In a report published on Tuesday, Bank of America analyst Eddie Leung raised the price target on Sina SINA from $67 to $92 and reiterated a Buy rating.
In the report, Bank of America stated, "In today's analyst call, Sina provided detail on the revenue impact of its cooperation with Alibaba for the first time after Ali's US$586m investment in Weibo for an 18% stake. Weibo will see US$50m+ of ad sales in 3Q13, up significantly from US$20m in 3Q12 and US$30m in 2Q13 due to contribution from Alibaba merchants. This uptake would bring 13E/ 14E Weibo sales to US$195m/ US$389m, up from our previous expectation of US$145m/ US$312m; and reduce the drag to portal, which we model to absorb 13E/ 14E Weibo losses of (US$109m)/ (US$19m). We raise Sina's 13E/ 14E net by 35% to US$34m/ US$127m. While working to integrate user data and develop social ad functions for merchants, Sina also achieves a quick fix by connecting to Ali's ad exchange system and becomes a passive partner providing ad space for monetization. This approach enables faster monetization than using its own monetization system."
SIna closed on Monday at $80.35.
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