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Sina Sees Record 4Q Revenues

Sina Corp, the biggest Internet portal in China, Wednesday reported record revenues for the fourth quarter, mainly due to strong growth in mobile messaging and online advertising business.

The company, which in 2000 became the first Chinese-mainland-based Internet company listed on the NASDAQ stock market, said its income for the past quarter achieved a record high of US$38.3 million, rising 197 percent year-on-year and 20 percent quarter-on-quarter.


The results beat Sina's projections for the quarter at US$35.2-36.2 million made in October.


Sina's profits in the fourth quarter reached US$9.3 million, or 16 US cents per share.


"Both our advertising and mobile message businesses performed very well in the past quarter and are big contributing factors to our growth," said Hurst Lin, Sina's chief operating officer (COO), in a telephone interview with China Daily.


Sina's advertising revenues grew 13 percent over the third quarter to US$12.9 million.


Lin pointed out that an increasing recognition of online advertising and the strengthening of its leadership were major factors.


According to market consulting firm Shanghai iResearch Co Ltd, China's online advertising market in 2003 grew 120 percent over 2002 to 1.08 billion yuan (US$130 million) and Sina took about 300 million yuan (US$36 million) out of the pie, leading other players on the arena.


The company's non-advertising revenues reached US$25.3 million with a 24 percent quarter-on-quarter increase.


The Sina COO attributed the growth to factors including strong offline sales forces, its online marketing platform, and the launch of new products.


According to Lin, his firm has about 40 people covering almost every provincial region in China to communicate with mobile operators and promote new products, while other companies have a presence in key markets only.


Cash flow from operations during the quarter was US$19.5 million, in contrast with US$3.2 million during the same period in 2002.


Sina's annual revenues also achieved US$114.3 million, almost tripling 2002 sales, while its full-year profits stood at US$31.4 million, or 58 US cents by the end of 2003, compared with a net loss of US$4.9 million and an 11 US cent loss per share over the previous year.


By December 31, Sina's cash funds, cash equivalents and investments in marketable securities were US$227.2 million, an increase of US$18.9 million over three months ago.


Sina Corp's stock price suffered a fall of 8 percent to US$3.10 on Tuesday US time due to the market's reaction to Sina's peer Sohu.com Inc, but gained 2.3 percent to US$44.09 after announcing its financial results.


Sohu reported annual revenues of US$80.4 million last year and US$26.4 million in profits, but its quarter-on-quarter growth was only 11 percent in the past quarter with revenues of US$24.6 million.


"Sina's performance is very good." said Chang H. Qiu, an analyst with US consulting firm Forun Technologies, "Both revenues and profits exceeded market expectations."


Sina estimates its revenues in this quarter will be US$39.5-40.5 million, with US$12.7-13.2 million in advertising revenues and US$26.8-27.3 million in non-advertising revenues.


Its earnings per share are expected to be 27-29 US cents.


Lin said his company will continue to focus on advertising and wireless services, while investing in online gaming, search engines and e-commerce.


He believes the markets for new value-added wireless services like multimedia messaging services, wireless application protocols and interactive voice response will see breakthroughs this year after several years of preparation by the industry.


The company will also launch its second online game, Lineage 2, free of charge in the next quarter and commercially launch it in the third quarter, but Lin said the contribution from online games to his company won't be significant due to fierce competition.


He said Sina will continue to seek acquisition opportunities in online gaming, wireless services, advertising and e-commerce.


Lin believes more and more Chinese Internet users will accept online shopping this year and in 2005, and Sina will spend more resources on developing this market.


The company said it has paid US$600,000 for professional services related to several acquisition transactions that did not materialize.


(China Daily February 5, 2004)



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