SINA Corporation – a leading online media company and value-added information service (VAS) provider for China and for Chinese communities worldwide.

Financial results for 2^nd quarter 2007:

ü        Net revenues increased 11% year over year (YoY) to $59.8 million

ü        Advertising revenues increased 40% YoY to $41.2 million, exceeding the Company's expectation of between $40.0 million and $41.0 million.

ü        Non-advertising revenues decreased 23% to $18.6 million YoY, and 5% decrease from the previous quarter.

Ø     MVAS revenues decline 24% from the same period last year and 7% from last quarter. The YoY decline can be mostly attributed to the changes in mobile operators' policies over the past year. The quarter over quarter (QoQ) decline was mostly related to the decline of revenues from interactive voice response ("IVR") as a result of reduced promotional efforts.

Ø     Other non-advertising revenues mainly search and other fee-based revenues decline 10% from the same period last year and an increase of 27% from last quarter. The sequential increase was mostly due to an increase in search revenues, only a small portion of which is related to the Google arrangement.

ü        Operating expenses and non-operating expenses experienced a decline of 7% and 3% respectively on YoY basis due to lower marketing spending, particularly related to MVAS promotions. While there was an increase of 7% and 9% on QoQ basis from last quarter which was primarily due to higher payroll-related costs as well as increased travel and entertainment expenses.

ü        GAAP net income was $14.5 million or $0.25 diluted net income per share, compared to $10.4 million or $0.18 diluted net income per share in the same period last year. – A 39% increase in GAAP net income.

ü        Non-GAAP net income was $16.1 million or $0.27 diluted non-GAAP net income per share, compared to $12.3 million or $0.21 diluted non-GAAP net income per share in the same period last year. – A 30.89% increase in Non-GAAP net income.

ü        From DuPont Analysis, both ROA & ROE increased on either YoY or QoQ basis.

The second quarter results continue to demonstrate the strength in SINA’s core online advertising business. The company experienced a high revenue base in the same period last year, and under this circumstance, the online advertising business still grows by 40% YoY. Based on the strategic planning referred by CEO of SINA to forged strategic partnership with industry heavyweights, it is reasonable to believe that the company will continuously experience earnings growth in a long term.

Based on the Business Outlook, the company estimates a 5.53% - 8.7% increase in total revenues mainly due to an increase in advertising revenues. Non-advertising revenues are expected to remain unchanged or decrease slightly from $18.6 million to $18 million.

P/E Ratio analysis

From calculations, SINA has a high P/E ratio which may due to the market expectation of continuous earnings growth in a long term and the increasing market confidence of the company to generate profits in the future.

By comparing its P/E ratio with a similar company listed in NASDAQ (SOHU), it is not surprised to observe such a high P/E ratio for this company. This fact precludes the evidence that SINA stock is experiencing a speculative bubble. High P/E is mainly due to its earnings growth expectation and its long term strategic positioning.

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