According to data from CCID Consulting, the low-altitude infrastructure and flight guarantee sectors only account for 5% of the low-altitude economy's industrial scale, indicating that the market potential has not been fully released, and there is significant room for growth in the mid-term share of low-altitude infrastructure.
Zhito Finance APP learned that Sealand Securities released a research report stating that the low-altitude economy has been included in government work reports, categorized as a new type of productive force, and various local governments are successively promoting three-year low-altitude action plans, which clearly shows the progress of the low-altitude industry; structurally, the low-altitude air traffic management system is the most likely area to see initial implementation, which could drive related information system industry chain companies to achieve leapfrog development. According to CCID Consulting data, the low-altitude infrastructure and flight guarantee sectors only account for 5% of the low-altitude economy's industrial scale, indicating that the market potential has not been fully released, and there is significant room for growth in the mid-term share of low-altitude infrastructure.
The main views of Zhonghai Securities are as follows:
As an important representative of the national new productive force, the low-altitude economy is continuously being advanced through central top-level design along with local policy cooperation.
The central top-level design is continuously deepening: in 2021, "low-altitude economy" was first incorporated into the "National Comprehensive Three-Dimensional Transport Network Planning Outline"; in 2023, the central economic work conference listed low-altitude economy as a strategic emerging industry; in 2024, low-altitude economy was first included in the government work report and classified under new productive forces; by the end of March 2024, four departments, including the Ministry of Industry and Information Technology, jointly released the "Implementation Plan for the Innovative Application of General Aviation Equipment (2024-2030)" outlining the development goals for China's general aviation industry for 2027 and 2030.
Currently, multiple provinces and cities nationwide have included the low-altitude economy in their government work reports and have made plans for target industrial scales; by 2027, Shanghai/Henan aims for over 50 billion yuan, Anhui strives for 80 billion yuan, and Beijing/Hubei targets 100 billion yuan, while Guangdong plans to exceed 300 billion yuan by 2026. According to data from the Civil Aviation Administration, in 2023, the market scale of China's low-altitude economy exceeded 500 billion yuan, with expectations to surpass 2 trillion yuan by 2030.
In terms of funding, current special bonds and ultra-long-term national bonds are expected to become important support for the development of the low-altitude economy. For example, the document released by Zhejiang Province titled "Several Opinions on Building a Strong Civil Aviation Province at a High Level to Create a High Ground for the Development of the Low-Altitude Economy" provides support for qualifying low-altitude new infrastructure projects through central budget investments, local government special bonds, ultra-long-term special national bonds, and other policy funds. On September 26, 2024, the Political Bureau meeting proposed to increase the counter-cyclical adjustments of fiscal policy; on October 12, at a news conference organized by the State Council Information Office, a package of targeted incremental policy measures was successively introduced, including increased support for local governments to resolve debt risks and reduce local debt pressures, which could free up more resources for economic development; concerns about funding issues in the market may be better addressed, and as a significant representation of the new productive force, the low-altitude economy may continue to benefit from policy drives.
Low altitude infrastructure leads the way, and air traffic control systems become the leader in the trillion-yuan track.
China's low altitude economic industry has a trillion-yuan market space in three areas: aircraft manufacturing, infrastructure construction, and cross-boundary integration ecology. According to data from CCID Consulting, the low altitude infrastructure and flight security sectors only account for 5% of the low altitude economy industry scale, indicating that the market space has not been fully released. The medium-term share of low altitude infrastructure can increase significantly, mainly because: low altitude infrastructure is the foundation for the development of the low altitude industry. The "General Aviation Equipment Innovation Application Implementation Plan (2024-2030)" outlines the development goals for our general aviation industry by 2027 and 2030. If a mature general aviation and low altitude industry is to be established by 2030, then 2024-2030 will be an acceleration period for the development of low altitude infrastructure. The low altitude infrastructure business can fully draw from existing air traffic control construction experience, making it likely to be a more explosive track in the next five years compared to the relatively early-stage eVTOL and more mature drone industries.
Low altitude infrastructure covers air traffic control systems and infrastructure, with the air traffic control system being the solid foundation for the development of the low altitude economy, specifically including CNS systems (covering communication, navigation, and surveillance) and air traffic management (ATM) etc.; based on the judgment of implementation rhythm, the air traffic control system is expected to become the leader in low altitude infrastructure. Currently, peripheral equipment (including navigation and related systems) has a relatively mature industry model; information systems (including air traffic management systems ATM, etc.) are expected to have the fastest implementation rhythm, and traditional air traffic control sector leading manufacturers have a first-mover advantage.
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Lais Information: Backed by China Electronics Technology Group, it's an important civil product platform under Electronic Technology Lais. In the low altitude field, Lais Information provides an integrated system platform that includes "airspace planning tools", "one-stop approval and filing for flight plans", "complete process management", and "simulation testing"; major products include the national/provincial/city low altitude flight service management platform, flight service centers/stations, and drone control systems targeting application scenarios. Lais Information focuses on accelerating the R&D of low altitude 'Sky Shepherd' series products around the flight management platform, plans overall schemes for low altitude development in collaboration with local governments, engages in close exchanges and forms strategic partnerships with over 20 provinces and cities, including Peking, Shanghai, Chongqing, Jiangsu, Anhui, Guangzhou, Nanjing, and Suzhou, and has achieved phased results in some areas.
Sichuan Jiuzhou: The subsidiary Sichuan Jiuzhou Air Traffic Control provides an overall system solution combining hardware and software. The software aspect includes the low altitude collaborative operation center, flight service stations, low altitude control systems, testing business systems, and training systems; the hardware aspect mainly focuses on airborne avionics and low altitude infrastructure equipment, including onboard transponders, ADS-B series, radios, low altitude collaborative control systems, radars, radio detection, and a series of air traffic control testing and simulation systems, effectively covering applications for general aviation aircraft, medium and large drones, and eVTOLs.
Shenzhen City Transportation: A comprehensive, turnkey solution capability has been developed that includes a "full-process digital platform for the low altitude economy, integrated delivery of all products, and full-cycle investment and operation services"; in terms of specific business development, it actively collaborates to promote the development and delivery of benchmark projects such as the first phase of Shenzhen’s intelligent low altitude integrated infrastructure construction project. It also undertakes research projects such as 'Key Technologies for Urban Low Altitude Environment Simulation Modeling and Dynamic Monitoring Based on Digital Twin' in Shenzhen, and has won bids for planning projects for low altitude aircraft takeoff and landing facilities in cities such as Shenzhen, Wuxi, Zhongshan, and Jiangmen.
Brilliance Technology: Low altitude business includes: low altitude flight plan declaration platform, which lays out a construction service platform for integrated low altitude airspace usage plan declaration in Shanghai, Shandong, Heilongjiang, Jilin, etc., providing airspace usage plan declaration services for local meteorological and aviation entities. A comprehensive low altitude flight monitoring system is also in place, with the bid awarded for related construction projects by the end of 2023. In September 2024, a formal cooperation with Beijing Big Data Research Institute was announced, aiming to empower the low altitude economy through data and promote talent cultivation for low altitude data services.
Wisesoft Co., Ltd.: The company is a leading product developer, system integrator, and service provider of three-dimensional facial recognition systems and air traffic control systems in the country. The products in the air traffic control field are divided into civil aviation and military aviation levels. Civil aviation products include smart airports, flight simulation, control simulators, etc.; military aviation includes low-altitude airspace monitoring management and low-altitude radar.
Other related symbols.
Low-altitude air traffic control system: Lais Information (688631.SH), Sichuan Jiuzhou Electric (000801.SZ), Brilliance Technology (300542.SZ), Wisesoft Co., Ltd. (002253.SZ), Wisesoft Co., Ltd. (002253.SZ), Glarun Technology (600562.SH), and Shengxun Co., Ltd. (003004.SZ), etc.
Low-altitude airspace planning/infrastructure: Deep City Transportation (301091.SZ), China Design Group (603018.SH), Jsti Group (300284.SZ), Anhui Transport Consulting & Design Institute (603357.SH), etc.
Low-altitude navigation and meteorological systems: Nairui Radar (688522.SH), Sun Create Electronics (600990.SH), Beijing Starneto Technology (002829.SZ), Piesat Information Technology (688066.SH), Beijing BDStar Navigation (002151.SZ), Guangzhou Hi-Target Navigation Tech (300177.SZ), China Telecom (00728), ZTE (000063.SZ), etc.
Risk warning: The development of the low-altitude industry may not meet expectations, the promotion of low-altitude related policies may not meet expectations, technological iterations may not meet expectations, risks of related social issues, macroeconomic risks, and risks of related companies' performance not meeting expectations.
