Financial Performance - NetDragon Websoft Holdings Limited's overall revenue for 2024 decreased by 14.8% year-on-year to RMB 6 billion[4] - The gaming and application services segment generated revenue of RMB 3.94 billion in 2024, a decline of 6.0% year-on-year[5] - Revenue for 2024 was RMB 6.047 billion, a decrease of 14.8% compared to RMB 7.101 billion in 2023[14] - Gross profit for 2024 was RMB 3.942 billion, down 10.4% from RMB 4.398 billion in 2023[14] - Operating profit for 2024 was RMB 745 million, a decrease of 9.3% from RMB 821 million in 2023[14] - The Mynd.ai business generated RMB 2,106 million in revenue, indicating a significant contribution to overall performance[33] - Revenue from Mynd.ai business was RMB 2.106 billion, a decrease of 27.6% from RMB 2.910 billion in 2023[13] - The revenue from educational services amounted to RMB 526 million, reflecting the company's diversification in service offerings[29] - The revenue from prepaid game cards was RMB 3,425 million, while sales of educational equipment and related products generated RMB 2,015 million[29] - The company reported a profit before tax of RMB 756 million for the year, with a segment profit of RMB 576 million[33] Profitability and Cash Flow - The company achieved a pre-tax profit of RMB 756 million in 2024, reflecting a year-on-year growth of 19.1%[4] - Net cash increased by 13.3% year-on-year to RMB 2.1 billion, with stable operating cash flow of RMB 1.1 billion[4] - Operating cash flow decreased from RMB 1,115 million in 2023 to RMB 1,052 million in 2024, indicating a decline in cash generated from operations[19] - Cash balance at the end of 2024 was RMB 541 million, down from RMB 650 million at the end of 2023[11] - Financing activities generated a net cash inflow of RMB 130 million in 2024, compared to a net cash outflow of RMB 1,695 million in 2023[20] - The company’s investment activities resulted in a net cash outflow of RMB 875 million in 2024, slightly improved from RMB 915 million in 2023[19] Dividends and Shareholder Returns - The company plans to pay a final dividend of HKD 0.50 per ordinary share for 2024, a 25.0% increase year-on-year[4] - The company announced a final dividend of HKD 0.50 per share, up from HKD 0.40 per share in 2023, pending shareholder approval[12] - The board proposed a final dividend of HKD 0.50 per share for the year ending December 31, 2024, totaling approximately RMB 246 million, subject to shareholder approval[70] Assets and Liabilities - Total liabilities increased from RMB 4,045 million in 2023 to RMB 4,414 million in 2024, primarily due to an increase in bank loans from RMB 1,033 million to RMB 1,729 million[18] - The company’s net asset value decreased from RMB 6,174 million in 2023 to RMB 5,866 million in 2024, indicating a reduction in overall equity[18] - The company’s total assets decreased from RMB 6,337 million in 2023 to RMB 6,018 million in 2024, indicating a contraction in the asset base[18] - The asset-liability ratio rose to 0.29 in 2024 from 0.17 in 2023, indicating a significant increase in financial leverage[47] - The company’s net current assets improved to RMB 1,272 million in 2024 from RMB 945 million in 2023, suggesting better liquidity[47] Workforce and Restructuring - As of December 31, 2024, the total number of employees decreased to 4,593 from 5,984 a year earlier, representing a reduction of approximately 23.3%[48] - The company is currently undergoing a restructuring process, which has led to the reduction in workforce across various departments[48] - Research and Development (R&D) staff decreased to 2,505 from 3,021, a decline of about 17.0%[48] - Sales and Marketing personnel reduced to 669 from 817, reflecting a decrease of approximately 18.1%[48] - Production staff saw a significant drop to 563 from 1,264, indicating a reduction of around 55.5%[48] - The company reported a significant reduction in administrative staff, which decreased to 856 from 882, a decline of approximately 2.9%[48] Share Option Plans - The company adopted the 2024 Share Option Plan on June 6, 2024, which allows for a total of 53,126,253 options and reward shares to be granted, equivalent to 10% of the company's shares[56] - The 2024 Share Option Plan is set to be effective for ten years from June 6, 2024, and no options have been granted under this plan as of December 31, 2024[58] - The 2018 Share Option Plan and the 2008 Share Option Plan were terminated on June 6, 2024, and May 24, 2018, respectively, but unexercised options from these plans remain valid[58] - The company has a total of 5,300,000 options under the 2018 Share Option Plan, all of which are unexercised as of December 31, 2024[59] - The company’s share option plans are designed to incentivize employees and service providers based on their contributions to the group[58] Corporate Governance and Compliance - Best Education has complied with the corporate governance code throughout the review year[76] - The audit committee has reviewed the consolidated financial results for the year ending December 31, 2024, and confirmed compliance with applicable accounting standards and regulations[78] - The audit committee consists of three independent non-executive directors, with Li Shengzong serving as the chairman[78] - The company has adopted a code of conduct for securities transactions that meets or exceeds the standards set out in the listing rules[69] Strategic Initiatives - The company signed a term sheet with Beijing Zhongke Wenge Technology Co., Ltd. for exclusive cooperation in promoting AI services, with a potential investment of RMB 75 million[7] - The company is actively developing "AI-native" games and interactive educational games, aiming to capture new business opportunities in the AI era[8] - The newly launched ActivPanel 10 received positive feedback, enhancing the company's market competitiveness[10] - A merger agreement was established on April 18, 2023, involving the registration of eLMTree as a wholly-owned subsidiary of Best Education, transferring various educational businesses to eLMTree[65] - A special dividend of approximately HKD 71.7 million was paid to shareholders as a physical distribution of shares held indirectly through NetDragon BVI[68]

Financial Performance - Revenue for the first half of 2024 was RMB 3.3 billion, a decrease of 10.3% year-on-year[4] - Revenue from game and application services was RMB 2.12 billion, accounting for 64.3% of total revenue, a decrease of 0.8% year-on-year[4] - Revenue from Mynd.ai was RMB 1.18 billion, accounting for 35.7% of total revenue, a decrease of 23.5% year-on-year[4] - Gross profit was RMB 2.2 billion, a decrease of 3.8% year-on-year[4] - Operating profit was RMB 634 million, a decrease of 9.3% year-on-year[4] - Non-GAAP operating profit was RMB 640 million, a decrease of 7.5% year-on-year[4] - Profit attributable to owners of the company was RMB 400 million, a decrease of 20.0% year-on-year[4] - Mynd.ai reported an operating loss of RMB 111 million, an increase of 131.3% year-on-year[4] - Overall game revenue for the first half of 2024 reached RMB 1.86 billion, a decrease of 3.0% year-on-year, accounting for 87.8% of game and application service revenue[9] - The flagship IP "Magic Domain" generated revenue of RMB 1.69 billion, with a year-on-year decline of 3.8% due to external factors and preparations for a new game launch[9] - The "Honor of Kings" IP saw a revenue increase of 29.6% year-on-year, supported by significant gameplay improvements and successful esports events[10] - The "Conquer" IP experienced a 6.6% year-on-year revenue growth, attributed to major content updates and innovative gameplay[10] - The company reported a total of RMB 2,121 million from game and application services, compared to RMB 2,139 million in the previous year, showing a slight decline[89] - The company reported a profit attributable to owners of RMB 500 million for the six months ended June 30, 2024[68] - The total comprehensive income for the period was RMB 513 million, compared to RMB 388 million in the same period last year, representing a growth of 32.2%[68] Dividend and Shareholder Information - The company declared an interim dividend of HKD 0.40 per ordinary share for the six months ended June 30, 2024[4] - The company plans to distribute an interim dividend of HKD 0.4 per share for the six months ending June 30, 2024, compared to an interim special dividend and interim dividend of HKD 1.0 and HKD 0.4 per share in 2023[38] - As of June 30, 2024, the company's major shareholder DJM Holding Ltd. holds 191,078,100 shares, representing 35.97% of the issued share capital[46] - Liu Dejian, a director, holds 216,384,938 shares, which accounts for 40.73% of the company's shares[41] - The company has a total of 5,779,040 shares held by director Liang Nianjian, representing 1.09%[41] - Chen Hongzhan, another director, owns 11,197,019 shares, which is 2.11% of the total shares[42] - The company has a total of 43,733,320 shares held by International Data Group, representing 8.23%[46] - The company has a total of 41,374,375 shares held by Zhou Quan, representing 7.79%[46] - The company has a total of 34,437,519 shares held by the late Zheng Hui, representing 6.48%[46] - Liu Luoyuan holds 4.37% of the shares, with a total of 21,541,819 shares held by certain trust beneficiaries[43] Debt and Financial Position - As of June 30, 2024, total bank loans and other debts amounted to RMB 1.967 billion, an increase from RMB 1.647 billion as of December 31, 2023[17] - The debt-to-equity ratio was 0.21 as of June 30, 2024, up from 0.17 at the end of 2023[20] - Total equity was approximately RMB 6.28 billion as of June 30, 2024, compared to RMB 6.17 billion at the end of 2023[21] - The company held cash and cash equivalents of RMB 4.94 billion and established sufficient available credit lines[12] - The company’s total liabilities decreased to RMB 4,052 million from RMB 4,045 million, showing a slight reduction[67] - The company’s total liabilities as of June 30, 2024, were RMB 613 million, unchanged from the previous reporting period[83] - The company’s current liabilities decreased to RMB 1,390 million as of June 30, 2024, from RMB 1,518 million as of December 31, 2023[118] Employee and Talent Management - As of June 30, 2024, the total number of employees in the group is 6,123, an increase from 5,984 in December 2023 and 5,207 in June 2023[27] - The group successfully attracted 294 new talents in the first half of 2024, including 77 senior elite talents, enhancing team strength significantly[28] - The company has implemented a digital transformation strategy in human resources, focusing on AI-enabled management and data-driven decision-making[29] - The company is committed to continuous improvement in human resource allocation and has established internship bases to nurture potential future stars[28] - The company has introduced a certification system for employees to enhance their skills and benefits, with a focus on task-oriented management[33] Research and Development - Research and development expenses rose to RMB 696 million, compared to RMB 641 million in the previous year, indicating a focus on innovation[64] - The company plans to continue its focus on research and development projects in China, supported by government subsidies[99] Market Expansion and Product Development - The company continues to explore new strategies for market expansion and product development, although specific details were not disclosed in the report[84] - The company plans to launch four to five new games based on existing flagship IPs and new IPs within the next six to nine months[11] - The new game "Code - Alpha" is expected to launch in multiple countries in the second half of the year, contributing to revenue growth[8] Corporate Governance and Compliance - The company has complied with the corporate governance code throughout the review period, ensuring adherence to the standards set forth in the listing rules[59] - The audit committee, consisting of three independent non-executive directors, reviewed the interim financial results for the six months ended June 30, 2024, confirming compliance with applicable accounting standards[59] Financial Assets and Liabilities - The company’s financial assets and liabilities are measured at fair value, categorized into three levels based on the observability of inputs used in the valuation[139] - Financial assets measured at fair value through profit or loss totaled RMB 255 million as of June 30, 2024, compared to RMB 205 million as of January 1, 2024, indicating an increase of 24.39%[145] Related Party Transactions - The group incurred related party transactions totaling RMB 4 million for services provided to Fuzhou 851 during the period, compared to RMB 6 million for the same period last year[153] - The group has ongoing related party transactions, including a lease agreement with Fuzhou 851 for office property in China[153]

浦银国际研究 财务模型更新 | 互联网行业 浦银国际 财务模型更新 网龙 （777.HK） 网龙（777.HK）：游戏保持相对稳定， 关注新游表现 利润率持续改善：公司 1H24 收入人民币 33.0 亿元，同比下降 10.3%； 其中，游戏及应用服务收入为 21.2 亿元，同比小幅下降 0.8%，主要 是海外游戏收入下滑；Mynd.ai 收入同比下降 23.5%至 11.8 亿元，主 要由于硬件需求回归常态化；毛利率同比改善 4.5pp 至 66.6%，主要 受益于高毛利的游戏收入占比提升；调整后净利润为 5.6 亿元，调整 后净利率为 16.9%。此外，公司宣布派发中期股息每股 0.4 港元。 游戏收入维持相对稳定，关注新游表现：1H24 公司游戏业务维持相 对稳定，收入同比下降 3%至 18.6 亿元；其中，国内游戏收入同比下 降 1.3%，端游保持增长，手游有所下滑；海外游戏收入同比下降 12.9%， 主要是《魔域》端游海外版受外挂影响及《征服》端游海外版受埃及 临时限电影响。这些问题正逐步改善，下半年海外收入有望恢复。国 内端游核心产品《简体魔域》保持良好用户粘性，MAU、DAU 等指标 均实现增长 ...

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 14.00, indicating a potential upside of 32.8% from the current price of HKD 10.54 [1][3]. Core Views - The company is expected to see a recovery in game revenue in the second half of 2024, driven by new game launches, particularly a reboot of its flagship IP, "Magic Domain," in 2025. The first half of 2024 experienced a revenue decline due to product launch cycles and external factors, but profitability is expected to improve through cost reduction and efficiency measures [2][3]. - The adjusted net profit forecast for 2024 is set at RMB 1 billion, with a downward revision of the target price from HKD 15 to HKD 14 [2][3]. Financial Performance Summary - In the first half of 2024, total revenue decreased by 10% year-on-year to RMB 3.3 billion, with adjusted net profit at RMB 558 million, down 5% year-on-year. Game and Mynd.ai revenues fell by 1% and 23% respectively [2][6]. - The company’s game revenue is projected to recover in the second half of 2024, with anticipated positive growth driven by 2-3 new game releases [2][6]. - The financial forecasts for 2024E to 2026E show a decline in revenue estimates, with total revenue expected to be RMB 6.545 billion in 2024, down 13% from previous estimates [3][9]. Key Financial Metrics - The company reported a gross profit margin of 66.6% for 2024E, reflecting an increase from 61.9% in 2023 [3][9]. - The adjusted operating profit margin is projected to be 17.8% for 2024E, up from 16.7% in 2023 [3][9]. - The forecasted net profit for 2024 is RMB 1.007 billion, with a net profit margin of 15.9% [9].

Revenue Performance - Domestic game revenue increased by 2.1% year-on-year to RMB 1.36 billion, driven by enhanced player engagement and retention[2] - Overall game revenue for the first half of 2024 reached RMB 1.86 billion, a decrease of 3.0% year-on-year, accounting for 87.8% of game and application service revenue[4] - The flagship IP "Magic Domain" generated revenue of RMB 1.69 billion, with a year-on-year decline of 3.8% due to external factors affecting the overseas version[4] - The "Honor of Kings" IP saw a 29.6% year-on-year revenue increase, attributed to gameplay enhancements and successful esports events[5] - Revenue for the first half of 2024 was RMB 3.3 billion, a decrease of 10.3% year-on-year[9] - Revenue from games and application services was RMB 2.12 billion, accounting for 64.3% of total revenue, a decrease of 0.8% year-on-year[9] - Revenue from Mynd.ai was RMB 1.18 billion, accounting for 35.7% of total revenue, a decrease of 23.5% year-on-year[9] - Total revenue for the six months was RMB 3,301 million, down from RMB 3,681 million, indicating a decline of 10.3%[14] - Revenue from prepaid game cards was RMB 1,862 million, while revenue from education services was RMB 276 million, contributing to a total revenue of RMB 3,301 million for the six months ended June 30, 2024[29] Profitability and Financial Metrics - Gross profit was RMB 2.2 billion, a decrease of 3.8% year-on-year[9] - Operating profit for the six months ended June 30, 2024, was RMB 634 million, a decrease of 9.3% compared to RMB 699 million in 2023[12] - Non-GAAP operating profit was RMB 640 million, down from RMB 692 million, reflecting a decline of 7.5% year-over-year[12] - Profit attributable to the company's owners was RMB 400 million, a decrease of 20% from RMB 500 million in the previous year[12] - Gross profit margin decreased to 66.7% from 62.1%, with gross profit at RMB 2,199 million compared to RMB 2,287 million[14] - Total comprehensive income for the period was RMB 294 million, down from RMB 513 million, reflecting a decrease of 42.7%[15] Cash Flow and Assets - Operating cash flow increased by RMB 340 million compared to the same period last year[7] - Cash and cash equivalents increased to RMB 2,382 million from RMB 2,241 million, showing a growth of 6.3%[16] - Total assets as of June 30, 2024, were RMB 11,561 million, compared to RMB 10,982 million at the end of 2023, representing a growth of 5.3%[18] - The company's net asset value increased to RMB 6,280 million from RMB 6,174 million, reflecting an increase of 1.7%[18] - Net cash generated from operating activities for the six months ended June 30, 2024, was RMB 259 million, a decrease of 43.4% compared to RMB 457 million for the same period in 2023[19] - The net cash used in investing activities was RMB 247 million, down from RMB 549 million year-over-year, indicating a reduction of 55.1%[19] - The net cash generated from financing activities increased significantly to RMB 156 million from RMB 20 million, representing a growth of 680%[19] Game Development and Future Plans - The new game "Code - Alpha" is expected to launch in multiple countries in the second half of the year, contributing to revenue growth[2] - The new Roguelike game "Star Sea Assault" received an 8.0 user rating on TapTap and is projected for global release in 2025[5] - The company plans to implement a multi-faceted growth strategy for the "Magic Domain" IP, including the launch of "Magic Domain Rebirth" in Q1 2025[4] - The company is actively developing new games targeting various genres, including MMORPG and card games, to expand its market presence[5] - The overseas market for "End of Oath" is expected to launch in the first half of 2025, following positive feedback from testing[5] - Mynd.ai plans to launch four to five new games based on existing flagship IP and new IP in the next six to nine months[6] Shareholder and Corporate Governance - The company paid a mid-term dividend of HKD 0.40 per share, amounting to RMB 194 million[37] - The company has complied with the corporate governance code throughout the review period[76] - The Audit Committee was established on October 15, 2007, to oversee the company's financial reporting and internal control systems[77] - The Audit Committee consists of three independent non-executive directors, including the chairman, Mr. Li Shengzong[77] - The interim financial results for the six months ending June 30, 2024, have been reviewed by the Audit Committee, which confirmed compliance with applicable accounting standards[77] Debt and Liabilities - The total liabilities decreased from RMB 1,555 million to RMB 1,425 million, a reduction of approximately 8.4%[43] - The company added bank loans totaling RMB 863 million during the reporting period, compared to RMB 703 million in the previous six months[45] - The total bank loans amounted to approximately RMB 1,318 million, up from RMB 1,034 million as of December 31, 2023, with fixed-rate loans increasing to RMB 1,121 million from RMB 762 million[52] - The asset-liability ratio increased to 0.21 as of June 30, 2024, from 0.17 as of December 31, 2023[52] Employee and Share Option Plans - The total number of employees increased to 6,123 as of June 30, 2024, from 5,984 as of December 31, 2023, with R&D staff rising to 3,165 from 3,021[53] - The company has adopted the 2024 Share Option Scheme and the 2024 Share Award Scheme, which collectively allow for a total of 53,126,253 share options and awards, representing 10% of the company's shares[62] - The 2024 Share Option Scheme is set to last for ten years starting from June 6, 2024, and aims to reward eligible participants for their contributions to the group[63] - The company’s share option plans are designed to incentivize employees and service providers for their contributions to the group[63]

Share Valuation - The fair value of the awarded shares on July 27, 2023, and October 27, 2023, were HKD 3,696,000 and HKD 1,668,000 respectively[1] - The closing prices of the shares prior to the awards on July 27, 2023, and October 27, 2023, were HKD 14.128 and HKD 13.74 respectively[1] Expense Recognition - The total amount to be recognized as expenses for the awarded shares is based on their fair value, considering all market performance conditions[1] - The company will adjust its estimates of the number of shares expected to vest based on non-market vesting and service conditions at each reporting period end[1] - The adjustments to the original estimates will be reflected in the consolidated income statement and will correspondingly adjust equity[1] Reporting Impact - The information provided does not affect other data disclosed in the 2023 annual report[2]

本次电话会议仅服务于长江证券研究所白名单客户未经长江证券事先书面许可任何机构或个人不得以任何形式对外公布、复制、刊载、转载、转发、引用本次会议相关内容否则由此造成的一切后果及法律责任由该机构或个人承担长江证券保留追究其法律责任的权利 各位投资者晚上好我是长江城的高超今天给各位领导汇报一下我们关于细分的互联网领域的一个持续的跟踪我们之前也提到过我们现在每周固定是打造三档栏目周二晚上是AI的黄金档 对于整个AI的这个技术变革以及应用端进行一个持续的跟踪周三是MR的超声波这个栏目的话主要是针对技术硬件跟软件端的一个布局进行演讲那周四晚上或者是周天晚上的这档栏目的话就是对整个传媒互联网细分的一些赛道包括我们前期对于这个电影票房对于广告的一个这个复苏对于游戏短剧等等不同的领域它的一个跟踪 那互联网的话也是近期大家看到这前一周跟这一周来看的话是整个互联网整个一级报业绩的一个密集的这个发布期所以这一期的话我们就是只对我们重点跟踪的篇内容赛道的一些互联网厂商他们的一级报进行一个简单的这个综述跟热点的一个提取整体来看的话我们是认为整体表现的话的亮点主要体现在三个方面 一个方面是来自于在相对而言比较高渗透率高基数的情况下整个运营 ...

Financial Performance - In 2023, NetDragon's gaming business revenue rebounded strongly, achieving RMB 3.8 billion, a year-on-year increase of 9.6% compared to a decline of 5.8% in 2022[4]. - Total revenue for 2023 was RMB 7.101 billion, a decrease of 9.7% year-on-year[17]. - Revenue from gaming and application services was RMB 4.189 billion, accounting for 59.0% of total revenue, with a year-on-year growth of 6.6%[17]. - Revenue from Mynd.ai was RMB 2.910 billion, representing a 25.7% decrease year-on-year[17]. - Gross profit for 2023 was RMB 4.398 billion, reflecting a 1.9% increase year-on-year[17]. - Operating profit decreased by 28.6% year-on-year to RMB 821 million[17]. - Profit attributable to the company's owners was RMB 550 million, down 34.1% year-on-year[17]. - Basic earnings per share for 2023 was RMB 103.00, compared to RMB 154.15 in 2022[15]. - Cash flow from operating activities increased by 4.2% year-on-year to RMB 1.1 billion[17]. - Non-GAAP operating profit was RMB 1.1 billion, a decrease of 12.7% year-on-year[17]. Gaming Business Highlights - NetDragon's gaming revenue has increased 3.9 times over the past decade, with nine out of ten years showing revenue growth[4]. - NetDragon's core gaming IPs have shown strong performance, contributing to the overall growth of the gaming business[3]. - Domestic and overseas game revenues grew by 10.5% and 4.5% respectively, with overseas revenue accounting for 15% of total game revenue despite a 5.7% decline in overall overseas revenue for Chinese game developers[21]. - The flagship IP "Magic Domain" achieved a revenue increase of 12.4% to RMB 3.4 billion, with the flagship PC game generating RMB 2.9 billion, a 14% year-on-year growth[21]. - The mobile version of "Magic Domain" saw a 50.4% increase in monthly active users, contributing to 36.2% of PC game active users[22]. - The "Honor of Kings" IP experienced a revenue growth of 5.8% in 2023, supported by a strong player base of over 300 million[22]. - The company plans to launch a new game, "Code-Alpha," in 2024, leveraging the success of the "Conquest" game[22]. Education Business Developments - The company successfully completed the spin-off of its overseas education business, Mynd.ai, which is now listed in the United States, enhancing its competitiveness in the hardware sector[5]. - The company aims to redefine the education industry landscape through its leadership position in the classroom hardware and software market[6]. - NetDragon's education business hardware sales have returned to pre-pandemic levels, indicating recovery in the sector[5]. - Mynd.ai's revenue for 2023 was RMB 2.9 billion, down from RMB 3.9 billion in 2022, reflecting a return to normalcy post-COVID-19[24]. - The gross margin for Mynd.ai increased to 25%, up 1.3 percentage points from 2022, due to lower raw material and shipping costs[24]. Strategic Initiatives and Future Plans - The company plans to continue creating long-term value for shareholders in 2024, building on its growth strategies[7]. - The company aims to expand its market presence in Japan, the Middle East, and Indonesia in 2024, focusing on new game development projects[23]. - Mynd.ai plans to enhance its software business and develop subscription-based SaaS revenue opportunities in 2024[25]. - The company is committed to enhancing its software quality management system, led by its senior vice president, Mr. Lin, who has a strong background in software quality assurance[50]. Corporate Governance and Management - The company has a strong management team with over 30 years of experience in the IT and telecommunications industry, led by Vice Chairman Dr. Liang Nianjian[43]. - The company has received multiple awards for its contributions to the economy and youth development in Fujian Province[44]. - The board of directors includes four executive directors and four non-executive directors, with a focus on strategic oversight and performance monitoring[119]. - The company has adopted corporate governance practices in line with the listing rules, ensuring effective risk management[118]. - The company has implemented a board diversity policy since 2013 and continues to monitor and maintain it[151]. Employee and Workplace Culture - The company emphasizes a learning culture, encouraging lifelong learning and conducting comprehensive training for employees[40]. - The company provides a friendly and enjoyable work environment with comprehensive facilities, including sports courts and a swimming pool[41]. - The company has established employee inclusion groups to enhance communication and cooperation among diverse groups, focusing on gender, race, LGBTQ+, and disability[193]. - The company conducts annual health check-ups for employees and provides comfortable spaces for pregnant and breastfeeding employees[193]. Sustainability and ESG Commitment - In December 2023, NetDragon received an upgrade in its ESG rating to BBB from MSCI, reflecting its commitment to sustainable development[7]. - The company is committed to balancing economic growth, social progress, and environmental protection as part of its sustainable development governance[148]. - The company has established a comprehensive cybersecurity management framework, ensuring strict compliance with local laws and regulations related to information security[165]. - The company has implemented advanced monitoring systems to detect and respond to suspicious network activities promptly[178]. Risk Management and Compliance - The company is committed to complying with various legal and regulatory requirements to protect employee rights and ensure data security[54]. - The company acknowledges the risks associated with new technologies and games that could render current offerings less appealing, impacting profitability and growth prospects[52]. - The group may face significant adverse tax consequences if the Chinese tax authorities determine that the contractual arrangements are not established on an arm's length basis[93]. - The company has established a dedicated internal audit department to oversee employee feedback and suggestions, ensuring a transparent communication environment[198].

Table_BaseInfo 2024 年 4 月 9 日 公司动态分析 网龙（777.HK） 证券研究报告 软件互联网 整体业绩保持稳定，教育业务未来可期 投资评级： Xx 买入 xx 事件：2023年公司收入71亿元，同比下降10%；归母净利润5.5亿元，同比 下降34%。游戏业务全年收入42亿元，同比提高7%，教育业务（MYND.AI）收 目标价格： 16.0 港元 入29亿元，同比下降26%。我们认为公司游戏业务2024年将保持增长态势， 现价(2024-4-9)： 11.06港元 而教育业务最差的时间已经过去，市场逐渐恢复常态，2023年或是业绩低点， 值得关注。 报告摘要 总市值(亿港元) 58.8 整体收入下滑，游戏基本盘保持稳健 公司2023年整体收入同比下降10%至71 流通市值(亿港元) 58.8 亿元，其中游戏业务同比增长7%至42亿元。游戏业务在本年度保持增长，国 总股本(亿股) 5.3 流通股本(亿股) 5.3 内及海外业务收入分别同比增长11%和5%（海外游戏收入占比15%）。得益于 12个月低/高(港元) 10.5/15 公司正确的游戏运营策略 - 通过高频更新提升游戏可玩性、满 ...

Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted to HKD 15, indicating a potential upside of 37% from the current price of HKD 10.96 [2][3][14] Core Insights - The company's revenue for 2023 was RMB 7.1 billion, a decrease of 10% year-on-year, which was below market expectations by 3.1%. Game and application service revenue grew by 6.6% to RMB 4.2 billion, while Mynd.ai revenue fell by 25.7% to RMB 2.9 billion due to the normalization of the post-pandemic operating environment [2][3] - The gross margin improved by 7.0 percentage points to 61.9%, primarily due to the increased proportion of high-margin game revenue. The adjusted net profit was RMB 0.96 billion, with an adjusted net profit margin of 13.5% [2][3] - The company declared a final dividend of HKD 0.4 per share, bringing the total annual dividend to HKD 1.8 per share, resulting in a dividend yield of 16.4% [2] Revenue and Profit Forecast - The company expects revenues of RMB 7.2 billion and RMB 7.6 billion for FY24E and FY25E, respectively, with adjusted net profits projected at RMB 1.1 billion and RMB 1.3 billion for the same periods [3][14] - The target price corresponds to an 8x P/E ratio for 2024 [2][3] Game Business Performance - The gaming segment remained stable, with game revenue increasing by 9.6% to RMB 3.8 billion. Domestic game revenue grew by 10.5%, while overseas revenue increased by 4.5%, affected by a decline in player activity post-pandemic [2][3] - The core game IP "Magic Domain" maintained stability, with its revenue rising by 14% to RMB 2.9 billion and user engagement increasing by 50% year-on-year [2] Education Software Market Position - The company’s Promethean brand continues to lead the global K-12 interactive flat panel display market (excluding China) with a market share of 17.4%. Recently, Promethean launched a comprehensive SaaS solution to leverage hardware advantages and explore software revenue opportunities [2][3]