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Sina

(SINA) - Get SINA Corp. Report

plunged late Wednesday after the Chinese online media company said fourth-quarter profit slumped 21%.

Net income was $13.8 million, or 24 cents a share, compared with $17.4 million, or 30 cents, a year earlier, the Shanghai-based company said in a statement. The results included a gain of $2.6 million from the sale of the company's shares in 1Pai.com, an auction joint venture with

Yahoo

!

(YHOO)

. Revenue dropped 8.6% to $51.95 million.

Excluding some costs, profit was $12.4 million, or 21 cents a share, below the 22-cent average estimate of analysts surveyed by Thomson Financial. Sales were in line with analysts' forecast of $51.85 million.

"We are proud of another record revenue quarter in our advertising business and are pleased with our overall 2005 results in light of the continued challenging environment surrounding the mobile value-added service sector in China," says CEO Wang Yan in a statement.

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Revenue in the first quarter will be between $44.5 million and $46.5 million, below the $52.2 million analysts had expected. First quarter of 2006 excluding some costs will be $8.5 million and $9.5 million.

Though Chinese Internet stocks are gaining popularity among U.S. investors burned by earnings disappointments from titans including Yahoo!,

Google

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and

Amazon.com

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, analysts are urging caution. They note that the Chinese market, which is growing at a much faster rate than the U.S., is becoming increasingly competitive.

That seemed to take its toll on Sina. Operating expenses soared 29% last year to $88.9 million. They rose 9% to $23.3 million in the quarter. Gross margins fell from 68% to 66%.

Shares of Sina, which has 180 million registered users worldwide, tumbled $1.79, or 7.8%, to $21.18 in after-hours trading.

Sina's shortfall came a day after Baidu, China's No. 1 search engine, reported a 286% gain in fourth-quarter profit, which was better than analysts' already bullish estimates. Its shares jumped $2.79, or 5.4%, to $54.48. The gains evaporated after the close of trading with Sina's reported results.