Chinese online game provider Shanda (SNDA) says its total net revenues surged 13.1% quarter-over-quarter and increased 55.9% year-over-year to CNY532.3 million as it announced its unaudited financial results for the first quarter ended March 31, 2007.

"Driven by online game revenues that hit a historical high, our results in the first quarter of 2007 were very strong. We managed to leverage our come- stay-pay model and operating platform to launch new expansion packs for our main game titles and hold special themed promotions over the holiday period to achieve growth in ARPU and active paying accounts," said Tianqiao Chen, chairman and CEO of Shanda. "As we look at the remainder of this year, we feel very confident that our new expansion packs for existing games and our strong game pipeline will continue to generate sustainable user and revenue growth."

Online game revenues in the first quarter of 2007 increased 12.2% quarter- over-quarter and 63.1% year-over-year to CNY505.0 million. Revenues from MMORPGs in the first quarter of 2007 increased 9.5% quarter- over-quarter and increased 83.9% year-over-year to CNY414.0 million, accounting for 77.8% of total revenues. Revenues from casual games in the first quarter of 2007 increased 26.3% quarter-over-quarter and 7.8% year-over-year to CNY91.0 million.

Shanda's other revenues in the first quarter of 2007 increased 32.9% quarter-over-quarter and decreased 14.1% year-over-year to CNY27.3 million.

Gross profit for the first quarter of 2007 was CNY347.0 million, representing a 17.2% increase compared to CNY296.2 million in the fourth quarter of 2006 and a 79.0% increase from CNY193.8 million in the first quarter of 2006. Gross margin was 65.2% in the first quarter of 2007, up from 62.9% in the fourth quarter of 2006 and 56.8% in the first quarter of 2006.

Operating income for the first quarter of 2007 was CNY224.5 million, representing a 44.7% increase compared to CNY155.2 million in the fourth quarter of 2006 and up 1117.2% from CNY18.4 million in the first quarter of 2006. Operating margin was 42.2% in the first quarter of 2007, up from 33.0% in the fourth quarter of 2006 and up from 5.4% in the first quarter of 2006.

In the first quarter of 2007, Shanda had net income of CNY448.8 million, an increase of 86.8% from CNY240.3 million in the fourth quarter of 2006, compared to CNY11.8 million in the first quarter of 2006.