Core Insights - The "AI + Education" sector is experiencing a significant value reassessment driven by technological advancements and policy support, particularly with the introduction of DeepSeek, which reduces the cost of AI model development and deployment [1] - The Ministry of Education and other departments have issued guidelines to accelerate digital education, focusing on integration, intelligence, and internationalization, which is expected to stimulate the application of AI in education [1] Company Developments - NetDragon has been a pioneer in the "AI + Education" field, having invested in AI research since 2017 and successfully commercializing various AI educational products [1][2] - The company aims to establish the largest global education content production center in Hong Kong, enhancing the efficiency and quality of interactive educational games [2] - NetDragon's AI education content unit, "Photosynthesis," was showcased at the Global Smart Education Conference in September 2024, highlighting the company's innovative capabilities [2] Strategic Partnerships - NetDragon is collaborating with Thailand's Ministry of Higher Education to launch an online AI education platform, providing vocational training in sectors like new energy vehicles, aligning with national policies for developing skilled talent in emerging markets [2] - The company has formed a strategic partnership with Hong Kong Polytechnic University to integrate advanced AI and vocational training content into its education platforms [2] Technological Integration - NetDragon's subsidiary, Mynd.ai, has been independently listed and is set to launch new SaaS products that will incorporate AI technology, enhancing the educational experience for users [3] - The company is a technical service partner for the National Smart Education Public Service Platform, which has over 163 million registered users, indicating its significant role in the national education framework [3][4] Market Positioning - NetDragon has established a strong foundation in educational technology, with over a decade of experience in content, software, and hardware, positioning itself to benefit from the dual support of technological advancements and favorable policies [4] - The company has been recognized for its collaboration with educational institutions to develop modern industry colleges, showcasing its commitment to integrating education with industry needs [5] Financial Performance - NetDragon's gaming sector is also benefiting from AI applications, with popular games like "Heroes of the Storm" integrating AI features to enhance player experience [6] - The company has a history of consistent dividend payments, with a proposed annual dividend of 0.9 HKD per share for 2024, reflecting a dividend yield of over 9% [6]

Financial Performance - The company reported a 19.1% year-on-year increase in pre-tax profit, reaching RMB 756 million[12]. - Revenue for 2024 was RMB 6,047 million, a decrease of 14.8% year-over-year[29]. - Revenue from gaming and application services was RMB 3,938 million, accounting for 65.1% of total revenue, down 6.0% year-over-year[30]. - Revenue from Mynd.ai business was RMB 2,106 million, representing 34.8% of total revenue, a decrease of 27.6% year-over-year[29]. - Gross profit for 2024 was RMB 3,942 million, a decline of 10.4% compared to the previous year[29]. - Operating profit for 2024 was RMB 745 million, a decrease of 9.3% year-over-year[29]. - Profit attributable to the company's owners was RMB 311 million, down 43.5% from RMB 550 million in 2023[29]. - Cash flow from operating activities was RMB 1,100 million, a decrease of 5.7% year-over-year[29]. - Basic earnings per share for 2024 was RMB 58.60, compared to RMB 103.00 in 2023[24]. - Adjusted EBITDA loss was RMB 172 million, compared to a loss of RMB 78 million in 2023[43]. Cash and Investments - Operating cash flow remained stable at RMB 1.1 billion, supporting the ongoing "AI+" strategy[16]. - The net cash increased by 13.3% to RMB 2.1 billion, providing a solid foundation for future growth[16]. - Cash balance at the end of 2024 was RMB 541 million, down from RMB 650 million at the end of 2023[43]. - Interest-bearing debt decreased by RMB 148 million by the end of 2024[43]. - The company plans to invest RMB 50 million in Wuxi Benge New Materials Technology Co., Ltd., acquiring approximately 2.27% equity[153]. Dividends - The board declared a final dividend of HKD 0.5 per share, a 25.0% increase compared to the previous year[16]. - The final dividend for 2024 is set at HKD 0.50 per ordinary share, reflecting a year-on-year increase of 25.0%[34]. - The interim dividend of HKD 0.40 per share was paid on October 31, 2024, and a final dividend of HKD 0.50 per share is proposed, expected to amount to approximately RMB 246 million[121]. AI and Technology Initiatives - The company successfully implemented an AI production line for gamified educational content, enhancing operational efficiency[14]. - The company aims to deepen the deployment of advanced AI tools across business segments to enhance organizational efficiency[14]. - The "AI+" strategy has led to a reduction in employee costs by nearly RMB 100 million[14]. - The company is actively exploring "AI-native" gaming and interactive educational games to capture new business opportunities[15]. - The company is collaborating with Thailand's Ministry of Higher Education to develop online AI education platforms for vocational training[14]. Market and Competitive Landscape - The company faces increasing competition in the online and mobile gaming industry, with significant players like Electronic Arts and Tencent Holdings posing challenges to market share and talent retention[109]. - The company relies on consumer spending from gamers, which may be affected by economic uncertainties, including inflation and liquidity crises in major economies, potentially impacting financial performance[111]. Employee and Talent Management - The company has successfully attracted 478 outstanding talents from the gaming and education sectors in 2024, including 97 senior elite talents, enhancing the talent structure[70]. - The total number of full-time employees as of December 31, 2024, is 4,593[71]. - The company emphasizes a "people-oriented" management philosophy, focusing on employee experience and providing various welfare programs throughout the employee lifecycle[75]. - The company has initiated large-scale campus recruitment activities, attracting 27,145 resumes from graduates, ultimately hiring 86 outstanding candidates[70]. Governance and Compliance - The board includes independent directors with significant legal and investment experience, ensuring robust governance and oversight[88][86]. - The company is committed to maintaining strong corporate governance through its various committees, including the remuneration and audit committees[88]. - The company strictly adheres to various laws and regulations regarding employee rights and data protection, ensuring compliance with local and international standards[115]. Strategic Partnerships and Collaborations - The company signed a term sheet with Beijing Zhongke Wenge Technology Co., Ltd. for exclusive cooperation in promoting AI services outside mainland China, with a potential investment of RMB 75 million[39]. - The company has established partnerships with educational authorities and institutions to improve educational services[95]. Future Outlook and Plans - The company plans to launch the sequel to its flagship IP "Magic Domain" in 2025, with the new MMORPG mobile game "Code - Dragon" also set for overseas release[38]. - The company is expanding its online education business overseas, covering a wide range of educational fields[95]. - The company is committed to innovation in educational technology, particularly in AI and cloud computing[94]. Risks and Challenges - The group may face significant adverse tax consequences if the tax authorities determine that the contractual arrangements are not established on an arm's length basis[190]. - The group may incur additional tax liabilities if the tax authorities impose penalties for any unpaid taxes[190]. - There are significant risks associated with the contractual arrangements, including potential non-compliance with Chinese laws, which could adversely affect the company's ability to operate[185].

Core Viewpoint - First Shanghai Securities maintains a "Buy" rating for NetDragon (00777) with a target price of HKD 15, highlighting the stability of its gaming business and the potential market space for its education business [1] Group 1: 2024 Performance - NetDragon is expected to achieve a total revenue of CNY 6.05 billion and a net profit of CNY 310 million in 2024, with performance pressure stemming from adjustments in its two core businesses [2] - The gaming business revenue is projected at CNY 3.94 billion, with a decline in income due to the company's proactive reduction of payment thresholds to expand its user base [2] - Despite revenue challenges, net profit is expected to increase by 17.4% year-on-year, reflecting effective cost control, and the gross margin is anticipated to rise by 3.3 percentage points to 65.2% [2] Group 2: Gaming Business Adjustments - The main IP, "Magic Domain," experienced a revenue decline, but the overall Monthly Active Users (MAU) grew by 10.1%, with the "Magic Domain Interconnected Version" MAU significantly increasing by 37.5%, indicating effective user engagement strategies [2] - The company launched "Magic Domain Rebirth" this year and plans to release a series of new games, including the MMORPG mobile game "Code-Dragon," to enrich its product matrix [2] - The AI + gaming strategy is beginning to show cost reduction and efficiency improvements, suggesting a potential stabilization and recovery in the gaming business [2] Group 3: Education Business Challenges - The education business generated revenue of CNY 2.11 billion, showing a year-on-year decline due to a cyclical adjustment in the overseas education information market [3] - The demand for Interactive Flat Panel Displays (IFPD) has shown temporary weakness, although gross margin improved by 1 percentage point to 26% due to optimized material and transportation costs [3] - While there are short-term pressures from fluctuations in overseas education budgets, the long-term logic of increasing global digital penetration in education remains unchanged, with potential for profitability improvement post-market adjustment [3]

Investment Rating - The investment rating for the company is downgraded to Neutral [2][3]. Core Insights - The company's revenue growth in gaming and education is facing uncertainty in the short term, with a target price adjustment from HKD 14.00 to HKD 10.20, reflecting a potential decline of 2.7% [2][3]. - The company is focusing on the improvement of the education market in Europe and the US, as well as the anticipated recovery in gaming revenue in the second half of the year [2][8]. Financial Performance Summary - **2024 Performance**: Total revenue is expected to decline by 15% to RMB 6,047 million, with gaming and Mynd.ai revenues decreasing by 6% and 28% respectively [7][8]. - **2025 Forecast**: Revenue is projected to further decline to RMB 5,241 million, with gaming revenue at RMB 3,555 million and Mynd.ai at RMB 1,685 million, both showing a decrease of 10% and 20% respectively [6][8]. - **Profitability Metrics**: Adjusted net profit is expected to drop to RMB 530 million in 2025, down 26% from the previous year, with a net profit margin of 10.1% [6][8]. Revenue Breakdown - **Gaming and Applications**: Revenue is forecasted to be RMB 3,555 million in 2025, down from RMB 3,938 million in 2024 [8]. - **Mynd.ai**: Expected revenue for 2025 is RMB 1,685 million, a significant drop from RMB 2,106 million in 2024 [8]. Cost and Expense Management - The company is implementing cost-saving measures, particularly in operational expenses, which are projected to decrease from RMB 3,351 million in 2024 to RMB 2,878 million in 2025 [8][14]. - Adjusted operating profit is expected to decline to RMB 577 million in 2025, with an operating profit margin of 11.0% [6][8]. Market Position and Valuation - The company's market capitalization is approximately HKD 5,565.61 million, with a 52-week high of HKD 12.78 and a low of HKD 9.47 [5][8]. - The stock's average trading volume is 1.83 million shares per day, indicating moderate liquidity [5].

Investment Rating - The investment rating for the company is downgraded to Neutral with a target price reduced from HKD 14.00 to HKD 10.20, indicating a potential downside of 2.7% [2][3][11]. Core Insights - The company's performance in the short term is under pressure, particularly in its gaming and education segments, with revenue growth facing uncertainties. The AI+ strategy is expected to optimize operational costs, but short-term profits may still decline. The focus is on the improvement of the education market in Europe and the US, as well as the anticipated recovery in gaming revenue in the second half of the year [2][7][8]. Financial Performance Summary - **2024 Performance**: Total revenue is projected to decline by 15% year-on-year to RMB 6,047 million, with gaming and Mynd.ai revenues expected to decrease by 6% and 28% respectively. Adjusted net profit is forecasted to drop by 25% to RMB 718 million [7][8]. - **2025 Forecast**: Revenue is expected to further decline to RMB 5,241 million, with gaming revenue at RMB 3,555 million and Mynd.ai at RMB 1,685 million, reflecting a 26% reduction in both segments. Adjusted net profit is anticipated to be RMB 530 million, a 56% decrease [6][14]. - **Profitability Metrics**: The adjusted operating profit margin is projected to decrease significantly from 19.1% in 2024 to 11.0% in 2025, while the adjusted net profit margin is expected to drop from 16.9% to 10.1% [6][14]. Market Position and Trends - The company is navigating a challenging environment, with strategic adjustments in its gaming operations and a focus on cost reduction to mitigate profit pressures. The anticipated launch of new games in the second half of 2025 is expected to support a recovery in gaming revenue [2][7][8].

Mynd.ai业务 2024全年公司Mynd.ai业务营收21.1亿元，主要系海外教育信息化行业仍处于调整周期。毛利率26.0%/同 比+1.0pcts，主要系单位材料和运输成本节约。研发、销售、行政费用率分别9.6%/12.6%/17.2%，同比 分别+2.9/+1.4/+8.0pcts。 智通财经APP获悉，中信证券发布研报称，维持网龙(00777)"买入"评级，目标价 16 港元。公司公布 2024年全年业绩，2024年录得营收/归母净利润分别60.5/3.1亿元。展望2025年，公司游戏业务上半年仍 受战略主动调整略有压力，但该行预计公司有望通过AI+战略实现较好的费用控制，全年营业利润料能 持；Mynd.ai业务方面，长期看，在全球教育信息化渗透率提升趋势下，公司该业务有望恢复增长。 中信证券主要观点如下： 整体业绩 公司公布2024年全年业绩，2024年分别录得营收/归母净利润60.5/3.1亿元，主要系一次性非现金递延所 得税费用影响(约4.5亿元)，剔除该影响后公司净利润同比+17.4%。盈利方面，公司全年毛利率65.2%/同 比+3.3pcts;销售、行政、研发费用率分别12.5%/19.3 ...

Core Viewpoint - The company has established a dual-core business strategy of "AI + Gaming" and "AI + Education," accelerating AI research and global expansion to capture growth opportunities brought by the AI wave [1][10]. Financial Performance - For the fiscal year 2024, the company reported revenue of RMB 60.47 billion, a year-on-year decline, primarily due to product optimization in the gaming sector and a demand pullback in its subsidiary Mynd.ai [1]. - Gross profit reached RMB 39.42 billion, with a gross margin of 65.2%, an increase of 3.3 percentage points year-on-year [1]. - EBITDA profit was RMB 14.18 billion, up 7.1% year-on-year, while net profit attributable to shareholders was RMB 6.46 billion, reflecting a 17.4% increase [1]. - The company declared a final dividend of HKD 0.50 per share, a 25% increase from the previous year [1]. AI Integration in Business - The company has fully established AI production lines in both gaming and education sectors, integrating the DeepSeek model across all business operations [3]. - In the gaming sector, AI has been applied in various areas such as code writing, design, and customer service, significantly reducing the need for development personnel and cutting costs [3]. - Active user metrics for key IP games like "Magic Domain" and "Honor of Kings" have shown growth, with the average monthly active users (MAU) for PC games increasing by 16.1% year-on-year [3]. Global Expansion and New Products - The company is optimizing its product lines and expanding its core IPs into overseas markets, with the overseas version of "Conquest" achieving an 8.8% revenue increase in local currency for 2024 [4]. - New games like "Code-Dragon" are expected to launch in overseas markets, supporting the company's game export strategy [4]. AI in Education - The company has been a pioneer in AI education since 2017, launching various AI-driven educational products and platforms, including the EDA metaverse education ecosystem in 2024 [4][5]. - Mynd.ai's Prometheus has a significant installation base covering over 1 million classrooms, providing a strong market foundation for AI educational devices [5]. R&D and Industry Chain Expansion - The company emphasizes R&D investment, particularly in AI, which is expected to optimize research costs and enhance profitability [6]. - The number of R&D personnel decreased by 14% in 2024 due to AI integration, which is projected to improve efficiency by 50%-200% [6]. Cash Flow and Shareholder Returns - As of the end of 2024, the company had net cash of RMB 2.1 billion, reflecting a 13.3% year-on-year increase, ensuring sufficient funds for AI development and shareholder returns [2][8]. - The company has maintained a high dividend payout ratio, with a historical average of 70.61% since 2005, and a dividend yield of nearly 10% for 2024 [9]. Future Outlook - The dual strategy of "AI + Gaming" and "AI + Education" is expected to drive continued growth in the company's performance, supported by strong cash flow and a commitment to R&D [10].

Summary of Key Points Core Viewpoint - ST New潮's stock price has shown significant volatility, with a recent increase of 6.39% over the past week, indicating potential investor interest and market activity [1]. Trading Information - As of March 28, 2025, ST New潮's stock closed at 2.33 yuan, up from 2.19 yuan the previous week, with a market capitalization of 15.845 billion yuan, ranking 2nd in the oil and gas extraction sector and 1003rd among A-shares [1]. - The stock has appeared on the trading alert list due to a cumulative price deviation of 12% over three consecutive trading days, marking its second appearance in five days [1][3]. Company Announcements - The company confirmed that there are no undisclosed significant matters affecting stock trading, following a self-examination [2]. - ST New潮 received a letter from Jindi Petroleum regarding the progress of a takeover bid, which is still in process, with no confirmed timeline for the full offer report [1][3]. - The company is in the process of appointing an auditing firm for the 2024 fiscal year, with a temporary shareholders' meeting scheduled for April 7, 2025, to discuss the appointment of Lixin Accounting Firm [2].

智通财经APP获悉，3月27日，网龙(00777)召开2024年年度业绩发布会。集团副董事长兼执行董事梁念 坚博士介绍，在游戏板块，公司持续推进"游戏+AI"战略，不仅优化开发效率与画面表现，还延长《魔 域》等经典IP的生命周期。在教育板块，欧美市场短期承压，预计2026年实现全面复苏。 2024年，AI应用正加速渗透各行业，网龙积极布局"AI+游戏"和"AI+教育"双赛道成效显著。据网龙集团 代理首席财务官刘克建先生介绍，2024年，公司的毛利率提升3.3个百分点至65.2%，EBITDA利润率增 长4.8个百分点至23.4%，税前利润增长19%至7.6亿元。 另外，公司经营性现金流增长至11亿元并连续六年保持超10亿现金流。基于强劲的现金流，集团宣布派 发末期股息每股普通股0.50港元(2023年末期股息：每股普通股0.40港元)，同比增长25.0%。值得注意的 是，得益于2024年第四季度启动的AI降本措施，网龙今年经营开支将进一步压减。 具体来看，近年来，网龙在AI与游戏的结合上取得了重要突破。据网龙集团高级副总裁林琛介绍，从 2023年开始，AI不仅帮助网龙实现了显著的降本增效，如在研发团队精简14 ...

Core Viewpoint - NetDragon reported a 14.8% year-on-year decline in revenue for the fiscal year ending December 31, 2024, despite a significant growth of 356% in its education services business [3][4]. Group 1: Financial Performance - Total revenue for NetDragon in 2024 was RMB 6 billion, down from the previous year [3]. - Gross profit decreased by 10.4% to RMB 3.9 billion, while net profit attributable to shareholders fell by 43.5% to RMB 311 million [3]. - The company recorded a net profit of RMB 114 million, a decline of 74.4% year-on-year [3]. - The gaming and application services segment generated RMB 3.9 billion, accounting for 65.1% of total revenue, down 6.0% [3]. - Revenue from the overseas education subsidiary Mynd.ai was RMB 2.1 billion, representing 34.8% of total revenue, a decrease of 27.6% [3]. Group 2: Business Segments - Mynd.ai's revenue decline was attributed to challenges in the global education market, while the company is transitioning from a hardware supplier to a leader in the "Classroom as a Service" (CaaS) sector [5]. - Mynd.ai's education device sales revenue was RMB 1.77 billion, down 37.5%, while education services revenue surged to RMB 333 million, up 356% [4][5]. - Mynd.ai reported a loss of RMB 279 million, but this represented an 11.4% reduction in losses compared to the previous year [4]. Group 3: Strategic Initiatives - The implementation of the "AI+ strategy" improved operational efficiency, reducing employee costs by nearly RMB 100 million [4]. - The company optimized its capital structure, leading to a 19.1% increase in pre-tax profit to RMB 756 million [4]. - Net cash increased by 13.3% to RMB 2.1 billion, with stable operating cash flow of RMB 1.1 billion [4]. Group 4: Workforce and Corporate Actions - The number of employees increased from 5,984 at the beginning of the year to 6,123 mid-year, but decreased to 4,593 by year-end [5]. - The company completed the sale of non-strategic early education business in October 2024, which helped repay some debt and optimize cost structure [5]. - NetDragon announced a final dividend of HKD 0.50 per share, totaling approximately RMB 246 million [6].