Deutsche Bank Markets Research

Rating Company Date Buy Alert 19 February 2013 Company Update Asia Price at 15 Feb 2013 (USD) 56.00 Technology Price target - 12mth (USD) 57.70 Software & Services Reuters Bloomberg Exchange Ticker 52-week range (USD) 77.38 - 41.38 SINA.OQ SINA US NSM SINA HANG SENG INDEX 23,382 4Q preview Alex Yao Research Analyst (+86) 21 2080 1666 Looking for GAAP EPS of USD0.02 in profit vs consensus of USD0.01 loss per [email protected] share We expect Sina to report revenues of USD135m in 4Q12, vs. Bloomberg Alan Hellawell III consensus of USD134m. Our forecast for operating profit is USD2m, compared with consensus of a USD1m operating loss. The company will report its 4Q12 Research Analyst earning results at 9:00AM HKT on February 20. (+852) 2203 6240 [email protected] Key things to look for 1) Comment on 1Q progress in Weibo monetization, particularly the development of promoted tweets. In our view, one of the key drivers behind Stock data Weibo monetization in 2013 is promoted tweets, which is a technology-based Market cap (USDm) 3,733 ad product instead of Sina’s existing media-based ad product. Market cap (USDm) 3,733

Shares outstanding (m) 66.4 2) Comment on 2013 outlook for online ads Major shareholders Stone Electronics 3) Impact on Weibo user activity levels from Wechat. We decompose Sina (4.6%) Weibo’s value proposition to Chinese Internet users into 1) social media, which Free float (%) 74 is the core value proposition of and 2) mobile SNS, which is more Avg daily value traded 115.1 of a value-added service to the core value proposition. We believe ’s (USDm) Wechat is gradually drawing mobile SNS activity away from other mobile Key data apps, including Sina Weibo. Nonetheless, we don’t think Tencent’s Wechat and Weibo are able to challenge Sina’s dominant social media position. FYE 12/31 2011A 2012E 2013E Sales (USDm) 483 530 664 4) Comment on potential investment in Weibo from other Internet names. Net Profit -302.1 31.0 69.2 According to local news media, other Internet companies (e.g. Alibaba Group) (USDm) are considering making an investment in Sina Weibo. We believe other DB EPS (USD) 0.92 0.15 1.22 potential investors include large companies such as . Such an investment PER (x) 101.6 363.0 45.9 is likely to improve Sina’s technology infrastructure and enhance Weibo Yield (net) (%) 0.0 0.0 0.0 monetization at the expense of shareholder dilution. What could surprise us? 1) 2013 Weibo cost outlook. We expect mgmt to place Weibo monetization as the top priority in 2013. This could involve increasing spend on market education and promotion 2) 2013 MVAS outlook, which is subject to telco operator policy changes 3) Portal profitability. We think Sina is likely to allocate more resources to non- Weibo mobile product development. This could lead to lower portal profitability

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