Shares of SINA (NASDAQ: SINA) and Weibo (NASDAQ: WB) have both tumbled this year, mainly due to escalating trade tensions between the United States and China. Yet their sell-offs seem overdone, since both tech companies are well insulated from a potential trade war.

SINA is one of the oldest internet companies in China. It spun off its Twitter-like social network, Weibo, via an IPO in 2014, but still holds a majority voting stake in it, and generates most of its revenues from that stake. The rest of its revenues come primarily from its older portal and a new fintech unit.

A group of young people using their smartphones.

Image source: Getty Images.

Meanwhile, Weibo flourished as a standalone company. It attracted popular celebrities to its platform, extended its reach into rural areas, and expanded its ecosystem with Reddit-like forums, live video streams, and e-commerce features. Those expansions helped it become one of the largest social networks in China.

Last year was great for both stocks. Shares of SINA and Weibo rallied 65% and 155%, respectively, as both companies repeatedly beat expectations with robust sales and earnings growth. But so far in 2018, SINA has tumbled 17% while Weibo is off 15%. Do these pullbacks represent buying opportunities?

How fast are SINA and Weibo growing?

SINA and Weibo both posted high double-digit sales growth over the past four quarters. Weibo’s growth generally outpaces SINA’s, which is throttled by its more mature portal business.


Revenue  Growth Q2 2017

Revenue  Growth Q3 2017

Revenue  Growth Q4 2017

Revenue  Growth Q1 2018*











YOY revenue growth. Source: Quarterly reports. *Uses new ASC 606 standard.

For the full year, analysts expect SINA’s revenue to rise 45%, compared to the 54% growth it delivered in 2017. Weibo’s revenue is expected to grow 57%, compared to 75% growth last year. However, some of the deceleration at both companies can be…

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