《SINA_CORP(SINA.OQ)：BRAND_ADS_OUTLOOK_SOFT;_WEIBO_MONETIZATION_ON_TRACK-2012-11-22.ppt》由会员分享，可在线阅读，更多相关《SINA_CORP(SINA.OQ)：BRAND_ADS_OUTLOOK_SOFT;_WEIBO_MONETIZATION_ON_TRACK-2012-11-22.ppt（11页珍藏版）》请在三一办公上搜索。
1、160,120,80,1,2,Deutsche BankMarkets Research,RatingBuyAsiaChina,CompanySina Corp,Date21 November 2012Forecast Change,TechnologySoftware&Services,Reuters,Bloomberg,Exchange Ticker,Price at 20 Nov 2012(USD)Price target-12mth(USD)52-week range(USD),47.0057.7077.38-44.40,SINA.OQ,SINA US,NSM,SINA,HANG SE
2、NG INDEX,21,228,Brand ads outlook soft;Weibo,monetization on trackOnline ads outlook deteriorating faster than expectedWe attribute Sinas soft 4Q guidance largely to cyclical and one-off factors.Weibo remains structurally under-monetized against its large traffic and Weiborev growth should significa
3、ntly drive Sinas earnings growth over the next 2years.From a valuation perspective,the portals under-performance andWeibos outperformance translate to a rev mix shift from a low multiple to ahigh multiple business.We value the portal at US$14/share or 25%of total TP.Digging into the soft 4Q outlookG
4、iven the current visibility,we expect brand ads weakness will continue into,Alex YaoResearch Analyst(+86)21 2080 Alan Hellawell IIIResearch Analyst(+852)2203 Key changes,1Q13 but could improve in 2Q13.We expect Weibo revenue growth to slowdown in 4Q as Sina fine-tunes product offerings and to resume
5、 strong growthin 1Q13.Despite a likely US$8-9m MVAS revenue decline,we expect limitedimpact on earnings as MVAS is a low-margin business(DBe 3%net margin).Loss of time-spend to Weixin might affect Weibo mobile monetization in LTIn the near future(i.e.2013),we expect loss of time-spend to Weixin will
6、 have,Price targetSales(FYE)Op profmargin(FYE)Net profit(FYE),64.50 to 57.70 551 to 530 0.0 to-2.3 39.5 to 31.0,-10.5%-3.8%-9330.5%-21.7%,limited impact on monetization,as Weibos mobile monetization is likely to bemeasured against traffic rather than time-spend.However,LT,Weibos mobilemonetization i
7、s directly correlated to total content consumption and thus time-spend on mobile devices.Therefore,loss of time-spend to Weixin will affectthe monetization potential of mobile Weibo traffic in the mid-to-long term.Maintaining Buy and tweaking target price to USD57.7 from USD64.5Our SOTP-based target
8、 price implies 46x 2013E non-GAAP PE.We assign 12x,Price/price relative,ex-cash 2013E PE to Sinas portal business.We value Sina Weibo at US$2.0bnon 30 x 2014E PE.We cut our target price and EPS forecast disproportionately,4011/10,5/11,11/11,5/12,(target price-11%vs.2013E EPS-21%)because of a revenue
9、 shift to Weibo,which we value at a higher multiple than the portal.Risks:weak Weibo,Sina CorpHANG SENG INDEX(Rebased),monetization,tough user acquisition and adverse regulations.Forecasts And Ratios,Performance(%)AbsoluteHANG SENG INDEX,1m-16.3-1.5,3m-15.65.6,12m-36.614.8,Year End Dec 31Sales(USDm)
10、EBITDA(USDm)Reported NPAT(USDm)Reported EPS FD(USD)DB EPS FD(USD)OLD DB EPS FD(USD)%ChangeDB EPS growth(%)PER(x)EV/EBITDA(x),2010A402.6116.5-19.1-0.291.731.730.0%47.126.212.7,2011A482.8-11.2-302.1-4.540.920.920.0%-46.9101.6,2012E529.610.931.00.460.150.30-48.5%-83.2304.7186.2,2013E663.699.469.21.031.
11、221.54-20.9%690.638.520.1,2014E955.8217.0172.12.542.773.39-18.4%127.017.08.5,Source:Deutsche Bank estimates,company dataDB EPS is fully diluted and excludes non-recurring itemsMultiples and yields calculations use average historical prices for past years and spot prices for current and future years,
12、except P/B which usesthe year end close_Deutsche Bank AG/Hong KongAll prices are those current at the end of the previous trading session unless otherwise indicated.Prices are sourcedfrom local exchanges via Reuters,Bloomberg and other vendors.Data is sourced from Deutsche Bank and subjectcompanies.
13、Deutsche Bank does and seeks to do business with companies covered in its research reports.Thus,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their inves
14、tment decision.DISCLOSURES ANDANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.MICA(P)072/04/2012.,21 November 2012Software&ServicesSina Corp,Model updated:20 November 2012,Fiscal year end 31-Dec,2009,2010,2011,2012E,2013E,2014E,Running the numbers,Financial Summary,AsiaChinaSoftware&ServicesSina Co
15、rp,DB EPS(USD)Reported EPS(USD)DPS(USD)BVPS(USD)Weighted average shares(m)Average market cap(USDm),1.186.950.0022.3551,709,1.73-0.290.0020.3612,774,0.92-4.540.0016.3656,099,0.150.460.0016.5663,133,1.221.030.0017.4673,133,2.772.540.0019.8673,133,Reuters:SINA.OQ,Bloomberg:SINA US,Enterprise value(USDm
16、),406,1,482,4,964,2,022,1,993,1,841,Valuation Metrics,Buy,P/E(DB)(x)P/E(Reported)(x),26.54.5,26.2nm,101.6nm,304.7101.2,38.545.7,17.018.5,Price(20 Nov 12)Target Price52 Week rangeMarket Cap(m),USD 47.00USD 57.70USD 44.40-77.38EURm 2,447USDm 3,133,P/BV(x)FCF Yield(%)Dividend Yield(%)EV/Sales(x)EV/EBIT
17、DA(x)EV/EBIT(x),2.025.50.01.16.710.9,3.403.40.03.712.715.4,3.200.20.010.3nmnm,2.86nm0.03.8186.2nm,2.700.90.03.020.127.6,2.374.80.01.98.510.2,Company Profile,Income Statement(USDm),Sina Corp is a leading online media company in China,providing an array of services to its users,includingregion-focused
18、 online portals,mobile value-addedservices,search and directory,interest-based andcommunity-building channels,free and premium e-mail,online games,virtual Internet service provider(ISP),classified listings,fee-based services,e-commerce andenterprise e-solutions.Price Performance16012080,Sales revenu
19、eGross profitEBITDADepreciationAmortisationEBITNet interest income(expense)Associates/affiliatesExceptionals/extraordinariesOther pre-tax income/(expense)Profit before taxIncome tax expenseMinoritiesOther post-tax income/(expense)Net profitDB adjustments(including dilution)DB Net profit,359220612043
20、7800375421810412-34270,403251117173969130-129-11800-19133114,483289-11221-341610-281-297500-30236361,53030311230-1217-60363421031-2110,664413992717213-400811200691382,95660821735118115400200280017215187,40Nov 10Feb 11May 11Aug 11Nov 11Feb 12May 12Aug 12,Cash Flow(USDm),Cash flow from operations,98,1
21、17,67,29,82,214,Sina CorpMargin Trends302010,HANG SENG INDEX(Rebased),Net CapexFree cash flowEquity raised/(bought back)Dividends paidNet inc/(dec)in borrowingsOther investing/financing cash flowsNet cash flowChange in working capital,-59315500115363-1,-21961200-211-103-11,-5512600-147-130-17,-53-24
22、000-1-2411,-5329000029-13,-6215200001526,0,-10,09,10 11EBITDA Margin,12E,13EEBIT Margin,14E,Balance Sheet(USDm)Cash and other liquid assetsTangible fixed assetsGoodwill/intangible assets,7462388,6443386,5147516,49014016,51916716,67019416,Growth&Profitability,Associates/investmentsOther assets,656101
23、,747126,623164,623163,623202,623287,50403020100-10,09,10,11,12E,13E,14E,6040200-20-40,Total assetsInterest bearing debtOther liabilitiesTotal liabilitiesShareholders equityMinoritiesTotal shareholders equityNet debt,1,614992923911,22301,223-647,1,636992973961,24101,241-545,1,39123273291,06201,062-51
24、2,1,43223383401,09201,092-487,1,52723633651,16201,162-517,1,79024544561,33401,334-668,Sales growth(LHS),ROE(RHS),Key Company Metrics,Solvency,Sales growth(%)DB EPS growth(%),-3.0-11.7,12.347.1,19.9-46.9,9.7-83.2,25.3690.6,44.0127.0,0-10-20-30-40-50-60,09,10,11,12E,13E,14E,EBITDA Margin(%)EBIT Margin
25、(%)Payout ratio(%)ROE(%)Capex/sales(%)Capex/depreciation(x)Net debt/equity(%)Net interest cover(x),17.010.40.044.61.40.2-53.0nm,28.923.9nm-1.65.21.0-43.9nm,-2.3-7.0nm-26.211.42.4-48.2nm,2.1-2.30.02.910.02.3-44.6nm,15.010.90.06.18.01.9-44.5nm,22.718.90.013.86.51.7-50.1nm,Alex Yao,Net debt/equity(LHS)
26、,Net interest cover(RHS),Source:Company data,Deutsche Bank estimates,+86 21 2080 1666Page 2,Deutsche Bank AG/Hong Kong,21 November 2012Software&ServicesSina CorpVictim of a tough online adsmarketOutlookPortal:worse-than-expected brand ads growthAs we discussed in 4Q brand ads guidance is at risk pub
27、lished on 4 November 2012,weexpected Sina to guide disappointing 4Q ads growth.Nonetheless,the actual guidancestill surprised us on the downside.Management guided 4Q ads revenue of US$110-112m,13-14%below our estimate of US$128m.Management attributed the weakness of the brand ads outlook to:A weak m
28、icro environmentJapanese auto makers operation hiccup(US$3m impact from Sep to Dec 2012)Given the current visibility,we expect the weakness will continue into 1Q13 and couldpotentially improve in 2Q13.We estimate 4Q portal brand ads revenue to decline 11%QoQ and 13%YoY to US$90m,followed by a 25%QoQ
29、 decline in 1Q13.Weibo:monetization progress beat expectation but 4Q12 could see a company-specificslowdownDespite soft 4Q brand ads revenue guidance,management commented that Weibo adsgrowth will remain meaningful in 4Q on a QoQ basis.Nonetheless,we expect thegrowth rate to slow down due to a compa
30、ny-specific reason.A quarter of Weibos 3Qads revenue(US$5m)came from new ads campaigns that were launched during theOlympics.Most of these ads campaigns were trials in nature.In 4Q,Sina willtemporarily discontinue its offering of such campaigns in order to fine-tune the adsformat and algorithm.As su
31、ch,4Q Weibo ads revenues will be partially affected.Weexpect Weibo to resume offering such campaigns in 1Q13 or 2Q13.We expect Weiboads revenue to reach US$22m in 4Q,up 15%QoQ.In 3Q Weibo generated 15%to 20%of ads revenue from mobile vs.72%user trafficfrom mobile or mobile/PC combined.In our view,We
32、ibo is one of the best channels tocapture eye-ball for advertisers on Chinas mobile Internet.Sina Weibos current mobileads product is in a relatively simple banner ads format.We expect the launch ofpromoted tweets will significantly improve monetization of Weibo mobile traffic.Weibo losing usage to
33、Tencents WeixinManagement discussed in the earnings conference that active user time-spend onWeibo decreased slightly during the quarter as Tencents Weixin gained usage amongoverlapping users.In our view,Weibos social media activities remain intact despite the rising popularity ofWeixin.However,a po
34、rtion of Weibos social networking activities is shifting to Weixin,particularly in tier 1 cities.The difference in foundation of the two platforms(i.e.Weibois based on weak user relationship while Weixin is based on a strong user relationship)makes Weibo inherently good for information dissemination
35、,particularly breaking newsor social events,and Weixin good for social interaction.,Deutsche Bank AG/Hong Kong,Page 3,21 November 2012Software&ServicesSina CorpExpecting limited impact on Weibos mobile revenue until monetization exhausts trafficin mid to longer termIn the near future(i.e.2013),we ex
36、pect mobile Weibo monetization to be measuredagainst traffic(e.g.reach)rather than time-spend.From a traffic perspective,we expectthe impact from Weixin is negligible as Weixin users continue to use Weibo to obtainnews flow.We believe mobile Weibo traffic is structurally under-monetized,given the la
37、rge trafficand total time-spend on mobile Weibo.As such,structural growth of mobile Weiborevenue will continue in the near future and the impact from Weixin should be limited.On the other hand,loss of time-spend will affect the mid-to-long term monetizationpotential of mobile Weibo traffic.Due to th
38、e weak user relationship and novelty ofWeibo content,ads that are relevant to users interest can be embedded into the mobileWeibo content without material intrusion of user experience.As such,the in-stream adsformat(promoted tweats)is a good solution to the monetization of mobile Weibo trafficand it
39、 also solves the inventory issue on mobile devices.However,total inventory volume of promoted tweats is directly correlated to theamount of content that a Weibo user consumes and thus directly correlated to time-spend on mobile devices.Therefore,loss of time-spend to Weixin will affect themonetizati
40、on potential of mobile Weibo traffic in the mid-to-long term.Defensive measures to combat Weixin usage gainTo increase Weibos social element so as to mitigate loss of time-spend to Weixin,Sinahas introduced private sharing functions to Weibo in the latest version.Users now canshare information and c
41、ontent with a selected audience(e.g.friends).MVAS:revenue outlook deteriorating but earnings impact is limitedIn addition to weak 4Q online ads revenue,Sina guided MVAS to decline by US$8-9mYoY as a result of further tightening of the MVAS business operating environment.Thesurprise came as telecom o
42、perators attempt to reduce customer complaints and thusrestrict the promotion and marketing of certain MVAS products.Sinas MVAS revenuewill be significantly affected because MVAS is marketing-driven in nature.Despite a potential US$8-9m decline in 4Q,we expect limited impact on earnings asMVAS is a
43、low margin business(DBe 3%net margins).As such,we expect MVAS tomaintain the same GM in 4Q while sales and marketing expense associated to it shoulddecline by US$1-2m in 4Q.Weibo monetization updatesWeibo user statsIn 3Q,Weibo recorded 400m registered accounts.Daily active users reached 42.3m in3Q.T
44、he number of daily active users was 10%of the total number of registered userson average.The time spent per active user decreased slightly in 3Q to one hour,asWeibo shares overlapping users with Weixin.In 3Q,we continue to see Weibo mobileusage growth.Management suggests that 72%of Weibo traffic is
45、from mobile devicesas of September,vs.69%in June.Weibo pricing strategyThe company applies different pricing strategies for its portal ads and Weibo ads,e.g.CPM for large advertisers and CPE(Cost Per Engagement)/CPF(Cost Per Active Fan)forsmall advertisers.Management reveals that Weibos ad pricing s
46、trategy is still at an,Page 4,Deutsche Bank AG/Hong Kong,21 November 2012Software&ServicesSina Corpearly stage and the company will provide different pricing methods for variousadvertisers.Mobile adsAs mobile becomes an increasingly important usage platform,the company plans toprioritize mobile deve
47、lopment for all of its products.During the Olympics,Weibo mobileusage increased dramatically.In 3Q,mobile ad represents 15-20%of Weibos adrevenue.We expect the percentage to increase as the company applies promotedtweets on its mobile Weibo,backed by the increasing mobile usage.Potential investment
48、from Alibaba groupAccording to an unconfirmed report on Peoples Daily Online,Alibaba group is likely tomake a strategic investment in Sina Weibo and take a 15-20%stake in Weibo.The dealvalues Sina Weibo at US$2-3bn(we value Sina Weibo at US$2.4bn or US$2.0b postoption dilution).We view this scenario
49、 as likely given Alibaba groups appetite for strategic relationshipswith non-Tencent SNS platforms.In addition,we see synergies between the twoplatforms:For Ali,the investment could secure access to one of the largest social trafficgateways in China.This should increase total traffic to Alis platfor
50、m given theincreasing popularity of social platforms.For Sina,the cooperation could potentially give it access to Alis consumertransaction data,which should improve the efficiency of Sinas targeted adsalgorithm.More importantly,the cooperation could open the door to millions ofSMEs that Ali services
