NetDragon is still  HKDS’ Highest-Yield Dividend Growth Stock

NetDragon 0777.HK currently sits at the top of the HKDS Dividend Growth Directory with a yield of roughly 13%.

That is hard to ignore.

The company has just declared another HK$0.50 interim dividend. Together with the HK$0.50 final dividend paid for 2025, shareholders have received HK$1.00 per share over the past twelve months.

The income is still there. Dividend growth has paused, however, as the interim payment is unchanged from last year.

Let’s look at where we stand now .

Costs fell faster than revenue

NetDragon’s revenue fell 12.2% to RMB2.09 billion during the first half of 2026.

The company responded by cutting operating expenses by 17.8%. That pushed operating profit up 24.1% to RMB144 million, even though the business brought in less revenue.

There was also progress at Mynd.ai. Its core loss narrowed from RMB195 million to RMB126 million. Mynd.ai is still losing money, but the drain on the rest of the group became smaller.

These are useful improvements. The source is clear: NetDragon has reduced its costs faster than its revenue declined.

The company still needs to show that gaming revenue has stabilized and that Mynd.ai can continue narrowing its losses. Gaming revenue did increase 3.1% compared with the previous six months, which is an encouraging first step.

The cash-flow number needs attention

NetDragon earned RMB36 million for shareholders during the period.

The new interim dividend will cost approximately RMB228 million. In other words, the dividend costs more than six times the profit earned in the first half.

Operating cash flow was also negative. The business used RMB160 million of cash, compared with RMB63 million a year earlier.

This is the number worth underlining. Profit improved, yet cash leaving the business increased.

NetDragon can afford the dividend for now. Management reported RMB1.8 billion in net cash and liquid investments. The company has also promised to return at least HK$600 million to shareholders through dividends and share repurchases.

That gives the board room to maintain the payment. It does not give the dividend permanent protection. Future payments at this level will need help from higher earnings and better cash generation.

What does the 13% yield tell us?

Part of the answer is the HK$1.00 annual dividend. The other part is NetDragon’s low share price.

The market is allowing investors to buy that HK$1.00 income stream cheaply because there is uncertainty around falling revenue, Mynd.ai’s losses and weak dividend coverage.

This leaves NetDragon with an unusual combination:

Dividend Growth: Very High
Dividend Safety: Weak
Stock Value: Fair

So what’s the takeaway?

NetDragon remains the highest-yielding Dividend Growth stock in the HKDS universe. The latest results are better in several places. Costs are down, operating profit is up and Mynd.ai’s loss has narrowed.

The dividend is still much larger than current profit, while operating cash flow remains negative. That keeps NetDragon firmly in the high-income, higher-risk corner of the Directory.

The 13% yield makes NetDragon interesting. The cash-flow statement tells us why the yield is 13%.

See the complete HKDS Dividend Growth Directory

Source: NetDragon interim results for the six months ended 30 June 2026.