Mobile: +86-139-1141-3520 in Beijing
     Email:  tmyers@christensenir.com

     Ms. Kathy Li (English and Chinese)
     Tel:    +1-212-618-1978 in the USA
     Email:  kli@christensenir.com

SOURCE China Power Equipment, Inc.

Source: newswire

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