TAIPEI (TheStreet) -- A trio of Chinese Internet heavyweights announced plans this month to start a platform for independent news bloggers. The paid service comes as a bellwether for today's China as bloggers get fewer but more serious, providers learn to make money and the criticism-wary Communist government perfects content controls.
Sina's (SINA - Get Report) Weibo (WB) platform will find advertisers linked to blog content as it plans to start by the end of July, according to Chinese tech media. Qihoo 360 (QIHU) will offer links to recommended content and UCWeb will suggest independent blogger articles to users of its browser.
This partnership follows Weibo's statement in May that it would monetize its platform to let independent bloggers get a share of revenues from ads on their posts.
"We rate SINA CORP (SINA) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The share price of SINA CORP has not done very well: it is down 16.69% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 151.8% when compared to the same quarter one year ago, falling from -$13.17 million to -$33.17 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, SINA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- SINA's debt-to-equity ratio of 0.70 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 5.71 is very high and demonstrates very strong liquidity.
- SINA CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SINA CORP increased its bottom line by earning $0.59 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus $0.59).
- You can view the full analysis from the report here: SINA Ratings Report