May 6 am, Sina (NASDAQ: SINA) announced as of March 31, 2005 first quarter financial report, from three months ago, caused fluctuations in earnings performance fell, was a grand "surprise" since the acquisition, Sina introduced in this financial report, not only to China's most prominent financial portals, Sina also may become a footnote to what course to follow.
Judging from the figures, Sina's earnings this quarter were mixed, with a net revenue increase of 11% over last year, reaching 45.8 million U.S. dollars, consistent with the company earlier from 43 million to 47 million U.S. dollars of the expected, in addition to SMS and color business letter, the wireless 2.5G products, IVR and other new business revenue was up 69% quarter over quarter, while at the same time, this first-quarter net profit Sina was 10.3 million U.S. dollars, compared with the same period in 1600, 2004 million U.S. dollars declined 36% from the previous quarter of 17.4 million U.S. dollars fell by 41%.
SMS violations hurt the profit decline
According to Sina filing shows the company's first-quarter advertising revenue totaled 16.6 million U.S. dollars, compared with the same period in 2004, 13.1 million U.S. dollars, up 27% decline the previous quarter of 18.3 million U.S. dollars of 9%, accounting for 36% of total revenues; non- Advertising revenues grew 3% over last year, reaching 29.2 million U.S. dollars, accounting for 64% of total revenues, of 38.6 million U.S. dollars the previous quarter, down 24%; one mobile value-added service revenues totaled 26.5 million U.S. dollars, compared with same period in 2004 The 25.8 million U.S. dollars, up 3% from the previous quarter of 35.7 million U.S. dollars fell 26%.
The current wireless business in general suffered cold, combined with Sina previously disclosed, "Since SARFT banned in February 2005 based in part on the use of SMS billing through television and radio advertising, this provides for Sina's SMS revenues a major impact. "Sina's wireless side, therefore the revenue decline had been expected.
Meanwhile, the announcement shows the first-quarter net income of Sina 10,300,000 U.S. dollars, compared with 2004, the 16 million U.S. dollars over the same period dropped 36% from the previous quarter of 17.4 million U.S. dollars fell by 41%, while net profit fell apart, the company operating costs also increased significantly during the season, the reason is included in the Shenzhen Xing Technology, Inc. network a full quarter of expenses (Sina at the end of March 2004 the company completed the acquisition), and text messaging, iGame and Search engines such as product development costs. In addition, first quarter 2005 operating expenses also include the company adopted a "poison pill" plan required 72.8 million.
Online advertising shrink unexpectedly
In this regard, Sina CEO Wang Yan said: "Although the Spring Festival holiday season and bring business to our strict regulatory environment has adversely affected the performance of our advertising revenue and non-advertising revenues continue to achieve annual growth and to the previous expectations. Looking ahead, we will adjust the business, focusing on enhancing the Internet portal Sina's core competitiveness, while continuing to explore new mobile value-added business development opportunities. "He also expects to bring online advertising by seasonal fluctuations may be the end of the second quarter of this year.
"If Sina's business model is running according to the present case, this year is likely to appear negative growth or decline." This is a famous venture capitalist and former Morgan Stanley Investment Bank Asia Limited, Vice President and Chief Representative of the Wang flood made by the end of February this year is expected, but the face of current financial reports Sina, Wang tide, "said the decline in SMS revenues was expected, but the sequential decline in online advertising can be said in surprise, this acquisition of events that may be affected to some extent Sina Sina online advertising revenue to stabilize, you can keep the company's lifeline - and can be seen in terms of the model with the portal to online games, interactive entertainment is still thriving on behalf of, but also there is ample room for growth. "
69% new business growth in wireless
Terms from the current situation, "Sina's performance may make the board more pressure." New financial report on Sina, Wang Chao-yong says.
Therefore, in addition to online advertising, wireless SMS, MMS revenue beyond the traditional breadwinner, Sina in other business areas have "had depth," as the most worthy of attention.
Sina reported a network game, the company's first quarter, with South Korean game company NcSoft net profit into a joint venture was 30.3 U.S. dollars, it appears that online game revenue is hard to hold up short one day. Sina at the same time, said plans to late in the second quarter of the full launch of the first self-developed search engine, to Sina's user base and influence of view, it's offensive in the commercial search seems worth the wait.
The earnings report was a major bright spot, Sina addition to SMS and MMS services, the wireless business of 2.5G products, IVR and other new revenues were up 69% quarter over quarter, 400 million, This has to a certain extent, compensate for the decline in SMS and MMS caused by loss of income, but the current situation, this part of the overall revenue in the mobile value-added service revenues Sina 26,500,000 U.S. dollars in less than one-sixth its growth will take some time.
Next to the report
Mr. Chen recognized strategic transformation Netease
Shanda announced the acquisition of shares in Sina, the May 6 SINA announced earnings for the first time. Shanda Sina appears in the current acquisition into an impasse, the grand manner of particular concern. As of last Friday's closing time when the U.S. stock market, the grand price of 32.78 U.S. dollars, rose to 2.598 percent the day, Sina price of 28.06 U.S. dollars. Shanda both for their own earnings, or on the earnings announcement within two days after the change in stock price were to take "no comment" attitude.
May 9 afternoon, the grand Chairman Chen Tianqiao reporter's telephone interview, his first published financial statements of the attitude of Sina. Mr. Chen said, I hope Sina each quarter earnings both rose, "we see the same types of enterprises such as Netease, the strategic adjustment, revenue growth is striking. We as a shareholder, can not say that they can to the company's revenue to go and feel all right down. We hope that Sina's earnings in good condition, we believe management will do their job, I think it reflects the common aspiration of all shareholders of Sina. "Mr. Chen also said," Now I want to emphasize the remark: Even if I am not the Chinese people love Sina, Sina is one of China's favorite. We hope that through joint efforts, the Sina well. "
Sina's earnings report also said 19.5% of the company for the acquisition of shares of Shanda's move to implement this year in February Sina shareholders Share Option Scheme (the "poison pill" plan), ending March 31, 2005 in the quarter, SINA was The plan and related legal, financial advisory services to pay up to 728,000 U.S. dollars and is expected "in the coming quarter, the expenditures will be roughly flat this quarter." For this expenditure, Chen said, as related to the company's specific business operations, declined comment.
It is worth noting, Chen particular reference to the "NetEase" is 80% of their income online games portal, now Ding in the game to a network, represented by the transformation of the field of interactive entertainment moves have also been generally recognized. Mr. Chen said at this time, Netease's "strategic transformation" line, no doubt quite profound meaning.
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