Hong Kong - 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 US.
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 to fend of competition from Tencent’s WeChat messaging application.
“We expect monetisation of Weibo to be well executed,” Thomas Chong, an analyst at Bank of China International in Hong Kong wrote in a February 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, which estimated Sina Weibo at as much as $7 billion, according to a February 26 note.
Sina could raise $500 million in an IPO in the US and has hired Credit Suisse and Goldman Sachs, 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 February 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. - Bloomberg News