China's largest online gaming firm, Shanda Networking, plans to seek a Nasdaq listing worth at least US$300 million next year, a key investor said on Tuesday, to tap demand for fantasy role playing in the world's most populous nation.

The Shanghai-based firm, which had an estimated value of more than US$1 billion, would sell between 20 and 25 percent of its share capital, said Andrew Yan, president of Softbank Asia Infrastructure Fund (SAIF).

"We plan to IPO in Q1 of next year," he said by telephone. "It's the largest, not only in China but also in the world in terms of users and also revenue."

The sale was being arranged by investment bank Goldman Sachs, he said. SAIF, a joint venture between Japan's Softbank Corp and U.S. networking giant Cisco Systems Inc, invested US$40 million in Shanda in March.

Shanda has 170 million registered users, it said on its Web site www.shanda.com.cn. It was founded in 1999 by Timothy Chan, 31, ranked by Forbes magazine as China's sixth-richest person this year with net worth of US$490 million.

Executives at Shanda were not immediately available for comment. Chan has said he owns about 70 percent of the firm.

Analysts said China's online gaming industry was conservatively forecast to be worth about two billion yuan (US$242 million) this year and growing more than 100 percent a year.

The country has around 40 million Internet game players and about 70 million Web surfers, second only to the United States.

BIG APPETITE

Shanda, the market leader, was already profitable and would earn between 500 million to 600 million yuan in revenue from its South Korea-developed fantasy game, Legend, in 2003, analysts said.

"I think there will be a lot of investor appetite for its IPO because China Internet companies are really hyped right now," said Paul Waide, a director at Shanghai-based consulting firm Pacific Epoch. "They have revenue to back them up."

Nasdaq-listed Chinese Internet media firms Sina Corp, Sohu.com and NetEase.com Inc have risen several hundred percent in the last year as all became profitable due to advertising, mobile short messaging and online games.

Shanda's most popular offering is Legend, a multi-player fantasy game in which players choose to be a character and spend days, weeks or even months amassing powers and weapons. Players pay a flat fee of 35 yuan a month.

It has many competitors, including the Nasdaq-listed Internet firms and The9 Online.

Analysts said Shanda's continuing lawsuit with a South Korean game developer, Wemade, could hamper listing plans. Official media have said Wemade is suing Shanda in a Beijing court, claiming it infringed on its property rights with a game called The World of Legend. If Shanda lists, it would join a handful of publicly traded online gaming firms such as South Korea's NCSoft Corp.

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