HK Stock Market Move | NETDRAGON (00777) rises over 4%; Muyu AI has been launched for testing simultaneously domestically and overseas; full-chain AI deployment and workforce optimization are expected to reshape the cost curve.

NETDRAGON (00777) rose over 4%, up 3.25% as of press time, at HK$8.095, with a turnover of HK$22.6416 million. On the news front, recently at the 2026 Global Smart Education Conference, NETDRAGON launched Muyu AI. The platform has now been launched for testing, and the mobile version is simultaneously being listed for testing in overseas markets. CITIC SEC stated that Muyu AI is a multi-scenario AI application ecosystem built on an AI Agent technology foundation, offering various specialized tools in areas such as video creation, teacher lesson preparation, and programming, providing a new AI application paradigm for work, learning, creation, and design. The bank believes that NETDRAGON has made key progress in its transformation into an AI-native enterprise and is optimistic about the company's long-term development amid the AI wave. China Securities Co.,Ltd. pointed out that according to NETDRAGON's financial reports, in 1H26 the proportion of AI employee workload increased to 35%40%, with AI employees deployed across 269 positions and achieving dynamic scaling. The R&D cost of a single lightweight/native game has been compressed from the tens of millions of yuan level to approximately 2 million yuan. As the group's total headcount was streamlined to 2,557, a net reduction of 504 people compared with the end of 2025 (a headcount decline of 16.47% within half a year). Management disclosed on the earnings call that AI's impact on labor efficiency costs will be concentrated in 25-26, and the optimization magnitude will gradually diminish from 27 onward, manifesting more as increased game production capacity with a slight increase in expenses, that is, an operating leverage effect.