今年国庆黄金周，世界文化与自然双遗产地武夷山交出了一份亮眼的文旅答卷——游客量突破百万，同 比增长16.4%。在机器狗巡逻、智能服务等新体验吸引游客的同时，一场数字空间的"出圈"合作也拉开 序幕——网龙旗下经典网游IP"魔域"近日与武夷山启动深度联动，推出金秋幻兽"御山司茗・忘忧"， 将"碧水丹山"与千年茶韵融入数字世界。据悉，此次联动是今年5月发起的"数字山海 福游新生——游 戏赋能福建文旅"专项计划的阶段性成果之一。 网龙旗下经典网游IP"魔域"近日与武夷山启动深度联动，推出金秋幻兽"御山司茗·忘忧" 碧水丹山幻化数字奇旅，金秋幻兽引领沉浸体验 网龙相关负责人介绍，本次联动的核心在于限定幻兽"御山司茗・忘忧"。该角色是设计团队深入解构武 夷山自然与人文遗产后，打造出的一个可互动、可收藏的文化符号，兼具"武茗山神"的威严与"茶馆掌 柜"的亲和。二元对立统一的形象设计，蕴藏东方山水文化中自然与人文共生的特质。最为特别的是， 其发簪更可化为取自丹霞地貌的"山刃"、摹写九曲溪的"水刃"与凝萃茶田云雾的"雾刃"。玩家在使用这 只幻兽的过程中，会自然而然地探究其武器所象征的山水茶意境，从而在游戏体验里，完成一次对武夷 ...

Group 1 - The core viewpoint of the report highlights the robust growth of NetDragon's gaming business, particularly the strong long-term operational capabilities of the "Magic Domain" IP series, supported by AI production centers that enhance cost efficiency and gaming experience [1] - The company is expected to achieve revenue of 4.86 billion, 5.31 billion, and 5.84 billion CNY, and net profits of 450 million, 650 million, and 830 million CNY for the years 2025 to 2027 [1] - The report assigns a target price of 16.7 HKD for 2025, based on a valuation of 18x PE, and initiates coverage with a "Buy" rating [1] Group 2 - The company is strategically investing in multiple lines within AI technology and the broader entertainment sector, including a partnership with Zhongke Wenge to develop AI models and applications outside mainland China [2] - In 2023, NetDragon invested 20 million USD in Rokid and signed a five-year strategic cooperation agreement to enhance the interaction between high-quality education and gaming with Rokid's hardware ecosystem [2] - The company is positioning itself in the group broadcasting sector by holding a 46% stake in Hangzhou ShuaiKu Network Technology, which is a leading international MCN agency with over 700 million fans and significant monthly engagement [2]

Core Insights - NetDragon's transformation and focus on AI have attracted significant attention from top-tier international capital, with BlackRock increasing its stake to over 5% [1] - The company is implementing a dual-driven strategy of "AI + Education" and "AI + Gaming," enhancing operational efficiency and market reach [1] Group 1: AI + Gaming Strategy - NetDragon has established an AI production center to integrate different game teams under the same IP, significantly improving cross-version content collaboration and automatic generation capabilities [1] - The flagship IP "Magic Domain" is set to launch multilingual versions efficiently, expanding into new overseas markets [1] Group 2: AI + Education Strategy - The company is leveraging its Mynd.ai business as the core operator for overseas classroom technology, embedding AI into educational hardware [1] - AI voice assistant technology is being deeply integrated with interactive display hardware to enhance product competitiveness and market share [1] Group 3: Investment in Frontier Technologies - NetDragon's strategic investments in AI edge devices have led to the successful launch of a new generation of AI glasses, marking a breakthrough in consumer market applications [2] - The influence and commercialization capabilities of NetDragon's invested companies in cultural creativity and IP operations are expanding [2] - Future strategic investments will focus on AI, XR, robotics, and blockchain technologies, reinforcing synergies with the company's core business [2]

Core Insights - NetDragon's transformation and focus strategy on "AI + Education" and "AI + Gaming" has attracted significant attention from top-tier international capital, with BlackRock increasing its stake to over 5% [1] Group 1: AI Strategy - The company is implementing a dual-driven strategy of "AI + Education" and "AI + Gaming" [1] - In the gaming sector, NetDragon has established an AI production center that enhances collaboration and automatic content generation across different game teams, significantly improving efficiency [1] - The flagship IP "Magic Domain" is set to launch multilingual versions to expand into new overseas markets with the help of the AI production center [1] Group 2: Education Sector - In the education sector, NetDragon is leveraging its first-mover advantage in AI to capture market share both domestically and internationally [1] - The Mynd.ai business serves as the core operational entity for overseas classroom technology, integrating AI voice assistant technology with interactive display hardware to enhance product competitiveness [1] Group 3: Technological Investments - The company's strategic layout in cutting-edge technology and AI ecosystems is becoming increasingly valuable, with recent investments leading to the launch of a new generation of AI glasses [2] - NetDragon's subsidiaries are expanding their influence in cultural creativity and IP operations, enhancing their commercialization capabilities [2] - Future strategic investments will focus on AI, XR, robotics, and blockchain technologies, reinforcing synergies with the company's main business [2]

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]

Financial Performance - In the first half of 2025, the company reported revenue of 2.38 billion RMB and gross profit of 1.66 billion RMB, with a gross margin increase of 2.9 percentage points to 69.5% year-on-year [1] - Operating expenses decreased by 15.6% year-on-year to 1.35 billion RMB, reflecting the effectiveness of cost optimization and efficiency improvement measures [1] Business Operations - The gaming business is undergoing a "long-term operation plan" with stable performance, despite short-term revenue fluctuations, showing only a slight decline in revenue quarter-on-quarter [1] - The Mynd.ai business faced challenges due to increased tariffs and weak demand in core markets, but the company is focused on optimizing operations and improving cost efficiency [1][2] Shareholder Returns - The board approved an interim dividend of 0.5 HKD per share, a 25% increase year-on-year, and plans to distribute no less than 600 million HKD to shareholders through dividends and share buybacks over the next 12 months [2] Strategic Initiatives - The company is embracing the AI era, implementing "AI + gaming" and "AI + education" strategies, with gaming and application services revenue of 1.74 billion RMB in the first half of 2025, down 18.1% year-on-year [2] - The flagship IP "Magic Domain" is enhancing content quality and engaging in various cultural and social projects to boost user activity [2] Product Development - The new product "Code MY" has begun small-scale testing, and the mobile game "Code Alpha" will expand into multiple overseas markets [3] - The company plans to leverage its AI production center to launch multilingual versions of its flagship IP and has successfully entered the mini-game market with "Magic Domain Legend" [3] AI Integration - The company has introduced leading domestic AI model firm Zhongke Wenge as a strategic shareholder to assist its AI transformation [4] - Collaborative AI applications have been developed, marking a significant step for Chinese core AI technology to enter international markets [4]

Core Viewpoint - The gaming industry is making significant strides in the Environmental, Social, and Governance (ESG) domain through innovative initiatives, exemplified by the collaboration between NetDragon and the Xishuangbanna Tropical Rainforest Conservation Foundation for the "Asian Elephant Rescue Action" program [1] Group 1: Digital Empowerment and New Ecological Models - NetDragon has integrated gaming mechanics with philanthropy, creating a new model of "digitalization + public welfare," allowing players to contribute to real-world elephant habitat restoration while enjoying the game [2] - The shift from offline fundraising to a virtual ecosystem-driven approach enhances the efficiency and transparency of charitable efforts, showcasing the gaming industry's potential in the ESG space [2] Group 2: Immersive Participation and Engagement - The new version of the game features a "triggered donation" model where player actions directly translate into donations to the rainforest foundation, alongside virtual tasks for ecological restoration [3] - Players can earn exclusive in-game rewards and a digital certificate for their contributions, creating a traceable link in the charitable process, thus engaging the Z generation in social responsibility through digital means [3] Group 3: Corporate Responsibility and Technological Goodness - As ESG principles gain traction, more companies are incorporating them into their strategies, with gaming companies uniquely positioned to embed positive values into their core operations [4] - NetDragon has expanded its "gaming + public welfare" strategy across various sectors, including ecological protection and cultural heritage, demonstrating corporate responsibility through multiple philanthropic projects [4] - The integration of gaming with public welfare and cultural tourism not only enriches game content but also establishes a positive communication mechanism with social benefits [4]