NETDRAGON (00777) has announced a shareholder return plan exceeding HK$600 million, injecting significant confidence into the market as the company continues creating value for shareholders through comprehensive AI+ strategy deployment.

NETDRAGON recently released its 2025 first half financial results, reporting revenue of RMB 2.38 billion. While revenue was adjusted due to industry factors, AI-enabled cost reduction and efficiency improvements were evident, with gross profit reaching RMB 1.66 billion and gross profit margin of 69.5%, up 2.9 percentage points year-on-year. Operating expenses totaled RMB 1.35 billion, down 15.6% year-on-year, demonstrating initial success in AI-powered cost optimization and efficiency enhancement.

NETDRAGON maintains its dual-wheel strategy of "AI + Education" and "AI + Gaming." In the AI application era, the company captures new growth opportunities in global markets through technological innovation and ecosystem partnerships while comprehensively improving operational efficiency through AI empowerment. In gaming, AI enhanced overall efficiency by approximately 15% in the first half. AI has clearly become the core highlight of both business segments.

On August 21, the State Council issued "Opinions on Deepening the Implementation of 'Artificial Intelligence+' Actions." Recently, at the "Shanghai Cooperation Organization+" meeting, the government again emphasized AI development and building AI application cooperation centers to share AI development dividends. NETDRAGON has comprehensively deployed across these two mainstream AI application tracks both domestically and internationally.

**"AI + Dual Tracks" Accelerating Globalization**

From the first half results, NETDRAGON's overall performance remained relatively stable. Gaming business deepened deployment according to the established "evergreen operation plan," with "AI + Gaming" continuously strengthened, accelerating R&D monetization. R&D expenses decreased 26.7% year-on-year, while AI improved overall efficiency by about 15%.

Although Mynd.ai business was affected by external factors including trade wars and macroeconomic weakness leading to demand slowdown in core European and American markets, under "AI + Education" strategy empowerment, second quarter gross margin recovered to 31%, with SaaS subscription services growing against the trend.

In gaming, the company has fully deployed AI production centers, enabling efficient integration of different game teams under the same IP through AI production centers. Cross-version game content collaboration and automatic generation capabilities have significantly improved. With AI production center assistance, flagship IP "Demon Realm" will efficiently launch multi-language versions, exploring new overseas market opportunities.

Some game products showed outstanding performance. "Conquer" and "Blade & Soul" IP revenues achieved year-on-year growth of 2.1% and 18% respectively. Additionally, core mobile game product MAU for "Demon Realm" grew over 30% year-on-year.

The company's gaming business evergreen strategy + AI strategy continuously enriches and innovates content, consistently improving player gaming experience and effectively enhancing user stickiness and payment willingness. Through forward-looking AI-native game deployment, the company has completed initial accumulation in key capabilities including AIGC art, multi-Agent collaboration, intelligent NPCs, AI content production, data closed-loop iteration, and security compliance, ensuring iterative R&D roadmap under "gameplay fun and commercialization principles."

Notably, the company's blockbuster new product "Code MY" began small-scale testing for IP users in August this year with positive feedback, advancing formal launch preparations. AI also accelerates the company's global deployment. In the second half, "Demon Realm" will launch three new language versions overseas. "Code Alpha," the localized gameplay of the "Conquer" series, will launch Southeast Asian versions with partners.

In education, NETDRAGON leverages first-mover advantages through domestic and international AI deployment to capture market share. Domestically, with relatively early deployment starting AI R&D investment in 2017, the company has launched AI textbooks, courseware, teaching assistants, and performance products or functions, gradually integrating them into "high-quality educational content."

Internationally, with Mynd.ai business as the core operational entity, through AI integration in educational interactive hardware, such as incorporating AI voice assistant technology into large screens through AI large models, the company continuously enhances product competitive advantages and market share.

The company focuses on national platform and other key AI technical service projects and vocational education sectors, continuously advancing AI expansion through partnerships. For example, AI vocational education cooperation project with Thailand's Ministry of Higher Education, Science, Research and Innovation successfully launched. With World Bank support, the company signed cooperation agreements with Cameroon's Ministry of Secondary Education to jointly promote the country's digital education construction, improving educational equity and teaching quality.

**"AI + Industry" Layout Opens Growth Space**

Additionally, the company seizes global AI technology highlands by introducing cutting-edge technology enterprises and promotes Chinese top-tier AI technology landing in global markets through AI+ ecosystem strategic deployment.

The company's Hong Kong subsidiary Cherrypicks successfully introduced strategic investment from SCAI. AI application products including social listening and multimodal creation tools jointly developed by Cherrypicks and SCAI completed global release in August this year. Leveraging Hong Kong's "international innovation and technology bridgehead" and multilingual environment advantages, they will enter Southeast Asian, European, and American overseas markets.

Its invested AI edge device enterprise recently successfully launched new-generation AI glasses, marking key breakthrough in consumer market applications. The company states future strategic investments will continue focusing on AI, XR, robotics, blockchain, and other frontier technology applications as well as cultural creative industries, strengthening synergistic effects with main business.

Overall, NETDRAGON holds "gaming" and "education" two mainstream application tracks, comprehensively deploying AI with accelerated global advancement, occupying first-mover advantages and forming strong competitive barriers. "Offensively," it fully embraces the AI application era, rapidly launching AI products in both tracks to capture market share. "Defensively," it comprehensively empowers both tracks through AI for cost reduction and efficiency improvement, initially manifesting in the first half with continued optimization expected in the second half. AI + industry comprehensive strategic deployment will bring new growth points, opening the company's growth space.

**Long-termism + High Dividends Offer Investment Value**

Artificial intelligence has become the commanding height of global technology competition and a key driving force for China's industrial upgrading, high-quality economic development, and new productive forces transformation. This year, national-level supportive policies have been intensively introduced, with domestic regions actively launching AI industry encouragement measures, creating favorable expansion environments for NETDRAGON's two application tracks and AI + industry.

NETDRAGON has comprehensively entered AI and will be among the biggest beneficiaries of policies and markets. For investors, AI application tracks sweep globally, with each track representing tens of thousands-level market opportunities, bringing growth and profit expectations for NETDRAGON with high long-term investment value.

NETDRAGON adheres to long-term development paths, highly values ESG construction, integrates business with high ESG practice, achieving industry-leading levels in ESG through efficient governance architecture implementation and strict policy compliance.

Currently, NETDRAGON's biggest investment highlight lies in shareholder returns through generous dividends bringing high dividend yields. In 2025 first half, despite performance adjustments, the company maintained dividends, proposing HK$0.50 per ordinary share, up 25% year-on-year with annualized dividend yield exceeding 9%, rare among the entire technology stock sector.

Short-term performance volatility-induced valuation corrections create rare accumulation opportunities for value investors. Regarding shareholder returns, in August 2021, the company announced a shareholder return plan totaling up to US$300 million over 36 months, successfully stabilizing stock prices and resisting market volatility over three years.

This announcement of not less than HK$600 million shareholder return plan includes dividend and buyback plans. Based on current market value, total shareholder return rate approaches 11%, injecting market confidence for long-term investors while demonstrating full confidence in future development prospects and proving company strength to the market.

Following results release, the company conducted buybacks for four consecutive trading days, cumulatively repurchasing 1.4 million shares worth HK$14.8395 million. As AI + dual tracks + industry deployment releases performance, the company will enter its optimal investment cycle.