U.S. SECURITIES AND EXCHANGE COMMISSION



|Washington, D.C. 20549________________
|--------------------------------------

FORM 10-QSB/A

________________

x  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2007

 ̈  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from  to

Commission file number 000-51787 
________________

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.(Exact name of small business issuer as specified in its charter)________________

|NEVADA
(State or other jurisdiction of 
incorporation or organization) | 98-0522960
(IRS employer 
Identification No.)
|---------------------------------------------------------------------- | ---------------------------------------------



|6130 Elton Avenue, Las Vegas, Nevada, 89107(Address of principal executive offices)
|-----------------------------------------------------------------------------------



|702-216-0470(Issuers telephone number)
|---------------------------------------

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No  ̈

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes  ̈ No x

As of March 31, 2007, 51,000,000 shares of the issuers Common Stock, $.0001 par value per share, were outstanding.

Transitional Small Business Disclosure Format Yes  ̈ No x



|- 1 -
|-----

---

***********************************************************************

On October 5, 2006 the Company determined that a restatement of its financial statements for the year ended December 31, 2006 was necessary to eliminate the consolidation of Shenzhen Naiji Science and Technology Co. Ltd., to correct an error in recording the issuances of 3,000,000 shares of common stock and 5,000,000 shares of preferred stock, and to correct several errors in accounting. Please refer to our notes to financial statements number 3 in our amended 10KSB filed with the SEC on November 7, 2007 and our notes to financial statements number 2 in our amended March 31, 2007 financial statements below.

As a result of these errors, the quarter ended March 31 and June 30, 2007 are amended to reflect the elimination of errors carried forward into 2007 records.

***********************************************************************

- 2 -

---

|INDEX   
|--------
|PART I. 
|Item 1. 
|        
|        
|        
|        
|        
|        
|Item 2. 
|Item 3. 
|PART II.
|Item 1. 
|Item 2. 
|Item 3. 
|Item 4. 
|Item 5. 
|Item 6. 
|        

- 3 -

---



|Item 1.           FINANCIAL STATEMENTS
|--------------------------------------

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.



|Consolidated Financial StatementsMARCH 31, 2007RESTATED(Prepared Without Audit)-F1-
|-----------------------------------------------------------------------------------

- 4 -

---

|ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.                            
|--------------------------------------------------------------------------
|CONSOLIDATED BALANCE SHEETS                                               
|                                                                          
|                                                                          
|ASSETS                                                                    
|Current Assets:                                                           
|Cash                                                                      
|Accounts receivables                                                      
|Other receivables                                                         
|Advances to suppliers                                                     
|Inventory                                                                 
|Total current assets                                                      
|Fixed Assets:                                                             
|Land use right                                                            
|Production equipment                                                      
|Office equipment                                                          
|Vehicles                                                                  
|Construction in progress                                                  
|                                                                          
|Less accumulated depreciation                                             
|Net fixed assets                                                          
|Other Assets:                                                             
|Collateral deposit                                                        
|Deposits                                                                  
|Total other assets                                                        
|Total Assets                                                              
|                                                                          
|LIABILITIES AND STOCKHOLDERS EQUITY                                      
|Current Liabilities:                                                      
|Notes payable                                                             
|Accounts payable                                                          
|Advances from customers                                                   
|Accrued liabilities                                                       
|Other liabilities                                                         
|Shareholder advances                                                      
|Total current liabilities                                                 
|                                                                          
|Stockholders Equity:                                                     
|Common stock: authorized 150,000,000 shares of $0.001                     
|par value; issued and outstanding 51,000,000 shares                       
|Preferred stock: authorized 5,000,000 shares of $0.001                    
|par value; issued and outstanding 5,000,000 shares                        
|Capital in excess of par value                                            
|Retained Earnings                                                         
|Earnings appropriated for statutory reserves                              
|Comprehensive income                                                      
|Total Stockholders equity                                                
|Total Liabilities and Stockholders Equity                                
|                                                                          
|The accompanying notes are an integral part of these financial statements.
|-F2-                                                                      

- 5 -

---

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. 
CONSOLIDATED STATEMENTS OF INCOMEFor the Three Months Ended March 31, 2007 and 2006
 (Prepared Without Audit)
RESTATED

|                                              |   | Three Months Ended March 31,
|--------------------------------------------- | - | ----------------------------
|                                              |   | 2007                        
|Revenue                                       | $ | 1,939,482                   
|Cost of Sales                                 |   | 1,607,415                   
|Gross Profit                                  |   | 332,067                     
|Expenses:                                     |   |                             
|Selling and Administrative Expenses           |   | 155,682                     
|                                             
|Operating Income                              |   | 176,385                     
|Other Expense                                 |   | (1,908)                     
|                                             
|Income Before Income Taxes                    |   | 174,477                     
|Provision for Income Taxes:                   |   |                             
|Current Provision                             |   | -                           
|Realized Deferred Tax Asset                   |   | -                           
|Income Tax Recovery                           |   | -                           
|Net Tax Provision                             |   | -                           
|                                             
|Net Income for the Period                     |   | 174,477                     
|Other Comprehensive Income -                  |   |                             
|Foreign currency translation adjustments      |   | 70,533                      
|                                             
|Total Comprehensive Income                    | $ | 245,010                     
|Income Per Common Share -                     |   |                             
|Basic and Diluted                             |   | $0.01                       
|Weighted average number of shares outstanding |   | 33,000,000                  

The accompanying notes are an integral part of these financial statements.
 -F3-

- 6 -

---

|ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.                            
|--------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                     
|For the Three Months Ended March 31, 2007 and 2006                        
|(Prepared Without Audit)                                                  
|RESTATED                                                                  
|                                                                          
|                                                                          
|CASH FLOWS FROM OPERATIONS:                                               
|Net income                                                                
|Charges not requiring the outlay of cash:                                 
|Depreciation and amortization                                             
|Changes in assets and liabilities:                                        
|Decrease (increase) in accounts receivable                                
|Decrease (increase) in other receivables                                  
|Decrease (increase) in advances to suppliers                              
|Increase in inventory                                                     
|Increase in deposits                                                      
|Increase in accounts payable                                              
|Decrease in advances from customers                                       
|Decrease in other payable                                                 
|Decrease in accrued liabilities                                           
|                                                                          
|Decrease in deferred taxes                                                
|Net Cash Provided (Consumed) By Operating Activities                      
|                                                                          
|CASH FLOWS FROM INVESTING ACTIVITIES:                                     
|Purchases of fixed assets                                                 
|Increase in construction in progress                                      
|                                                                          
|Deposit on land                                                           
|Net Cash Consumed By Investing Activities                                 
|                                                                          
|CASH FLOWS FROM FINANCING ACTIVITIES:                                     
|Advances from shareholder                                                 
|Funds set aside for collateral account                                    
|Repayment under bank credit facility                                      
|                                                                          
|Net Cash Provided (Consumed) By Financing Activities                      
|Cash effect of other comprehensive income                                 
|Net change in cash                                                        
|Cash balance, beginning of period                                         
|Cash balance, end of period                                               
|                                                                          
|The accompanying notes are an integral part of these financial statements.
|-F4-                                                                      

- 7 -

---

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSMARCH 31, 2007 
(Unaudited) 
RESTATED

|1. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The unaudited interim financial statements of Asia Electrical Power International Group Inc. (the Company) as of March 31, 2007 and for the three month periods ended March 31, 2007 and 2006, have been prepared in accordance with generally accepted accounting principles. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. The results of operations for the quarter ended March 31, 2007 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2007.
|  
|   | Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2006.                                                                                                                                                                  
|  
|2. | RESTATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | On October 5, 2007, the Company determined that a restatement of its financial statements for the period ended March 31, 2007 was necessary to eliminate the consolidation of Shenzhen Naiji Science and Technical Co. Ltd., to correct an error in recording the issuance of 3,000,000 shares of common stock and 5,000,000 shares of preferred stock, and to correct several errors in accounting.                                                                                                                                                                                                                                                        
|  
|   | The effect of these restatements on the Companys previously issued March 31, 2007 financial statements is detailed below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | Statement of Income and Comprehensive Income, March 31, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  

|                                     |   | Previously |   | Increase       |   | As       
|------------------------------------ | - | ---------- | - | -------------- | - | ---------
|                                     |   | Reported   |   | (Decrease)     |   | Restated 
|                                    
|Cost of Sales                        | $ | 1,580,324  | $ | (27,091)(A)    | $ | 1,607,415
|Gross Profit                         |   | 359,158    |   | (27,091)       |   | 332,067  
|                                    
|Selling and Administrative Expenses  |   | 294,211    |   | 138,529 (A)(I) |   | 155,682  
|Operating Income                     |   | 64,947     |   | 111,438        |   | 176,385  
|                                    
|Other Income                         |   | 6,831      |   | (6,831)(B)     |   | -        
|Other Expense                        |   | (7,499)    |   | 5,591 (B)      |   | (1,908)  
|                                    
|Minority Interest                    |   | 4,610      |   | (4,610)(D)     |   | -        
|Income Before Income Taxes           |   | 68,889     |   | 105,588        |   | 174,477  
|                                    
|Other Comprehensive Income - Foreign |   |            |   |                |   |          
|                                    
|Currency Translation Adjustments     |   | -          |   | 70,533 (F)     |   | 70,533   
|Total Comprehensive Income           | $ | 68,889     | $ | 176,121        | $ | 245,010  
|                                    
|Net Income Per Common Share          |   |            |   |                |   |          
|Basic and Diluted                    | $ | .03        | $ | (.02)(G)       | $ | .01      

-F5-- 8 -

---

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSMARCH 31, 2007 
(Unaudited) 
RESTATED



|2.           RESTATEMENTS (CONTINUED)
|-------------------------------------

|Statement of Cash Flows, March 31, 2007     |   |            |   |                |   |          
|------------------------------------------- | - | ---------- | - | -------------- | - | ---------
|                                           
|                                           
|                                            |   | Previously |   | Increase       |   | As       
|                                            |   | Reported   |   | (Decrease)     |   | Restated 
|Cash Flows From Operating Activities:       |   |            |   |                |   |          
|Net income                                  | $ | 68,889     | $ | 105,588        | $ | 174,477  
|Depreciation and amortization               |   | 20,938     |   | (1,562)        |   | 19,376   
|Provision for minority interest in earnings |   | (4,610)    |   | 4,610 (D)      |   | -        
|Decrease in accounts receivable             |   | 302,997    |   | (98,003)(T)    |   | 204,994  
|Decrease (increase) in other receivables    |   | (56,640)   |   | 413,393 (J)    |   | 356,753  
|Increase in advances to suppliers           |   | (601,907)  |   | 593,218 (H)    |   | (8,689)  
|Increase in deposits                        |   | -          |   | (48,265)(J)    |   | (48,265) 
|Increase in accounts payable                |   | (42,823)   |   | 353,262 (K)    |   | 310,439  
|Decrease in other payables                  |   | (7,764)    |   | 1,140          |   | (6,624)  
|Decrease in accrued liabilities             |   | (25,934)   |   | (871)          |   | (26,805) 
|Decrease in deferred taxes                  |   | 2,830      |   | (2,830)        |   | -        
|                                           
|Net Cash Provided (Consumed) by Operating   |   |            |   |                |   |          
|Activities                                  |   | (760,552)  |   | 1,319,680      |   | 559,128  
|                                           
|Cash Flows From Investing Activities:       |   |            |   |                |   |          
|Purchases of Fixed Assets                   |   | (8,497)    |   | 6,084          |   | (2,413)  
|                                           
|Increase in construction in progress        |   | -          |   | (631,523)(H)   |   | (631,523)
|Net Cash Consumed by Investing Activities   |   |            |   |                |   |          
|                                            |   | (8,497)    |   | (625,439)      |   | (633,936)
|                                           
|Cash Flows From Financing Activities:       |   |            |   |                |   |          
|Advances from shareholder                   |   | 192,734    |   | (106,105)(N)   |   | 86,629   
|Reduction in funds set aside in collateral  |   |            |   |                |   |          
|account                                     |   | -          |   | 113,650 (P)    |   | 113,650  
|Repayment under bank credit facility        |   | -          |   | (353,262)(K)   |   | (353,262)
|                                           
|Net Cash Provided (Consumed) by             |   |            |   |                |   |          
|Financing Activities                        |   | 192,734    |   | (345,717)      |   | (152,983)
|                                           
|Effect of exchange rate changes on cash     |   | 42,502     |   | 28,031 (F)     |   | 70,533   
|Net Change in Cash                          |   | (533,813)  |   | 376,555        |   | (157,258)
|                                           
|Cash Balance, Beginning of Period           |   | 2,087,766  |   | (1,092,190)(Q) |   | 995,576  
|Cash Balance, End of Period                 | $ | 1,553,953  | $ | (715,635)      | $ | 838,318  

-F6-- 9 -

---

|ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.
|----------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|MARCH 31, 2007                                
|(Unaudited)                                   
|RESTATED                                      
|2.                                            
|                                              
|Balance Sheet, as of March 31, 2007           
|                                              
|                                              
|ASSETS:                                       
|Current Assets:                               
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|Fixed Assets:                                 
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|Other Assets:                                 
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|LIABILITIES                                   
|Current Liabilities:                          
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|Minority Interest                             
|                                              
|Stockholders Equity:                         
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              

-F7-- 10 -

---

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSMARCH 31, 2007 
(Unaudited) 
RESTATED

|2. | RESTATEMENTS (CONTINUED)
|-- | ------------------------



|(A) | The increase in cost of goods sold results from reclassification of delivery expense, previously classified as Selling and Administrative Expense.                                                                                                                                                                                                                                                                                                                                                                                                
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(B) | Primarily the result of a reclassification between interest income and interest expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(C) | Reclassification between two fixed asset accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(D) | Shenzhen Naiji Science and Technology Co. Ltd. had erroneously been consolidated with the Company. As a result, this account was created. That company is now not consolidated.                                                                                                                                                                                                                                                                                                                                                                   
|   
|(E) | The accrual of the deferred tax asset was based on the assumption that the Company would be able to use several tax benefits carried forward from previous years. The Company has been granted exemption from income taxes for the years 2006 and 2007 and 50% exemption for 2008, 2009, and 2010. The likelihood that these potential benefits will be used within the prescribed carryforward period has, thus, been substantially reduced. A valuation reserve has been created to offset the deferred tax accrual.                            
|   
|(F) | The change in the composition of the account balances on the balance sheet resulted in changes in the translated balances.                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(G) | CorrCorrection of a calculation error.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(H) | A $2,113,330 deposit with the prime contractor of the construction project was previously included in advances to suppliers. Since this deposit was approximately the same proportion of the total expected cost to this contractor as the portion of the project that had been completed at March 31, 2007, this deposit has been reclassified to construction in progress. Partially offsetting this increase in construction in progress is a $1,082,354 transfer to land use rights which previously was included in construction in progress.

(I)
     In addition to the reclassification of delivery expense noted in (A), above, selling and administrative expenses were affected by collection of accounts receivables, which had previously been written off as bad debts; these amounted to $101,095.(J)
     A rent deposit has been reclassified from other accounts receivable.(K)
     Notes due on a bank credit facility have been reclassified from accounts payable.(L)
     A $39,000 refund of 2005 income taxes must be returned.(M)
     A $109,000 balance due to the former holders of the land use right is in dispute and had not previously been recorded; it has now been recorded.(N)
     The issuance during 2006 of 3,000,000 shares of common stock and 5,000,000 shares of preferred stock was compensated with $4,750,000. Most of this compensation was cancellation of amounts due shareholders. This transaction was previously incorrectly reported.



|-F8-
|----

- 11 -

---

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSMARCH 31, 2007 
(Unaudited) 
RESTATED

|2.  | RESTATEMENTS (CONTINUED)                                                                                                                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(O) | Shenzhen Naiji Science and Technology Co. Ltd. was previously deemed erroneously to be a VIE and was consolidated with Company financial statements. That treatment has been corrected and it is now not consolidated.                                                 
|   
|(P) | This deposit has been reclassified from cash to a separate account.                                                                                                                                                                                                    
|   
|(Q) | The accounts of Shenzhen Naiji Science and Technology Co. Ltd. are no longer included in these consolidated amounts, causing these balances to change.                                                                                                                 
|   
|(R) | The cost of the land use right, which has a 50 year life, was not previously amortized. This amortization was been capitalized during 2006 and 2007 as part of the construction project. When construction is complete, future amortization will be charged to expense.
|   
|(S) | Results from changes in the Statements of Income of 2006 and the quarter ended March 31, 2007.                                                                                                                                                                         
|   
|(T) | Recent collection efforts have produced favorable results, causing a reduction in the allowance for doubtful accounts.                                                                                                                                                 
|   
|3.  | SHAREHOLDER ADVANCES                                                                                                                                                                                                                                                   
|   
|    |                                                                                                                                                                                                                                                                        
|   
|4.  | INCOME TAXES                                                                                                                                                                                                                                                           
|   
|    |                                                                                                                                                                                                                                                                        
|   



|-F9-
|----

- 12 -

---

Item 2.       MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things:

|· | general economic and business conditions, both nationally and in our markets,                                         
|- | ----------------------------------------------------------------------------------------------------------------------
| 
|· | our expectations and estimates concerning future financial performance, financing plans and the impact of competition,
| 
|· | our ability to implement our growth strategy,                                                                         
| 
|· | anticipated trends in our business,                                                                                   
| 
|· | advances in technologies, and                                                                                         
| 
|· | other risk factors set forth herein.                                                                                  
| 

In addition, in this report, we use words such as "anticipates," "believes," "plans," "expects," "future," "intends," and similar expressions to identify forward-looking statements.

Asia Electrical Power International Group Inc. (AEPI or the Company) undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this prospectus. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.



|History
|-------

Asia Electrical Power International Group Inc.(AEPI)was incorporated in the State of Nevada on August 30, 2002 as Berita International Corporation, for the purpose of producing high and mid-voltage electrical switchgears in PRC. On December 24, 2003, we changed our name to Keiji International Group Inc. and on September 30, 2004 we changed our name to Asia Electrical Power International Group Inc..

On January 23, 2003, we entered into an Asset and Share Exchange Agreement (the Agreement") with Shenzhen Naiji Electrical Equipment Co., Ltd. ("Naiji"), a PRC Corporation whereby we acquired all the issued and outstanding stock of Naiji for consideration of 24,000,000 shares of our common stock. Naiji has produced high and mid-voltage electrical switchgears since its inception in 1997. We design, manufacture and market electrical power systems designed to monitor and control the flow of electrical energy and to provide protection to motors, transformers and other electrically powered equipment.

For the 3 months ended March 31, 2007 and 2006, we generated a profit of $ 174,477 and $93,397, respectively.

- 13 -

---



|Trends in the market
|--------------------

We expect a high volume of new domestic business from electricity infrastructure investments as a result of the PRCs 11thfive year plan which will:

Build new socialist rural areas, optimize and upgrade industrial structures, promote concordant development of regions, build a conservation-minded and environment-friendly society, further system reform and enhance opening-up, efficiently practice strategies to invigorate China through science and education and through human resource development, and give impetus to constructing a socialist harmonious society.  Source,www.China.org

With new developments in rural areas, the PRC will be accepting bids to service such areas to establish electrical networks. We anticipate such new developments will increase our sales by 40% per year for fiscal 2007 and 2008 year ends and 30% by fiscal 2009 year end. A majority of our sales are generated through existing customer base by referrals however with these new developments, we expect a substantial amount of our sales to be generated by fulfilling PRC contract bids to service rural areas in 2007 though 2009.



| | Results of Operations
| | ---------------------

Three months ended March 31, 2007, compared to three months ended March 31, 2006.

We generated revenues for the three months ended March 31, 2007, 2006 of $ 1,939,482 and $ 1,406,524, respectively. The increase was attributed to establishing additional branch offices and sales staff devoted solely to marketing of our products in various areas. Our selling and administrative expenses consist of the following:

|                            | 2007      | 2006      | Change   | % Change
|--------------------------- | --------- | --------- | -------- | --------
|Salaries, benefits and dues | $ 140,613 | $ 59,928  | 80,685   | 135%    
|Travel and promotion        | 30,659    | 17,463    | 13,196   | 76%     
|Office and utilities        | 17,057    | 18,390    | (1,333)  | -7%     
|Depreciation                | 15,939    | 15,823    | 116      | 1%      
|Occupancy                   | 15,456    | 11,843    | 3,613    | 31%     
|Marketing                   | 6,194     | 12,681    | (6,487)  | -51%    
|Technical support           | 5,531     | 3,808     | 1,723    | 45%     
|Transportation              | 2,002     | 2,070     | (68)     | -3%     
|Bad debts                   | (96,991)  | -         | (96,991) | 100%    
|Research & development      | (3,022)   | 3,828     | (6,850)  | -179%   
|Other                       | 22,244    | 15,478    | 6,766    | 44%     
|                           
|Total expenses              | $ 155,682 | $ 161,312 | (5,630)  | -4%     

Salariesincreased as a result of bonuses paid to employees and also retaining additional staff in branch offices.

OurTravel and Promotioncosts were increased as a result of market research efforts, surveying north eastern and western markets. Promotion costs consist of functions held for current and prospective customers for the purpose of maintaining good client relations with current customers while providing an opportunity to generate interest by prospective customers. We hope to generate referrals through our existing customer base.

Office and Utilitiescosts are relatively stable and expect to remain at this level.

Occupancyexpense is not expected to fluctuate as monthly payments are predetermined as per our lease agreement and any deviation from such amounts are as a result of increases to maintenance or common area costs. Our office and manufacturing facilities are leased from July 31, 2004 until April 30, 2006 wherein a new lease was negotiated with our lease to expire April 30, 2009. Our occupancy cost per month increased by approximately 31% to reflect the change in the market conditions which have allowed occupancy costs in the area to increase. We expect our new

- 14 -

---

facilities to be completed September 2007. The rental market for the facilities we currently occupy is expected to increase and we will examine sub letting opportunities mid 2007.

Marketing costs decreased as we are in the process of negotiating with various marketing agencies. These negotiations are expected to be finalized by the end of the 2ndquarter.

Technical Support costs increased as a result of various on site visits initiated by management to ensure the customers satisfaction.

Transportation expense consists of travel to and from such locations for follow up and on call visits for technical support. Such costs are expected to increase as a result of the PRC imposing further taxes on fuel and new fees per transportation unit based on the vehicle weight. These fees were imposed to generate the funds for improvements of roads. Costs for the 1stquarter decreased as a result of negotiating a fixed rate for our transportation costs outside of Guandong Province.

Our Bad Debts decreased as a result of recovery of various accounts which were considered uncollectible as they were older than 3 years.

Our Research & development costs are incurred upon review of technical support logs which determine which of our products require refinements based on customer reviews. Such costs were over accrued previously, resulting in a negative balance.



| | Liquidity and Capital Resources
| | -------------------------------

As of March 31, 2007, we had a positive working capital of $ 1,221,420.

Not including our plans for construction of new office facilities, over the next 12 months, we will require approximately $8,800,000 to sustain our working capital needs as follows based on projected yearly sales of $ 10,500,000:

|Materials, Labor, Overhead                   | $ 7,800,000
|-------------------------------------------- | -----------
|Selling Expenses and Administrative Expenses | 1,000,000  
|Total                                        | $ 8,800,000
|                                            
|Sources of Capital:                          |            

We expect our revenues generated to absorb these costs; however, if additional capital is needed, we will explore financing options such as shareholder loans. Shareholder loans are without stated terms of repayment with interest at the rate of 6% per annum. We will not be considering taking on any long-term or short-term debt from financial institutions in the next 12 months. Shareholders loans are granted from time to time as required to meet current working capital needs. We have no formal agreement that ensures that we will receive such loans. We may exhaust this source of funding at any time.

In the past, we have normally been able to sustain our working capital needs that have surpassed the revenues from sales through shareholder loans. We expect this source of funding to continue; however, in the event shareholder loans are no longer granted to us, we may obtain long or short term financing.

We have a credit facility with Shenzhen Business Bank under which we can borrow up to $2,300,000, with interest at the Basic Rate (a rate which is promulgated periodically by the China central bank - Peoples Bank of China). The facility will expires October 11, 2007. The principal balance on this facility at March 31, 2007 was $ 474,338. The facility is collateralized by the land use right and by a cash deposit with the bank equal to 30% of the outstanding balance, or $ 142,301, of the facility.

We may also receive capital contributions from our shareholders.



|Plans for Expansion:
|--------------------

- 15 -

---

Given sufficient funding, we expect to expand our operations throughout the region by establishing up to 20 more branch offices devoted to marketing efforts. Each branch office will have approximately 3-10 full time and part time employees. To sustain new branch offices for 12 months, we will require a total of $200,000 of which $164,000 will be allocated to salaries and $36,000 allocated to rent. The need for the $200,000 for expansion is not included in the $ 8,800,000 we require to meet working capital needs.

We will be occupying our current office space and manufacturing facilities leased until April 30, 2009 until we have constructed a new office building on land we leased for 50 years effective January 2006. The purchase was financed through shareholder loans. No bank loans were taken out to fund this purchase.

We do not know of any trends, events or uncertainties that are likely to have a material impact on our short-term or long-term liquidity other than those factors discussed above.



|New Manufacturing Facilities
|----------------------------

As of March 31, 2007, we incurred construction costs in the amount of $ 2,344,827 for excavation and land leveling, surrounding roadwork and design/architectural fees. We estimate the completion date to be September 2007. Funding for this project will be through shareholder loans and bank loans. Our new facilities will occupy 300,000 square feet with 158,000 square feet of new manufacturing facilities. New facilities will be approximately 5 times the size of existing facilities and as such will have the capabilities of meeting production requirements based on our projected levels of sales in the next 3 years.

We will be occupying our office space at 28thBuilding, Lishan Industrial Zone, Xinghai Road, Nanshan District, Shenzhen, until construction of our new facility is completed.



|Cash FlowsOperating Activities:
|-------------------------------

Net Cash provided by operating activities was $ 599,122 in 2007 compared to $ 294,959 consumed in 2006, respectively and are summarized as follows:

|                                                     |   | 2007      |   | 2006     
|---------------------------------------------------- | - | --------- | - | ---------
|Net income                                           | $ | 174,477   | $ | 93,397   
|Decrease (increase) in accounts receivable           |   | 204,994   |   | (319,289)
|Decrease (increase) in advances to suppliers         |   | (8,689)   |   | 18,767   
|Increase in inventory                                |   | (235,349) |   | (230,700)
|Increase in accounts payable                         |   | 310,439   |   | 285,789  
|Decrease in advances from customers                  |   | (181,179) |   | (54,233) 
|Other                                                |   | 294,435   |   | 88,690   
|Net Cash Provided (Consumed) By Operating Activities | $ | 559,128   | $ | (294,959)

We collected a majority of accounts which were older than 2 years. In anticipation of sales levels for the 2ndquarter ended, we replenished our inventory levels to fulfill such orders. The increase in prepayments to suppliers and accounts payable were as a result of costs incurred for construction of our new manufacturing facilities. During the quarter there was a decrease in payments by customers however we expect levels of prepayments to increase in the next quarter.

Net Cash consumed by investing activities in 2007 was $ 633,936 compared to $ 217,183 in 2006, of which the majority was attributed to construction costs. In 2006 deposits were made on the land we leased in September of 2004 for which our President provided the necessary funding.

Net Cash consumed/provided by financing activities in 2007 and 2006 was $ 152,983 and $ 441,785, respectively. In 2007 we received $ 86,629 in advances from our shareholders and the remaining balance consists of amounts relating to the borrowings under our bank credit facility from the Shenzhen Business Bank as mentioned above under Sources of Capital.

- 16 -

---



| | Critical Accounting Policies
| | ----------------------------

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The application of GAAP involves the exercise of varying degrees of judgment. The resulting accounting estimates will not always precisely equal the related actual results. Management considers an accounting estimate to be critical if:

- assumptions are required to be made; and
- changes in estimates could have a material effect on our financial statements.

The majority of our estimates do not vary over time and are not expected to change in the future with the exception of allowance for doubtful accounts. The normal collection period for accounts receivable is between 1.5 and 2 years; however the timing collection of accounts vary significantly and therefore estimates of doubtful accounts are not as accurate compared to other operations which have a shorter normal collection period of, for example, net 30 days.

Factors That May Affect Our Future Results and the Trading Price of Our Common Stock

An investment in shares of our common stock involves a high degree of risk. You should consider carefully the following information about these risks, together with other information contained in this report and our other filings with the Securities and Exchange Commission before you decide to buy our stock. If any of the following risks actually occur, our business, financial condition and prospects would likely suffer. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our operations.

Broker-dealers may be discouraged from effecting transactions in our shares because they are considered penny stocks and are subject to the penny stock rules.

Rules 15g-1 through 15g-9 promulgated under theSecurities Exchange Act of 1934(the Securities Exchange Act) impose sales practice and disclosure requirements on NASD broker-dealers who make a market in penny stocks. A penny stock generally includes any non-NASDAQ equity security that has a market price of less than $5.00 per share. Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or accredited investor (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchasers written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.

In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customers account and information with respect to the limited market in penny stocks.

Our stock is substantially controlled by directors, officers and principal shareholders for the foreseeable future and as a result, will be able to control our overall direction.

Our insiders, being the directors, officers and principal shareholders, own an aggregate of approximately 57.3% of our outstanding shares. As a result, the insiders will be able to control the outcome of all matters requiring stockholder approval and will be able to elect all of our directors. Such control, which may have the effect of delaying, deferring or preventing a change of control, is likely to continue for the foreseeable future and significantly diminishes control and influence which future stockholders may have in AEPI.

- 17 -

---



|Item 3.         CONTROLS AND PROCEDURES
|---------------------------------------



| | (A) Evaluation of Disclosure Controls and Procedures
| | ----------------------------------------------------

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Companys Chief Executive Officer/Chief Accounting Officer of the effectiveness of the design and operation of the Companys disclosure controls and procedures. The Companys disclosure controls and procedures are designed to provide a reasonable level of assurance of achieving the Companys disclosure control objectives. The Companys Chief Executive Officer/Chief Accounting Officer has concluded that the Companys disclosure controls and procedures are, in fact, effective at this reasonable assurance level as of the period covered. In addition, the Company reviewed its internal controls, and there have been no significant changes in its internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation or from the end of the reporting period to the date of this Form 10-QSB.

(B) Changes in Internal Controls Over Financial Reporting

In connection with the evaluation of the Companys internal controls during the Companys first fiscal quarter ended March 31, 2007, the Companys Chief Executive Officer/Chief Accounting Officer has determined that there are no changes to the Companys internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal controls over financial reporting.



|PART II.
|--------



|OTHER INFORMATION
|-----------------



|Item 1.          Legal Proceedings: None
|----------------------------------------

Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds

On December 21, 2006, the company approved a stock split wherein the number of authorized common stock with a par value $0.001 was to be increased on a two for one basis. The total authorized capital increased from 75,000,000 to 150,000,000. Accordingly, the number of issued common stock increased from 24,000,000 to 48,000,000. The Company also approved the establishment of a new class of preferred shares with a $ 0.001 par value with an authorized capital of 5,000,000 preferred shares.

On December 22, 2006, 5,000,000 shares of preferred stock, par value $0.001, were allotted and issued to our President, Yulong Guo for repayment of shareholder loans.

A further 2,500,000 shares of common stock were allotted and issued to Yulong Guo and 500,000 shares issued to Xiaoling Chen. These shares were issued for repayment of shareholder loans.

As a result of the aforesaid share issuances, the issued and outstanding share capital of the Company is now 51,000,000 shares of common stock and 5,000,000 shares of preferred stock.

The offer and sale of the shares were exempt from registration pursuant to section 4(2) of the Securities Act, Rule 701 and Rule 506 of Regulation D promulgated thereunder. We limited the manner of the offering and provided disclosure regarding the offering and our company to the stockholders. Both of the stockholders are our officers and directors. We believe that these sales were also exempt under Regulation S under the Securities Act, as such sales were made in offshore transactions to non-U.S. persons.

All of our authorized common shares are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets. Holders of shares are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders.

- 18 -

---

All of our authorized preferred shares are of the same class and once issued, are restricted from being publicly traded, have no dividend rights and are not entitled to the participation in assets in the event of dissolution of the Company. Preferred shares are entitled to 100 votes perZ share.

Dividends may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available. However, our present intention is not to pay any cash dividends to holders of shares but to reinvest earnings, if any. In the event of our liquidation, dissolution or winding up the holders of shares are entitled to share pro-rata in all assets remaining after payment of liabilities.

Our common and preferred shares have no pre-emptive, conversion or other subscription rights. There are no redemption or sinking fund provisions applicable to the shares.

Our articles and by-laws do not contain any provisions that would delay, defer or prevent our change in control.

|Item 3. | Defaults Upon Senior Securities: None                    
|------- | ---------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders: None
|Item 5. | Other Information: None                                  
|Item 6. |                                                          
|A)      | Exhibits                                                 
|Exhibit | Description                                              
|Number  |                                                          

|3.1                                                                                                          | Certificate of Incorporation, dated August 30, 2002-Berita International Corporation(1)                                                         
|------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                            
|3.2                                                                                                          | Certificate of Incorporation, dated December 24, 2003-Keiji International Group Inc.(1)                                                         
|                                                                                                            
|3.3                                                                                                          | Certificate of Incorporation, dated September 30, 2004-Asia Electrical Power International Group Inc.(1)                                        
|                                                                                                            
|3.4                                                                                                          | Articles of Incorporation, dated August 26, 2002-Berita International Corporation(1)                                                            
|                                                                                                            
|3.5                                                                                                          | Certificate Amending Articles of Incorporation dated December 24, 2003 changing our name to Keiji International Group Inc.(1)                 
|                                                                                                            
|3.6                                                                                                          | Certificate Amending Articles of Incorporation dated September 30, 2004 changing our name to Asia Electrical Power International Group Inc.(1)
|                                                                                                            
|3.7                                                                                                          | Bylaws, effective September 3, 2002(1)                                                                                                          
|                                                                                                            
|31.1                                                                                                         | CEO Section 302 Certification                                                                                                                   
|                                                                                                            
|31.2                                                                                                         | CAO Section 302 Certification                                                                                                                   
|                                                                                                            
|32.1                                                                                                         | CEO Section 906 Certification                                                                                                                   
|                                                                                                            
|32.2                                                                                                         | CAO Section 906 Certification                                                                                                                   
|(1) Incorporated by reference from our Form SB-2 that was originally filed with the SEC on October 29, 2004.



|B) Reports on Form 8-K
|----------------------

Form 8-K Filed on January 8, 2007 reporting the following items: 
Item 3.02: Unregistered Sales of Equity Securities 
Item 3.03: Material Modifications to Rights of Security HoldersItem 5.02: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers 
Item 5.03: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year 
Item 9.01: Financial Statements and Exhibits

Form 8K/A was filed on January 29, 2007 to correct errors on Form 8K filed on January 8, 2007.

- 19 -

---

SIGNATURES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.

|      |              | ASIA ELECTRICAL POWER                          
|----- | ------------ | -----------------------------------------------
|      |              | INTERNATIONAL GROUP INC.                       
|Date: | July 2, 2008 |                                                
|      |              | /s/ Yulong Guo                                 
|      |              | By:                                            
|      |              | Yulong Guo                                     
|      |              | President, Chief Executive Officer and Director
|     
|      |              | /s/ Xiaoling Chen                              
|      |              | By:                                            
|      |              | Xiaoling Chen                                  
|      |              | Secretary, Chief Accounting Officer            

- 20 -

---