China Stock Profile – Harbin Electric, Inc.

(HRBN)1

Statistics for HRBN:

P/E 13.2
Long Term EPS Growth 22%
PEG Ratio 0.61
Net Margin 22%
Average Rating Value 2
Average Rating Buy
Average Target Price 20
Current Price 17.24
Year to Date Performance 116%
Institutional Ownership 22.43%
Short Interest as % of Float 1.91%

Explanation of Terms

P/E - Price divided by Earnings

Long Term EPS Growth - Long-Term (next 3-5 years) EPS Growth Rate estimated by Wall Street analysts
PEG Ratio – P/E to Growth Ratio. Generally the lower the ratio the more attractive the stock
Net Margin – Net Profit divided by Revenue
Average Rating Value – Based on Ratings given by Wall Street analysts. Generally, the lower the value, the
higher the rating
Average Rating – Based on Ratings given by Wall Street analysts
Average Target Price – Based on Target Price given by Wall Street analysts
Current Price – Current Market Price of stock
Year to Date Performance – Year to Date Performance in Price of stock
Institutional Ownership - % of Shares held by Large Institutions
Short Interest as % of Float – Short Interest in the stock as a % of Equity Float

Chart for HRBN

HRBN Company Profile

HRBN is involved in the design, development, manufacture, supply, and service of various electric motors
in China and internationally. The company offers linear motors (LM), automobile specialty micro-motors,
and industrial rotary motors. Its flat linear asynchronous motor series and flat three-phase linear
1
By H.U.
asynchronous motors are used in transmission systems, such as the production transportation line, crane,
postal service sorting machine, baggage sorting machine, printed matter sorting machine, automatic linear
door, and revolving door applications; and integrated linear motor systems used in oil services, factory
automation, packaging, logistic systems, and food industry.

The company’s automobile micro-motors allows for car seat automation, back seat folding, electric power
steering, automated window, and automated trunk opening used for various automation functions in
automobiles. Its industrial rotary motors include high/low voltage motors, AC/DC motors, and speed control
motors are used in the petrochemical industry, metallurgical and mining industry, textile industry,
agricultural machinery, transportation machinery, machine tools, medical devices, ventilation equipment, air
compressor, and electric pumps. The company is headquartered in Harbin in China.

Key Executives of HRBN

Mr. Tianfu Yang , 48

Exec. Chairman, Chief Exec. Officer and Pres
Mr. Zedong Xu , 39
Chief Financial Officer, Principal Accounting Officer and Treasurer
Mr. Yunyue Ye , 57
Chief Technical Advisor and Independent Director
Ms. Lanxiang Gao , 57
Director and Chief Operating Officer of Shanghai Tech - Full Electric Co Ltd
Ms. Christy Young Shue , 46
Exec. VP of Fin. & Investor Relations and Corp. Sec.

Major Holders of HRBN

TOP INSTITUTIONAL HOLDERS

Holder Shares % Out Value* Reported

FIRST WILSHIRE SECURITIES
1,048,759 4.75 $6,449,867 31-Mar-09
MANAGEMENT INC
Black River Asset Management LLC 869,092 3.93 $5,344,915 31-Mar-09
ARDSLEY ADVISORY PARTNERS 769,000 3.48 $4,729,350 31-Mar-09
Argyll Research, LLC 650,000 2.94 $3,997,500 31-Mar-09
WHITEBOX ADVISORS, LLC 416,693 1.89 $2,562,661 31-Mar-09
Barclays Global Investors UK Holdings Ltd 223,635 1.01 $1,375,355 31-Mar-09
Wedbush Morgan Securities, Inc. 151,625 .69 $932,493 31-Mar-09
BALYASNY ASSET MANAGEMENT, LP 88,318 .40 $543,155 31-Mar-09
Artio Global Management LLC 79,660 .36 $489,909 31-Mar-09
STATE STREET CORPORATION 72,597 .33 $446,471 31-Mar-09

TOP MUTUAL FUND HOLDERS

 Holder Shares % Out Value* Reported
ISHARES RUSSELL 2000 INDEX FD 91,728 .42 $1,154,855 31-May-09
SATUIT CAPITAL MICRO CAP FUND 83,680 .38 $667,766 30-Apr-09
Powershares Exhg Traded Fd-Powershares
63,446 .29 $506,299 30-Apr-09
Golden Dragon Halter
ISHARES RUSSELL 2000 GROWTH
48,670 .22 $612,755 31-May-09
INDEX FD
WESMARK SMALL COMPANY GROWTH
45,000 .20 $703,800 30-Jun-09
FUND
Wasatch International Opportunities Fund 44,500 .20 $273,675 31-Mar-09
COLLEGE RETIREMENT EQUITIES
33,656 .15 $268,911 31-Dec-08
FUND-STOCK ACCOUNT
ROYCE VALUE TRUST, INC. 10,000 .05 $61,500 31-Mar-09
OHIO NATIONAL FUND INC.-SMALL
9,200 .04 $56,580 31-Mar-09
CAP GROWTH PORTFOLIO
John Hancock Trust-Small Cap Index Tr 6,508 .03 $40,024 31-Mar-09

Analysts’ Estimates

Current Qtr Next Qtr Current Year Next Year

Earnings Estimate
Jun-09 Sep-09 Dec-09 Dec-10
Avg. Estimate 0.28 0.35 1.36 1.60
No. of Analysts 3 3 3 3
Low Estimate 0.27 0.29 1.24 1.35
High Estimate 0.29 0.40 1.43 1.93
Year Ago EPS 0.31 0.34 1.19 1.36

Analysts estimate earnings growth of 17.6% for HRBN next year.

[May] HRBN announced that it had signed an agreement with a domestic Maglev technology company to
co-develop a linear motor-driven freight train system for coal transportation. Under the agreement, the first
part of the project is to build 850 meter long testing line in a coal mine in inner-Mongolia.

If the testing is successful, the project will expand to a 32 km long coal transportation line in inner-
Mongolia. Harbin will provide linear motor driving systems for the entire transportation line. For the initial
testing line, Harbin will provide 5 linear motors to be integrated with the train as well as 850 meter long
secondary components to be installed on the train track before the end of June 2009.

"I am very excited about this project," said the Chief Executive Officer of Harbin "not only because it is the
first of its kind in the mining industry and in the electric motor industry in China, but also because it opens a
new market potential for us and we believe that the potential is substantial."
HRBN Financial Statements

Income Statement PERIOD ENDING 31-Dec-08 31-Dec-07 31-Dec-06

Total Revenue 120,820 65,403 40,416
Cost of Revenue 73,344 32,968 20,754

Gross Profit 47,477 32,435 19,661

Operating Expenses
Research Development 1,170 1,064 1,491
Selling General and Administrative 11,913 7,660 4,176
Non Recurring - - -
Others - - -

Total Operating Expenses - - -

Operating Income or Loss 34,393 23,711 13,994

Income from Continuing Operations

Total Other Income/Expenses Net 2,406 (189) 7,206
Earnings Before Interest And Taxes 36,799 23,523 21,200
Interest Expense 6,896 6,620 2,762
Income Before Tax 29,903 16,903 18,439
Income Tax Expense 4,524 - -
Minority Interest - - -

Net Income From Continuing Ops 25,379 16,903 18,439

Non-recurring Events
Discontinued Operations - - -
Extraordinary Items - - -
Effect Of Accounting Changes - - -
Other Items - - -

Net Income 25,379 16,903 18,439

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $25,379 $16,903 $18,439

Balance Sheet PERIOD ENDING 31-Dec-08 31-Dec-07 31-Dec-06

Assets
Current Assets
Cash And Cash Equivalents 48,926 45,534 67,314
Short Term Investments - - -
Net Receivables 35,514 25,315 9,735
Inventory 21,960 2,571 583
Other Current Assets - - -

Total Current Assets 106,400 73,420 77,633

Long Term Investments 13,309 25,859 -
Property Plant and Equipment 94,932 23,858 9,220
Goodwill 12,274 - -
Intangible Assets 6,430 5,900 3,226
Accumulated Amortization - - -
Other Assets 2,080 3,595 2,880
Deferred Long Term Asset Charges 64 17 -

Total Assets 235,488 132,649 92,959

Liabilities
Current Liabilities
Accounts Payable 14,103 3,733 2,452
Short/Current Long Term Debt 5,384 - -
Other Current Liabilities 1,245 333 319

Total Current Liabilities 20,732 4,067 2,771

Long Term Debt 39,374 43,966 28,590
Other Liabilities 734 - 16,568
Deferred Long Term Liability Charges - - -
Minority Interest - - -
Negative Goodwill - - -

Total Liabilities 60,839 48,033 47,929

Stockholders' Equity
Misc Stocks Options Warrants - - -
Redeemable Preferred Stock - - -
Preferred Stock - - -
Common Stock 0 0 0
Retained Earnings 52,100 32,281 26,222
Treasury Stock - - -
Capital Surplus 95,029 44,971 12,252
Other Stockholder Equity 27,519 7,364 6,556

Total Stockholder Equity 174,649 84,617 45,030

Net Tangible Assets $155,945 $78,717 $41,804

Cash Flow Statement PERIOD ENDING 31-Dec-08 31-Dec-07 31-Dec-06

Net Income 25,379 16,903 18,439

Operating Activities, Cash Flows Provided By or Used In

Depreciation 7,673 6,152 2,176
Adjustments To Net Income 2,322 950 (6,000)
Changes In Accounts Receivables (1,668) (12,306) (2,802)
Changes In Liabilities (1,015) (110) 2,484
Changes In Inventories 9,606 (1,616) 2,748
Changes In Other Operating Activities 9 (869) (131)

Total Cash Flow From Operating Activities 42,305 9,104 16,913

Investing Activities, Cash Flows Provided By or Used In

Capital Expenditures (16,035) (12,139) (1,579)
Investments - - 1,093
Other Cashflows from Investing Activities (65,064) (23,878) (3,994)

Total Cash Flows From Investing Activities (81,099) (36,016) (4,480)

Financing Activities, Cash Flows Provided By or Used In

Dividends Paid - - -
Sale Purchase of Stock 48,276 1,713 36
Net Borrowings (8,570) - 47,045
Other Cash Flows from Financing Activities (505) (1,000) -

Total Cash Flows From Financing Activities 39,202 713 47,082

Effect Of Exchange Rate Changes 2,470 4,419 2,060

Change In Cash and Cash Equivalents $2,878 ($21,780) $61,575

Reference

Yahoo Finance and China Analyst