The acceleration of digitalization in education and the deep integration of artificial intelligence, NetDragon (00777) is expected to see an increase in valuation.

With the support of technological catalysis and policy stimulation, assets related to "AI+ Education" are accelerating the revaluation of their value: from a technological perspective, the emergence of DeepSeek has significantly reduced the research and deployment costs of AI large models, bringing about the technological conditions for the popularization of AI applications. From a policy perspective, the Ministry of Education and nine other departments recently jointly issued the "Opinions on Accelerating the Advancement of Education Digitization" (referred to as the "Opinions" below), with policies focusing on integration, intelligence, internationalization, expanding the benefits of high-quality educational resources, promoting AI-assisted educational reforms, accelerating the formation of a lifelong education system that is ubiquitously accessible. It is expected to further encourage and stimulate the application and implementation of AI+ Education. Some visionary companies have been deeply cultivating the field of "AI+ Education" for a long time. A typical example is NETDRAGON (0777.HK), a company that has been strategically positioning itself in the field of education technology domestically and internationally for many years. Currently, the company has already commercialized both software and hardware products related to "AI+ Education". Building an AI production line for educational content, promoting artificial intelligence to assist in educational reform NETDRAGON has over ten years of profound accumulation in the software and content of educational technology. As early as 2017, NETDRAGON began investing in AI research and development, and over the years has introduced AI textbooks, courseware, assistant teachers, performances, and other products or functions, gradually integrating them into "educational resources granules". After the release of DeepSeek R1, the company's departments under the education business, such as the Engineering Institute, Resource Production Center, and Design Center, were the first to integrate models based on the use of advanced AI tools, forming an internal capability platform AI Hub and creating a complete AI production line. NETDRAGON is integrating its accumulated development experience and content resources to create "interactive educational games", using its self-built AI production line to develop game-based educational content centered around learners, creating an immersive learning experience and bringing about disruptive changes to traditional teaching methods. It can be said that NETDRAGON's educational AI is at the forefront of the industry. In terms of results, the "most beautiful educational resource granule" developed by NETDRAGON - the "Photosynthesis" interactive educational content unit made a stunning appearance at the Global Smart Education Congress in September 2024. This innovative interactive educational content is the masterpiece of the AI educational content production line. NETDRAGON also plans to deploy AI production lines in Hong Kong, China, with the goal of creating the "world's largest educational content resource production center", significantly improving the production efficiency and resource quality of "interactive educational games". In the near future, a massive amount of high-quality "interactive educational games" will provide educators and learners worldwide with a more effective, efficient, and engaging teaching experience, collectively forming a large-scale "educational metaverse" and realizing NETDRAGON's vision in the global AI education field of building a global education community. AI+ blended learning, assisting in the international co-construction and sharing of digital education resources The "Opinions" clearly state the need to promote domestic higher education institutions and enterprises to cultivate talents who have a combination of "digital + skills" for developing countries. NETDRAGON's layout in the "Belt and Road" market with its "AI+ Education" coincides with national policies. The online AI education platform developed by NETDRAGON in cooperation with the Ministry of Higher Education, Science, Research, and Innovation of Thailand (MHESI) will officially launch in the near future, providing vocational skills training services in areas such as the new energy vehicle industry to Thai university students and adult users. This has set a new example for developing countries to achieve a "fast track" in higher education and vocational training in the AI era. NETDRAGON will leverage its AI production line to create high-quality learning resources for the AI education platform, integrating advanced vocational training content from China's high-end manufacturing industry, making a unique contribution to the country's "Belt and Road" strategy and the global "community of shared future for mankind" in the areas of knowledge equality and education sharing. Recently, NETDRAGON also reached a strategic cooperation agreement with the Hong Kong Polytechnic University, with plans to incorporate more cutting-edge AI+ vocational training content into the AI education platform in the "Belt and Road" market. Additionally, NETDRAGON's overseas education subsidiary, Mynd.ai, was spun off and independently listed in December 2023. Its operating entity, the global interactive display screen leader Prometheus, has strong brand recognition and competitive advantages such as a global distribution network. In 2024, Prometheus launched its first SaaS product, Explain Everything Advanced, and in January of this year, it released a new ActivSuite smart tablet SaaS platform, with plans to integrate AI technology in the future. Users of the ActivPanel smart tablet in the education and corporate sectors will be able to access cutting-edge AI functionality through this SaaS platform. Facilitating the construction of the national "Four Horizontal and Five Vertical" platforms, positioning for "full-depth application in all areas" The "Opinions" require the improvement of the resource layout of the national Smart Education "Four Horizontal and Five Vertical" platforms. It is understood that the "Four Horizontal" refers to the four major fields of basic education, vocational education, higher education, and lifelong education, while the "Five Vertical" refers to the five categories of moral education, intellectual education, physical education, artistic education, and labor education. The core intersection point of the national "Four Horizontal and Five Vertical" platforms is the "National Intelligent Education Public Service Platform". Currently, the platform has a registered user base exceeding 163 million and 6.08 billion views. NETDRAGON's domestic educational technology subsidiary, Huayu, became a technical service partner for the elementary and middle school smart education platform of the "National Intelligent Education Public Service" in the "Four Horizontal" in 2021, and also won the bid for the "2024 National Intelligent Education Public Service Platform Upgrade Project" in July 2024. The "Opinions" further require provinces and cities to formulate regional digital education plans to achieve interconnectedness with the national platform. As a technical support provider for national-level platforms, Huayu is expected to further explore new business opportunities in various provincial platforms. NETDRAGON had already partnered with the Ministry of Education in 2021.The Technology and Resource Development Center (Central Digital Education Hall) has reached a strategic cooperation with NETDRAGON to promote the construction of a new normal in education. NETDRAGON provides technical support for the virtual experiment teaching platform developed by the Central Hall, which utilizes high-precision 3D, VR, and AI technology to accurately reproduce more than 4000 experiment processes in subjects such as physics, chemistry, and biology for primary and secondary schools. Currently, the platform has been implemented in 22,000 schools.In addition, NETDRAGON has been deeply cultivating in the field of educational technology for more than ten years, and has laid a solid foundation in content, software, hardware, and other fields. It is expected that NETDRAGON's AI+ education business will yield fruitful results in the AI new era driven by DeepSeek technology and policy guidance detailed in the Opinions. AI+ integration of production and education brings new business space Article 7 of the Opinions states, "In response to the needs of advanced manufacturing and modern service industry digital transformation, adjust vocational education majors dynamically, empower deep integration of production and education, and serve the construction and cultivation of high-skilled talents in the 'one body and two wings'." NETDRAGON has been strategically positioned in the field of vocational education and integration of production and education for many years. Its business direction is highly aligned with national strategic objectives. NETDRAGON has established professional partnerships with more than ten schools to create virtual reality, digital media, and other majors. In April 2025, the practice of building the "AIGC-driven Digital Media Modern Industry College" at the Zhi Cheng College of Fuzhou University by NETDRAGON and Fuzhou University was awarded as an excellent case of industrial college construction in the second batch of Fujian Province, receiving high recognition from provincial leaders. This typical case of cooperation indicates that NETDRAGON's future cooperation with industrial colleges nationwide is expected to make steady progress and achieve significant advancements, bringing new impetus to the overall business development and social image of NETDRAGON. AI+ driving valuation growth In addition to the education sector, NETDRAGON's gaming sector will also benefit from the wave of AI+ applications. The company's popular games, including core IPs such as "Magic Domain," "Conquest," and "Blade of the Soul," have built a large player base. In terms of AI empowerment, for example, the AI Agent companion tool of the core product "Blade of the Soul" in its MOBA track has already integrated cutting-edge pedestal models, and its AI agents' gaming abilities have reached the level of advanced players. Dozens of heroes in the game have achieved structured AI agent support across abilities, enhancing the gaming experience for all players. It is worth mentioning that since its listing on the Hong Kong stock market eighteen years ago, NETDRAGON has consistently adhered to semi-annual dividends, with accumulated dividends exceeding 18 Hong Kong dollars per share. In its 2024 performance announcement, the Board of Directors of NETDRAGON has approved a year-end dividend of 0.5 Hong Kong dollars per share, representing a 25% increase year-on-year. With a full-year dividend of 0.9 Hong Kong dollars, the current price corresponds to a dividend yield of over 9%. Whether in games, education, or glasses, they are all key areas of AI+ application. DeepSeek accelerates the rapid implementation of AI+ applications, and NETDRAGON has a certain first-mover advantage in the "AI+ gaming" and "AI+ education" dual main businesses, especially in the education sector. Driven by policies, NETDRAGON will benefit from the wave of AI and achieve valuation growth. It is worth looking forward to whether NETDRAGON will become a dark horse stock in the science and technology sector bull market in 2025.