Summary of Key Points from the Conference Call Company Overview - **Company**: NetDragon - **Industry**: Gaming and Education Technology - **Founded**: 1999, listed on Hong Kong Stock Exchange in 2007 - **Key Milestones**: - 2013: Sold 91 Wireless for $1.9 billion - 2015: Acquired Promethean, entering the education technology sector - 2023: Spun off Promethean into a separate publicly listed company, Mand AI [2][3] Core Business Segments Gaming - **Flagship IP**: "Magic Domain" characterized by: - 100% original design, enhancing legal and financial stability - Fully self-published, improving profit margins - Long-term operation with high user engagement [4] - **Revenue Growth**: - "Conquer" has over 60% of revenue from overseas, with plans for deeper localization [7] - "Soul of Heroes" saw a 10% year-over-year increase in APA due to collaboration with domestic IP [9] - **AI Integration**: - AI production centers established to enhance content adaptation and efficiency - Introduction of smart NPCs and AI-generated content to improve user experience [6][14] Education Technology - **Market Position**: - Promethean holds a 70% market share in the U.S. K12 interactive display market and 30% in Europe [11] - **User Base**: Nearly 200 million users on the AI+ education platform [2][8] - **Future Plans**: - Interconnect provincial platforms with national platforms for increased service opportunities - Collaborations with international markets, including a recent project in Thailand [8] Financial Performance - **R&D Expenses**: Decreased by 27% year-over-year in the first half of 2025 [1][17] - **Shareholder Returns**: Announced over HKD 600 million in returns through dividends and buybacks in the next 12 months [2][13] - **Profitability Outlook**: - EBITDA expected to break even by Q4 2025, with growth anticipated from 2026 to 2028 [23] Strategic Initiatives - **AI Transformation**: - Focus on developing impactful AI-native games and educational content [5][16] - **Investment Strategy**: - Recent investments in companies like Slow Point AI and Chuangqi Si to enhance AI capabilities and SaaS offerings [12] - **OpenQuest Academy Collaboration**: - Aims to leverage AI infrastructure for global educational content creation [10] Market Trends and Challenges - **Gaming Market**: - Adjustments in "Magic Domain" game mechanics led to a double-digit increase in monthly active users [26] - Anticipated revenue growth from new projects and regional expansions [27] - **Education Market**: - Post-pandemic demand fluctuations have led to a slowdown, but a recovery is expected as hardware needs renewal [21][22] Additional Insights - **Team Integration**: - AI production centers are enhancing team collaboration and efficiency across different projects [6][7] - **SaaS Growth**: - New product launches are expected to increase SaaS subscription rates, contributing to overall profit margins [24] This summary encapsulates the key points discussed in the conference call, highlighting the company's strategic direction, financial performance, and market positioning within the gaming and education technology sectors.

致：香港交易及結算所有限公司 截至月份: 2025年9月30日 狀態: 新提交 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 公司名稱: 網龍網絡控股有限公司 呈交日期: 2025年10月2日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00777 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 1,000,000,000 | USD | | 0.01 | USD | | 10,000,000 | | 增加 / 減少 (-) | | | | | | | USD | | | | 本月底結存 | | | 1,000,000,000 | USD | | 0.01 | USD | | 10,000,000 | 本月底法定/註冊股 ...

Group 1 - The online education sector in Hong Kong has seen a general increase, with stocks like NetDragon rising over 12% to reach a new high, New Oriental up over 5%, and Thinking乐 Education increasing by 2% [1] - Recent positive developments in online education are attributed to policy support, technological empowerment, and industry regulation, including the significant impact of the "14th Five-Year Plan" for educational digitalization [1] - The "County High School Revitalization Action Plan" is promoting the allocation of digital resources to county-level schools, providing a long-term and stable growth outlook for the industry [1] Group 2 - Daiwa has raised the target price for New Oriental to HKD 49, anticipating increased shareholder returns and noting improvements in K-9 student retention rates for the autumn term [1] - NetDragon is recognized for its stable cash-generating business and its active use of AI technology to empower its second growth curve in education, with current market focus on its AI effectiveness and overseas expansion [1] - Thinking乐 Education received a boost this month with Fidelity International and its affiliates increasing their holdings by 950,000 shares, valued at approximately HKD 2.146 million [1]

Group 1 - Company stock price increased over 12%, reaching a high of 16.59 HKD, the highest since March 2023, with a current price of 15.25 HKD and a trading volume of 5.29 billion HKD [1] - The company's strategic investments in AI and cutting-edge technology are gaining market recognition, particularly with the recent launch of a new generation of AI glasses [1] - The influence and commercialization capabilities of the company's invested entities in the cultural creativity and IP operation sector are expanding [1] Group 2 - The company has established strategic partnerships in the education sector, covering over 190 countries and regions, leveraging AI to enhance global digital education [2] - Upcoming game releases include "Code MY," which began small-scale testing in August, and plans for "Magic Domain" and "Code Alpha" to enter multiple overseas markets in the second half of the year [2] - The company is actively exploring lower-tier markets and diverse channels for "End of Oath," with a mobile game "Mecha War" expected to launch next year [2]

Group 1 - Company stock price increased over 12%, reaching a new high of 16.59 HKD since March 2023, currently trading at 15.25 HKD with a transaction volume of 529 million HKD [1] - The company's strategic investments in AI and related technologies are gaining market recognition, particularly with the recent launch of a new generation of AI glasses [1] - The influence and commercialization capabilities of the company's invested entities in the cultural creativity and IP operation sector are expanding [1] Group 2 - The company has established strategic partnerships in the education sector, covering over 190 countries and regions, leveraging AI to enhance global digital education [2] - Upcoming game releases include "Code MY," which began small-scale testing in August, and plans for "Magic Domain" and "Code Alpha" to enter multiple overseas markets [2] - The company is actively exploring lower-tier markets and diverse channels for its game "End of Oath," with a mobile game "Mecha War" expected to launch next year [2]

Core Viewpoint - NetDragon Websoft Holdings Limited reported a significant decline in revenue for the first half of 2025, with a focus on strategic adjustments and AI integration to navigate current challenges and seek future growth opportunities [1][2][5][6]. Financial Performance - The company's revenue for the first half of 2025 was 2.38 billion RMB, a decrease of 27.9% year-on-year [1][2]. - The gaming and application services segment generated 1.74 billion RMB, down 18.1% year-on-year, while the Mynd.ai segment saw a 45.7% decline to 640 million RMB [2]. - Net profit attributable to shareholders was 30 million RMB, a drop of 92.5%, primarily due to impairment losses on intangible assets, including approximately 92 million RMB in cryptocurrency write-downs [2]. - The adjusted net profit showed a significantly reduced decline when excluding these factors [2]. - The company maintained a strong financial position with net cash of approximately 1.5 billion RMB and effective cash flow management [2]. Business Challenges and Strategic Adjustments - The Mynd.ai business faced substantial challenges, with a 45.7% revenue decline attributed to economic uncertainties affecting client budgets [3]. - To address these challenges, Mynd.ai launched next-generation integrated solutions, focusing on enhancing customer network security and user experience [3]. - The company signed an agreement to acquire award-winning AI voice assistant technology, expected to enhance classroom interaction experiences [3]. Market Expansion - In light of weak performance in traditional markets in Europe and the US, the company is actively exploring emerging markets for new growth opportunities [4]. AI Strategy and Technological Development - NetDragon is fully embracing the AI era, with significant investments in both business applications and cutting-edge technologies [5]. - The Hong Kong subsidiary, Chuangqi Si, has partnered with leading AI model company Zhongke Wenge to develop international AI applications, marking a significant step for Chinese AI technology in global markets [5]. - The recent launch of a new generation of AI glasses by an invested AI edge device company signifies a key breakthrough in consumer market applications [6]. - The AI strategy is seen as a crucial element for the company to address current challenges and secure future technological leadership [7].

Core Viewpoint - NetDragon (00777) experienced a significant stock increase, rising over 15% at one point and closing at 14.3 HKD, with a trading volume of 208 million HKD, following the announcement of its mid-2025 performance and strategic developments in its gaming business [1] Group 1: Financial Performance - The company's gaming business has seen a 26.7% year-on-year reduction in R&D expenses due to the comprehensive deployment of an "AI Production Center" [1] - Overall efficiency has improved by approximately 15% due to AI enhancements [1] Group 2: Product Development - NetDragon is focusing resources on its major product "Codename MY," which has entered user testing with positive feedback [1] - The game "Moyou" is expanding its multilingual versions, with two new language versions set to launch overseas in the second half of this year [1] - "Codename Alpha," a localized version of the "Conquest" series, is expected to be released in Southeast Asia in collaboration with partners, with additional regions under discussion for launches later this year [1] Group 3: Market Outlook - CITIC Securities anticipates growth in NetDragon's gaming business following the optimization of core IPs, and expects recovery in the Mynd.ai business after tariff policies are implemented [1] - The company's advancements in AI, including a strategic partnership between its subsidiary Chuangqisi and Zhongke Wenge, as well as breakthroughs in investments in AI edge devices, suggest a promising future for NetDragon [1] - These positive developments are expected to provide strong support for the company's stock price, with optimistic expectations for business growth in the second half of the year [1]

Group 1 - The core viewpoint of the article highlights that NetDragon's stock surged over 15% following the announcement of its mid-2025 performance, driven by advancements in AI and new product developments [1] - NetDragon's gaming business has seen a 26.7% year-on-year reduction in R&D expenses due to the implementation of an "AI production center," which has improved overall efficiency by approximately 15% [1] - The company is focusing resources on its major product "Code MY," which has received positive feedback during user testing, and is also expanding its popular game "Magic Domain" with two new language versions set to launch overseas in the second half of the year [1] Group 2 - Citic Securities expresses optimism regarding NetDragon's gaming business growth following core IP optimization, and anticipates recovery for the Mynd.ai business after tariff policies are implemented [1] - The company has made significant progress in the AI sector, including a strategic partnership between its subsidiary Chuangqisi and Zhongke Wenge, as well as breakthroughs in investments in AI edge devices [1] - Overall, these positive developments are expected to provide strong support for NetDragon's stock price, with Citic Securities expressing a positive outlook for the company's business development in the second half of the year [1]

Core Viewpoint - NetDragon (00777) experienced a significant stock price increase, rising over 15% at one point and closing at 14.3 HKD, with a trading volume of 208 million HKD [1] Group 1: Financial Performance - The company reported a 26.7% year-on-year decrease in R&D expenses due to the comprehensive deployment of the "AI Production Center" [1] - AI enhancements have improved overall efficiency by approximately 15% [1] Group 2: Product Development - NetDragon is focusing resources on its major product "Codename MY," which has entered user testing with positive feedback [1] - The game "Moyou" is actively expanding into multiple language versions, with two new versions set to launch overseas in the second half of this year [1] - "Codename Alpha," a localized version of the "Conquest" series, is expected to be launched in Southeast Asia in collaboration with partners, with additional regions under discussion for potential launches [1] Group 3: Market Outlook - CITIC Securities anticipates growth in NetDragon's gaming business following core IP optimization, and expects recovery in the Mynd.ai business after tariff policies are implemented [1] - The company's advancements in the AI sector, including a strategic partnership between its subsidiary Chuangqisi and Zhongke Wenge, as well as breakthroughs in investments in AI edge devices, suggest a promising future for NetDragon [1] - These positive factors are expected to provide strong support for the company's stock price [1]

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