Shares of SINA (SINA) surged nearly 70% over the past year, which was an impressive gain for one of China's oldest internet companies. Yet the stock could still rise higher next year, as its double-digit revenue and earnings growth propels it to fresh highs. Let's discuss why the 19-year-old company could still be a gold mine for growth investors.

Solid growth and reasonable valuations

Last year, SINA's revenue rose 17% and its non-GAAP earnings grew 94%. For the current year, analysts expect its revenue and non-GAAP earnings to grow 53% and 99%,respectively.

SINA's mobile app.

SINA's mobile app. Image source: Google Play.

Looking ahead to fiscal 2018, SINA's revenue is expected to increase another 33%, and its earnings are expected to grow 40%. Those are impressive growth figures for a stock that trades at 26 times forward earnings.

Weibo's growth

Three years ago, SINA spun off its microblogging site Weibo (WB -6.95%) in an IPO. It retained a majority stake in the new company, which was eventually reduced to 46% (with 72% voting power) via two share distributions.

The majority of SINA's revenue still comes from Weibo, which accounted for 72% of its top line last quarter. Analysts expect Weibo's revenue and earnings to rise 68% and 104%, respectively, this year, fueled by the growth of its monthly active users (376 million last quarter), advertising revenue, and new businesses like live video.

Weibo has stronger growth rates than SINA, which is weighed down by its older portal business. Weibo's 160% rally over the past year also crushed SINA's 69% gain. However, that rally boosted Weibo's trailing P/E to 90, which is much higher than SINA's P/E of 59. Therefore, SINA is arguably a cheaper way to invest in Weibo than Weibo itself.

A resilient portal business

Some investors consider SINA's older business of portal websites and apps, which generate the rest of its revenue, to be a dead weight on its top line. Yet that business is still growing at a decent clip, with 26% annual sales growth last quarter.

The business' portal advertising went up 9% to $87.4 million last quarter, while its "other" revenue jumped 89% to $39.8 million. Sixty-three percent of its ad revenue came from mobile devices during the quarter, up from 57% in the prior-year quarter.

Buyout potential

SINA and Weibo are both frequently mentioned as potential buyout candidates for bigger Chinese tech companies like Alibaba (BABA -4.76%). Alibaba owns a 31.5% stake in Weibo, making it the social network's second-largest shareholder after SINA.

Alibaba's UCWeb browser and Youku Tudou streaming video site are also integrated with Weibo. These close ecosystem ties have fueled speculation that Alibaba could buy either Weibo or SINA to become the social network's majority shareholder.

Activist investor Aristeia Capital, which owns a 4% stake in SINA, recently challenged the company's board in a bid to either sell Weibo or itself to maximize shareholder value. That push ultimately failed, but it indicates that other suitors might eventually try to buy SINA, which still trades at a discount to Weibo.

The key takeaways

SINA is often overshadowed by Baidu, Alibaba, and Tencent in the high-growth Chinese internet market. But its aging portal sites remain remarkably resilient, thanks to higher mobile engagement rates, and its stake in Weibo makes it a high-growth play.

But SINA's stock isn't cheap, and it still faces unpredictable headwinds. The Chinese government cracked down on SINA's news reports before, halted Weibo's live media broadcasts earlier this year, and fined the company over allegedly lax censorship rules. If SINA further reduces its stake in Weibo via additional share distributions, its growth could also slow down.

Nonetheless, SINA remains an overlooked growth play on the lucrative Chinese market, which has an internet penetration rate of 52% -- compared to 89% in the U.S.