Growing on its own. As the parent of Weibo (WB US, USD99.28, Buy, TP USD106),Sina has benefited from its subsidiary’s fast revenue and profit growth (see Weibo:Buy: Growing scale drives greater monetization, 8November 2017) while transformingits core portal business and investing in other end markets for growth. Sina’s 3Q resultsnot only reflected Weibo’s strong performance, they also highlighted two new growthdrivers: First, the portal business grew for the first time in 12quarters, as the mobilenews app accounted for 63% of the total portal ad revenue. We now foresee modestgrowth as mobile offsets a declining PC business. Second, a 250% y-o-y increase inonline finance revenue drove 89% y-o-y growth in other revenue, which amounted to9% of the total net revenue. Weibo is monetising its B2B payment platform on a pertransaction basis and through a monthly software fee. It also consolidated a smallloanservice provider. We expect the market to begin to assign value to Sina’s otherbusinesses, given that the portal has returned to growth and online finance continuesto surge. On a separate note, Sina’s shareholders rejected an activist’s proposal toappoint two new directors to its board. Following the annual general meeting, the newboard has issued preferred shares to Chairman Charles Chao, effectively increasinghis voting stake from 11.1% to 55.5%. Management continues to review options toreturn value to shareholders through dividends or buybacks. By end-September, Sinahad reported USD1.3bn and Weibo had registered USD737m in net cash. In October,Weibo completed a convertible bond offering of USD900m.    3Q results ahead of expectations. Net revenue grew 62% y-o-y, to USD443m, 10%above consensus. Advertising revenue grew 47% y-o-y, driven by Weibo. Core portalincreased 9% y-o-y, to USD87m, as revenue from its mobile news app accounted for63% of total portal ad revenue. News app monthly active users grew 30% y-o-y, andfrequency and time spent continued to expand year-to-date. Non-advertising revenuewas USD40m, of which the online payment was USD16.5m, and service revenue frommicro lending was USD12.8m. Adjusted EPS was USD0.77vs consensus of USD0.74.    Maintain Buy and cut SOTP-based TP to USD144. We raise our revenue forecaststo reflect faster revenue growth in portal and others, but lower our core Sina marginforecasts (to account for higher S&M) and reduce our EPS forecasts to reflect theincreased non-operating loss due to widening losses from the company’s investmentin Leju. We increase our revenue forecast by 6% for 2017e and 8% for 2018e, but wetrim our EPS estimates by 10% and 14%, respectively. We project an EPS CAGR of53% over 2017-20e. Mainly to factor in our lower earnings estimates, we cut our TPto USD144from USD170. We continue to see Sina as undervalued, given the risingvalue from its subsidiary Weibo and the improving performance of its portal andfinance businesses. Key downside risks include lower than expected monetisation ofits news app and performance of Weibo.

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