Sina Corporation: How Much Has SINA been Undervalued? Expect In Line 2Q16 Results; Maintain Buy
SINA will report 2Q16 results on Monday, August 8 after the market closes followed by a 9:10pm EST earnings call. We are expecting 2Q results to be at least in line with consensus driven by solid results from its core business Weibo. We believe Sina is significantly undervalued. SINA owns 54.5% of WB, which is valued at $7B. In addition, SINA has $1.4B net cash. Just adding the value of these two, SINA should be valued at $74.50 per share, a 36% upside from its current level. Also, since SINA is working to transition its portal business to verticals, we believe new risks can be low. Therefore, we maintain our Buy rating on the stock.