China Power Tech (PINK:CNPI)

We believe that our operating cash provided by sales of boilers and provision of boiler-related services is sufficient to repay the portion of such loans that is due within the next 12 months. We also believe that our currently available working capital, together with the net proceeds from our recent offering, should be adequate to sustain our operations at our current levels through at least the next 12 months.

Our capital expenditures were approximately $0.1 million, $0.1 million and $3.7 million for 2008, 2009 and 2010, respectively. We expect that our capital expenditures will increase in the future because of our planned expansion of production capacity and equipment upgrade. Our expansion plan is expected to be completed by the end of 2011. As of December 31, 2010, we had spent $2.1 million in this expansion plan for the construction of eight workshops and another $1.6 million to purchase new equipment. We have budgeted another $6.0 for this expansion plan million in 2011, which will be used to purchase 68 sets of new equipment for our new workshops or for equipment upgrades in our existing workshops. We expect the plan will increase our production capacity by approximately 1,000 steam tons by the end of the first quarter of 2011 and another 1,500 steam tons by the end of fourth quarter 2011. These capital expenditures will be funded through cash generated from operating activities and, if available, from net proceeds from this offering.

CHINA POWER TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Amounts in US$, except shares)

We are offering shares of our common stock. Our common stock is quoted on the OTCQB market, a Pink Sheets quotation service, and trades under the symbol “CNPI.” There have been no recent public quotations of our common stock on the OTCQB. There has never been an active public market for our common stock, and the shares are being offered in anticipation of the development of a secondary trading market. We have applied to list our common stock on The NASDAQ Global Market under the symbol “CNPT.”

Chna Power plans to raise at least $45 million to $55 million.

On June 1 2010, Desheng Boiler became public via a reverse merger tansaction.

 Company Snapshot:

Engaged in manufacture, design, development, installation and maintenance of circulating fluidized bed (“CFB”) boilers which operate with higher thermal efficiency and less pollution.

Industry Snapshot:

• CFB technology has emerged as an environment favorable clean combustion technology for burning a wide range of solid fuels to generate steam and heat.
  
• Based on the positive expectations of the economic growth, the Chinese government forecasted that the industrial boiler industry's annual growth rate will be 20% in the "Eleventh Five-Year" period between 2006 and 2010. (Source: page 232, Yearbook of Chinese industrial boiler industry(2007-2008).
  
• We believe that the following factors have been and will continue to drive the growth of our industry:
  
  • Pollution control and energy conservation
  • Heightened environmental awareness
  • Government stimulus.

Post Merger Share Calculation:

•   8,098,750: Pre reverse merger outstanding shares 
•   4,898,750: Shares cancelled as part of the Share Exchange
• 36,800,000: Newly issued shares of Common Stock

GeoTeam® best effort calculation of total post reverse merger shares assuming full conversions:  40,000,000

Financial Snapshot: see note