Never underestimate the drive of a pioneer. Shanda (NASDAQ:SNDA) has awakened from the Internet gaming slumber that found it diversifying into ad-supported casual games, Internet portals, and even home theater entertainment hardware.

Last night's first-quarter report was encouraging. Revenues soared 56% higher to $68.8 million. Reported earnings were a stunning $0.80 per ADS, though once you adjust that for the company's sale of the 2.1 million shares of SINA (NASDAQ:SINA) it was holding, the company's profit is actually $0.36 per share.

Either way, the company clocked in well ahead of the $0.29 per ADS profit on $65.7 million in revenue that analysts had been expecting.

With online gaming accounting for 95% of its revenue -- even more than rival NetEase's (NASDAQ:NTES) 87% slice -- it's nice to see Shanda growing with a wide range of multiplayer fantasy games, as well as more casual fare like online chess and board games. This is the kind of concentrated diversity that Shanda needed all along. Last night the company also announced that it would be introducing a running-themed multiplayer sports game in China. Yep, just in time for the track and field-intensive Olympics in Beijing next year.

Let's put it all together. Shanda beat estimates a day after NetEase and The9 (NASDAQ:NCTY) smoked past projections. Are you sure the Chinese government is trying to slow these outfits down? The government is concerned about online gaming addiction, especially with young kids spending way too much time at the neighborhood Internet cafe, but is it worth the fight? Going by China's booming productivity, one could argue that the quest for leisurely pursuits is actually more inspirational than detrimental at this point.

The market isn't convinced. Shanda is trading at just 20 times next year's Wall Street estimate, and NetEase and The9 are fetching even lower multiples. It has become a value investing niche in China. And as a bonus, they're actually growth stocks.

NetEase and Shanda are Motley Fool Rule Breakers recommendations. A free 30-day subscription offer is available if you want to kick those tires.

Longtime Fool contributor Rick Munarriz has been a fan of China's high-margin gaming stocks for a long time. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.