Mediaboss Marketing

February 28, 2012, 2:43 PM EST

By Belinda Cao

Feb. 29 (Bloomberg) -- Chinese Internet stocks climbed, led by Sina Corp., after the company said its Twitter-like Weibo service may start contributing to sales in the second half.

Sina, owner of China’s third-most visited website, jumped the most in four months and was the biggest gainer on the Bloomberg China-US 55 index of the most-traded Chinese stocks in the U.S. which added 1.7 percent to 108.57 by 1:08 p.m. in New York. Youku Inc., owner of China’s largest video sharing website, surged to a six-month high while Baidu Inc., operator of China’s biggest search engine, climbed to the highest level since Feb. 16 based on closing prices.

Shanghai-based Sina has jumped 37 percent this year as Weibo users rose by about 50 million to more than 300 million in the past three months, according to Chief Executive Officer Charles Chao. Prospects the government will take further steps to preserve Chinese growth, the fastest of major economies, has helped drive a 13.4 percent gain in the Bloomberg China-US 55 measure in 2012. Policy makers cut the reserve ratio for banks for the second time in three months on Feb. 24.

“China’s Internet stocks, especially the bigger names like Sina and Baidu, still have lots of room for growth going forward,” Agnes Deng, a Hong Kong-based portfolio manager whose $405 million Greater China Fund invests in Chinese equities, said in an interview at Bloomberg’s headquarters in New York yesterday. “China’s economy will be able to maintain growth of more than 8 percent” this year, she said.

Shanghai-based Sina leaped 13 percent to $71.25, poised for the biggest daily gain since Oct. 13.

‘Meaningful Monetization’

The company plans to start “meaningful monetization” from Weibo in the second half of 2012, CEO Chao said in a conference call yesterday.

“We do not expect that total monetization on Weibo will be significant this year,” he said. The company will start a Weibo-based display advertising system in the second quarter and several fee-based services beginning in the second half, Chao said.

Weibo may contribute $20 million to $30 million to Sina revenue in 2012, Andy Yeung, a New York-based analyst at Oppenheimer & Co Inc. wrote in a research note issued yesterday.

Net income of Sina totaled $9.3 million in the fourth quarter, from a net loss of $100 million a year earlier and a loss of $336.3 million in the previous three months, it said in a Feb. 27 statement.

Deng at the Greater China Fund said she is looking for better “valuation levels” to buy Internet stocks including Sina, after selling holdings of the company when its stock price reached $140 in April. The fund she manages has increased 18 percent this year after posting a 23 percent loss in 2011.

China ETF Climbs

The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., climbed 1.5 percent to $40.31 yesterday, extending a 3.8 percent advance this month. The Standard & Poor’s 500 Index added 0.3 percent to 1,371.57, set for the highest close since June 2008.

Beijing-based Youku advanced 8.3 percent to $24.93 in New York and was poised for the highest close since Aug. 31.

The company is scheduled to report its fourth-quarter results on March 14. Sales for the quarter probably rose 97 percent from a year earlier to 300.07 million yuan ($47.6 million), according to the average estimate of five analysts in a Bloomberg survey. That would exceed the company’s previous forecast of 297.3 million yuan.

Youku competitor Tudou Holdings Ltd., China’s second- largest video sharing website, advanced 4.5 percent to $15.89. Renren Inc., a Beijing-based social networking website, jumped 8.6 percent to $5.58, set for the highest closing level this month.

Beijing-based E-Commerce China Dangdang Inc., the biggest Internet-based online book retailer in China, advanced 8.1 percent to $6.79 in New York, the biggest gain in a month. Baidu jumped 2.7 percent to $138.12.

Sohu.com Inc., which owns the third-biggest search engine, rose 5 percent to $51.44 while online games operator NetEase.com Inc. climbed 4.9 percent to $53.60.

--Editors: Marie-France Han, Emma O’Brien

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net

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Sina’s Weibo Outlook Buoys Internet Stock Gains: China Overnight