Morgan Stanley report says Sina profits exceed expectations

Beijing time February 25 afternoon news, Morgan Stanley published a research report today to maintain the Sina (Nasdaq:sina) stock "hold-see" rating.

The following is the full report:

Revenue for the quarter was expected: Total net revenue grew 42% to 197 million dollars year-on-year, consistent with previous forecasts and our expectations. As a result of the commercialization of micro-blogging, advertising revenue growth of 45% per cent to 160.1 million U.S. dollars (previously forecast for 160 million to 162 million U.S. dollars). Non-US general accounting standards Non-advertising revenue (excluding CRIC-related revenue) grew 36% to $32.2 million (previously forecast at 30 million to 32 million US dollars), mainly due to higher microblogging value-added service revenues (such as data authorization, gaming and membership services). The last quarter, micro-blog revenue of 71.4 million U.S. dollars, the chain growth of 34%, year-on-year growth of 151%, of which from the advertising revenue of 56 million U.S. dollars (year-on-year growth of 163%, accounting for the total revenue of Sina advertising business about 36%).

Profit exceeded expectations: Sina reported a net profit of USD 44.5 million. Fully diluted earnings per share of 0.59 U.S. dollars, an increase of 267%. This is mainly due to the fair-value adjustment of investors ' bonds brought 19.5 million of dollars in earnings. Non-US GAAP fully diluted earnings per share of 0.47 U.S. dollars, while the analyst average expectations and our expectations are 0.46 and 0.44 U.S. dollars respectively.

Profit margin: Operating margin in the fourth quarter rose by about 10% Year-on-year, up about 1% per cent, to 14%, in line with our expectations. The gross profit margin of non-US general accounting standards rose from 57% in the same period last year to 64%, as the scale expanded. Non-US General accounting standard non-advertising gross profit margins rose to 61% from 54% in the same period last year, due to higher micro-blogging value-added services and better profitability. As a result of higher labor costs and more efforts to promote activities, the fourth quarter of the total operating costs rose 34%.

Stable first quarter revenue forecast: Sina forecast, the first quarter of non-US general accounting standards Net revenue will be 162 million to 167 million U.S. dollars, an increase of 34% to 38%. Advertising revenue for 133 million to 136 million U.S. dollars, an increase of 41% to 44%, the advertising business revenue of 29 million to 31 million U.S. dollars. The US GAAP net revenue, which includes $4.7 million trillion in revenue associated with CRIC, will be 166.7 million to 171.7 million U.S. dollars, up 32% to 36% per cent year-on-year, in line with the analyst's average expected growth of 35%.