T.h.capital to maintain Sina's bid-rating target of $89

Beijing Time August 12 Evening News, investment company T.h.capital today issued an investment report to maintain the Sina stock (Nasdaq:sina) "buy" rating, while maintaining a 89 dollar target share price unchanged.

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

Sina will be in the U.S. Eastern Time August 12 after the U.S. stock market close (Beijing time August 13) released the second quarter of fiscal year 2013, and in the eastern United States August 12 Monday 9 o'clock in the evening to 10 points (Beijing time August 13, 2013 early 9 o'clock to 10 points) held a earnings conference call.

We expect Sina's second-quarter results to be at least as consistent with Wall Street's expectations, thanks largely to the commercialization of microblogs. As a new media platform, we believe that more and more enterprise users are beginning to support Weibo. As for the third-quarter results, we think Sina's guidance is expected to be at least consistent with Wall Street expectations, or even more than expected, mainly thanks to Alibaba investment. We also believe that the second half of Sina Weibo will further demonstrate its commercial capabilities and potential. Therefore, we believe that Sina's current share price is undervalued.

The second-quarter results will be at least consistent with Wall Street's expectations: In our view, Sina's second-quarter revenue will be at least the same as Wall Street's expected $145.2 million trillion (up 14% per cent year-on-year growth of 20%). In the first half of this year, although China's GDP rose less than expected, but in fact the economic situation remains strong, this from Baidu and Sohu's second-quarter results can be a glimpse. So we think Sina will keep the same trend. In addition, as a new media platform, Sina Weibo has been gradually accepted by the brand advertisers. To this end, we believe that with the increase in the number of advertisers, as well as a stable economic situation, Sina second-quarter results will be very strong.

Working with Alibaba prompted Sina to provide strong third-quarter earnings forecasts: We are confident of Sina's third quarter's guidance on performance expectations, as the partnership with Alibaba will be the driving force in third-quarter results. August 2, Alibaba and Sina announced account integration, designed to facilitate microblogging users in Taobao shopping. Taobao on the sale of products can be displayed on Sina Weibo, including pictures, prices and store credit ratings and other detailed information, users can directly click on the microblog purchase. We believe this is the beginning of the commercialization of Sina Weibo in the commercial and SME markets. Sina expects that this strategic partnership will bring about 380 million dollars in marketing and social e-commerce revenue for Sina Weibo over the next three years, and that part of the revenue is likely to start in the third quarter. Therefore, we believe that Sina's third-quarter guidance revenue is expected to be at least the same as Wall Street's expected 165.5 million dollars (up 12% year-on-year growth of 14%).

Valuation: We continue to maintain the Sina stock "buy" rating, while maintaining the 89 dollar target share price unchanged. (Li Ming)