SINA Corp. (SINA) is the leading internet portal in China. It can leverage the great potential of online brand advertising business in China.
For the second quarter of 2008, both its revenue and EPS exceeded the market consensus in spite of the Earthquake in China. SINA continued to do well in its online brand advertising and increased the gap between it and its closest competitor in the online brand ad market.
SINA's advertising revenue increased more than 50% year-over-year for the second quarter, which shows accelerated growth momentum. The Beijing Olympic Games can significantly stimulate the online advertising business in China in the next quarter. Therefore, we are maintaining our Buy rating for SINA.
The stock is currently trading at 28.3x our estimate for fiscal year 2008 earnings per share, which is slightly lower than the industry mean and higher than that of its closest Chinese competitors. The stock is also trading at 21.4x our estimate for fiscal year 2009 earnings per share, which is lower than the industry mean.
Using a P/E multiple of approximately 24.4x our fiscal year 2009 earnings per share estimate yields a target price of $50.00, which we believe reflects the company's current prospects.
Read the full analyst report on SINA
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