J.P. Morgan launches research report today to keep Sina's equity holdings rating

Summary: View the latest quotes Beijing time August 30 afternoon news, JPMorgan released a research report today to maintain the nasdaq:sina of Sina (overweight) shares of the rating, while the target share price from 67 U.S. dollars to a sharp increase to 97 U.S. dollars. The following is a summary of the report

View the latest quotes

Beijing time August 30 afternoon news, JPMorgan released a study today to maintain the "overweight" (overweight) rating of Sina (Nasdaq:sina) shares, while the target share price from 67 U.S. dollars to a sharp increase to 97 U.S. dollars.

The following is a summary of the report:

Maintain overweight ratings

We expect that in the next 12 months, microblogging commercialization will quickly boost Sina's profitability. We also believe that Sina Weibo's quarterly net profit will turn positive in the second half of 2013, while the net loss for the year 2013 will be narrowed from $95 million in 2012 to $10 million. We expect Sina's operating profit margin for 2013 to reach 10% in 2014, and 2% in 2012, as the commercialization of microblogs accelerates.

Alliance with electric business platform will expand to SME

We believe that Sina's relatively high-end user base is conducive to the commercialization of the electricity business. Given the distribution of different advertisers, this part of the revenue source belongs to the incremental revenue of online advertising.

Fans will drive revenue growth

We believe that advertising based on performance (ie, "fan tong") will be an important source of revenue growth for Sina Weibo, helping Sina generate revenue from mobile-side traffic. The key to further development of this product is to improve data mining capabilities and computing capabilities. We believe that this alliance also provides downward protection, because if the own advertising matching algorithm does not work well, then Sina can open to the electric platform advertising.

VAS Business improves profitability

Since its business costs (COGS) include server depreciation, bandwidth costs, operator salaries, and payment processing fees, we estimate that the gross margin of Sina value-added services (VAS) will reach 80%. In view of this, we expect Sina value-added services business 2013 years of revenue will increase from 12 million U.S. dollars to 39 million U.S. dollars in 2012, thus further enhance Sina's profit margin.

Valuation

We maintain an "overweight" rating on Sina's stock and overweight the target share price from $67 trillion to $97.