Sina Weibo Value Estimated at $5.1 Billion After Posting Profit

Sina Corp. (SINA)’s Weibo unit is valued at $5.1 billion by analysts after posting its first profit as China’s largest Twitter-like microblogging platform is said to seek an initial public offering in the U.S.

Sina Weibo may be valued between $3.3 billion to $7 billion, according to 10 analysts surveyed by Bloomberg News. Using the midpoint of estimates for analysts providing a range, Sina Weibo may be worth $5.1 billion.

Sina Weibo earned a profit in the fourth quarter for the first time, as the business attracted more companies to buy advertisements on the platform. Sina Weibo is working closer with China’s largest e-commerce company Alibaba Group Holding Ltd. to fend of competition from Tencent Holdings Ltd. (700)’s WeChat messaging application.

“We expect monetization of Weibo to be well executed,” Thomas Chong, an analyst at Bank of China International Holdings Ltd. in Hong Kong wrote in a Feb. 25 report. “Management considers driving user engagement a key focus amidst the fierce competition.”

BOCI values Sina Weibo at $4 billion, Chong said in an e-mail.

The highest potential valuation was from China International Capital Corp., which estimated Sina Weibo at as much as $7 billion, according to a Feb. 26 note.

Sina could raise $500 million in an IPO in the U.S. and has hired Credit Suisse Group AG and Goldman Sachs Group Inc., according to people familiar with the matter.

Sina Weibo was China’s biggest microblogging outlet with 61.4 million daily active users at the end of December, rising from 58.9 million as of September and 36 percent higher than a year earlier, Sina Chairman Charles Chao said on an earnings call Feb. 25.

Sina’s fourth quarter net income rose to $44.5 million from $2.36 million a year. That beat the $28.1 million average of six analysts’ estimates compiled by Bloomberg. Sales gained 42 percent to $197 million.

To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net; Sarah Gill in Sydney at sgill23@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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