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Zacks Analyst Blog Highlights: SINA Corp., Focus Media, Sohu Inc., Baidu Inc. and AirMedia Group

Posted on: Tue, 01 Dec 2009 17:00:00 EST

Symbols: FMCN, SINA, SOHU, AMCN, BIDU

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Here are highlights from Monday's Analyst Blog:

SINA Finishes Private Equity Deal

SINA Corp. (Nasdaq: SINA | Quote | Chart | News | PowerRating)
announced the completion of private equity placement of its ordinary
shares with New Wave Investment Holding Company Limited, a British
Virgin Islands company established and controlled by Charles Chao,
SINA's Chief Executive Officer (CEO) and other members of the management.

The company will receive gross proceeds of $180 million in exchange for
approximately 5.6 million shares. The issuance of shares to New Wave
will have a dilutive effect on the company's outstanding shares in the
fourth quarter of 2009.

New-Wave now becomes Sina's largest single investor. Other investors in
New-Wave include CITIC Capital Holdings, FountainVest Partners and
Sequoia Capital who are backing Sina's purchase of new shares, which
will give the combined group a 9.4% stake in the company.

The company had entered into the agreement in Sep 2009. SINA said
proceeds will be used for acquisitions and general corporate purposes.
The management buy in will help strengthen Sina management's hold on the
company and will provide greater confidence to the investors in SINA's
business.

While this is positive news, SINA's failed merger with ad group Focus
Media (Nasdaq: FMCN | Quote | Chart | News | PowerRating)
due to the failure to secure approval from Chinese regulatory
authorities does not bode well for the company. This merger would have
been an important addition to the media segment, enabling SINA to
compete against other media giants such as Beijing-based China Central
Television and Shanghai Media Group. Moreover, there would have been a
strong synergistic effect on SINA's online advertising platform and
significantly enhance the company's position in the media space.

The company expects strong growth in advertising revenue in 2010 and
resurgence in margins. Third quarter results exceeded the company's own
guidance and beat Zacks Consensus Estimates. Moreover, the company is
witnessing signs of a strong recovery in the advertising market of
China, which is reflected in the higher-than-expected guidance.

We expect the company to benefit from the growing trends in the wireless
business and expect a huge improvement in SINA's advertising business,
as advertising spending recovers. However, SINA faces increased
competition from Sohu Inc. (Nasdaq: SOHU | Quote | Chart | News | PowerRating)
and Tencent and popular internet search companies such as Baidu Inc.
(Nasdaq: BIDU | Quote | Chart | News | PowerRating)
and AirMedia Group (Nasdaq: AMCN).
Moreover the cyclical nature of online advertising adds to risk.

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For full details on Focus Media Holding Limited ADS (FMCN) FMCN. Focus Media Holding Limited ADS (FMCN) has Short Term PowerRatings at TradingMarkets. Details on Focus Media Holding Limited ADS (FMCN) Short Term PowerRatings is available at This Link.

For full details on Sina Corp (SINA) SINA. Sina Corp (SINA) has Short Term PowerRatings at TradingMarkets. Details on Sina Corp (SINA) Short Term PowerRatings is available at This Link.

For full details on Sohu.Com Inc (SOHU) SOHU. Sohu.Com Inc (SOHU) has Short Term PowerRatings at TradingMarkets. Details on Sohu.Com Inc (SOHU) Short Term PowerRatings is available at This Link.

For full details on AirMedia Group (AMCN) AMCN. AirMedia Group (AMCN) has Short Term PowerRatings at TradingMarkets. Details on AirMedia Group (AMCN) Short Term PowerRatings is available at This Link.

For full details on Baidu, Incorporated (BIDU) BIDU. Baidu, Incorporated (BIDU) has Short Term PowerRatings at TradingMarkets. Details on Baidu, Incorporated (BIDU) Short Term PowerRatings is available at This Link.

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