Shanda Interactive Entertainment Ltd – ‘6-K’ for 6/7/04

On:  Monday, 6/7/04, at 10:46am ET   ·   For:  6/7/04   ·   Accession #:  1145549-4-728   ·   File #:  0-50705

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Report of a Foreign Private Issuer   —   Form 6-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Shanda Interactive Entertainment Limited               5     17K 

6-K
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 6-K

REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
 THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF JUNE 2004

SHANDA INTERACTIVE ENTERTAINMENT LIMITED
 (Translation of registrant's name into English)

NO. 1 INTELLIGENT OFFICE BUILDING, NO. 690 BIBO ROAD
ZHANGJIANG MICRO-ELECTRONICS HARBOR, PUDONG NEW AREA
SHANGHAI, CHINA 201203
(Address of principal executive offices)

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  (Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)                                 

Form 20-F   X            Form 40-F        
        -----                    -----

    (Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the        
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of      
1934.)                                                                          

Yes                No   X     
 -----             -----

(If "Yes" is marked, indicate below the file number assigned to the   
registrant in connection with Rule 12g3-2(b):82-          .)                    
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6-K
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SHANDA INTERACTIVE ENTERTAINMENT LIMITED

Form 6-K

Table of Content

                                                                [Download Table]


                                                                         PAGE 
                                                                        ------
                                                                              
Signature                                                               Page 3

Press release regarding first quarter results, dated June 7, 2004       Page 4

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SIGNATURES

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the        
undersigned, thereunto duly authorized.                                         

                                        SHANDA INTERACTIVE ENTERTAINMENT LIMITED

                 By: /s/ Shujun Li
                                            ------------------------------------
                       Name: Shujun Li
                                      Title: Chief Financial Officer

Date: June 7, 2004                                                              

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 SHANDA REPORTS FIRST QUARTER 2004 FINANCIAL RESULTS

  (Shanghai, China, June 7, 2004) Shanda Interactive Entertainment Limited
(Nasdaq: SNDA) ("Shanda"), the largest operator of online games in China, today 
announced its financial results for the quarter ended March 31, 2004. Shanda's  
financial results for the first quarter are in-line with the financial estimates
that were included in the final prospectus for Shanda's initial public offering 
dated May 12, 2004.                                                             

SUMMARY OF THE FIRST QUARTER 2004:                                              

o    Net revenues for the first quarter of 2004 increased 23.7% to RMB 227.6    
   million (US$27.5 million) from RMB 184.0 million (US$22.2 million) in the
fourth quarter of 2003;                                               
o    Gross profits for the first quarter of 2004 increased 20.9% to RMB 137.0   
   million (US$16.6 million) from RMB 113.3 million (US$13.7 million) in the
fourth quarter of 2003;                                               
o    Income from operations increased 50.9% to RMB 70.0 million (US$8.5 million)
    in the first quarter of 2004 from RMB 46.4 million (US$5.6 million) in the
fourth quarter of 2003;                                               
o    Net income totaled RMB 71.9 million (US$8.7 million) in the first quarter  
of 2004.                                                              

FINANCIAL RESULTS                                                               

  Total Revenues. In the first quarter of 2004, Shanda had revenues of RMB
240.2 million (US$29.0 million), and net revenues after business tax and related
surcharges of RMB 227.6 million (US$27.5 million), representing an increase of  
23.7% compared to net revenues of RMB 184.0 million (US$22.2 million)in the     
fourth quarter of 2003. The increase in Shanda's net revenues was primarily due 
to the continued increase in Shanda's user base and an increase in revenue      
contributed by BNB, Shanda's leading casual game.                               

    Gross Profit. In the first quarter of 2004, Shanda had gross profit of RMB
137.0 million (US$16.6 million), representing an increase of 20.9% compared to  
gross profit of RMB 113.3 million (US$13.7 million) in the fourth quarter of    
2003. The increase in gross profit was primarily due to Shanda's increase in    
total revenues in the first quarter of 2004.                                    

 Income from Operations. In the first quarter of 2004, Shanda had income
from operations of RMB 70.0 million (US$8.5 million), representing an increase  
of 50.9% compared to income from operations of RMB 46.4 million (US$5.6 million)
in the fourth quarter of 2003. The increase in Shanda's income from operations  
was due to the increase in Shanda's gross profit in the first quarter of 2004,  
while Shanda's operating expenses decreased as a percentage of net revenue.     

 Shanda's income from operations in the fourth quarter of 2003 reflected
share-based compensation expense of RMB 18.2 million (US$2.2 million)           
attributable to the immediate vesting of 25% of the share options that Shanda   
granted to certain of its managers in December 2003. Shanda's income from       
operations in the first quarter of 2004 reflected share-based compensation      
expense of RMB 16.3 million (US$2.0 million) attributable to the vesting on     
March 31, 2004 of an additional 25% of the share options that Shanda granted in 
December 2003. Due to the accelerated vesting schedule of the first 50% of the  
share options that Shanda granted in December 2003, Shanda does not expect in   
the future to recognize levels of share-based compensation expense similar to   
those that it recognized in the fourth quarter of 2003 and the first quarter of 
2004. Shanda expects to recognize deferred share-based compensation expense on  
the remaining portion of the unvested share options granted in                  

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December 2003 based on the vesting of those share options, which will occur in  
two equal installments on March 31, 2005 and March 31, 2006.                    

     Net Income. In the first quarter of 2004, Shanda had net income of RMB 71.9
million (US$8.7 million), representing an increase of 5.3% compared to net      
income of RMB 68.3 million (US$8.3 million) in the fourth quarter of 2003. The  
increase in Shanda's net income was primarily attributable to the increase in   
Shanda's income from operations in the first quarter of 2004, which was         
partially offset by the fact that, while Shanda received RMB 18.1 million       
(US$2.2 million) in respect of government financial incentives in the fourth    
quarter of 2003, Shanda did not receive payments in respect of government       
financial incentives in the first quarter of 2004. Shanda records these         
government financial incentives as other income when received. While Shanda     
typically receives these government financial incentives two quarters after the 
quarter in which Shanda has paid the taxes to which the incentives relate, the  
receipt of these government financial incentives is subject to time lags and    
inconsistent government administrative practices relating to payment times.     
Accordingly, Shanda's net income in any quarterly period may be higher or lower 
relative to other periods as a result of timing differences in the receipt of   
these government financial incentives, in addition to operational and other     
factors. Shanda expects to receive government financial incentives during the   
remainder of 2004 and, in the case of Shengqu, Shanda's wholly-owned subsidiary,
through 2005.                                                                   

     The conversion of Renminbi (RMB) into U.S. dollars in this release is based
on the noon buying rate in The City of New York for cable transfers in Renminbi 
per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of
New York as of March 31, 2004, which was RMB 8.2770 to US$1.00.                 

ABOUT SHANDA                                                                    

  Shanda is the largest operator of online games in China. Shanda offers a
portfolio of online games that are licensed from third parties and that are     
developed in-house. The games that Shanda offers include The Legend of Mir II,  
which is the most popular online game in China according to users surveyed by   
International Data Corporation ("IDC"), The World of Legend, which is Shanda's  
leading in-house developed game, and BNB, which was the highest ranked casual   
game in IDC's survey of the top ten most popular online games in China in 2003. 
Shanda is headquartered in Shanghai, China. Shanda's company website address is 
www.shandaentertainment.com. The information on Shanda's website is not a part  
of this press release.                                                          

SAFE HARBOR STATEMENT                                                           

 This announcement contains forward-looking statements that are based on
Shanda's current expectations, assumptions, estimates and projections about the 
company and the industry. All statements other than statements of historical    
fact in this announcement are forward-looking statements. These forward-looking 
statements involve various risks and uncertainties. Although Shanda believes    
that its expectations expressed in these forward-looking statements are         
reasonable, it cannot assure you that its expectations will turn out to be      
correct. Shanda's actual results could be materially different from and worse   
than its expectations. Important risks and uncertainties could cause Shanda's   
actual results to be materially different from Shanda's expectations include but
not limited to Shanda's dependence on two online games for the majority of      
Shanda's revenues, the fact that Shanda could lose its ability to operate The   
Legend of Mir II and The World of Legend if it were to lose an arbitration      
proceeding relating to its license to operate The Legend of Mir II and an       
intellectual property infringement lawsuit concerning The World of Legend;      
potential adverse changes in PRC government regulation affecting the online game
industry or internet cafes, where its games are most frequently played;         
potential discontinuation of preferential tax treatments or government          
financial incentives; and other risks set forth in Shanda's filings with the    
U.S. Securities and Exchanges Commission, including Shanda's registration       
statement on Form F-1.                                                          

CONTACT:                                                                        

Donglei Zhou                                                                    
Director of Investor Relations                                                  
Shanda Interactive Entertainment Limited                                        
Phone: 8621-50504740 x 8812                                                     
E-mail: donglei.zhou@shanda.com.cn                                              

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘6-K’ Filing		Date		First		Last			Other Filings
		3/31/06		5
		3/31/05		5
Filed on / For Period End:		6/7/04		2		4
		5/12/04		4					F-1/A
		3/31/04		4		5
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