SINA Reports Third Quarter 2003 Financial Results -

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SINA Reports Third Quarter 2003 Financial Results -

Company Reports Revenue Growth of 208% to $31.9 million

SHANGHAI, China, Oct 27, 2003 /PRNewswire-FirstCall via COMTEX/ -- 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 third quarter ended September 30, 2003:

     * Net revenues for the quarter grew by 208% year-over-year and by 23%
       quarter-over-quarter to a record $31.9 million
     * Advertising revenues for the quarter grew by 76% year-over-year and by
       20% quarter-over-quarter to $11.4 million and accounted for 36% of
       total revenues
     * Non-advertising revenues for the quarter grew by 431% year-over-year
       and by 24% quarter-over-quarter to $20.5 million and accounted for 64%
       of total revenues
     * Operating income for the quarter grew by 71% quarter-over-quarter to
       $11.6 million and compared to an operation loss of $0.8 million for the
       same period in 2002
     * US GAAP net income for the quarter grew to $11.7 million, or $0.21
       diluted net income per share, compared to a net loss of $0.6 million,
       or $0.01 diluted net loss per share for the same period in 2002

"We're very pleased with our third quarter results," said Yan Wang, CEO of SINA. "SINA maintained strong growth momentum in all its major business lines. Our record financial performance in the third quarter further demonstrated our team's ability to execute well under increasing competition."

Business Results

For the quarter ended September 30, 2003, SINA reported record net revenues of $31.9 million, an increase of 23% over the previous quarter and an increase of 208% over the same period in 2002.

Advertising revenues totaled $11.4 million for the quarter, representing a 20% increase over $9.5 million reported in the previous quarter and a 76% increase over $6.5 million reported in the same period in 2002. The increase in advertising revenues was primarily driven by an increase in the number of advertisers.

Non-advertising revenues totaled $20.5 million for the quarter, a 24% increase over $16.5 million reported in the previous quarter and a 431% increase over $3.9 million reported in the same period in 2002. Non-advertising revenues accounted for 64% of the total net revenues for the quarter, compared to 63% for the previous quarter and 37% for the same period in 2002. The increase in non-advertising revenues was primarily driven by the growth in mobile content value added services.

The gross margin for the quarter was a record high of 70%, up from 69% reported in the previous quarter and 61% reported in the same period in 2002.

"In addition to achieving record revenues, we continued to focus on our products and branding," said Hurst Lin, Chief Operating Officer of SINA. "On the mobile content value added service side, we have launched ring back tone service while continuing to bolster our offerings in MMS and WAP services. On the content side, we continued to invest significant resources in reporting on key news or entertainment events such as the Women Soccer World Cup and Miss World Contest. During China's recent historic man-space flight, SINA provided in-depth and round-the-clock coverage that led to record daily page views of 150 million for our news channel, further cementing SINA's position in the minds of the users as the leading online media in China."

A recent survey conducted by the Chinese Academy of Social Science ranked SINA as the number one website of choice for Chinese Internet users by a margin 59% over the second ranked website in China.

Operating expenses for the quarter totaled $10.8 million, a decrease of 3% from $11.1 million reported in the previous quarter and an increase of 53% over $7.1 million reported in the same period in 2002. The higher operating expenses for the previous quarter were largely due to one-time charges relating to the write-off of $0.9 million intangible assets and a $0.6 million severance benefit.

Operating income for the quarter totaled $11.6 million, an increase of 71% from $6.8 million reported in the previous quarter. For the same period in 2002, the Company incurred a loss of $0.8 million from operations.

Net income for the quarter totaled $11.7 million, representing an improvement of 64% from a net income of $7.1 million for the previous quarter. For the same period in 2002, the Company recorded a net loss of $0.6 million. Diluted net income per share was $0.21 for the quarter, compared to diluted net income per share of $0.14 for the previous quarter and diluted net loss per share of $0.01 for the same period in 2002. The Company has included 3.9 million of common stock equivalents for our outstanding convertible bonds in the shares used in calculating the diluted net income per share for the quarter ended September 30, 2003, as the bonds met the criteria for contingent conversion during the quarter.

Excluding the amortization of intangible assets, non-cash charges for stock based compensation, and one-time charges relating to intangible assets write-offs and severance benefit, on a pro forma basis, net income for the quarter totaled $12.3 million, compared to a net income of $9.2 million for the previous quarter and a net loss of $0.1 million for the same period in 2002. Diluted net income per share, on a pro forma basis, was $0.21 for the quarter, compared to diluted net income per share of $0.18 for the previous quarter and diluted net loss per share of $0.002 for the same period in 2002.

As of September 30, 2003, the Company has recorded an accumulated unrealized loss of $4.7 million from its investment in Sun Media Group, a Hong Kong listed company. The Company is closely monitoring the developments of Sun Media Group and if the Company determines that the decline in value of the Sun Media Group investment is other than temporary in the future periods, the Company will have to record such loss as realized in the statements of operations. However, such loss, if realized in the statements of operations, will not have any impact on the Company's cash flow in future periods.

As of September 30, 2003, SINA's cash, cash equivalents and investments in marketable securities totaled $208.2 million, an increase of $111.3 million from three months ago. Cash flow from operating activities for the quarter was $13.7 million, compared to $9.0 million for the previous quarter. Capital equipment expenditure for the quarter was about $1.3 million. The Company received $97.3 million net proceeds from its convertible bond offering and approximately $2.5 million in cash from the exercise of employee stock options during the quarter.

"We finished this quarter with record high numbers of advertisers and paid users. With much improved financial metrics, we have built up a strong and diverse foundation for our long-term growth," said Charles Chao, Chief Financial Officer of SINA.

Business Outlook

The Company estimates that its total revenues for Q4 2003 to be between $35.2 million and $36.2 million, with advertising revenues between $12.2 million and $12.7 million and non-advertising revenues between $23.0 million and $23.5 million. Excluding the effect of any potential realized loss from the investment in Sun Media Group, US GAAP diluted net income per share is expected to be $0.24 to $0.25 for Q4 2003. The Company expects that its effective income tax rate will be approximately 5% for Q4 2003.

NON-GAAP Measures

To supplement our consolidated financial statements presented in accordance with GAAP, SINA uses non-GAAP measures of gross profit, operating income, net income and earnings per share, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP measures are provided to enhance the user's overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors by excluding certain expenses that are not expected to result in future cash payments, gains and losses that are non-recurring in nature or may not be indicative of our core operating results. In addition, because we have historically reported certain non-GAAP results to investors, we believe the inclusion of non-GAAP measures provides consistency in our financial reporting. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for or superior to GAAP results. Consistent with our historical practice, the non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure.

Conference Call

SINA will host a conference call at 8:30 p.m. Eastern Time today to present an overview of the Company's financial performance and business operations for the third quarter. The dial-in number for the call is 617/847-8708. The pass code is 40888952. A live Webcast of the call will be available from 8:30 p.m. - 9:30 p.m. ET on Monday, October 27, 2003 (9:30 a.m. - 10:30 a.m. Hong Kong Time on October 28, 2003). The call can be accessed through the Company's corporate web site at http://corp.sina.com. The call will be archived for 12 months on SINA's corporate website at http://corp.sina.com. A replay of the conference call will be available for forty-eight hours after the conclusion of the conference call. The dial-in number is 617/801-6888. The pass code for the replay is 13891558.

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.

Safe Harbor Statement

This announcement contains forward-looking statements concerning SINA's expected financial performance (as described without limitation in the Business Outlook section and quotations from management in this press release regarding the Company's foundation for long-term growth), as well as SINA's strategic and operational plans. SINA 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 its annual report to shareholders, in its proxy statements, in its offering circulars and prospectuses, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. 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 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 its mobile content value added services and online advertising sales for a majority of its revenues, the Company's reliance on mobile operators in China to provide wireless short messaging service, 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 Annual Report on Form 10-K for the period ended December 31, 2002 and its recent reports on Form 10-Q as well as in its other filings with the Securities and Exchange Commission.


                                 SINA CORPORATION
                  UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                      (in thousands, except per share data)

                                      Three months ended    Nine months ended
                                     September 30,  June 30,  September 30,
                                     2003     2002    2003    2003     2002

    Net revenues
        Advertising                 $11,441  $6,491  $9,495  $28,234  $17,325
        Non-Advertising              20,473   3,855  16,492   47,781    8,699
                                     31,914  10,346  25,987   76,015   26,024

    Cost of revenues
        Advertising                   3,767   2,977   3,239    9,832    8,420
        Non-Advertising               5,790   1,076   4,855   13,912    2,540
        Stock-based compensation          5      28      12       31       88
                                      9,562   4,081   8,106   23,775   11,048

    Gross profit                     22,352   6,265  17,881   52,240   14,976

    Operating expenses
        Sales and marketing           5,613   3,076   5,086   15,153    9,038
        Product development           1,733   1,437   1,407    4,561    4,598
        General and administrative    2,923   2,091   3,091    8,130    6,507
        Stock-based compensation         88     461     198      516    1,454
        Amortization of intangibles     415      --     414    1,334    1,687
        Write-off of intangibles         --      --     903      903       --
                                     10,772   7,065  11,099   30,597   23,284

    Income (loss) from operations    11,580    (800)  6,782   21,643   (8,308)

    Other income, net                   675     552     655    1,731    2,337
    Loss on equity investment          (175)   (311)   (316)    (797)    (453)

    Income (loss) before income
     taxes                           12,080    (559)  7,121   22,577   (6,424)

    Provision for income taxes         (423)     --      --     (423)      --

    Net income (loss)               $11,657   $(559) $7,121  $22,154  $(6,424)

    Shares used in computing basic   48,279  45,671  47,661   47,571   45,579
      net income (loss) per share

    Basic net income (loss) per
     share                             0.24   (0.01)   0.15     0.47    (0.14)

    Shares used in computing
     diluted net income (loss)
     per share                       57,622  45,671  51,971   53,675   45,579

    Diluted net income (loss) per
     share *                          $0.21  $(0.01)  $0.14    $0.42   $(0.14)

    * Diluted net income (loss) per
     share calculation


    Net income (loss)               $11,657   $(559) $7,121  $22,154  $(6,424)

    Amortization of convertible
     bond issuance cost                 170      --      --      170       --

    Net income (loss) used for
     diluted net income
      (loss) per share calculation  $11,827   $(559) $7,121  $22,324  $(6,424)


                                 SINA CORPORATION
             UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                      (in thousands, except per share data)

                                      Three months ended    Nine months ended
                                     September 30,  June 30,  September 30,
                                     2003     2002    2003    2003     2002
    Net revenues
        Advertising                 $11,441  $6,491  $9,495  $28,234  $17,325
        Non-Advertising              20,473   3,855  16,492   47,781    8,699
                                     31,914  10,346  25,987   76,015   26,024

    Cost of revenues
        Advertising                   3,767   2,977   3,239    9,832    8,420
        Non-Advertising               5,790   1,076   4,855   13,912    2,540
                                      9,557   4,053   8,094   23,744   10,960

    Gross profit                     22,357   6,293  17,893   52,271   15,064

    Operating expenses
        Sales and marketing           5,613   3,076   5,086   15,153    9,038
        Product development           1,733   1,437   1,407    4,561    4,598
        General and administrative    2,923   2,091   2,516    7,555    6,507
                                     10,269   6,604   9,009   27,269   20,143

    Income (loss) from operations    12,088    (311)  8,884   25,002   (5,079)

    Other income, net                   845     552     655    1,901    2,337
    Loss on equity investment          (175)   (311)   (316)    (797)    (453)

    Pro forma net income (loss)
     before income taxes             12,758     (70)  9,223   26,106   (3,195)

    Provision for income taxes         (423)     --      --     (423)      --

    Pro forma net income (loss)      12,335     (70)  9,223   25,683   (3,195)

    Shares used in computing pro
     forma basic net income (loss)
     per share                       48,279  45,671  47,661   47,571   45,579

    Pro forma basic net income
     (loss) per share                  0.26   (0.00)   0.19     0.54    (0.07)

    Shares used in computing pro
     forma diluted
      net income (loss) per share    57,622  45,671  51,971   53,675   45,579

    Pro forma diluted net income
     (loss) per share                 $0.21  $(0.00)  $0.18    $0.48   $(0.07)


    Reconciliation from GAAP
     results to pro forma results:

    GAAP net income (loss)          $11,657   $(559) $7,121  $22,154  $(6,424)

    Stock based compensation
        Cost of revenues                  5      28      12       31       88
        Operating expenses               88     461     198      516    1,454

    Amortization of intangibles         415      --     414    1,334    1,687
    Amortization of convertible bond
     issuance cost                      170                      170
    Write-off of intangibles             --      --     903      903       --
    Severance benefit                    --             575      575

    Pro forma net income (loss)     $12,335    $(70) $9,223  $25,683  $(3,195)


                                SINA CORPORATION
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
                           (in thousands U.S. dollar)

                                                 September 30      December 31
                                                     2003              2002
    Assets
       Cash, cash equivalents and investments
        in marketable securities                  $208,228           $96,736
       Accounts receivable, net                     16,610             5,847
       Property and equipment, net                   8,412             7,599
       Long-term investment                         10,327            16,637
       Goodwill/intangible assets, net              19,075               993
       Other assets                                  7,475             2,667
          Total assets                            $270,127          $130,479

    Liabilities and Shareholders' Equity
       Liabilities                                 $25,856           $13,092
       Convertible Debt                            100,000                --
       Shareholders' equity                        144,271           117,387

          Total liabilities and
           shareholders' equity                   $270,127          $130,479


                                 SINA CORPORATION
                          UNAUDITED SEGMENT INFORMATION
                                  (in thousands)

                                     Three months ended     Nine months ended
                                   September 30,   June 30,   September 30,
                                   2003     2002     2003     2003     2002

    Net revenues
             Advertising          $11,441   $6,491   $9,495  $28,234  $17,325
             Mobile related        18,144    2,574   14,177   41,518    5,606
             Others                 2,329    1,281    2,315    6,263    3,093
                                  $31,914  $10,346  $25,987  $76,015  $26,024

    Cost of revenues
             Advertising           $3,767   $2,977   $3,239   $9,832   $8,420
             Mobile related         4,872      811    3,950   11,429    1,820
             Others                   918      265      905    2,483      720
                                   $9,557   $4,053   $8,094  $23,744  $10,960

SOURCE SINA Corporation

CONTACT:
Chen Fu,
Investor Relations of SINA Corporation,
+8621-62895678, ext. 6089,
fuchen@staff.sina.com; or
Denise Roche of The Ruth Group,
+1-646-536-7008,
droche@theruthgroup.com,
for SINA Corporation