Piper Jaffray Previews SINA (SINA) Q3 Earnings; Maintains Buy

September 25, 2008 12:05 PM EDT

Piper Jaffray is out with a research report this morning previewing SINA Corp.'s (Nasdaq: SINA) Q3 earnings. The firm maintains its Buy rating and $69 price target.

The firm cites four major advertising agencies in China as suggesting that SINA's branded ad business remains strong. Piper expects SINA to report sales of $103.4 million, which is about 2% higher than the current Street consensus of $101.67 million. Further, the firm believes that SINA will issue in-line guidance for its December quarter despite concerns over a post Olympic and overall economic slowdown. The Street is currently estimating that SINA will see growth of 40% year-over-year in branded ad sales.

Piper notes that according to ChinaRank, "SINA and SOHU (Nasdaq: SOHU) traffic were essentially the same during the entire two weeks of the [Olympic] games, despite the fact that SINA was not an official sponsor of the games."

Pointing to the often-debated slowdown of Chinese growth in '09, Piper mentions that most advertisers have said that they do see a slowdown, but believe that advertising will not be impacted by a shrinking GDP. Piper says that it believes a slowdown in GDP will negatively affect all companies, but believes the key question is "will the negative impact be worse than what the Street is currently expecting."

With shares of SINA trading around $36 today, Piper's price target represents potential price appreciation of more than 90% from current levels.

SINA Corporation, through its subsidiaries, operates as an online media company and information services provider in the People's Republic of China.

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