US investment company Nasdaq:sina today released a study to maintain an overweight rating of Sina's shares

Source: Internet
Author: User
Keywords Sina revenue we
Tags advertising advertising revenue alibaba alibaba group analysts based company group

The main contents of the report are as follows:

Based on Sina's third-quarter earnings, we still believe that Weibo revenues will reach $340 million trillion in 2015, an increase of 34% per cent year-on-year, and still have an upward potential (an average of 75% per cent growth for analysts). Predicting the exact inflection point of Weibo is difficult, but we think that, given the Alibaba Group's vested interest in Weibo, this inflection point is bound to come, and it is likely to prove that our current expectations are conservative. We maintain a "overweight" rating on Sina shares and a 95 dollar target share price.

-third-quarter results and quarterly results expected to exceed Wall Street expectations

Sina's earnings for the third quarter were $0.42 trillion, with revenues of $179.9 million, while Wall Street expected 0.32 dollars and 179.1 million dollars respectively. Sina forecast that the fourth quarter revenue of 190 million to 194 million U.S. dollars, higher than Wall Street expected 182.5 million U.S. dollars, the middle point exceeds 5%. Sina's fourth-quarter advertising revenue was 160 million to 162 million dollars, which we think is the main reason for the total revenue to exceed Wall Street's expectations. According to Sina Management, the fourth quarter of advertising revenue and total revenue of the chain growth is mainly driven by Weibo.

-Alibaba Group promotes Weibo advertising revenue growth

In the third quarter, Weibo's total revenue was 53.4 million dollars, of which 43.7 million dollars came from advertising. According to Sina Management, Alibaba Group has brought about 20 million dollars in advertising revenue to Weibo, higher than the 5 million dollars in the second quarter. If we look at Weibo ad revenue in the second quarter and the third quarter alone, we think that excluding Alibaba Group's contribution, microblogging advertising revenue is basically flat. Sina pointed out that the third quarter appeared the issue of advertising, forcing Weibo to allocate more advertising to Alibaba Group to meet certain performance requirements. We do not believe that the micro-blog advertising revenue of the chain flat true reflects the market demand for microblogging advertising services.

-Investment theme unchanged, looking forward to Weibo "Facebook moment"

Sina's third-quarter results reflect our investment theme, that Weibo remains one of China's most powerful social networks, and that Alibaba Group's investment is shrewd. Although the third quarter Weibo advertising revenue slightly lower, but we believe that this gap is mainly due to the above mentioned advertising position problem. We are not worried about the long-term importance of microblogging platforms for brand advertisers. In addition, we still expect that Weibo will usher in its own "Facebook moment", that is, the revenue trajectory reached a turning point, with successive quarterly accelerated growth.

-Performance expectations Adjustment

Based on a better fourth-quarter performance forecast, we adjusted SINA's valuation model. The main adjustments are as follows:

-Lower the fourth quarter of microblog advertising revenue forecast from 56 million U.S. dollars to 53 million U.S. dollars to better reflect the views of Sina management.

-Increase the fourth quarter's total revenue forecast by 7%. Sina's expectation of advertising revenue for the portal brand will offset the adjustment of Weibo.

-Increase revenue forecasts for 2014 and 2015 by 3% respectively to reflect better than expected portal services in the third quarter.

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