Pacific Crown Securities Releases research report today

The following is the full report:

Third-quarter results exceeded expectations

Sina reported third-quarter revenue of 179.9 million U.S. dollars, earnings per share of 0.42 U.S. dollars, respectively, more than we expect 178 million U.S. dollars and 0.25 dollars. In the third quarter, Weibo revenue grew 42% to 53.4 million dollars, and was close to break-even, with a net loss of 5 million dollars. Weibo's high percentage of total revenue has led to a higher than expected gross profit margin of 63.4% per cent, above our estimated 56.3%.

Quarterly results Forecast Strong

The median of non-US GAAP revenue in the fourth quarter was $192 million trillion, above our expectations and Wall Street expectations, the Sina forecast said. Sina is still predicting that Weibo is the main driver of revenue growth. Sina's profit margins will also rise as higher-margin microblogging revenues grow faster than low-margin web portals.

Current valuation levels are attractive

The commercial dynamics of microblogs remain strong, and we believe that a strong growth in Weibo will increase the likelihood of Alibaba's investment. According to the Division valuation summation, if Alibaba Group additional investment, then Sina stock price will reach 102 dollars. Sina's current stock price is more than 70 dollars, we think the risk return is very optimistic.