Jaffray to maintain micro-blog to increase its rating target price to 26 dollars

Jaffray Piper Jaffray, the US investment bank, released an investment report today to maintain a "overweight" rating on Weibo (NASDAQ:WB), raising its target share price from $25 to $26, Beijing time August 15 evening.

The following is a summary of the contents of the report:

In the second quarter, Weibo achieved its goal of building a platform for sustainable revenue growth. For example, the mobile trend is strong, the SME revenue is growing, and the payment service is in good initial feedback. We expect that this will boost the microblogging 2015 fiscal year revenue rise to 44%. To this end, we continue to hold a "overweight" rating on micro-blogging stocks, raising the target share price from 25 US dollars to 26 dollars.

Better-than-Expected results: in the second quarter of fiscal year 2014, microblog revenues were 77.3 million U.S. dollars, up from Wall Street's projected $75.8 million trillion, exceeding the company's proposed limit of 74 million to 76 million dollars. The loss of $0.03 per share was in line with Wall Street's expectations. The number of active users in the month was 156.5 million, an increase of 30%, above our expected 150.5 million. The number of active users was 69.7 million, an increase of 32%. Weibo expects revenue from the third quarter to reach $79 million trillion to $82 million trillion, a median higher than Wall Street's expected $80.1 million trillion.

Move quickly to the mobile platform: we believe that the results of Weibo's second-quarter advertising revenue highlight the gains from investment channels. In the second quarter, Mobile contributed 39% of total revenue, compared with 31% in the first quarter, and 28% in the fourth quarter last year. In the second quarter, mobile advertising revenue grew by 45%, while overall advertising revenue grew by 15% a quarter. 78% of the month's active users use mobile platforms, close to Facebook's 81%. We believe that Weibo's mobile advertising revenue ratio will continue to rise. Facebook, by contrast, is 62%, while Twitter is 81%.

Small and medium Enterprises market: It is worth mentioning that Weibo is focusing on China's small and medium enterprises market. In the second quarter, Weibo had 9,300 small and medium business clients, compared with 7,000 in the first quarter. Small and medium-sized businesses have grown by 32% per cent a quarter, meaning revenues of $13.2 million trillion, compared with $10 million trillion in the first quarter. In the first quarter, Weibo launched its payment service, with 5 million independent users completing deals in the second quarter, compared with 1 million in the first quarter.

Valuation: We continue to maintain the "overweight" rating of Weibo shares, raising the target share price from 25 US dollars to $26. (Li Ming)