SNDA

[David Randolph]

SNDA has this habit of crossing just a bit below the ascending 50 days SMA as the bullish trend continues, as you can see on the chart below.

There was a press release out yesterday:

Shanda Prepares Professional Online Game Fund

Shanda's management is truly innovative, I like them ... and the stock.

[David Randolph]

And Dracull had his chance of buying at the bottom of the ascending channel of the chart below, I hope he did it.

The setbacks are awful, but over the long term, the stock will probably keep moving up, since fundamentals of the business are attractive.

[David Randolph]

SNDA rose 2.5%, responding to the long term ascending support. When it revisits the top of the channel it will probably be at $40 plus.

[David Randolph]

SNDA was enjoying a nice 3% rally until American Home Mortgage (AHM) said it could no longer fund loans and was considering liquidating its assets

I wonder what online gaming in China has to do with mortgage loans in the US

I'll continue holding SNDA.

[David Randolph]

Another touch on the base of the ascending channel and SNDA is set to go higher, I believe.

The company's management is really confident in the online gaming market potential, given today's news:

Shanda lifts salary by 20 pct to attract talents

I hope this doesn't hurt net profit margin.

I'll hold SNDA.

[David Randolph]

Nice 3.1% rally for SNDA. The company will report 2nd quarter earnings on August the 27th:

• Shanda Interactive Entertainment to Report Second Quarter 2007 Financial Results on August 27, 2007
PR Newswire (Thu 9:00am)

I'll keep holding SNDA.

[David Randolph]

According to the general market analysis I wrote today I must sell two of the Main's holdings, and I have opted to sell SNDA, exclusively based on valuation: SNDA is the Main's holding with the least potential, given the estimates I have in the valuation model.

The trading plan for SNDA is SELL.

[BigSully1]

SNDA looking good.

[BigSully1]

Up 13% today on ER

http://stockcharts.com/h-sc/ui?s=SNDA&p=D&b=5&g=0&id=p59191861522


Source: Shanda Interactive Entertainment Limited


Shanda Reports Third Quarter 2007 Results
Tuesday November 27, 5:13 pm ET 
Third Quarter 2007 Net Revenues Increased 16.3% QoQ and 50.3% YoY to US$87.4 million, EPS per ADS US$0.44, Results Top Guidance


SHANGHAI, China, Nov. 27 /Xinhua-PRNewswire/ -- Shanda Interactive Entertainment Limited (Nasdaq: SNDA - News), or Shanda, a leading interactive entertainment media company in China, today announced its unaudited consolidated financial results for the third quarter ended September 30, 2007.

    Third Quarter 2007 Highlights:

     -- Consolidated net revenues achieved a record high of RMB656.3 million
        (US$87.4 million), an increase of 16.3% QoQ and 50.3% YoY, exceeding
        the upper end of the Company's guidance of QoQ growth between 8% and
        11%.

     -- Online game revenues, including MMORPGs and casual games, was RMB633.7
        million (US$84.4million), an increase of 16.6% QoQ and 54.9% YoY.

     -- Gross profit was RMB457.9 million (US$61.0 million), an increase of
        20.6% QoQ and 86.6% YoY.

     -- Operating income was RMB257.9 million (US$34.3 million), an increase
        of 5.6% QoQ and 128.9% YoY. Operating margin was 39.3% in the third
        quarter of 2007, compared to the Company's guidance of no less than
        35%.

     -- Net income was RMB238.9 million (US$31.8 million), compared to
        adjusted net income of RMB238.4 million in the second quarter of 2007
        (excluding the net gain of RMB177.5 million from the disposal of SINA
        shares), and net income of RMB143.5 million in the third quarter of
        2006.

     -- Earnings per diluted ADS were RMB3.26 (US$0.44), compared to adjusted
        earnings per diluted ADS of RMB3.28 in the second quarter of 2007
        (excluding the net gain of RMB2.42 per diluted ADS from the disposal
        of SINA shares) and earnings per diluted ADS of RMB1.98 in the third
        quarter of 2006.

     -- Active paying accounts (APA) for MMORPGs increased 13.2% QoQ to 3.08
        million.

     -- Average monthly revenue per active paying account (ARPU) for MMORPGs
        increased 3.0% QoQ to RMB59.7.

"Our game revenues reached a record high in the third quarter due to the strong organic growth of our main titles," said Tianqiao Chen, Chairman and Chief Executive Officer of Shanda. "Leveraging our CSP model and operating platform, we introduced new expansion packs and held special promotions during the summer holidays, which translated to growth in both our ARPU and APA. We have also built a strong game pipeline for 2008 to include a series of exciting new MMORPGs, casual games and expansion packs. We believe the growth of our content will allow us to continue to expand our business going forward."

Conference Call and Webcast Notice

Shanda will host a conference call on November 28, 2007 at 9:00 a.m. Beijing/Hong Kong time, corresponding with November 27, 2007 at 8:00 p.m. Eastern Standard Time, to present an overview of the Company's financial performance and business operations. A live webcast of the conference call will be available on the Company's corporate website at http://www.snda.com.

Financial Results

Net Revenues

Shanda reported net revenues of RMB656.3 million (US$87.4 million) for the third quarter of 2007, representing a 16.3% increase compared to RMB564.4 million in the second quarter of 2007 and a 50.3% increase compared to RMB436.8 million in the third quarter of 2006.

Online game revenues in the third quarter of 2007 increased 16.6% quarter- over-quarter and 54.9% year-over-year to RMB633.7 million (US$84.4 million).

Revenues from MMORPGs in the third quarter of 2007 increased 16.6% quarter-over-quarter and 66.0% year-over-year to RMB551.5 million (US$73.4 million), accounting for 84.0% of net revenues. The sequential growth in MMORPG revenues was primarily due to continued increase in revenues generated by the Company's major titles, including Mir II, Woool and Latale, and an initial contribution from Feng Yun Online, which was acquired in conjunction with the Company's acquisition of Aurora Technology Development Co. Ltd. ("Aurora"), in July 2007.

The number of APA of MMORPGs increased 13.2% to 3.08 million in the third quarter of 2007 from 2.72 million in the second quarter of 2007. ARPU for MMORPGs increased 3.0% to RMB59.7 in the third quarter of 2007 from RMB57.9 in the second quarter of 2007. The quarter-over-quarter increase in APA is mainly due to the continued growth of users of existing titles and the initial contribution from Feng Yun Online. The quarter-over-quarter increase in ARPU was primarily due to an increased consumption of in-game premium features in connection with the launching of new expansion packs for the Company's major titles and in-game promotions.

Revenues from casual games in the third quarter of 2007 increased 16.2% quarter-over-quarter and 6.9% year-over-year to RMB82.2 million (US$10.9 million). The sequential increase in revenues from casual games was due to the release of new expansion packs for Maple Story, GetAmped, Crazy Kart and Tales Runner, as well as the seasonal revenue improvement related to students' summer holidays.

Gross Profit

Gross profit for the third quarter of 2007 was RMB457.9 million (US$61.0 million), an increase of 20.6% from RMB379.5 million in the second quarter of 2007 and 86.6% from RMB245.5 million in the third quarter of 2006. Gross margin was 69.8% in the third quarter of 2007, compared to 67.2% in the second quarter of 2007 and 56.2% in the third quarter of 2006. The sequential improvement in gross margin was primarily due to the consolidation of Korean software developer Actoz Soft Co., Ltd. ("Actoz") into Shanda's financial statements from the third quarter of 2007, which reduced the Company's licensing fees relating to Mir II.

Income from Operations

Operating income for the third quarter of 2007 was RMB257.9 million (US$34.3 million), an increase of 5.6% from RMB244.3 million in the second quarter of 2007 and 128.9% from RMB112.7 million in the third quarter of 2006. Operating margin was 39.3% in the third quarter of 2007, compared to 43.3% in the second quarter of 2007 and 25.8% in the third quarter of 2006. The quarter-over-quarter change in operating margin was primarily due to the increased operating expenses from the consolidation of Actoz, an increase in marketing expenses during the summer holidays, and the full-quarter increase in payroll costs as a result of employee salary raises commencing from June 2007.

Excluding the consolidation of Actoz and Aurora, gross margin and operating margin for the third quarter of 2007 would have been 65.9% and 40.4%, respectively.

Non-Operating Income

Net non-operating income for the third quarter of 2007 was RMB29.0 million (US$3.9 million), compared to RMB209.7 million in the second quarter of 2007 and RMB46.7 million in the third quarter of 2006. The major difference is investment income of RMB177.5 million recorded from the disposal of SINA shares in the second quarter of 2007. Non-operating income contributed from government financial incentives amounted to RMB14.9 million (US$2.0 million) in the third quarter of 2007, compared to RMB14.0 million in the second quarter of 2007 and RMB29.1 million in the third quarter of 2006.

Net Income

Net income for the third quarter of 2007 was RMB238.9 million (US$31.8 million), compared to adjusted net income of RMB238.4 million in the second quarter of 2007 (excluding the net gain of RMB177.5 million from the disposal of SINA shares), and net income of RMB143.5 million in the third quarter of 2006. Earnings per diluted ADS for the third quarter of 2007 were RMB3.26 (US$0.44), compared to adjusted earnings per diluted ADS of RMB3.28 in the second quarter of 2007 (excluding the net gain of RMB2.42 per diluted ADS from the disposal of SINA shares) and earnings per diluted ADS of RMB1.98 in the third quarter of 2006. Earnings per diluted ADS including the gain on the disposal of SINA shares were RMB5.70 per diluted ADS in the second quarter of 2007.

The conversion of Renminbi (RMB) into U.S. dollars in this release is based on RMB7.5108 to US$1.00 as published by the People's Bank of China on September 28, 2007. The percentages stated in this press release are calculated based on the RMB amounts.

Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with generally accepted accounting principals in the United States, or GAAP, this press release includes non-GAAP financial measures of adjusted net income and adjusted earning per ADS, each of which is adjusted to exclude the net gain from disposal of the Company's stake in SINA. The Company believes these non- GAAP financial measures are important to help investors understand the Company's current financial performance and future prospects, compare business trends among different reporting periods on a consistent basis and access the Company's core operating results. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see the financial statements included with this press release.


    Important Events & Announcements:

     -- Shanda obtained an exclusive license to operate an online free-running
        game FreeJack in mainland China, Hong Kong and Macao. (2007/09/04)

     -- Shanda announced the appointment of Donald Chan as Senior Vice
        President of Shanda's new in-game advertising ("IGA") business.
        (2007/10/23)

     -- Shanda announced three new online games currently under development
        for 2008 pipeline: Gui Chui Deng Online, Creation of the Gods and
        World Hegemony. (2007/10/26)

     -- Shanda and NCsoft announced a strategic alliance pursuant to which
        Shanda will become a strategic investor of NCsoft's Chinese subsidiary,
        NCsoft China. Shanda also obtained an exclusive license to operate
        AION: The Tower of Eternity, NCsoft's highly-anticipated 3D MMORPG, in
        mainland China. (2007/11/06)

     -- Shanda's US$275 million Principal Amount of Zero Coupon Senior
        Convertible Notes due 2014 have been fully redeemed. (2007/11/15)

     -- Shanda announced the appointment of Grace Wu as the Company's Chief
        Financial Officer. (2007/11/28)

     * Please visit Shanda's website (http://www.snda.com) for details about
       these and other announcements.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements in this announcement that are not historical facts, including but not limited to statements regarding the Company's pipeline of games and expectations of future growth, represent only the Company's current expectations, assumptions, estimates and projections and are forward-looking statements. These forward-looking statements involve various risks and uncertainties. Important risks and uncertainties that could cause the Company's actual results to be materially different from expectations include but are not limited to that the newly added titles in our pipeline may not be well received by the users and the risks set forth in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's annual report on Form 20-F. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Shanda Interactive Entertainment Limited

Shanda Interactive Entertainment Limited (Nasdaq: SNDA - News) is a leading interactive entertainment media company in China. Shanda offers a portfolio of diversified entertainment content including some of the most popular massively multi-player online role-playing games (MMORPGs) and casual online games in China, as well as online chess and board games, network PC games and a variety of cartoons, literature works and music. Shanda's interactive entertainment platform attracts a large and loyal user base, of which more and more is coming from homes. Each user can interact with thousands of other users and enjoy the interactive entertainment content that Shanda provides. Interaction enriches your life. For more information about Shanda, please visit http://www.snda.com.




                    SHANDA INTERACTIVE ENTERTAINMENT LIMITED
                           CONSOLIDATED BALANCE SHEET
                                 (in thousands)


                             As of December 31,       As of September 30,
                                     2006                    2007
                                     RMB               RMB            US$
                                  (audited)        (unaudited)    (unaudited)
    ASSETS
    Current assets:
    Cash and cash equivalents        1,291,901       3,679,836       489,939
    Short-term investment              407,399         437,836        58,294
    Marketable securities            1,844,966         469,025        62,447
    Accounts receivable                 31,685          37,248         4,959
    Inventories                          8,972           2,873           383
    Deferred licensing fees
     and related costs                  27,433          52,804         7,030
    Prepayments and other
     current assets                     51,708         110,572        14,723
    Deferred tax assets                 17,421          66,909         8,908
    Total current assets             3,681,485       4,857,103       646,683

    Investments in affiliated
     companies                         334,693           3,704           493
    Property, equipment and
     software                          349,153         332,223        44,233
    Intangible assets                  186,062         373,878        49,779
    Goodwill                           493,564         608,647        81,036
    Long-term deposits                      --          59,849         7,968
    Long-term prepayments              100,160         124,148        16,529
    Other long-term assets                  --         187,641        24,983
    Non-current deferred tax assets                     72,578         9,663
    Total assets                     5,145,117       6,619,771       881,367

    LIABILITIES
    Current liabilities:
    Accounts payable                    91,184          44,234         5,890
    Licensing fees payable              14,135          84,842        11,296
    Taxes payable                       80,253         164,914        21,957
    Deferred revenue                   201,650         417,452        55,580
    Licensing fees payable to
     a related party                    46,090              --            --
    Due to related parties               3,044           3,044           405
    Acquisition related obligation       3,047           2,955           393
    Convertible debt due
     within one year                 2,147,393       2,065,470       275,000
    Other payables and accruals        138,017         207,497        27,627
        Deferred tax liabilities                         6,302           839
    Total current liabilities        2,724,813       2,996,710       398,987

    Other long term liabilities             --           7,528         1,002
    Non-current deferred tax
     liabilities                                        37,197         4,952
    Total liabilities                2,724,813       3,041,435       404,941

    Minority interests                   2,910         225,109        29,972

    Shareholders' equity
    Ordinary shares                     11,849          11,931         1,589
    Additional paid-in capital       1,468,825       1,593,283       212,132
    Statutory reserves                 142,019         146,869        19,554
    Deferred share-based
     compensation                           --
    Accumulated other
     comprehensive gain                205,082          21,372         2,845
    Retained earnings                  589,619       1,579,772       210,334
    Total shareholders' equity       2,417,394       3,353,227       446,454
    Total liabilities and
     shareholders' equity            5,145,117       6,619,771       881,367



                   SHANDA INTERACTIVE ENTERTAINMENT LIMITED
                    CONSOLIDATED STATEMENTS OF OPERATIONS
             (in thousands, except for share and per share data)

                               For the three month periods ended,
                          September 30,    June 30,        September 30,
                                2006         2007                2007
                                RMB          RMB            RMB         US$
                            (unaudited)  (unaudited)    (unaudited) (unaudited)
    Net revenues
    MMORPG                     332,292      472,869        551,483      73,425
    Casual game                 76,845       70,701         82,177      10,941
    Others                      27,632       20,879         22,656       3,017
    Total net
     revenues                  436,769      564,449        656,316      87,383

    Cost of services
    Ongoing
     licensing fees
     for online
     games                     (82,242)    (104,012)       (86,154)    (11,471)
    Amortization of
     upfront
     licensing fees            (13,310)     (15,063)       (31,649)     (4,214)
    Server leasing
     and maintenance
     fees                      (24,273)     (19,931)       (23,136)     (3,080)
    Salary and
     benefits                  (13,441)     (14,028)       (19,106)     (2,544)
    Depreciation of
     property,
     equipment
     and software              (13,310)     (13,092)       (13,845)     (1,843)
    Others                     (44,741)     (18,779)       (24,510)     (3,263)
    Total cost of
     services                 (191,317)    (184,905)      (198,400)    (26,415)

    Gross profit               245,452      379,544        457,916      60,968

    Operating
     expenses
    Product
     development               (35,965)     (30,678)       (49,923)     (6,647)
    Sales and
     marketing                 (31,860)     (38,011)       (60,749)     (8,088)
    General and
     administrative            (64,953)     (66,577)       (89,339)    (11,895)
    Total operating
     expenses                 (132,778)    (135,266)      (200,011)    (26,630)

    Income from
     operations                112,674      244,278        257,905      34,338

    Interest income              5,863       13,046         19,403       2,583
    Amortization of
     convertible
     debt issuance
     cost                       (4,402)      (4,511)        (4,138)       (551)
    Investment
     income                        141      189,765         14,864       1,979
    Other income,
     net                        47,832       11,152          5,695         759
    Income before
     income tax
     expenses,
     equity in loss
     of affiliates
     and minority
     interests                 162,108      453,730        293,729      39,108

    Income tax
     expenses                  (15,877)     (38,141)       (48,028)     (6,394)
    Equity in (loss)
     gain of
     affiliates                 (2,909)         189           (510)        (69)
    Minority
     interests                     203           86         (6,315)       (841)
    Net income                 143,525      415,864        238,876      31,804

    Earnings per
     share:
    Basic                         1.00         2.92           1.67        0.22
    Diluted                       0.99         2.85           1.63        0.22
    Earnings per
     ADS:
    Basic                         2.00         5.84           3.34        0.44
    Diluted                       1.98         5.70           3.26        0.44
    Weighted average
     ordinary shares
     outstanding:
    Basic                  142,903,595  142,397,374    143,358,691 143,358,691
    Diluted                144,732,342  145,689,850    146,389,982 146,389,982
    Weighted average
     ADS
     outstanding:
    Basic                   71,451,798   71,198,687     71,679,346  71,679,346
    Diluted                 72,366,171   72,844,925     73,194,991  73,194,991

    Reconciliation
     from Non-GAAP
     measures to
     GAAP measures:
    Non-GAAP income            143,525      238,356        238,876      31,804
    Net gain from
     disposal of
     Sina's Stake                   --      177,508             --          --
    Net income                 143,525      415,864        238,876      31,804

    Non-GAAP diluted
     earnings per
     ADS                          1.98         3.28           3.26        0.44
    Net gain from
     disposal of
     Sina's Stake
     per ADS                        --         2.42             --          --
    Diluted earnings
     per ADS                      1.98          5.7           3.26        0.44



    For more information, please contact:

    Shanda Interactive Entertainment Limited

     Maggie Yun Zhou
     Investor Relations Manager
     Shanda Interactive Entertainment Limited
     Phone: +86-21-5050-4740 (Shanghai)
     Email: [email protected]

    CCG Elite

     Crocker Coulson (investors)
     Phone: +1-310-231-8600 (USA)
     Email: [email protected]

     Elaine Ketchmere (media)
     Phone: +1-310-231-8600 (USA)
     Email: [email protected]

[Houlahan]

 

[David Randolph]

SNDA used to be trading within an ascending channel, but not anymore. Now it seems range bound, with $25 and change as support and $35 as resistance.

I just want to register if there were news out in points 1 and 2, since in these points the stock gapped up:

1 - Shanda Reports Fourth Quarter and Full Year 2007 Unaudited Results
PR Newswire (Mon, Feb 25)

2 - Sector Snap: Chinese Web Gaming Rises
AP (Tue, Mar 25)