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INVESTOR PRESENTATION December 2011 Virtual Road Show Presentation Building a Green Future with Power Saving Transformers

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Safe Harbor Statement Certain statements in this document are forward-looking or predictive statements. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied. Such factors include but are not limited to market and customer acceptance and demand for our products; our ability to market our products; the impact of competitive products and pricing; the ability to develop and launch new products on a timely basis; the regulatory environment, including government regulation in the PRC; our ability to obtain the requisite regulatory approvals to commercialize our products; fluctuations in operating results, including spending for research and development and sales and marketing activities; and other risks as detailed in our filings with the Securities and Exchange Commission. The words identifying forward-looking or predictive statements can include believe, expect, anticipate, intend, and plan and similar words. These statements are subject to risks and uncertainties that cannot be known or quantified and, consequently, actual results may differ materially from those expressed or implied by such predictive statements. Readers are cautioned not to place undue reliance on these forward-looking or predictive statements, which speak only as of the date they are made. Safe Harbor Statement

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Transformers are used to convert, or step down high voltage electricity supplied by power stations via electrical wires into lower 220 and 380 volts for safe residential and commercial usage Where You Find Our Products Step Down Transformers for the Last Mile Amorphous Transformers A GENERATION TRANSMISSION B DISTRIBUTION C D COMMERCIAL & INDUSTRIAL BUSINESS CONSUMERS E RESIDENTIAL CONSUMERS

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What We Manufacture Our Products & Applications Energy Efficient Amorphous Alloy Transformer Cores A transformer core is where the transformer windings that carry the electricity are coiled 34 types of cores based on capacity Number of cores used depends on the voltage of the transformer Below and Pole Amorphous Alloy Transformers Transparent view of cores inside the transformer Opened in Q3 2011, our dedicated manufacturing facility has 5,000 units of capacity in 4 series. Urban and rural residential areas Industrial applications Alternative energy 4

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China Leads the World in Smart Grid Expansion A Government Supported Program 5 China Top Ten Smart Grid Federal Stimulus Investments by Country, 2010 In U.S. Millions Source: Data obtained from respective region (country) federal agencies

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Amorphous Cores Address Market Demand Government Support and Incentives Technology principle for rural power grid renovation upgrade Jan. 1, 2011 Sep. 14, 2010 Jun. 21, 2011 Cash incentive guidelines for energy saving projects Incentive program provided by both central and local Ministry of Finance 12 th five-year plan Smart strong electricity grid Rural electricity grid to lift living standards Guidance for Demand Side Management Further accelerates the adoption of new technologies to improve energy efficiency Type S11 or amorphous alloy transformers are the first choices for both new installation and replacement 6 2011~2015

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Energy saved by using amorphous alloy transformers (one unit) Capacity (kva) Product No-load loss (watts) Load loss (watts) Annual energy savings at no load (kwh) Annual Cost Savings (RMB) 500 Amorphous alloy transformer 2405,150+ 6,307+4,415 Traditional steel transformer 9605,150 Most energy-efficient distribution transformers Direct annual savings of RMB 4,415 (approximately $692) Government incentives provided to customers using energy-saving products No-Load efficiency is perfectly suited for the fast expanding rural grid Pollution reduction benefits Advantage of Amorphous vs. Steel Cores Energy Efficient, Green and Cost Saving 7

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China Power Equipments Amorphous Cores Production Line and Patents Amorphous alloy pioneer Extensive expertise & knowledge Expanded core production from 1,500 tons to 6,500 tons in 2010 Six patents Three-stage continuous annealing furnace 3-phase oil-immersed amorphous alloy transformer Dry type transformer Vacuum oiling device for amorphous alloy transformers A new type of amorphous alloy transformer Configuration of three-phase three-column transformer cores Applied new patent in May 2011 High-voltage coiling of 35KV amorphous oil-immersed transformers 8

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Largest amorphous alloy transformer production line in Northwestern China; located in Xian. Cutting-edge technology and production process Experienced technicians and workers New Transformer Production Line 5,000 Unit Facility Opened in Q3 2011 9

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Northwestern China should experience the highest growth of any regional transformer market for a sustained period. Government mandated grid upgrades and new grid build out in this region should result in high demand for amorphous alloy transformers. No significant competitor in Northwestern China. Competitors from other regions face high transportation costs to sell into our region. Product & process technology- 6 patents granted. Experienced management and strong R&D and engineering team. Expanded capacity - new factory added 5,000 metric tons of annual capacity for cores with total capacity of 6,500 metric tons; 5,000 units of annual capacity for transformers. Strong financial position more than $19.4 million in cash on Sept. 30, 2011. Competitive Advantages 10 WESTEAST

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Competitor Landscape Information as of 2010 CompetitorLocation Amorphous Alloy Core Annual Capacity (Ton) Estimated No. of Amorphous Transformers sold in 2010 (Unit @500KVA) End Markets Shanghai Zhixin Electric Co., Ltd. Shanghai, Eastern China 20,00025,000* Majority of cores are internally used and remaining are sold to other transformer makers; Main customers of transformers are grid companies. Beijing Zhong Ji Lian Gong Co., Ltd Beijing, Northern China 6,000N/A All of the cores are sold to other transformer makers 11 * The number of transformer units is estimated using the data obtained from Shanghai Zhixin Electric Co. 2010 Annual Report and calculated using the industry average factor.

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Industry Trends and Government Support Favor a Product Mix Shift Towards Transformer Sales 12 Energy-efficient amorphous core transformers have a higher adoption rate in new installations vs. replacement of steel core transformers Company estimates strong growth in its newly built transformer lines and a near 50% split in revenues between the segments by 2012 China Power transformers sales prices are approximately 2x-3x greater than its cores = higher gross profit dollars

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Growth Strategies Core business segment 1.Capitalize on increased production levels 2.Research and develop more energy-efficient applications for different industries 3.Assist transformer makers with specifications, engineering, design, prototyping, performance validation, and production processes 4.Expand sales and market share nationwide Transformer business segment 1.In-house high-performance transformer line commenced commercial production in Q3 2011 2.Further expand downstream in the value chain 3.Focus and expand transformer sales in Northwestern China 13

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Selected Financial Data SymbolOTCBB: CPQQ Closing Price December 1, 2011$0.53 Financial year endsDecember 31 Diluted shares outstanding as of September 30, 201123.6 M Market capitalization on December 1, 2011$12.5 M Cash as of September 30, 2011$19.4 M 2010 Revenues$29.7 M 2010 Net Income$5.5 M 2010 EPS$0.25 YTD 2011 Revenues$27.7 M YTD 2011 Net Income$4.5 M YTD 2011 EPS$0.19 14

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Net Revenues by Product Segment Net Revenues (US$ in thousands ) CAGR (2008-2010) = 77.7%9M / 9M = +26.6% 15

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Capital Allocation Strategy Cash Flows from Operations (US$ in Millions ) 16 Cash Balance (US$ in Millions ) Strong demand of amorphous cores from existing transformer manufacturers provide solid cash flows and low DSOs for core sales 5,000 unit transformer production line already complete and expensed; cash balances will be used to bid and win lucrative transformer tenders for grid companies. Minimal Capex costs (est. $0.3 million) to further expand core production line to 10,000 tons when needed

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Strong Financial Metrics Revenues9,39423,86629,65835,47821,89627,716 Gross Margin24.9%23.9%26.3%24.1%27.3%24.3% EBITDA2,1475,2476,9777,4395,9925,596 Operating Margin16.7%18.9%21.1%18.6%23.2%19.6% Net Income1,4564,2205,4965,4534,5394,496 Net Profit Margin15.5%17.7%18.5%15.4%20.7%16.2% 17

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Financial Snap Shot Income Statement Balance Sheet and Cash Flow 18 U.S. dollars except percents and ratios Year ended December 31 9 months ended Sep 30 Income statement items 200820092010YTD 2010YTD 2011 Net revenues 9,394,491 23,866,239 29,657,846 21,896,12127,716,131 Net income1,455,793 4,220,0005,496,145 4,539,2494,495,660 Gross profit margin 24.9% 23.9% 24.3% 27.3%24.3% Operating profit margin16.7%18.9%21.1%23.2%19.6% Net profit margin 15.5% 17.7% 18.5% 20.7%16.2% Balance sheet items Cash 1,071,038 8,883,188 17,932,447 15,582,673 19,447,576 Accounts Receivable, net 2,013,305 1,949,818 1,552,298 2,339,793 2,379,194 Property, plant, and equipment, net3,116,422 4,593,068 7,110,5495,760,1049,501,038 Inventory, net 461,634 363,312 645,777 297,856609,790 Accounts payable 710,480 549,065 1,130,368 542,222533,523 Short Term Loan58,35858,50360,68959,718 62,613 Shareholders' equity 7,935,218 17,141,382 27,865,352 26,569,546 33,230,356 Total liabilities and equity 9,675,638 18,881,134 30,300,659 28,525,382 35,069,493 Summary cash flow Cash flows from operations 1,135,332 5,380,655 6,719,135 4,416,145 3,369,559 Cash flows from investing activities88,274 (2,509,214) (2,475,520)(2,329,485) (2,298,688) Cash flows from financing activities (1,287,089) 4,937,502 4,454,702 4,456,8830 Effect of currency exch rate changes on cash 60,626 3,207 350,942155,942 444,258 Net increase (decrease) in cash (2,857) 7,812,150 9,049,259 6,699,485 1,515,129 Income & cash flow statements are for 9months ended September 30. Balance sheets are as of September 30.

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Investment Highlights Amorphous cores and transformers consume about 70% less electricity (at no load) which results in more efficient use of electricity and less demand on resources Market opportunities Government has encouraged energy-efficient amorphous alloy cores and transformers New investments on rural electricity grid and under-developed regions Leader in new generation amorphous alloy transformer technology 6 patents, including 3 granted in 2010; applied new patent in May 2011 Years of experience in technology and production Capacity expansion Capacity expansion increased transformer core production in 2010 by 4 fold In-house, 5,000 unit high-performance transformer production is brought on line in Q3 2011 Favorable location No significant competitor in Chinas Northwestern market 19

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Experienced Management Mr. Yongxing (Henry) Song, Chairman of the Board, President, and CEO - Chairman and CEO of China Power since the company began in June 2004. Was also Chairman for Alloy Science (1999-2004) and is acting CEO and President of Alloy Science. From 1996 to 1999: Vice general manager at Xi'an Xianglong Co., Ltd. From 1982 to 1996: Manufacturing planner and manager in Qing'an Aviation Electronic Equipment Co., Ltd. Masters degree in International Trade from University of International Business and Economics in 2003 and a bachelors degree from Shaanxi Aviation Profession University (mechanical & aeronautical engineering). Ms. Yarong (Lillian) Feng, Director and Vice General Manager - Director since November 2007. CFO of China Powers operating affiliate since June 2007. Trustee for stockholders of China Power who were former stockholders of Alloy Science. Previously served as Secretary to Board of Alloy Science. Graduate of Xi'an Institute of Finance and Economics (finance management). Ms. Elaine Zhao, CFO - Ms. Zhao has been CFO since June 1, 2008. Founded and is president of ELZ Accountancy Corp., an accounting and financial advisory firm in Los Angeles. Clients have included privately owned and publicly traded companies in various industries. Firm has also worked with banks in financing small businesses. M.S. in Finance from the Kelley School of Business at Indiana University. Certified Public Accountant. Mr. Zewei Xu, Chief Engineer - With the companys operating affiliate since July 2004. Previously, engineer for Tianjin Electric Transmission Design Labs. The first person to use amorphous alloy technology to build high-frequency amplifier switches. Is also chief, general secretary, or member of several electric-related academic organizations, including China Power Supply Society and its transformer and inductor commission. Holds a degree in machinery production from Harbin Institute of Technology. Ms. Nicole Chen, VP of Finance Ms. Chen has been VP of Finance since September 2010. Before that, she was Sr. Associate at PricewaterhouseCoopers, LLP, providing accounting advisory for some leading domestic listed companies, and FPIs, such as, AIG Inc., AIG Capital Corporation, Shanda, Ctrip, HomeInn, Jingao Solar. MBA in Accounting and Finance from HEC Montreal. Certified Public Accountant. 20

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Contact Us Company Contact China Power Equipment, Inc Room 602, 6/F, Block B, Science & Technology Park of Xi Dian University, No. 168 Kechuang Road, Hi-tech Industrial Development Zone, Xian, Shaanxi Province, Peoples Republic of China Telephone +86 (29) 626 19758 Email xa-fj@xa-fj.com Ms. Nicole Chen, Vice President of Finance Telephone +86 186 1633 1170 Email: nicolechen@xa-fj.com Investor Relations MZ-HCI Scott Powell, Senior Vice President 1001 Avenue of the Americas New York, NY 10018 Phone: +1 212-301-7130 Email: scott.powell@hcinternational.net Auditor appointed January 31, 2011 Mazars CPA Limited 42nd Floor, Central Plaza 18 Harbour Road Wanchai HK China Telephone +852 2909 5555 Legal Contact Loeb & Loeb LLP 345 Park Avenue, 18th Floor New York, New York, USA Telephone +1 212 407 4159 www.chinapower-equipment.com 21