Road King Infrastructure Recommendation: Buy Brokerage: Salomon Brothers Hong Kong-based Road King Infrastructure develops, operates, and manages toll roads on the mainland through joint ventures.
It has strong management flexibility and fund-raising capability and there is no geographical restriction for the company in seeking new projects. The company also has the best net asset value growth potential of the three expressway companies being covered.
The stock should trade at $11.80 in 12 months, representing 50 per cent upside on the company's current price.
First Pacific Co Recommendation: Undervalued Brokerage: Goldman Sachs First Pacific is a regional conglomerate with interests in banking, trading, property development and telecommunications.
Following the 35 per cent rise in the Hang Seng Index over the past 12 months, First Pacific is one of the few constituents that still looks attractive in growth and value.
The stock should benefit from above-average earnings per share growth of 18 per cent on average over the next four years. The shares also are trading at an historically steep discount of 24 per cent to estimated net asset value.
