Citi Securities issued a research report maintaining a "Buy" rating on NETDRAGON (00777). Using a sum-of-the-parts valuation method, the firm assigned the company a 2026 valuation of HKD 7.17 billion, corresponding to a target price of HKD 13. The company is focused on shareholder returns, and the bank expects it to maintain a dividend per share of HKD 1 in 2026, implying a dividend yield of approximately 11%. The company recently announced that its Board Chairman will increase his shareholding within the next 12 months, demonstrating confidence in long-term development. NETDRAGON released its 2025 performance announcement, reporting annual revenue/attributable net profit of RMB 4.48 billion/RMB 150 million. The full-year gross profit margin was 70.3%, an increase of 5.1 percentage points year-on-year. Annual operating profit was RMB 280 million, with second-half operating profit rising 47.7%. The Mynd.AI business is expected to see a moderate recovery in revenue. The report noted that the Mynd.AI business generated revenue of RMB 1.20 billion with a gross margin of 25.0%, while overall operating expenses decreased by 21% year-on-year. With the gradual recovery of the overseas educational large-screen market and further cost controls, the operating profit margin of the Mynd.AI business is expected to continue improving. Previously, NETDRAGON partnered with ByteDance to accelerate its transformation into an AIGC-driven creative enterprise. On January 27, NETDRAGON signed an AI ecosystem and joint innovation cooperation framework agreement with Volcano Engine, ByteDance's cloud and AI service platform. The partnership aims to build deep collaborative barriers combining technology, resources, and ecosystem, enabling large-scale production of next-generation AIGC educational resources and creating a global, co-created, and shared innovative education ecosystem. The integration of NETDRAGON's comprehensive AIGC strategic capabilities in education, cultural creativity, and gaming with Volcano Engine's cutting-edge technological infrastructure is expected to further advance its transformation into an AIGC-driven creative enterprise, potentially enhancing both profit quality and growth prospects.