Weibo profit soars, beats expectations

China's microblogging website Weibo reported higher than expected revenue and profit in the second quarter thanks to higher advertising income as brand owners embrace social media for marketing campaigns.

Profits jumped 80 percent in Q2 from a year earlier to US$156.1 million and revenue grew 68 percent year on year to US$426.6 million.

Sports events such as the World Cup in the second quarter raised user engagement on social media and also pushed up advertising.

Monthly active users reached 431 million — 93 percent visiting from mobile devices. Advertising and marketing accounted for 86.7 percent of quarterly revenue, compared with 86.1 percent a year earlier.

Weibo estimates Q3 revenue at between US$465 million and US$475 million, 49-52 percent annual increase.

BOCOM International said in a research note yesterday that short-term profit might be under pressure due to aggressive sales and marketing and spending on user acquisition. It lowered Weibo's target price from US$139 to US$112 but it remains a “Buy.”