SINA.com Press Center

1104

SINA Reports Its First Quarter Fiscal Year 2003 Financial Results
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Record Net revenues of $10.3 million – 71% Year over Year Growth and 21% Quarterly Sequential Growth; Positive Cash Flow of $2.5 million

BEIJING & SAN MATEO, Calif.--(BUSINESS WIRE)—November 4, 2002-- SINA (Nasdaq:SINA), a leading online media company and value-added information service provider for China and global Chinese communities today announced its financial results for the first quarter of fiscal year 2003.

Financial Highlights:
·Quarterly net revenues grew by 71% year over year to a record high of $10.3 million
·Non-advertising revenues grew by 320% year over year to $3.9 million and accounted for 37% of the total revenue
·Advertising revenues grew by 26% year over year to $6.5 million
·Quarterly pro forma net income of $241,000, compared to a quarterly pro forma loss of $2.9 million for the same period of last year
·Quarterly US GAAP net loss narrowed by 70% sequentially and 89% from the same period of last year to $559,000
·Positive cash flow from operations reached $3.1 million and overall positive cash flow was $2.5 million for the quarter
·Gross margin further improved to a record high of 61%
Business Results

For the quarter ended September 30, 2002, SINA reported record net revenues of $10.3 million, an increase of 21% from previous quarter and of 71% from the same period of the previous year. Gross margins improved to an all-time high of 61%, up from 59% for the previous quarter.

On a GAAP (Generally Accepted Accounting Principles) basis, net loss for the quarter was $ 559,000, an improvement of 70% from $1.9 million for the previous quarter and of 89% from $5.3 million for the same period of the previous year. Net loss per share for the quarter was $0.01, as compared to $0.04 for the previous quarter and $0.13 for the same period of the previous year.

On a pro forma basis, SINA recorded its first ever profitable quarter with quarterly pro forma net income totaling $241,000. This compared to a pro forma loss of $0.95 million for the previous quarter and of $2.9 million for the same period of last year. Pro forma net income per share for the quarter was $0.01, compared to a pro forma net loss per share of $0.02 for the previous quarter and $0.07 for the same period of the previous year. Pro forma net income or loss excludes non-cash charges for amortization of intangibles, stock-based compensation and gains or losses from equity investments.

For the quarter ended September 30, 2002, SINA generated positive cash flow of $3.1 million from operations. As of September 30, 2002, the total balance of SINA's cash, cash equivalents and short-term investments was $95.6 million, representing an increase of $2.5 million from the previous quarter.

“We’re very proud that our team was able to achieve excellent performance this quarter. In this quarter, we have achieved new records in revenue, gross margin and profitability,” said Daniel Mao, CEO of SINA. “Indeed, SINA continues to be the leader in our industry. Our revenues and customer base exceed our competitors by large measures.”

During the quarter, SINA’s advertising revenue reached $6.5 million, representing a 26% growth year over year and an 11 % growth compared to the June quarter.

“SINA continues to dominate the online advertising market. What is particularly impressive about our September quarter’s performance is that even without a major event such as the World Cup, our advertising sales continue to show strong traction,” said Wang Yan, President of SINA. “Indeed, during the quarter, we have put further distance between us and our nearest competitors, clearly demonstrating that advertisers prefer SINA.”

Also during the quarter, SINA non-advertising revenue reached a record $3.9 million, representing a 320% growth year over year and a 41% growth compared to the June quarter. This impressive result was driven primarily by the growth of SINA’s wireless short messaging service (SMS) and SINA.net enterprise services, both of which are growing at much faster rates relative to advertising.

“Wireless and SINA.net have become the faster growth business lines for SINA, representing our success in transitioning to new growth opportunities in the market place,” said Charles Chao, CFO of SINA. “Furthermore, we have been able to do this by leveraging our central platform for R&D, content management and brand marketing with only limited additional costs.”

In the first quarter, SINA has moved its worldwide headquarters to Shanghai to complete the last milestone of its strategy of dual operations centers in Beijing and Shanghai; three business lines of SINA.com, SINA.net and SOL; and four geographic regions of North, East, South Greater China and International. SINA also announced during the quarter the launch of its first city portal in cooperation with Yangzhou TV and Radio Administration. This cooperation between SINA and a relevant local government body marks a milestone in SINA's e-government initiative.

Furthermore, during the quarter, SINA’s newly launched SMS dating service “Mobile Hunter” has attracted over 200,000 paid members in less than two months of its launch. Additionally, SINA has launched global SMS messaging service, providing a low-cost alternative, for overseas Chinese to communicate with their friends and love ones back home. The successful launch of both new service is another demonstration of SINA’s ability to identify market opportunities and capitalize on them.

SINA announced that it will change its ending month of fiscal year from June to December. SINA also announced that Pehong Chen, one of its board directors has resigned from the audit committee of SINA board. He was replaced by Yichen Zhang. Mr. Zhang joined SINA board in May 2002. He has extensive experience working in the financial industry. He was formerly a Managing Director with Merrill Lynch (Asia Pacific) and President of CITIC Pacific Communications, Ltd. (Hong Kong). He is currently serving as the Deputy Chief Executive Officer of CITIC Capital (Hong Kong).

Conference Call

SINA's management team will host a conference call at 5:00 p.m. Pacific Time on November 4, 2003, to present an overview of the Company's financial performance and business operations.

For US participants, please dial into 888/482-0024 (US Toll-free); for participants in Hong Kong, please dial into 800/963-844 (HK Toll-free); for other international participants, please dial into 617/801-9702 (US Toll). The pass code for the conference call is 214511.

A live Webcast of the call will be available from 5:00 p.m. - 6:00 p.m. PT on Monday, November 4, 2002 (9:00 a.m. - 10:00 a.m. Hong Kong Time on November 5, 2002). Additional details about the live Webcast can be found on the Company's Web site at http://www.sina.com/corp/invest

About SINA

SINA.COM (NASDAQ:SINA) is the leading online media and value-added information service ("VAS") provider for China and for global Chinese communities. With a branded network of 15 localized web sites targeting Greater China and overseas Chinese, SINA operates three major business lines including SINA.com (online media and entertainment service), SINA Online (consumer fee-based online and wireless VAS) and SINA.net (Small and medium-sized enterprises VAS), providing an array of services including online portals, premium email, wireless short messaging, virtual ISP, search, classified information, online games, e-commerce, e-learning and enterprise e-solutions.
To learn more about SINA, please logon to our corporate website at www.sina.com/corp

Safe Harbor Statement

This announcement contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the Securities and Exchange commission on forms 10-K, 10-Q, 8-K, etc., in our annual report to shareholders, in our proxy statements, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, SINA historical and future losses, limited operating history, uncertain regulatory landscape in the People's Republic of China, fluctuations in quarterly operating results, the Company's reliance on online advertising sales for a significant portion of its revenues, and any failure to successfully develop and introduce new products. Further information regarding these and other risks is included in SINA's prospectus, 10K, 10Q and in its other filings with the Securities and Exchange Commission.

Contact:

Grace Lee
SINA
Phone: 650-638-9228
E-mail: gracelee@staff.sina.com

Denise Roche
The Ruth Group
Phone: 646-536-7008
E-mail: droche@theruthgroup.com