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 imran.t.khan@jpmorgan.com 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 imran.t.khan@jpmorgan.com 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 imran.t.khan@jpmorgan.com 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 imran.t.khan@jpmorgan.com 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 imran.t.khan@jpmorgan.com 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 imran.t.khan@jpmorgan.com 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 imran.t.khan@jpmorgan.com 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 imran.t.khan@jpmorgan.com 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 imran.t.khan@jpmorgan.com 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 imran.t.khan@jpmorgan.com 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. . 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 *. Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Our Estimates and Outlook for 2009 We forecast net revenue of US$437.6MM in 2009,