SINA's Big Plans for China's Future

On Thursday, SINA (NASDAQ: SINA  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise.

SINA has been a big part of the Internet revolution in China and has benefited greatly from the upsurge in interest in online commerce and advertising in recent years. As competition increases, the company has come out with some interesting new strategic moves to retain its leadership role in the industry. Let's take an early look at what's been happening with SINA over the past quarter and what we're likely to see in its report.

Stats on SINA

Analyst EPS Estimate

($0.03)

Year-Ago EPS

($0.21)

Revenue Estimate

$117.54 million

Change From Year-Ago Revenue

15.8%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

How will SINA fare this quarter?
In recent months, analysts have scaled back their views on SINA's earnings somewhat, widening their loss estimates for the first quarter by $0.01 per share and cutting full-year 2013 earnings projections by $0.04 per share. But they've gotten more optimistic about SINA's prospects in 2014, and that longer-term optimism has helped push the stock up about 10% since early February.

SINA started out trying to be all things to Chinese Internet users, offering news portals, search engines, e-commerce, and other related services. But lately, SINA's main claim to fame in the Internet space has been its SINA Weibo microblogging service, which is similar to what Twitter provides to users in the U.S. and throughout the world. With the benefit of the Chinese government, SINA and many of its domestic peers have been able to hold foreign competitors largely at bay.

To try to take advantage of its opportunity, SINA has made some high-profile partnerships to bolster its growth. Its partnership with Apple (NASDAQ: AAPL  ) will automatically give iOS users in China built-in preloaded capacity to use SINA Weibo and its sharing functions, and Apple hopes to benefit from giving its users Weibo functionality in the same way that Apple buyers in the U.S. value having Twitter available on their mobile devices. Moreover, its agreement with Baidu has the two online giants cooperating on aspects including search and cloud-based services, helping to boost their joint mobile presence.

But the latest big partnership involves a major investment from e-commerce giant Alibaba, which took an 18% stake in SINA Weibo in late April. With $586 million in new capital, Weibo should be able to boost its growth, and Alibaba hopes to find new ways to use social media to develop new advertising and business opportunities that will benefit both SINA and its own businesses.

In SINA's quarterly report, watch for early signs of how the Alibaba relationship is going. With so much happening in the Internet industry in China, SINA will have to work hard to keep up, but so far, it seems to making smart moves to stay ahead of the game.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Click here to add SINA to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2429920, ~/Articles/ArticleHandler.aspx, 12/22/2014 6:34:12 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement