Catalyzes the conversion of 7,8-dihydroneopterin monophosphate (H2NMP) to 6-hydroxymethyl-7,8-dihydropterin (6-HMD). Cannot use 7,8-dihydroneopterin (H2Neo) or 7,8-dihydroneopterin triphosphate (H2NTP) as substrate. 7,8-dihydroneopterin 3'-phosphate = 6-hydroxymethyl-7,8-dihydropterin + glycolaldehyde phosphate Binds 1 zinc ion per subunit. Belongs to the PTPS family.