Core Viewpoint - The company, NetDragon, has announced a shareholder return plan of over HKD 600 million, instilling significant confidence in the market while continuing to create value for shareholders through its AI-driven strategies in both education and gaming sectors [1][7]. Financial Performance - For the first half of 2025, NetDragon reported revenue of HKD 2.38 billion, with a gross profit of HKD 1.66 billion and a gross margin of 69.5%, reflecting a year-on-year increase of 2.9 percentage points [1]. - Operating expenses decreased by 15.6% year-on-year to HKD 1.35 billion, showcasing the initial effectiveness of AI in cost optimization and efficiency enhancement [1]. AI Strategy and Implementation - The company is pursuing a dual strategy of "AI + Education" and "AI + Gaming," leveraging technological innovation and ecosystem collaboration to seize new growth opportunities globally [1][2]. - AI has improved overall efficiency in the gaming sector by approximately 15%, with significant advancements in AI production centers enhancing content generation and collaboration across different game teams [2][3]. Market Expansion and Product Development - NetDragon has launched a new product, "Code MY," which has received positive feedback during its small-scale testing phase, and plans to expand its flagship IP "Magic Domain" into new language versions for overseas markets [3][4]. - The company is actively expanding its AI applications in education, having started AI research as early as 2017, and is now integrating AI into educational content and hardware to enhance market competitiveness [3][4]. Global Partnerships and Collaborations - NetDragon is focusing on key AI technology service projects and vocational education, collaborating with international entities such as the Thai Ministry of Higher Education and the World Bank to enhance digital education and equity [4][5]. Long-term Investment Value - The company emphasizes long-term growth and has a strong commitment to ESG principles, which positions it favorably in the current market environment [7]. - Despite short-term performance fluctuations, NetDragon maintains a high dividend yield, proposing a dividend of HKD 0.50 per share for the first half of 2025, representing a year-on-year increase of 25% [7][8]. Shareholder Return Initiatives - The recent announcement of a shareholder return plan, which includes dividends and buybacks, aims to reassure long-term investors and reflects the company's confidence in its future prospects [8].

Core Viewpoint - NetDragon (00777) reported a mid-year revenue of RMB 2.381 billion for 2025, with a gross profit of RMB 1.655 billion and a net profit attributable to shareholders of approximately RMB 30 million, reflecting a focus on long-term game operations and user experience enhancement despite short-term revenue declines [1] Group 1: Financial Performance - The company's revenue from game and application services was RMB 1.7 billion, with a focus on long-term game IP development [1] - Operating expenses for game and application services decreased by 14.7% year-on-year, showcasing effective cost control [1] - Operating profit for the segment rebounded to RMB 501 million, indicating strong resilience and positive recovery momentum [1] Group 2: AI Strategy in Gaming - The company established an AI production center to enhance organizational efficiency, resulting in a 26.7% reduction in R&D expenses [2] - The flagship IP "Magic Domain" is set to launch multilingual versions to expand into new overseas markets [2] - New game "Code MY" is in small-scale testing, while "Code Alpha" will expand into multiple overseas markets [2] Group 3: AI in Application Services - The company is focusing on AI technology services in the domestic education sector, including a collaboration with Thailand for vocational education [3] - A partnership with Cameroon aims to enhance digital education and improve educational equity and quality [3] - The Hong Kong subsidiary Cherrypicks is transforming into a key platform for Chinese AI technology in overseas markets [3] Group 4: Investment in Emerging Technologies - The company invested in AI edge device firms, successfully launching a new generation of AI glasses [4] - The influence of the company's invested IP matrix continues to grow, enhancing commercialization capabilities [4] - The company holds approximately 12,000 Ether units, valued at RMB 211 million, indicating a strategic focus on AI, XR, robotics, and blockchain technologies [4]