Catalyzes the conversion of 7,8-dihydroneopterin (H2Neo) to 6-hydroxymethyl-7,8-dihydropterin (6-HMD). 7,8-dihydroneopterin = 6-hydroxymethyl-7,8-dihydropterin + glycolaldehyde kcat is 0.07 sec(-1) at 25 degrees Celsius. kcat is 1.0 sec(-1) at 70 degrees Celsius. Optimum pH is 8.3. Cofactor biosynthesis; 5,6,7,8-tetrahydromethanopterin biosynthesis. Homotetramer. Belongs to the archaeal dihydroneopterin aldolase family.