One year growth of SINA is 82.25%. Two years growth is 130%. SINA’s Current Market Cap is $8.0B which shows still a lot of space for growth.
Sina Corporation is an online media company serving China and the global Chinese communities. The Company’s digital media network of SINA.com (portal), SINA mobile (mobile portal and mobile applications) and Weibo (social media) enables Internet users to access professional media and user generated content (UGCs) in multi-media formats from personal computers and mobile devices, and share their interests with friends and acquaintances.
The Company’s segments include Portal advertising, Weibo Corporation (Weibo) and Others. SINA.com is an online media property, which provides professional digital contents to users and offers online brand advertising and marketing solutions to customers.
Weibo is a social media platform for people to create, distribute and discover Chinese-language content. It offers eReading, a shop for book reviews, as well as complimentary and fee-based online book reading. It offers SINA Blog, a Website in China for bloggers to publish and read original writings.
Chinese tech company SINA (NASDAQ:SINA) and MOMO (NASDAQ:MOMO) are often overshadowed by bigger players like Baidu (NASDAQ:BIDU), Alibaba (NYSE:BABA), and Tencent (NASDAQOTH:TCEHY). But since going public in 2000 at $17 per share, the stock rose nearly 530% to its current price.
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SINA generates revenue from its social network Weibo (NASDAQ:WB) and various portal websites, which cover the news, entertainment, sports, business, and other topics on PCs and mobile devices.
SINA spun off Weibo as a publicly traded company in 2014, but still retains a 46% stake in the company, which gives it a 72% voting share. Alibaba is Weibo’s second largest stakeholder — which has constantly fueled speculation that the e-commerce giant could buy SINA or Weibo to widen its moat against Tencent’s WeChat.
Company total revenue grew 47% annually to $358.9 million last quarter. Revenues from Weibo rose 72%, fueled by a big jump in advertising revenues, and accounted for 71% of SINA’s top line. The rest of SINA’s revenue came from its older portal business, which posted 9% growth.
Profitability has been improving at both businesses. Weibo’s gross margin expanded from 72% a year ago to 80%, while the portal unit’s gross margin jumped from 51% to 61%. Its total gross margin rose from 64% to 74%, which lifted its non-GAAP net income by 165% to $52.7 million.
Understanding the tailwinds and headwinds
SINA’s biggest tailwind is Weibo, which grew its monthly active users (MAUs) by 28% annually to 361 million last quarter. Weibo is the preferred communication tool for Chinese celebrities, who lure millions of followers to its ecosystem.
Weibo is often called the “Chinese Twitter“, but it actually blends aspects of Twitter’s tweets,Facebook‘s core social network, and Reddit’s forum-based conversations in a jack of all trades ecosystem. Analysts expect Weibo’s revenue and earnings to respectively rise 66% and 99% this year — so SINA is an easy way to profit from its growth.
Analysts expect SINA’s growth — throttled by its portal business — to be slightly less impressive than Weibo’s with 46% sales growth and 99% earnings growth this year. But SINA’s P/E of 35 is also much lower than Weibo’s P/E of 120, and compares favorably to the industry average of 37 for internet information providers. This arguably makes SINA a safer play on Weibo than Weibo itself.
Yet SINA and Weibo both remain vulnerable to government crackdowns. Chinese regulators threatened to shut down SINA’s portals in 2015, claiming that they “distorted news facts, violated morality, and engaged in media hype.” Earlier this year, regulators forced Weibo to suspend all live audio and video broadcasts on its site, claiming that the company hadn’t obtained a new government broadcasting license. These incidents indicate that SINA and Weibo need to tread very carefully to maintain their double-digit growth rates.