SINA.com Press Center

0127

SINA Reports Its First Profitable Quarter and Announces Results for the Six-month Period Ended December 31, 2002
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Reports Record GAAP Net Income for the Quarter of $1.5 million and Gross Margin of 65%

BEIJING, China & SAN MATEO, Calif.--(BUSINESS WIRE)--Jan. 27, 2003—SINA Corporation (Nasdaq:SINA), a leading online media company and value-added information service provider for China and for global Chinese communities, today announced its financial results for the quarter and six-month period ended December 31, 2002.

Financial Highlights:
· Achieved U.S. GAAP profitability for the quarter of $1.5 million; or $0.03 per diluted share;
· Net revenues for the quarter grew 90% year-over-year to a record $12.9 million;
· Advertising revenues for the quarter grew 44% year-over-year to $7.4 million and accounted for 57% of the total revenues;
· Non-advertising revenues for the quarter grew by 234% year-over-year to $5.5 million and accounted for 43% of the total revenues;
· Gross margin for the quarter was a record 65% up from 61% of the previous quarter;

Business Results

For the quarter ended December 31, 2002, SINA reported record net revenues of $12.9 million, an increase of 24% from the previous quarter and an increase of 90% from the same period of the previous year. Gross margin improved to a record 65%, up from 61% for the previous quarter.

On a GAAP (Generally Accepted Accounting Principles) basis, SINA recorded its first profitable quarter with net income totaling $1.5 million, representing an improvement of $2.1 million from a net loss of $0.6 million for the previous quarter and an increase of $6.4 million from a net loss of $4.9 million for the same period of the previous year. Diluted net income per share was $0.03 for the quarter, compared to diluted net loss per share of $0.01 for the previous quarter and diluted net loss per share of $0.11 for the same period of the previous year.

On a pro forma basis, net income for the quarter totaled $1.8 million, compared to net income of $0.2 million for the previous quarter and a net loss of $2.3 million for the same period of the previous year. Diluted net income per share, on a pro forma basis, was $0.04 for the quarter, compared to diluted net income per share of $0.01 for the previous quarter and diluted net loss per share of $0.05 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 six-month period ended December 31, 2002, SINA reported record net revenues of $23.2 million, an increase of 81% from the same period of the previous year. Non-advertising revenues reached $9.3 million for the six-month period, an increase of 265% over the same period of the previous year. Gross margin improved to 63% compared to 48% for the same period of the previous year.

On a GAAP basis, SINA recorded net income of $0.9 million for the six-month period ended December 31, 2002, an increase of $11.1 million from a net loss of $10.2 million for the same period of the previous year. Diluted net income per share for the six-month period ended December 31, 2002, on a GAAP basis, was $0.02, compared to diluted net loss per share of $0.24 for the same period of the previous year.

On a pro forma basis, net income for the six-month period ended December 31, 2002 totaled $2.1 million, compared to a net loss of $5.1 million for the same period of the previous year. Diluted net income per share, on a pro forma basis for the six-month period ended December 31, 2002, was $0.05, compared to diluted net loss per share of $0.12 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.

As of December 31, 2002, SINA's cash, cash equivalents and investments in marketable securities totaled $96.5 million, an increase of $3.4 million from six months ago.

"In less than a year we have successfully executed our strategy of expanding our business plan and moving SINA from a dominant portal to a leading online/mobile media company with multiple inter-dependent business lines." said Daniel Mao, CEO of SINA Corporation. " Throughout 2002, we experienced accelerated growth in our media businesses and in our newest business segments of short messaging and enterprise services. With our recent strategic initiatives in online game and mobile services, we are in a strong position to continue to deliver profitable, sustainable growth in 2003 and in the upcoming years."

During the quarter, SINA’s advertising revenues reached $7.4 million, representing a 44% growth year-over-year and a 14 % growth compared to the September quarter.

“SINA continues to maintain its dominance in online media with leading market share,” said Wang Yan, President of SINA. “During the quarter, we have seen an increase in advertising commitments as well as new accounts in both our domestic and international client base. Additionally, during the quarter, as a reflection of their confidence in SINA’s brand and industry leadership, two of our Global 500 clients, Nike and Motorola, have upgraded their commercial relationships with SINA into a multi-year partnership making SINA an anchor for their China online and mobile business strategies.”

During the quarter, SINA’s non-advertising revenues reached a record $5.5 million, representing a 234% growth year-over-year and a 42% growth compared to the September quarter. This impressive result was primarily driven 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.

“Our non-advertising revenue continued to surge during the quarter, as more and more of our users adopted our fee based services such as mobile and email services,” said Charles Chao, CFO of SINA. “Our non-advertising revenue now constitutes 43% of our total revenue, demonstrating SINA’s migration toward a business model that includes revenue streams from multiple business lines.”

Key Developments

In addition to reporting record profitability and revenue for the quarter ended December 31, 2002, SINA also reported the completion of several key achievements during and after the quarter including signing the definitive agreement for acquisition of Memestar, a leading independent value-added mobile service provider; signing the definitive agreement for a joint venture with NCsoft to operate and market Lineage, Asia’s most popular online game; and forming strategic partnerships with two global 500 companies, Nike and Motorola.

“We will continue to expand our businesses organically and by leveraging our strong balance sheet and our brand and platform to seek out new opportunities for growth,” said Daniel Mao. “We believe that the acquisition of Memestar and the formation of a joint venture with NCsoft have set the foundation for our growth in the new year, and we will continue to use investments and acquisitions as a part of our strategy to achieve higher growth and to make entries into emerging businesses within our market.”

Conference Call
SINA's management team will host a conference call at 5:00 p.m. Pacific Time on January 27, 2003 to present an overview of the Company's financial performance and its business operations. Participants in the United States, please dial 888/482-0024 (U.S. Toll-free); Participants in Hong Kong, please dial 800/963-844 (HK Toll-free); Other international participants, please dial 617/801-9702 (U.S. Toll). The pass code for the conference call is 676724.
A live Webcast of the call will be available from 5:00 p.m. – 6:00 p.m. Pacific Time on Monday, January 27, 2003 (9:00 a.m. - 10:00 a.m. Hong Kong Time on January 28, 2003). Additional details about the live Webcast can be found on the Company's Web site at http://www.sina.com/corp/invest.

A replay of the conference call will be available for forty-eight hours after the conclusion of the conference call. The dial-in numbers are 888/286-8010 (U.S. Toll-free) for U.S. callers and 617/801-6888 (U.S. Toll) for international callers. The pass code for the replay is 596921. Or you can listen to the replay archived on the Company’s Web site at http://www.sina.com/corp/invest.

About SINA
SINA Corporation (FKA: SINA.com) (Nasdaq:SINA) is a leading online media company and value-added information service ("VAS") provider for China and for global Chinese communities. With a branded network of 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 check out our corporate Web site 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 forward looking-statements include statements by Mr. Mao relating to SINA’s ability to deliver profitable growth, statements by Mr. Yan regarding SINA’s role in the China online and mobile strategies of Nike and Motorola, statements regarding the growth rate of SINA’s SMS and SINA.net services, statements by Mr. Chao relating to SINA’s progress towards a balanced revenue base with multiple revenue streams and statements by Mr. Mao relating to the use of acquisitions as part of SINA’s growth strategy. 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’s historical and future losses, its limited operating history, the 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, any failure to successfully develop and introduce new products and any failure to successfully integrate acquired businesses. 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 / IR Manager
SINA Corporation
Phone: 650-638-9228
E-mail: gracelee@staff.sina.com