Tài liệu Nothing But Net 2009 Internet Investment Guide 31 docx

301
Global Equity Research
05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Our Estimates and Outlook for 2009
We forecast net revenue of US$652.7MM in 2009, up 27% Y/Y, and GAAP diluted
EPS of US$2.69, up 11% Y/Y, or adjusted EPS (ex-share-based expense) of
US$2.80, up 11% Y/Y. We forecast MMORPG revenue of US$549.8MM in 2009
(84% of total revenue), up 29% Y/Y, and casual game revenue of US$80.6MM (12%
of total revenue), up 20% Y/Y.
We forecast gross margin at 70.9% for 2009, slightly lower than 71.8% for 2008,
adjusted operating margin (ex-share-based expense) of 39.3% for 2009, slightly
lower than 41.1% for 2008, and adjusted net margin of 30.6% for 2009, down from
35.7% for 2008 (on higher effective tax rate of ~24% in 2009, due to Actoz – with
higher tax rate in Korea – and Aurora combination).
Our Estimates and Outlook for 2010
For 2010, we forecast net revenue of US$736.2MM, up 13% Y/Y, and GAAP diluted
EPS of US$3.05, up 13% Y/Y, or adjusted EPS of US$3.16, up 13% Y/Y. We
forecast MMORPG revenue of US$615.8MM in 2010 (84% of total revenue), up
12% Y/Y, and casual game revenue of US$93.8MM (13% of total revenue), up 16%
Y/Y. On margins, we forecast gross margin at 70.8% (stable Y/Y); adjusted
operating margin of 39.1% (stable Y/Y) and adjusted net margin of 31.0% (also
stable Y/Y).
Price Target, Valuation and Rating Analysis
We maintain our Overweight rating on Shanda, which remains our top pick in the

online game sector in China. Our price target is US$35 (June-09), which implies
14.5x 2008E and 13.0x 2009E GAAP EPS, or 13.9x 2008E and 12.5x 2009E
adjusted EPS. Our price target is below our DCF valuation of ~US$55 (13% WACC,
0% terminal growth), due to the lower sector multiples. Historically, the game sector
has traded at a forward P/E of 10x-20x. We believe Shanda can trade towards the
mid-end of this range, due to upside potential to our estimates from successes in
upcoming new games, and in-game advertising. On the other hand, with general
stock market weakness, the stock is not likely to trade at the historical high end of
around 20x, in our view.
Risks to Our Rating
Risks to our rating and price target include: (1) existing games seeing a significant
decline from lack of new content or promotions, (2) new major titles seeing lower-
than-expected gamer interest, and (3) any new business initiatives that would lead to
large investments.



302
Global Equity Research
05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Table 210: SNDA Annual Income Statement
$ in millions
INCOME STATEMENT
2007 2008E 2009E 2010E
Revenue 327.2 514.0 652.7 736.2

MMORPG
270.6 427.1 549.8 615.8
Casual games
43.7 66.9 80.6 93.8
EZ hardware
1.1 0.3 0.3 0.3
EZ subscription
0.0 0.0 0.0 0.0
Others (Includes Actoz revenue from 3Q07)
11.7 19.7 22.1 26.3
COGS -106.5 -145.0 -189.8 -214.9
Gross Profit 220.6 369.0 462.9 521.3
Operating Expense -87.3 -165.8 -213.9 -241.2
Sales & Mktg. expenses -23.8 -45.6 -58.7 -66.3
G&A expenses -41.8 -80.0 -102.9 -116.0
R&D expenses -21.7 -40.1 -52.2 -58.9
Other expenses 0.0 0.0 0.0 0.0
123R share-based compensation -7.8 -8.0 -7.6 -7.6
EBIT 133.3 203.2 249.0 280.1
Adj. EBIT (ex-share-based comps.) 141.1 211.2 256.6 287.8
EBITDA 167.4 243.2 298.0 335.6
Net Interest Income 7.0 10.7 13.8 19.2
Net Other Income 65.7 2.6 3.3 3.7
Pre Tax Profit 206.0 216.6 266.1 303.0
Tax Expense/(Credit) -17.7 -38.4 -65.7 -74.6
Net Profit 185.1 175.8 192.4 220.5
Adj. Net Profit (ex-share-based comps.) 136.9 183.7 200.0 228.1
Pre Tax EPS (US$) 2.87 3.02 3.81 4.31
After Tax EPS (US$) 2.58 2.45 2.75 3.13
EPS Diluted (US$) 2.53 2.42 2.69 3.05

Adj. Diluted EPS (US$ ex-share-based comps.) 1.87 2.53 2.80 3.16
Margins (%)
Gross Margin 67.4 71.8 70.9 70.8
Adj. Operating Margin (ex-share-based comps.) 43.1 41.1 39.3 39.1
EBITDA Margin 51.2 47.3 45.6 45.6
Net Margin 56.6 34.2 29.5 29.9
Adj. Net Margin (ex-share-based comps.) 41.8 35.7 30.6 31.0
Sequential Growth (%)
Revenue 56.9 57.1 27.0 12.8
Gross Profit 81.4 67.3 25.5 12.6
Adj. EBIT 168.0 49.7 21.5 12.1
Pre Tax Profit 176.4 5.1 22.9 13.9
Net Profit (ex-share-based comps.) 116.2 34.2 8.9 14.0
EPS Diluted 174.3 -4.5 11.3 13.4
Adj. Diluted EPS (ex-share-based comps.) 113.7 35.0 10.7 12.9
Source: Company reports and J.P. Morgan estimates.



303
Global Equity Research
05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Table 211: SNDA Quarterly Income Statement
$ in millions
1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08E 1Q'09E 2Q'09E 3Q'09E 4Q'09E

Revenue 68.8 74.1 87.4 97.8 111.1 122.1 137.4 144.0 151.7 159.5 167.5 174.0
MMORPG
53.5 62.1 73.4 82.5 91.3 101.3 113.2 121.7 127.4 134.2 141.0 147.1
Casual games
11.8 9.3 10.9 11.7 16.6 15.7 17.6 17.1 19.4 19.9 20.6 20.8
EZ hardware
0.9 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
EZ subscription
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Others (Includes Actoz revenue from 3Q07)
2.6 2.7 3.0 3.5 3.1 5.0 6.5 5.1 4.9 5.3 5.8 6.1
COGS -24.0 -24.3 -26.4 -32.2 -33.9 -33.2 -37.1 -40.9 -44.2 -46.3 -48.6 -50.8
Gross Profit 44.9 49.8 61.0 65.6 77.2 88.9 100.2 103.0 107.5 113.2 118.9 123.3
Operating Expense -15.8 -17.8 -26.6 -27.4 -32.8 -40.0 -44.3 -49.0 -48.6 -52.6 -55.3 -57.4
Sales & Mktg. expenses -3.8 -5.0 -8.1 -7.0 -8.4 -11.5 -12.8 -13.0 -13.7 -14.4 -15.1 -15.7
G&A expenses -8.4 -8.7 -11.9 -12.9 -15.1 -18.7 -21.9 -24.5 -22.8 -25.5 -26.8 -27.8
R&D expenses -3.6 -4.0 -6.6 -7.5 -9.2 -9.9 -9.5 -11.5 -12.1 -12.8 -13.4 -13.9
Other expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
123R share-based compensation -1.5 -2.0 -2.0 -2.3 -2.2 -2.2 -1.7 -1.9 -1.9 -1.9 -1.9 -1.9
EBIT 29.0 32.1 34.3 38.2 44.5 48.9 56.0 54.1 59.0 60.5 63.6 65.9
Adj. EBIT (ex-share-based comps.) 30.5 34.1 36.3 40.5 46.7 51.1 57.6 56.0 60.9 62.5 65.5 67.8
EBITDA 35.7 39.4 44.1 48.6 53.7 58.6 66.6 64.5 70.4 72.5 76.1 78.9
Net Interest Income 0.9 1.1 2.0 3.0 2.7 2.8 2.6 2.6 2.9 3.3 3.6 4.0
Net Other Income 33.3 26.4 2.7 2.3 -1.5 -1.6 5.1 0.7 0.8 0.8 0.8 0.9
Pre Tax Profit 63.2 59.6 39.1 43.5 45.7 50.1 63.7 57.4 62.7 64.6 68.1 70.7
Tax Expense/(Credit) 3.1 5.0 6.4 3.3 4.1 9.0 13.7 11.9 15.5 16.0 16.8 17.4
Net Profit 58.0 54.6 31.8 40.1 41.1 40.8 49.4 44.5 45.2 46.7 49.3 51.3
Net Profit (ex-share-based comps.) 27.8 33.3 33.8 42.4 43.3 43.0 51.1 46.4 47.1 48.6 51.2 53.2
Pre Tax EPS (US$) 0.88 0.84 0.55 0.60 0.63 0.69 0.88 0.82 0.90 0.93 0.97 1.01
After Tax EPS (US$) 0.81 0.76 0.44 0.55 0.57 0.56 0.69 0.64 0.65 0.67 0.70 0.73

After Tax EPS Diluted (US$) 0.79 0.74 0.44 0.54 0.56 0.56 0.68 0.63 0.63 0.65 0.69 0.71
After Tax EPS Diluted (US$ ex-share-based comps.) 0.38 0.46 0.46 0.58 0.60 0.58 0.70 0.65 0.66 0.68 0.72 0.74
Margins (%)
Gross Margin 65.2 67.2 69.8 67.1 69.5 72.8 73.0 71.6 70.9 71.0 71.0 70.8
Operating Margin (ex-share-based comps.) 44.3 46.0 41.6 41.4 42.0 41.9 41.9 38.9 40.1 39.2 39.1 38.9
EBITDA Margin 51.8 53.2 50.5 49.7 48.3 48.0 48.5 44.8 46.4 45.5 45.5 45.3
Net Margin 84.3 73.7 36.4 41.0 37.0 33.4 36.0 30.9 29.8 29.3 29.4 29.5
Net Margin (ex-share-based comps.) 40.5 44.9 38.7 43.3 39.0 35.2 37.2 32.2 31.0 30.4 30.6 30.6
Sequential Growth (%)
Revenue 14.2 7.7 17.9 11.9 13.6 9.9 12.5 4.8 5.4 5.1 5.0 3.9
Gross Profit 18.3 11.1 22.3 7.6 17.7 15.2 12.7 2.8 4.4 5.3 5.1 3.7
Adj. EBIT 43.3 11.7 6.7 11.4 15.2 9.6 12.7 -2.8 8.8 2.6 4.9 3.4
Pre Tax Profit 92.7 -5.7 -34.4 11.2 5.0 9.8 27.1 -10.0 9.3 3.1 5.4 3.8
Net Profit (ex-share-based comps.) 17.9 19.5 1.6 25.3 2.3 -0.8 18.8 -9.2 1.5 3.1 5.4 3.9
After Tax EPS 87.5 -6.9 -40.5 23.8 2.9 -0.1 21.1 -7.7 1.4 3.0 5.4 3.8
After Tax EPS (ex-share-based comps.) 17.2 19.8 1.1 24.8 4.1 -2.6 19.9 -6.9 1.3 2.9 5.2 3.6
Source: Company reports and J.P. Morgan estimates.



304
Global Equity Research
05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Table 212: SNDA Annual Balance Sheet
$ in millions

2007 2008E 2009E 2010E
Cash and Cash Equivalents 263.24 515.40 731.75 961.67
Account Receivables 4.27 4.69 5.72 6.29
Inventory 0.29 0.78 0.95 1.05
Total Other Current Assets 24.74 30.25 37.22 41.74
Total Current Assets 292.55 551.13 775.65 1,010.74
Gross Fixed Assets 73.44 103.80 148.71 199.31
Accumulated Depreciation (31.51) (62.54) (87.34) (120.87)
Net Fixed Assets 41.93 41.26 61.38 78.44
Other Long Term Assets 189.53 212.99 214.88 214.88
Long Term Investments and Associates 107.54 131.03 132.19 132.19
Total Long Term Assets 339.00 385.27 408.44 425.50
Total Assets 631.55 936.40 1,184.09 1,436.25
ST Debt and Current Portion of LT Debt - - - -
Accounts Payable 6.44 9.82 12.02 12.81
Other Current Liabilities 110.87 190.28 232.06 254.91
Total Current Liabilities 117.31 200.11 244.08 267.71
Long Term Debt - 173.46 175.00 175.00
Other Long Term Liabilities 33.76 35.75 25.25 17.67
Total Long Term Liabilities 33.76 209.21 200.25 192.67
Share Capital 1.59 1.67 1.70 1.71
Share Premium 214.08 152.10 169.06 184.68
Other Reserves 16.64 8.34 8.42 8.42
Retained Earnings 248.17 364.96 560.57 781.05
Preferred Stock - - - -
Total Equity 480.48 527.08 739.76 975.86
Total Liabilities and Equity 631.55 936.40 1,184.09 1,436.25
Source: Company reports and J.P. Morgan estimates.

305
Global Equity Research
05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Table 213: SNDA Annual Cash Flow Statement
$ in millions
2007 2008E 2009E 2010E
Net Income 185.14 175.78 192.39 220.48
Add Non cash Expenses/(income) - - - -
Depreciation and Amortization 26.28 32.01 41.32 47.80
Extraordinaries 3.14 2.37 8.00 8.00
Other Non-Cash Items (90.37) 7.97 7.63 7.63
Changes in Working Capital: - - - -
(Increase)/Decrease Receivables (0.07) (0.01) (0.99) (0.56)
(Increase)/Decrease Inventories 0.90 (0.46) (0.16) (0.09)
(Increase)/Decrease Other Current Assets (11.94) (3.13) (6.69) (4.52)
Increase/(Decrease) Payables (5.65) 2.76 2.11 0.79
Increase/(Decrease) Other Current Liabilities 46.39 68.74 40.09 22.84
Net Cash from Operations 153.82 286.02 283.69 302.36
Cash Flow from Investing - - - -
Purchase of Property, Plant & Equipment (9.70) (12.75) (44.00) (50.60)
Purchase/Sale of Other LT assets (2.00) (19.76) (17.07) (14.27)
Purchase/Sale of Investments 235.51 (13.13) - -
Net Cash from Investing Activities 223.81 (45.63) (61.07) (64.87)

Cash Flow from Financing - - - -
Issuance/Repayment of Debt (271.16) 173.46 - -
Change in other LT liabilities - (1.26) (10.82) (7.57)
Change in Common Equity - net (1.11) (100.53) 8.00 8.00
Payment of Cash Dividends - - - -
Other Financing Charges, Net - (85.27) (8.00) (8.00)
Net Cash from Financing Activities (272.27) (13.60) (10.82) (7.57)
Net Effect of Exchange Rate Changes (13.41) - - -
Net Change in Cash and Cash Equivalents 91.93 226.79 211.79 229.92
Cash at End of Period 263.24 515.40 731.75 961.67
Source: Company reports and J.P. Morgan estimates.





306
Global Equity Research
05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Sina, Overweight, ($22.89)
We maintain our Overweight rating on Sina, the leader in the online branded
advertising segment in China. Our Jun-09 price target is US$53, which implies 31.5x
FY08E and 25.1x FY09E adjusted EPS, on the back of 51% / 26% earnings growth
forecast for ‘08/’09.
• Sina is the leader in China’s online branded advertising market. While there is

debate over how China’s economy will shape up over the next few years, we are
very confident that Internet usage will continue to grow, driven by lower
computer prices, lower connection fees, higher influence of online media, and
government support. Sina, as the leader in online branded advertising in China,
should remain a key beneficiary of China’s Internet usage growth. We maintain
our 2009 forecast for Sina to see ad revenue growth of 22% Y/Y, and we expect
to see Sina taking market share away from low-tier sites.
• We also expect a continuing increase in allocation of ad budgets from offline to
online media. While management has observed delays in the 2009 budget
planning process by advertisers, there had been no cancellations in 4Q08 as of
mid-November. Further, from surveying its own ad customers, the company
noted that the majority of clients planned to increase their budget allocation
online. We maintain our view that more offline ad budgets will be reallocated to
online, driven by: (1) China’s increasing Internet user penetration (still ~20% vs.
~70% in the US, Japan, Korea), (2) higher cost effectiveness, and (3) relatively
more measurable results for advertisers.
• 2009 drivers: In our view, the following factors will drive shares in 2009: (1)
better visibility on 2009 ad budget growth by early ‘09, (2) continued solid
growth in Internet usage in China, (3) potential upside from Google-Sina search
and E-House real estate channel partnership, and (4) formation of further online
partnerships (such as with E-House in online real estate segment).
Our current and newly introduced 2010 estimates are in the table below:
Table 214: Sina Financial Snapshot
$ in millions, except per share data
4Q'08E F'08E F'09E F'10E F'08E Y/Y F'09E Y/Y F'10E Y/Y
J.P. Morgan
Revenue 98.7 366.8 437.6 547.5 49% 19% 25%
EBITDA 31.0 106.1 138.8 173.9 43% 31% 25%
GAAP EPS 0.42 1.46 1.84 2.27 51% 26% 24%
Adj. EPS 0.48 1.68 2.11 2.55 51% 26% 21%

Consensus
Revenue 99.2 367.7 438.3 513.6 49% 19% 17%
EBITDA 31.9 99.9 133.3 166.4 35% 33% 25%
GAAP EPS 0.41 1.44 1.71 1.98 48% 19% 16%
Adj. EPS 0.45 1.59 1.88 2.28 42% 19% 21%
Source: J.P. Morgan estimates and Bloomberg. *Note: Adj. EPS excludes share-based compensation expense.



307
Global Equity Research
05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Our Estimates and Outlook for 2009
We forecast net revenue of US$437.6MM in 2009, up 19% Y/Y, and GAAP diluted
EPS of US$1.84, up 26% Y/Y, or adjusted EPS (ex-share-based expense) of
US$2.11, up 26% Y/Y. We forecast 2009 advertising revenue of US$314.3MM
(72% of total revenue), up 22% Y/Y, and wireless-related revenue of US$114.4MM
(26% of total revenue), up 14% Y/Y. Among other revenue, we currently forecast
US$6.2MM in search-related revenue in 2009, up 19% Y/Y.
We forecast gross margin at 61.3% for 2009, up from 60.4% for 2008 (due to lower
content-related costs in 2009). Our online ad gross margin forecast is 64.6% in 2009,
up from 62.6% for 2008 (due to lower content costs), and our wireless-related gross
margin forecast is 50.7%, down from 54.0% for 2008. We expect adjusted operating
margin (ex-share-based expense) of 27.0% for 2009, up from 24.7% for 2008, and
adjusted net margin of 29.5% for 2009, up from 27.8% for 2008.

Our Estimates and Outlook for 2010
For 2010, we forecast net revenue of US$547.5MM, up 25% Y/Y, and GAAP diluted
EPS of US$2.27, up 24% Y/Y, or adjusted EPS of US$2.55, up 21% Y/Y. We
forecast 2010 advertising revenue of US$414.1MM, up 32% Y/Y, and wireless-
related revenue of US$123.5MM, up 8% Y/Y. On margins, we forecast gross margin
at 61.1% (stable Y/Y), adjusted operating margin of 26.9% (stable Y/Y) and adjusted
net margin of 28.6% (slightly lower Y/Y).
Price Target, Valuation and Rating Analysis
We remain Overweight on Sina, on the back of low valuation and our relatively high
conviction for 2009 and longer-term growth. We maintain our Jun-09 price target at
US$53, which implies 36.2x 2008E and 28.9x 2009E GAAP PE, or 31.5x 2008E and
25.1x 2009E adjusted PE; on the back of our 50.6% and 25.6% earnings growth
forecast for 2008 and 2009. This is above our DCF valuation of ~US$44 (12%
WACC, 0% terminal growth); we believe Sina can trade at this valuation, given its
estimated longer-term earnings growth of ~30%. Our sum-of-the-parts valuation
indicates a range of US$49.4-56.3. Sina currently holds over US$550MM of cash
and short-term investments (or over US$450MM of net cash, net of ~US$100M
convertible debt); with significant net cash on hand, we believe Sina can weather the
more challenging environment in the near to medium term.
Risks to Our Rating and Price Target
Risks to our rating and price target include greater-than-expected slowdown in
advertising spending in China, decline in online ad gross margin, and competition
from other Internet portals. In addition, changes in regulations in the wireless value-
added space and further decline in wireless-related revenue also add to downside
risks.



308
Global Equity Research

05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Table 215: SINA Annual Income Statement
$ in millions
INCOME STATEMENT
2007 2008E 2009E 2010E
Revenue 246.1 366.8 437.6 547.5
Mobile related 70.5 100.6 114.4 123.5
Advertising 168.9 258.3 314.3 414.1
Others 6.7 7.8 8.9 9.9
COGS -92.9 -145.2 -169.5 -213.1
Gross Profit 153.2 221.6 268.0 334.4
Operating Expense -102.2 -145.6 -165.9 -203.2
Sales & Mktg. expenses -49.3 -75.5 -82.3 -102.9
G&A expenses -22.6 -26.1 -33.3 -41.6
R&D expenses -20.3 -28.3 -33.3 -41.6
Other expenses -1.2 -1.2 -1.0 -1.0
Share-based compensation -8.7 -14.5 -16.0 -16.0
EBIT 51.0 76.0 102.2 131.2
Adjusted EBIT (ex- 123R exp.) 59.7 90.5 118.2 147.2
EBITDA 74.3 106.1 138.8 173.9
Net Interest Income 12.4 27.4 32.2 36.9
Net Other Income 0.8 2.4 0.0 0.0
Pre Tax Profit 64.2 105.7 134.4 168.1
Tax Expense/(Credit) -6.5 -17.0 -21.1 -25.8
Reported Net Profit 57.7 88.6 111.9 139.3

Adj. Net Profit * 67.1 102.1 129.0 156.4
Reported Diluted EPS (US$) 0.97 1.46 1.84 2.27
Adj. Diluted EPS (US$) * 1.12 1.68 2.11 2.55
Margins (%)
Gross Margin 62.2 60.4 61.3 61.1
Adj. Operating Margin * 24.3 24.7 27.0 26.9
EBITDA Margin 30.2 28.9 31.7 31.8
Net Margin 23.5 24.2 25.6 25.4
Adj. Net Margin * 27.3 27.8 29.5 28.6
Sequential Growth (%)
Revenue 15.6 49.0 19.3 25.1
Gross Profit 13.3 44.6 21.0 24.8
Adj. EBIT (ex-123R) 34.6 51.6 30.6 24.6
EBITDA 32.4 42.8 30.9 25.3
Reported Diluted EPS 39.8 50.9 25.5 23.8
Adj. Diluted EPS * 26.8 50.6 25.6 20.6
Source: Company reports and J.P. Morgan estimates.



309
Global Equity Research
05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Table 216: SINA Quarterly Income Statement
$ in millions

1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08E 1Q'09E 2Q'09E 3Q'09E 4Q’09E
Revenue 51.3 59.8 64.3 70.7 71.3 91.3 105.4 98.7 92.3 105.4 118.7 121.1
Mobile related 18.2 17.0 16.6 18.6 21.7 24.5 27.1 27.3 27.8 28.3 28.9 29.4
Advertising 31.8 41.2 45.8 50.1 47.8 64.9 76.2 69.3 62.4 74.9 87.6 89.4
Others 1.3 1.6 1.9 1.9 1.8 1.9 2.1 2.1 2.1 2.2 2.2 2.3
COGS -20.4 -22.2 -24.1 -26.2 -28.5 -34.3 -44.4 -37.9 -37.1 -40.6 -45.4 -46.4
Gross Profit 30.9 37.6 40.2 44.5 42.8 57.0 61.0 60.8 55.2 64.8 73.3 74.7
Operating Expense 23.4 24.9 25.1 28.8 29.4 37.4 40.9 37.9 37.5 40.1 44.0 44.2
Sales & Mktg. expenses -10.7 -11.7 -12.1 -14.8 -14.5 -20.5 -21.8 -18.8 -18.5 -20.0 -22.0 -21.8
G&A expenses -5.8 -6.0 -5.5 -5.4 -5.8 -6.1 -6.8 -7.4 -7.4 -7.9 -8.9 -9.1
R&D expenses -4.3 -4.9 -5.5 -5.6 -5.6 -6.8 -8.3 -7.6 -7.4 -7.9 -8.9 -9.1
Other expenses -0.4 -0.3 -0.3 -0.3 -0.3 -0.3 -0.4 -0.3 -0.3 -0.3 -0.3 -0.3
Share-based compensation -2.2 -2.1 -1.7 -2.8 -3.3 -3.8 -3.6 -3.8 -4.0 -4.0 -4.0 -4.0
EBIT 7.5 12.7 15.2 15.7 13.4 19.6 20.1 22.9 17.7 24.7 29.3 30.5
Adjusted EBIT (ex- 123R exp.) 9.7 14.7 16.9 18.4 16.7 23.4 23.7 26.7 21.7 28.7 33.3 34.5
EBITDA 13.4 18.3 20.5 22.0 20.1 27.1 27.9 31.0 26.4 33.7 38.6 40.1
Net Interest Income 2.5 2.4 3.7 3.7 6.2 6.7 7.1 7.3 7.7 7.9 8.2 8.4
Net Other Income 0.0 0.8 0.0 0.0 0.0 3.1 -0.8 0.0 0.0 0.0 0.0 0.0
Pre Tax Profit 10.0 15.9 18.9 19.4 19.6 29.4 26.4 30.2 25.4 32.6 37.4 38.9
Tax Expense/(Credit) 1.4 1.5 1.7 1.9 3.6 4.2 4.4 4.8 4.1 5.1 5.8 6.0
Reported Net Profit 8.6 14.5 17.2 17.5 16.1 25.2 22.0 25.4 21.1 27.2 31.2 32.4
Adj. Net Profit * 11.4 16.1 19.1 20.5 19.6 26.2 26.8 29.4 25.4 31.5 35.5 36.7
Reported Diluted EPS (US$) 0.15 0.25 0.28 0.29 0.27 0.42 0.36 0.42 0.35 0.45 0.51 0.53
Adj. Diluted EPS (US$) * 0.19 0.27 0.32 0.34 0.33 0.43 0.44 0.48 0.42 0.52 0.58 0.60
Margins (%)
Gross Margin 60.2 62.9 62.5 62.9 60.1 62.4 57.9 61.6 59.8 61.5 61.7 61.7
Adj. Operating Margin * 18.9 24.6 26.2 26.1 23.5 25.6 22.5 27.0 23.5 27.2 28.0 28.4
EBITDA Margin 26.2 30.7 31.8 31.2 28.2 29.7 26.4 31.4 28.6 32.0 32.5 33.2
Net Margin 16.8 24.2 26.7 24.8 22.5 27.6 20.8 25.7 22.9 25.8 26.3 26.8
Adj. Net Margin * 22.1 26.9 29.7 29.0 27.5 28.7 25.5 29.8 27.5 29.9 29.9 30.3

Sequential Growth (%)
Revenue -9.1 16.6 7.6 9.9 0.9 28.1 15.4 -6.4 -6.4 14.2 12.6 2.0
Gross Profit -3.7 21.8 6.9 10.6 8.7 33.1 7.0 -0.4 -2.2 17.3 13.1 1.9
Adj. EBIT (ex-123R) -12.3 52.3 14.5 9.2 -3.7 39.9 1.4 12.6 -9.1 32.1 15.9 3.5
EBITDA -13.6 36.6 11.7 7.6 -8.7 34.7 2.9 11.3 -15.0 27.8 14.6 4.0
Reported Diluted EPS -26.8 65.5 16.2 1.5 -7.8 55.7 -12.8 15.3 -16.9 28.7 14.7 3.6
Adj. Diluted EPS * -25.7 40.9 17.7 6.7 -3.9 32.4 2.6 9.4 -13.9 23.9 12.7 3.1
Source: Company reports and J.P. Morgan estimates.



310
Global Equity Research
05 Januar
y
2009
Imran Khan
(1-212) 622-6693

Table 217: SINA Annual Balance Sheet
$ in millions
2007 2008E 2009E 2010E
Cash and Cash Equivalents 272 363 487 639
Account Receivables 57 76 93 117
Short-term investments 206 206 206 206
Total Other Current Assets 9 26 32 41
Total Current Assets 544 672 819 1003
Gross Fixed Assets 66 92 122 156
Accumulated Depreciation -39 -67 -87 -112
Net Fixed Assets 27 25 35 44

Other Long Term Assets 92 91 90 89
Long Term Investments and Associates 0 0 0 0
Total Long Term Assets 119 115 125 133
Total Assets 662 787 944 1135
ST Debt and Current Portion of LT Debt 0 0 0 0
Accounts Payable 1 6 7 8
Other Current Liabilities 66 74 91 115
Total Current Liabilities 67 80 98 123
Long Term Debt 99 99 99 99
Other Long Term Liabilities 1 0 0 0
Total Long Term Liabilities 100 99 99 99
Share Capital 7 7 7 8
Share Premium 332 357 383 411
Other Reserves 0 0 0 0
Retained Earnings 155 244 356 495
Preferred Stock 0 0 0 0
Total Equity 495 608 747 913
Total Liabilities and Equity 662 787 944 1135
Source: Company reports and J.P. Morgan estimates.