NetDragon (777.HK) Gaming business performed brilliantly; Eudcation business dropped due to cyclicality of tender business September 12, 2019 36

PSR Recommendation: BUY Status: Upgraded
Target Price: HKDHKD29.75

Investment Summary
NetDragon mainly engaged in gaming and education. The group announced its interim
results, where the gaming business performed brilliantly, with segment profit increased
by 85.4% YoY. Besides, the new game “Vow of Heroes” will be launched in the seconed
half of 2019. In the future, the Group will try to monetize its education business in order
to become profit-making. We adopted sum of the parts valuation, deriving a TP of HKD
29.75, and reiterate a “Buy” rating with a potential return of approximately 58.1%.
(Closing price at 10 Sep 2019)

About the author

Profile photo of Terry Li

Terry Li
Investment Analyst

Graduated from Lingnan University, with Master of Science in International Banking and Finance and Bachelor of Business Administration respectively. Specializes in analyzing company fundamentals and valuation to explore investment opportunities in TMT, Education and Financial industry.

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