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Sina's ads revenue hits US$52.5m
By Liu Baijia (China Daily)
Updated: 2004-10-28 08:43

Chinese Internet company Sina Corp achieved strong growth of its advertising revenues and beat a previous estimate of a decline in wireless value-added services, the company said in its third quarter financial report yesterday.

The biggest Internet portal and wireless value-added service provider in China said its revenues rose to US$52.5 million with 6.7 per cent growth over the second quarter.

It made net profits of US$14.5 million in the third quarter, compared with US$18 million in the previous one. Its diluted earnings per share were 27 US cents,compared with 31 US cents in the second quarter.

The company's American depository share on the NASDAQ Stock Market in New York rose by 3.412 per cent to US$28.19, but gained almost 20 per cent after announcing its financial results.

"This just showed our consistency in business operation and growth," said Sina CEO Wang Yan yesterday.

The results beat the company's guidance of US$39 million to US$40 million revenue in the third quarter and the market expectation that Sina's business would decline due to tighter regulatory efforts on wireless value-added services by the Chinese Government and mobile operators.

The Olympics Games were a big stimulus to Sina's growth.

Sina's advertising growth grew by almost 20 per cent to US$18.5 million in the quarter.

Its wireless value-added services including short messaging service (SMS), multimedia messaging service (MMS), wireless application protocol, interactive voice response (IVR), grew by 0.5 per cent quarter-on-quarter, although it was widely believed that wireless service providers including Sina, Sohu, NetEase, Tom Online, and Linktone, would suffer from the government and operators' efforts to curb pornographic content.

Sina's IVR business was suspended by the country's dominant mobile operator China Mobile in July, but the company said the suspension was lifted on October 15.

Jim Sun, an Internet analyst with London-headquartered Evolution Securities's branch in Shanghai, held a neutral attitude to Sina's performance and maintained a hold rating on Sina.

"Sina's wireless service revenues were better than expected, but the performance of the wireless service in the fourth quarter is still a concern," said Sun.

He said in a report that all service providers of China Mobile are required to join the latter's mobile information service centre, which aims to build an accurate billing system, and the impact on service providers is uncertain.

He said that Sina's account receivable was quite high in the third quarter at US$42.9 million, rising 45 per cent over the previous quarter.

However, Sina said in the financial report that part of the account receivable in the quarter had been paid this month.

Wang Yan said the cost of his company might remain at a high level, as the company needs to make aggressive investments to prepare for future expansion.

The company yesterday launched its instant messaging service tool Sina UC 2005, after acquiring Davidhill Capital, previous owner of UC.

Wang said Sina US will become a core component of its goal to build the biggest interactive entertainment platform in the broadband age.

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