高盛-盛大合并新浪研究.pdfVIP

Shanda Interactive Entertainment (SNDA) Sina (SINA) China Internet Shanda likely to watch and wait on Sina. We believe Shanda will use shares rather than cash if it acquires Sina, and February 22, 2005 that paying more than one Shanda share per Sina share is Stock rating: In-Line EPS/value dilutive. We therefore expect Sina and its peers to Coverage view: Neutral trade sharply up, then fall back as Shanda bides its time. Price: US$30.0 (SNDA) US$25.6 (SINA) Target price: US$33 (SNDA) US$26 (SINA) Why read this report Assuming equity accounting, 19.5% stake is 8% EPS accretive for Shanda • Calculates share swap Shandaís initial investment in Sina was earnings accretive because it used excess cash and ratios was conducted at a low multiple. We believe buying the residual 80.5% would require equity. • Analyzes Sinaís poison-pill possibilities EPS dilutive for Shanda if Shanda issues one share for one share • Discusses potential for We forecast that Sinaís EPS will be c.15% lower than Shandaís in 2005, and that Sina will other acquisitions in sector grow at a slower rate. We view Sinaís EPS quality as inferior due to reliance on wireless. Mergeco would be bigger than any three other China internet companies A merged entity would derive 37% of its