Zhi Tong Cai Jing·2025-09-17 01:40Core Viewpoint - Citic Securities maintains a "Buy" rating for NetDragon (00777), projecting growth in the gaming business after core IP optimization and recovery in Mynd.ai business following tariff policy implementation, with a target price of HKD 16 for 2025 [1] Financial Performance - For the first half of 2025, the company is expected to achieve revenue of HKD 2.38 billion, with adjusted net profit reaching HKD 280 million after excluding impairment losses and one-time employee severance compensation [1] - The gaming and application services segment is projected to generate revenue of HKD 1.74 billion, with a gross margin of 86.2%, and a significant reduction in R&D, sales, and administrative expenses by 14.7% year-on-year [1] Earnings Forecast - Citic Securities forecasts EPS for 2025-2027 at HKD 0.64, HKD 1.10, and HKD 1.82 respectively, with a net profit estimate of HKD 690 million for the gaming and application services business in 2025, applying a 9x PE valuation [2] - The Mynd.ai business is expected to generate revenue of HKD 1.72 billion in 2025, with a valuation of HKD 900 million based on a 0.7x PS multiple [2] Strategic Developments - The company has made significant advancements in the technology and AI sectors, including a strategic partnership with Zhongke Wenge to promote leading AI models and applications outside mainland China [3] - Recent investments in AI edge device companies have led to the successful launch of a new generation of AI glasses, marking a key breakthrough in the consumer market [3]