Road King Infrastructure Recommendation: Buy Brokerage: Pacific Challenge ROAD King develops, operates and manages toll highways and expressways in the mainland through joint ventures. The company announced much better than expected 1997 results, with net profit of $291.59 million for the nine months to December 31. Beijing's decision to make road building a national priority will provide excellent opportunities for Road King. Backed by its new strategic shareholder, Britain's Stagecoach, the group is well positioned to continue its spectacular growth. Qingling Motors Co Recommendation: Buy Brokerage: Nomura Research QINGLING Motors produces, assembles and sells Isuzu light-duty trucks, pick-up trucks, and minibuses in the mainland. Reports say Beijing is considering lowering the tariffs on imported cars by 20 percentage points as part of steps to enter the World Trade Organisation. This is unlikely to harm Qingling, however, as the company carries relatively new models and has achieved product quality close to that of the big Japanese car-makers. Its prices also are highly competitive, even compared with smuggled cars sold in Guangdong. China Telecom Recommendation: Buy Brokerage: DBS Securities CHINA Telecom provides cellular services in Guangdong, Zhejiang and Jiangsu provinces. The recent acquisition of Jiangsu mobile means the company dominates three of the largest cellular markets in the mainland. The company should see earnings surge by an average 30 per cent over the next three years, fuelled by strong subscriber growth of at least 32 per cent a year. Zhejiang Expressway Recommendation: Sell Brokerage: Indosuez WI Carr ZHEJIANG Expressway builds, operates and manages high-grade roads and develops services including car servicing and fuel facilities. The company is trading at a high valuation relative to its peers, with a narrow 10 per cent discount to its recurring net asset value, and a demanding price-earnings ratio of 20 times this year's earnings.