We View Weibo's Capital Allocation Rating as Standard

Senior Equity Analyst

Ivan Su

A strong presence of celebrities and key opinion leaders and users' habits of following the hottest news on the platform are differentiators for Weibo. The company generates revenue from advertising on its platform and has created a network effect between the users, who demand high-quality content, and content providers, celebrities and KOLs, who benefit from the opportunity to grow and monetize their followers. Weibo’s recent content enhancements include video accounts (similar to Weixin's), video pages with both professionally generated content and user-generated content (similar to YouTube channels), the discovery zone (where users can find the popular discussion topics at the main entrance of Weibo), and vertical videos focused on user-generated content.

With the increasing importance of more focused marketing and return on investment for advertisers, Weibo has started to catch up. For example, Weibo introduced optimized cost per x model in 2019. Advertisers can also evaluate their sales conversion on Tmall from the fans accumulated through advertising campaigns on Weibo in collaboration with Alibaba through the uni-marketing program. We expect to see increasing product development costs in the next few quarters. We believe investment in research and development is vital for Weibo even if that means near-term margin compression. 

To improve small and medium-size enterprise ad revenue, Weibo is expanding into untapped and faster-growing verticals such as Taobao merchants, online education, and online gaming by restructuring its sales team since 2019. For example, it has enhanced cooperation between sales and technical teams to provide customized services to top SMEs of key verticals. The success of the new model is unclear because of the disruption from COVID-19. 

To widen its product spectrum and potentially cope with the trend of social e-commerce, Weibo launched an interest-based social product, Oasis, in the fourth quarter of 2019. The app allows users to post, share, and edit photos and videos with a focus on fashion and lifestyle contents with followers. However, we have not seen substantial ramp-up in the usage of this app so far.

Business Strategy & Outlook

We believe Weibo possesses a narrow economic moat based on its network effect. Its 521 million monthly active users and 225 million daily active users in December 2020 make it one of China’s largest social media platforms. According to Questmobile, it was the third most popular social media app in terms of monthly active users as of 2020, just behind apps owned by Tencent (WeChat and QQ), which is a wide-moat company. Weibo’s social network is difficult to replicate, in our view. Not only new users of Weibo but also existing users see higher value from the network as the number of users increase. New users create new user-generated content, enriching Weibo’s function as an entertainment and information hub for existing users. Key opinion leaders, such as pop stars and well-known businesspeople, use Weibo to attract fans' attention and monetize on their fan base. As more key opinion leaders join Weibo, more users use Weibo to read view the key opinion leaders’ content and engage with them through replying, sharing, and clicking the “Like” button. These key opinion leaders can also get tipping from or sell merchandise to their fans, which can encourage them to share more content on the Weibo platform. This virtuous cycle enhances the value of the network for both existing and new users. The value of Weibo’s network rises as more customers use the network, via more users or more usage per customer. Monthly active users, or MAUs, were 521 million in December 2020, still up approximately 5 million users year over year despite the high base. At the end of 2017, MAUs were 392 million. Total time spent on Weibo in first- and second-tier cities rose 3%-4% from December 2015 to June 2016, whereas the growth was 14% for third- and fourth-tier and below cities. Increased user base and time spent on Weibo has in turn attracted more key opinion leaders and multichannel networks (entities that affiliate with multiple Weibo channels that assist in operations and monetization) to distribute their content on Weibo, which in return is helping to improve and lengthen user experiences. As of November 2017, the scale of verified users such as authors, celebrities and so on increased by 67% year over year to 25,000. We believe Weibo’s fintech services such as payment can also strengthen the ecosystem and enhance convenience and value for the users and more effectively monetize the growing user base and time spent. A virtuous cycle has been formed, and it is difficult for a new entrant to recreate the same ecosystem.Weibo’s monetization has evolved and increased over the last few years, and we expect that to continue in the next 10 years. Weibo started to monetize its platform by selling personal computer-based social display ads in 2012. It introduced promoted feeds appearing in the information feed to small and medium-sized enterprises in 2013 and introduced self-service ads for advertisers to buy Weibo’s marketing services on the platform directly in 2014. Since 2015, users can view and purchase an e-commerce merchandise from e-commerce sites such as Taobao and Jumei on Weibo. As of 2016, SMEs can also purchase brand ads and key accounts can purchase promoted feeds; in the same year, Weibo introduced video ads. Weibo started monetizing its search functions in the second half of 2017 by showing ads. The launch of Super FenSiTong, a new ad system, enables more specific audience targeting (for example, targeting users that interacted in a certain post or mentioned a certain topic and so on) and real time automatic bidding based on the lowest price the advertisers offer. To a lesser extent, revenue is also generated from VIP membership, data licensing and game services. Despite the formidable challenge from Tencent's Weixin and other newly emerged news apps with social functions, we’re convinced that Weibo's network effect will remain strong. Weixin and Weibo have distinctly different functions. Connections on the Weixin platform are acquaintances, and communications are private. Weibo is a media platform where all content is public, and users can follow any celebrities or personalized interest groups. Hence, even though Weixin’s user base has been increasing rapidly in the past several years, Weibo users are also growing at a fast pace, with monthly active users increasing at a 20%-plus year-over-year growth rate. We also think the threat of Tencent re-entering into the microblog business in a big way is limited, as Tencent strategically reduced its resources in noncore businesses such as microblogs, e-commerce, and search, and is focused on QQ and WeChat. Tencent integrated its microblog team into Tencent news and Tencent Weishi businesses in 2014. There is no indication that the data privacy ESG risk would lead to destruction of the network effect in our view. In the next five years, we expect Weibo’s return on invested capital to increase with rapid monetization and operating leverage. Weibo's ROIC exceeded its weighted average cost of capital in 2016.

Narrow

Economic Moat

Weibo

Weibo Corp. engages in the creation, distribution, and discovery of Chinese-language content. It operates through the Advertising and Marketing Services, and Other Services segments. Its products and services include Self-Expression, such as Feed, Individual page, and Enterprise page; Social Products, such as Follow, Repost, Comment, Favorite, like, Mention, Messenger, and Group Chat; Discovery Products, such as Information Feed, Search, Object Page, Trends, and Discovery Channel; Notifications; Weibo Games; VIP Membership; and Weibo Apps. The company was founded in August 2009 and is headquartered in Beijing, China.

Earnings data Q3 2023

Revenue

Cost of revenue

Gross profit

Operating expenses

SG&A

Other

Operating income

EBITDA

Net income

Earnings per share

Total assets

Current assets

Cash & equivalents

Receivables

Inventory

Non-current assets

Net PPE

Intangibles

Total liabilities

Current liabilities

Short term debt

Income tax payable

Non-current liabilities

Long-term debt

Total equity

Stockholders equity

Minority interest

Total liabilities & equity

Total debt

Net debt

Book value per share

Cash from operations

Funds from operations

Change in working capital

Cash from investing

Capital expenditure

Purchase/sale of investments

Purchase/sale of business

Other sources

Cash from financing

Change in stock

Change in debt

Cash dividends paid

Cash from other sources

Net change in cash

Free cash flow

Weibo Corp. engages in the creation, distribution, and discovery of Chinese-language content. It operates through the Advertising and Marketing Services, and Other Services segments. The company was founded in August 2009 and is headquartered in Beijing, China.

Endeavor Group Holdings

Twenty-First Century Fox

Nexstar Media Group

Olin

Purple Innovation

Pioneer Natural Resources

As you become more sophisticated in your investing journey, you'll want to pay closer attention to unusual options activity stocks. To briefly explain, options represent a contract that gives the holder the right – but not the obligation – to buy or sell the underlying security (or asset) at the specified strike price on or before the listed expiration date.

7 Stocks to Buy Based on Unusual Options Activity

Weibo Corporation (NASDAQ:WB ) Q2 2023 Earnings Conference Call August 24, 2023 7:00 AM ET Company Participants Sandra Zhang - Investor Relations Gaofei Wang - Chief Executive Officer Fei Cao - Chief Financial Officer Conference Call Participants Timothy Zhao - Goldman Sachs Miranda Zhuang - Bank of America Securities Daisy Chen - Haitong International Operator Good day and thank you for standing by. Welcome to the Weibo Report Second Quarter 2023 Financial Results Conference Call.

Weibo Corporation (WB) Q2 2023 Earnings Call Transcript

Weibo Corporation has posted second-quarter financials that beat estimates on earnings but missed the mark on revenue, sending its shares lower in Thursday premarket trading. The Chinese social media company, known for the microblogging website Sina Weibo, reported a 2% decrease in net revenues to US$440.2 million for the three months to June 30, 2023, below analysts' consensus of US$441 million.

Weibo stock falls as Chinese social media giant posts mixed 2Q earnings report

BEIJING , Aug. 24, 2023 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB and HKEX: 9898), a leading social media in China, today announced its unaudited financial results for the second quarter ended June 30, 2023. "We are pleased with the recovery of our business and improvement of our operating efficiency this quarter," said Gaofei Wang, CEO of Weibo.

Weibo Reports Second Quarter 2023 Unaudited Financial Results

BEIJING , Aug. 9, 2023 /PRNewswire/ -- Weibo Corporation (NASDAQ: WB and HKEX: 9898), a leading social media for people to create, share and discover content, will announce its unaudited financial results for the second quarter 2023 before the U.S. market opens on Thursday, August 24, 2023. Following the announcement, Weibo's management team will host a conference call from 7 AM – 8 AM Eastern Time on August 24, 2023 (or 7 PM – 8 PM Beijing Time on August 24, 2023) to present an overview of the Company's financial performance and business operations.

Weibo Corporation to Report Second Quarter 2023 Financial Results on August 24, 2023

Associated Banc-Corp

Bank of New York Mellon

BOK Financial

Commerce Bancshares

Cullen/Frost Bankers

Fulton Financial

M&T Bank

Northern Trust

Old National Bancorp

Prosperity Bancshares

Pinnacle Financial Partners

State Street

Truist Financial

U.S. Bancorp

U.S. bank shares slid on Tuesday after Moody's downgraded several small to mid-sized banks and said it may revise the credit ratings of some of the nation's biggest lenders, sparking concerns about the health of the lenders.

Quotes - U.S. bank stocks slide after Moody's ratings downgrade

Weibo: No Rebound In Sight

Weibo Corporation (NASDAQ:WB ) Q1 2023 Earnings Conference Call May 25, 2023 7:00 AM ET Company Participants Sandra Zhang - Investor Relations Gaofei Wang - Chief Executive Officer Fei Cao - Chief Financial Officer Conference Call Participants Alicia Yap - Citigroup Thomas Chong - Jefferies Operator Good day and thank you for standing by. Welcome to the Weibo Reports First Quarter 2023 Financial Results.

Weibo Corporation (WB) Q1 2023 Earnings Call Transcript

BEIJING , May 25, 2023 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB and HKEX: 9898), a leading social media in China, today announced its unaudited financial results for first quarter ended March 31, 2023. "We witnessed gradual recovery of our business in the first quarter of 2023 amid reopening," said Gaofei Wang, CEO of Weibo.

Weibo Reports First Quarter 2023 Unaudited Financial Results and Dividend

BEIJING , May 24, 2023 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB and HKEX: 9898), a leading social media in China, today announced that the following proposed resolutions submitted for shareholder approval have been adopted at its 2023 annual general meeting of shareholders held today: 1. as an ordinary resolution, THAT Ms.

Weibo Announces Results of 2023 Annual General Meeting

BEIJING , May 5, 2023 /PRNewswire/ -- Weibo Corporation (NASDAQ: WB and HKEX: 9898), a leading social media for people to create, share and discover content, will announce its unaudited financial results for the first quarter 2023 before the U.S. market opens on Thursday, May 25, 2023. Following the announcement, Weibo's management team will host a conference call from 7 AM – 8 AM Eastern Time on May 25, 2023 (or 7 PM – 8 PM Beijing Time on May 25, 2023) to present an overview of the Company's financial performance and business operations.

Weibo Corporation to Report First Quarter 2023 Financial Results on May 25, 2023

RELX

Investors interested in stocks from the Internet - Content sector have probably already heard of Weibo Corporation (WB) and RELX PLC (RELX). But which of these two stocks offers value investors a better bang for their buck right now?

WB vs. RELX: Which Stock Should Value Investors Buy Now?

BEIJING , April 27, 2023 /PRNewswire/ -- Weibo Corporation (the "Weibo" or "Company") (Nasdaq: WB and HKEX: 9898), a leading social media platform in China, today announced that it filed its annual report on Form 20-F for the fiscal year ended December 31, 2022 with the U.S. Securities and Exchange Commission on April 27, 2023. The annual report can be accessed on Weibo's investor relations website at http://ir.weibo.com.

Weibo Files its Annual Report on Form 20-F

Shutterstock

Investors interested in stocks from the Internet - Content sector have probably already heard of Weibo Corporation (WB) and Shutterstock (SSTK). But which of these two companies is the best option for those looking for undervalued stocks?

WB or SSTK: Which Is the Better Value Stock Right Now?

BEIJING , April 3, 2023 /PRNewswire/ -- Weibo Corporation (the "Weibo" or "Company") (Nasdaq: WB and HKEX: 9898), China's leading social media platform, today published a notice to announce that it will hold an annual general meeting (the "AGM") of shareholders (the "Notice of AGM") at 5809-5810, Two International Finance Centre, 8th Finance Street, Central, Hong Kong on Wednesday, May 24, 2023 at 2:00 p.m. (Hong Kong time), for the purposes of considering and, if thought fit, passing the Proposed Resolutions set forth in the Notice of AGM.

Weibo to Hold Annual General Meeting on May 24, 2023

Airbnb

WB vs. ABNB: Which Stock Is the Better Value Option?

Weibo Corporation (NASDAQ:WB ) Q4 2022 Earnings Conference Call March 1, 2023 6:00 AM ET Company Participants Sandra Zhang - IR Gaofei Wang - Chief Executive Officer Fei Cao - Chief Financial Officer Conference Call Participants Timothy Zhao - Goldman Sachs Felix Liu - UBS Xueqing Zhang - CICC Operator Good day, and thank you for standing by. Welcome to Weibo Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call.

Weibo Corporation (WB) Q4 2022 Earnings Call Transcript

China's Weibo Corp said on Wednesday it was raising its stake in Shanghai-listed media marketing firm Inmyshow Digital Technology Group Co Ltd through the acquisition of ShowWorld Hong Kong Ltd for 2.16 billion yuan ($314.7 million).

China's Weibo ups stake in Inmyshow Digital with $315 mln acquisition

BEIJING , March 1, 2023 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB and HKEX: 9898), a leading social media in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2022. "We navigated through the challenging 2022 with solid operating efficiency," said Gaofei Wang, CEO of Weibo.

Weibo Reports Fourth Quarter and Fiscal Year 2022 Unaudited Financial Results

Weibo (WB) is seeing favorable earnings estimate revision activity and has a positive Zacks Earnings ESP heading into earnings season.

Is a Surprise Coming for Weibo (WB) This Earnings Season?

VANCOUVER, BC , Feb. 28, 2023 /PRNewswire/ - RESAAS Services Inc. (TSXV: RSS) (OTCQB: RSASF), ("RESAAS" or the "Company"), a leading provider of technology solutions for the Real Estate Industry, is pleased to announce a Partnership with eMediaLinks, global real estate marketing company, and Sina Weibo North America (NASDAQ: WB), one of China's largest social networks. Weibo has 582 million monthly active users*.

RESAAS Enables Real Estate Agents to Market Across Asia Using Sina Weibo, a Leading Social Media Platform in Asia

BEIJING , Feb. 15, 2023 /PRNewswire/ -- Weibo Corporation (NASDAQ: WB and HKEX: 9898), a leading social media for people to create, share and discover content, will announce its unaudited financial results for the fourth quarter and fiscal year 2022 before the U.S. market opens on Wednesday, March 1, 2023. Following the announcement, Weibo's management team will host a conference call from 6 AM – 7 AM Eastern Time on March 1, 2023 (or 7 PM – 8 PM Beijing Time on March 1, 2023) to present an overview of the Company's financial performance and business operations.

Weibo Corporation to Report Fourth Quarter and Fiscal Year 2022 Financial Results on March 1, 2023

Weibo is one of China's leading social media platforms and offers a compelling tech play on China's economic rebound in 2023. The stock trades at about 8x its 2021 net income and is highly attractive if its financial performance can rebound quickly towards its 2021 result.

Weibo: Undervalued China Tech Play With Potential Event Catalysts Ahead

Weibo Corporation (WB) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might help the stock continue moving higher in the near term.

Weibo Corporation (WB) Surges 14.0%: Is This an Indication of Further Gains?

Baidu

JD.com

KraneShares CSI China Internet ETF

iShares MSCI China ETF

Pinduoduo Inc - ADR

China stocks rallied Thursday after the Hong Kong Stock Exchange surged into its first session of the Lunar New Year. The post China Stocks Open Year Of The Rabbit With A Leap appeared first on Investor's Business Daily.

News for Weibo Stock (WB)