Dutton Associates Announces Investment Opinion: Qiao Xing Universal Telephone Rated Strong Buy In Updated Coverage By Dutton Associates.

EL DORADO HILLS, Calif. -- Dutton Associates updates its coverage of Qiao Xing Universal Telephone (Nasdaq:XING) with a Strong Buy rating and a price target of $19.60. The 28-page report by Dutton senior analyst Stanley Ng is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals.

Qiao Xing Universal Telephone is a market leader in the domestic mobile handset market whose prospects will be driven by the continuing rapid increase in mobile subscribers, and thus handset demand, in China. The major factors are the relatively low mobile penetration rate of just above 35% in China, the growing affluence of the Chinese people and the rising affordability of both mobile service and handsets. In addition to its high-end but mid-range-priced CECT brand handsets, produced under the recently spun-off 61.3%-owned subsidiary, Qiao Xing Mobile Communication (QXM), XING also produces low-end handsets under the COSUN brand, as well as indoor phone products. We are also surprised to learn that the Company's indoor phone operation has made significant progress in its export business. In short, we believe that XING offers the best opportunity for investors to participate in the encouraging growth prospects in a wide spectrum of segments of China's mobile handset market. Based on our valuation and peer comparison, XING offers the lowest PE valuation for 2007 and 2008 and the strongest support on the downside by its lowest price-to-book ratio of around 1.0 times. At our 12-month target price of $19.60 per share, the stock is trading at 10.3 times PE on our diluted EPS (excluding non-cash exceptional items) of $1.91 in 2007 and 8.0 times PE on EPS of $2.45 in 2008. See our comments on the Class Action suits recently filed.

About Dutton Associates

Dutton Associates is one of the largest independent investment research firms in the U.S. Its 30 senior analysts are primarily CFAs, and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.

The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $50,500 from the Company for 6 Research Reports with coverage commencing on 5/18/2005. We do not accept payment of our fees in company stock. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.