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Snapshot: Sina Corp. before Q3 earnings

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internet_2Nov. 9, 2009 - Sina Corporation (NASDAQ:SINA) is an online media company and MVAS provider in the People’s Republic of China and the global Chinese communities. The company provides five major business lines: SINA.com (online news and content), SINA Mobile (MVAS), SINA Community (Web 2.0-based services and games), SINA.net (search and enterprise services) and SINA E-Commerce (online shopping). Together these business lines provide an array of services including region-focused online portals, MVAS, search and directory, interest-based and community-building channels, free and premium email, blog services, audio and video streaming, game community services, classified listings, fee-based services, e-commerce and enterprise e-solutions. The Company generates the majority of its revenues from online advertising and MVAS offerings and, to a lesser extent, from search and fee-based services (Sina, 2009). Sina Corporation (NASDAQ:SINA) is trading at $42.10 due on November 9, 2009, 1:30 p.m. (US Eastern Time).

SINA_price

Sina Corporation (NASDAQ:SINA) is listed on Technology Sector, Internet Software & Services Industry, NASDAQ. The main competitors are Sohu.com, CCTV, Yahoo, QQ, Baidu.com, and NetEase.com.

  1. It is important to keep in mind that increasing investment on news colleting and editing has been the mainly strategy of Sohu. In order to occupier the high plot, Sohu spent a lot of money to gained the sponsor right of 2008 Beijing Olympic Games. After The Olympic Games, Sohu still didn’t give up the investment on this sector in order to compete with Sina. Except News, Sohu also competes drastically with Sina Corporation (NASDAQ:SINA) on the Blog and Video sector.
  2. Yahoo was improving its online searching service and became the main competitor of Google in recent years. Therefore, since SINA.net, one of the five main business lines of Sina, focuses on the search service, Yahoo is an un-ignoring competitor of Sina Corporation (NASDAQ:SINA).
  3. Either QQ or Baidu is the potential competitor of Sina. Relying on the same name online chatting software—QQ, QQ owns the largest amount of young users. The diversified service is QQ’s most powerful competition tool. Recent years, QQ has spread to online news and e-commerce services. Compared with the single profit resource—advertisement, QQ generates its revenue from all its diversified services. Therefore, QQ is a strong potential competitor of Sina Corporation (NASDAQ:SINA).
  4. Based on the large amount of search data, Baidu generated huge profit from its key word search service. Besides, Baidu also has News, Paste Bar, Music, Video, and uprightness Search services. Similar with QQ, Baidu owns well diversified business lines and more abundant services compared with Sina Corporation (NASDAQ:SINA).
  5. In addition to Sohu, Yahoo, QQ, Baidu and NetEase, I think CCTV may be another potential strong competitor of Sina Corporation (NASDAQ:SINA), which can be seen from CCTV’s recent marketing actions.

CCTV belongs to General Office of Broadcasting and Television in PRC; therefore, it has the unique political support and incomparable authority and control on the public microphone. CCTV now owns TV media (CCTV), Internet (CCTV.com), Newspaper (Chinese TV), Magazine (Chanel 5), Open doors (CCTV Mobile Media), and Mobile (Mobile TV). Future internet will focus on video which is mainly from TV or individual programming. Individual programming is limited because of lack of management and organization. On the other hand, if each website wants to buy from TV Medias, the cost will be huge. But all of these two methods are not a problem for CCTV, therefore, not only Sina Corporation (NASDAQ:SINA), but all of the internet firms have to face CCTV as one strong competitor in future.

CRIC_price

CRIC Market Price (Source: Google Finance)

On Oct 16th the joint venture between Chinese portal Sina Corporation (NASDAQ: SINA) and realty agency E-House (China) Holdings Ltd. (NYSE: EJ) ---China Real Estate Information Corporation (NASDAQ: CRIC), IPO’d on the NASDAQ. The stock, whose IPO price is $12, generated a market cap of US$2.16B. The stock increased by 18% on the first day of trading.

In recent years, Chinese IPO is very popular in American market as 1/3 of the IPOs are from China. Before this, Sohu and Shanda Interactive (NASDAQ:SNDA) all split its game sector and made their own game sector go public in Nasdaque, but Sina’s real estate sector going public is different, which based on the process of “Split, Spin off, Go Public”. CRIC combined the advantages from both Sina and E-house, and became a company with both real estate data base and also independent internet media.

Before CRIC’s IPO, Sina Corporation (NASDAQ:SINA) had three other similar spin offs, such as its spin off with NCSoft in 2003, and that with Yahoo in 2007. The spin off with NCSoft, Shanghai NC-Sina Information Technology Co., LTD (NC-Sina), failed finally on 2008 because of the confused management. Besides, the spin off with Yahoo runs well and generates profit for Sina Corporation (NASDAQ:SINA).

As China’s real estate industry has developed great in the recent years, plenty of American investors are looking for the investing opportunities. CRIC’s IPO provides them a great chance to invest in China’s real estate industry. Pushed by the china’s real estate industry developing, CRIC is looks to have a bright future as well.


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