Core Viewpoint - The QDII funds are showing increased tolerance for stock valuations, reflecting a shift in market risk appetite as liquidity conditions change and Chinese asset prices rise globally [1][4]. Group 1: QDII Fund Investment Trends - QDII funds are beginning to invest in previously overlooked stocks, such as Blucor, which has seen its stock price rise over 110% in the last five months despite a projected net loss of 401 million yuan for 2024 [2]. - Funds are increasingly focusing on new economy sectors, with E Fund investing in Quzhi Group, which operates AI-driven vending machines, despite the company projecting a net loss of 167.2 million yuan for 2024 [3]. - Southern Fund has invested in the U.S.-listed company Manbang, which utilizes AI for logistics, marking a shift in QDII fund strategies towards more aggressive stock selection [3]. Group 2: Market Sentiment and Strategy - The shift towards a more aggressive investment strategy among QDII funds indicates growing confidence among institutional investors in the current market [4]. - Historically, QDII funds maintained strict selection criteria to avoid significant losses, but recent changes in liquidity and asset pricing have prompted a reevaluation of these strategies [4]. - Even companies with substantial losses, such as Weimeng Group, are being targeted by funds, suggesting a belief in their potential to benefit from domestic consumption recovery [4]. Group 3: Valuation Perspectives - Valuation assessments are subjective, varying significantly among fund managers based on their market outlook and investment philosophy [5]. - The rise of technology narratives is influencing stock market valuations, contributing to the more aggressive strategies adopted by QDII funds [6]. - The emergence of Chinese tech companies as new growth engines is creating diverse and sustainable investment opportunities, particularly in sectors like AI and consumer demand [7]. Group 4: Market Dynamics - The recovery of the Hang Seng Index's dynamic P/E ratio to historical averages suggests that further valuation increases will depend on corporate earnings and macroeconomic recovery [8]. - There is a notable shift of funds from higher-valued markets in the U.S. and India to lower-valued markets in China and Europe, providing additional capital to the Hong Kong tech sector [7].

Summary of Low Altitude Economy Commercialization Conference Call Industry Overview - The conference call focuses on the low altitude economy, particularly the commercialization of eVTOL (electric Vertical Take-Off and Landing) aircraft and related applications in various sectors such as tourism, logistics, and agriculture [1][2]. Key Points and Arguments - **Order Volume and Sales**: - EVGO has received approximately 4,000 orders since its first flight in November 2024 [1][2]. - EHang's EH216 series has delivered 216 units in 2024, with over 1,000 intention orders from clients including Taiyuan Xishan Cultural Tourism and Wencheng County Transportation Development Group [1][2]. - CITIC Jinzhong intends to purchase 100 EVGO aircraft [1][2]. - **Application Scenarios**: - The low altitude economy is expected to first take off in the cultural tourism sector, while logistics and agricultural applications are already relatively mature [1][2]. - Short-term applications for manned flights will occur in closed airspace and low-density tourist areas, with long-term goals aimed at urban transportation [1][2]. - **Production Capacity Expansion**: - XPeng Heavens and EHang are actively expanding production capacity, with XPeng aiming for mass production of flying cars by 2026 and EHang targeting a capacity of 1,000 units by 2025 [1][4]. - Meituan's drone service has opened 53 routes and completed over 450,000 deliveries since 2017 [1][4]. - **Market Growth Forecast**: - The eVTOL industry is projected to see significant commercialization and mass production between 2026 and 2027, with several companies like Fengfei Aviation and Volant expected to complete certification and market introduction [1][5]. Challenges and Difficulties - **Airspace Management**: - Complex airspace approval processes involving multiple stakeholders (military, civil aviation, local governments) hinder efficiency [6]. - **Market Development**: - Insufficient application scenarios and low public acceptance regarding safety and reliability pose challenges [6]. - **Infrastructure Development**: - A lack of existing general aviation airports and supporting facilities limits operational range and efficiency [7]. Investment Opportunities - **Manufacturing and Technology**: - Companies like Zongheng Co. and Wan Feng Aowei are highlighted as potential investment targets in the manufacturing of industrial drones and lightweight aircraft [3][9]. - **Power Systems**: - Beneficiaries in the power systems segment include Yingboer, Wolong Electric Drive, and Zongshen Power, with significant contributions to the low altitude economy [10]. - **Avionics and Flight Control Systems**: - Zongheng Communication and Zhonghe Technology are key players in the avionics and flight control systems sector, focusing on solutions for urban industrial drones and manned aircraft [11]. Leading Companies and Solutions - **Zongheng Co.**: - Offers a comprehensive range of industrial drones, including vertical take-off fixed-wing drones and multi-rotor drones, continuously upgrading its unmanned systems [9]. - **Wan Feng Aowei**: - Engaged in lightweight automotive and general aviation aircraft manufacturing, with its electric aircraft EDA40 entering the certification phase [9]. Future Research Activities - **Guotai Junan Machinery**: - Plans to conduct research on the low altitude economy industry chain in the coming weeks, inviting industry professionals to participate in discussions [12].

Group 1 - XPeng Motors is considering an IPO for its flying car subsidiary, XPeng Huitian, with potential listings in Hong Kong or the US [1] - Since its public debut in November 2024, XPeng Huitian has received approximately 4,000 orders for its split-type flying car [1] - The model certification application for XPeng Huitian's flying car, known as "Land Carrier" (model code: X3-F), has been accepted by the Civil Aviation Administration of China [1] Group 2 - XPeng Huitian's manufacturing base is expected to be completed and operational by Q4 2025, with an annual production capacity planned to reach 10,000 units [1] - EHang Intelligent plans to expand its production capacity in 2025, targeting an overall annual production goal of 1,000 units [1] - The capacity expansion plans of XPeng Huitian and EHang Intelligent are expected to advance the low-altitude economy from the technology validation stage to large-scale production [1]

Core Insights - The low-altitude tourism market is experiencing significant growth, with various regions in China launching low-altitude flight projects during the May Day holiday, particularly helicopter sightseeing routes that have gained popularity among tourists [1][2] - The first eVTOL (electric Vertical Take-Off and Landing) low-altitude sightseeing flight activity was launched at the Huangguoshu Waterfall scenic area, marking a milestone in the industry [1] - Government policies are increasingly supporting the development of low-altitude tourism, with multiple regions implementing measures to promote this sector [3] Group 1: Market Growth - During the May Day holiday, regions such as Hainan, Zhejiang, Guangdong, Sichuan, Anhui, and Shanghai introduced low-altitude tourism projects, with helicopter sightseeing routes being particularly popular among tourists [1] - Chongqing initiated a low-altitude flight consumption week, distributing consumption vouchers for activities like skydiving and sightseeing flights, with 35 participating companies, a 45% increase from the previous year [2] - In Chengdu, the first urban low-altitude sightseeing route was launched, allowing tourists to view iconic buildings and landmarks from a helicopter [2] Group 2: Government Support - The low-altitude economy has been included in government work reports for two consecutive years, prompting local governments to introduce policies to support low-altitude tourism projects [3] - Specific measures, such as those from Guangzhou and Hainan, aim to enhance low-altitude tourism experiences by developing new flight routes and integrating them with local tourism infrastructure [3] Group 3: Regulatory Challenges - The rapid growth of low-altitude tourism has created regulatory pressures, with the Civil Aviation Administration of China (CAAC) conducting inspections and temporarily halting some low-altitude activities pending safety evaluations [4] - The CAAC maintains strict regulations for general aviation, particularly for passenger-carrying projects, emphasizing safety in densely populated areas [4][5] - The increasing demand for airworthiness certification for unmanned aerial vehicles (UAVs) poses a challenge, as the current resources for certification are insufficient to meet the growing needs of the industry [5]

Investment Rating - Investment rating: Positive (maintained) [1] Core Viewpoints - The low-altitude economy is experiencing rapid commercialization, with significant government support and investment in infrastructure and projects [21][26][28] - By 2030, the drone industry in China is expected to exceed 1 trillion yuan, with eVTOLs likely becoming a mainstream choice for urban air mobility [32] Summary by Sections Industry Overview - The low-altitude economy is gaining momentum with various local governments implementing supportive measures and funding initiatives [21][28][31] - Recent projects include a 500 million yuan investment by Dongfang Hope Group in Chongqing for urban air traffic operations [29] Company Dynamics - Zhongke Xingtou has secured low-altitude projects in four cities and plans to raise 650 million yuan for platform construction [33] - Wan Feng Aowei has acquired core assets from global eVTOL pioneer Volocopter to enhance urban air transport solutions [36] - Shencheng Jiao is actively involved in over 20 cities for low-altitude economic planning and consulting projects [38] Market Performance - The average stock price change for low-altitude economy-related A-shares was +0.5% from April 28 to April 30, with notable gains from companies like Blue Ocean Huateng (+13.7%) and Guanglian Aviation (+9.6%) [12][24] - In the US market, Yihang Intelligent saw a significant increase of +11.1% [19][24]

Group 1 - The core viewpoint emphasizes the importance of maintaining a calm and steady approach in the development of technology and new industries, avoiding short-term gains and fostering long-term growth [1][3][5] - The fifth China International Consumer Products Expo introduced a new consumer technology exhibition area showcasing advanced technologies such as humanoid robots and unmanned aerial vehicles, indicating a shift towards innovative consumer experiences [1][2] - Companies like Yihang Intelligent are focusing on practical challenges in the development of air taxis, highlighting the need for comprehensive solutions and gradual progress in emerging industries [4][5] Group 2 - The government plays a crucial role in supporting emerging industries by providing strategic stability and fostering a conducive environment for growth, as seen in the policies supporting companies like iFlytek and Yihang Intelligent [5] - The recent expo facilitated 52 signed agreements worth approximately 92 billion yuan, showcasing the potential for economic growth despite global uncertainties [5]

Core Insights - EHang Intelligent's subsidiary, Guangdong EHang General Aviation Co., Ltd., and its joint venture Hefei HeYi Aviation Co., Ltd., have received the first batch of operational qualifications for manned civil unmanned aerial vehicles (UAVs) from the Civil Aviation Administration of China, marking the beginning of the low-altitude flying "manned era" [1][2] - The electric vertical takeoff and landing (eVTOL) industry is witnessing a surge in interest from battery manufacturers, who are seen as key players in driving the commercialization of eVTOLs [1][2] - Despite advancements, the current battery performance still falls short of market demands, posing challenges for the expansion of eVTOL applications [1][10] Industry Developments - EHang Intelligent has completed the necessary certifications to initiate commercial low-altitude services, allowing consumers to purchase tickets for experiences such as low-altitude tours and urban sightseeing in cities like Guangzhou and Hefei [2] - Other companies, such as XPeng Heitech, are also accelerating their industrialization processes, with plans for mass production of their flying cars by 2026 [2] - The eVTOL industry is evolving into a new industrial chain, with various companies vying for a share of the market [2] Battery Technology and Market Dynamics - The value of the "three electrics" (motor, battery, and avionics) constitutes approximately 70% of the total value of eVTOLs, with battery costs accounting for about 20% of the overall costs [3] - Compared to electric vehicles, eVTOLs exhibit lower sensitivity to battery prices, allowing for greater innovation potential and profitability for battery manufacturers [3] - Major battery manufacturers are focusing on developing solid-state and semi-solid-state batteries, with companies like CATL and Guoxuan High-Tech actively collaborating on eVTOL battery projects [4][12] Performance Requirements - The eVTOL industry demands high-performance batteries characterized by high safety, high energy density, high discharge rates, and fast charging capabilities, collectively referred to as "three highs and one fast" [5][6] - Current eVTOL battery energy densities range from 270Wh/kg to 320Wh/kg, with a need for further advancements to meet the demands of longer-range and more frequent urban air mobility applications [11][12] Future Outlook - The industry anticipates a transition towards semi-solid-state batteries by 2025 and solid-state batteries by 2030, which are expected to significantly enhance the flight range of eVTOLs [12] - EHang Intelligent has successfully conducted the first flight test of an eVTOL with a solid-state battery, achieving a flight duration increase of 60% to 90% [12] - The development of charging infrastructure, including ultra-fast charging solutions, is critical for the operational efficiency and profitability of eVTOL services [12][13]

Company Performance - EHang Holdings Limited Unsponsored ADR (EH) has shown a year-to-date performance increase of approximately 3%, outperforming the average gain of 1.2% in the Aerospace group [4] - The Zacks Rank for EHang is currently 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] Industry Context - EHang belongs to the Aerospace - Defense Equipment industry, which consists of 27 companies and currently ranks 37 in the Zacks Industry Rank [6] - The Aerospace - Defense Equipment industry has experienced an average decline of 2.9% this year, highlighting EHang's relative strength within this sector [6] Analyst Sentiment - Over the past 90 days, the consensus estimate for EHang's full-year earnings has increased by 27.3%, reflecting improved analyst sentiment [3] - Spirit Aerosystems (SPR), another stock in the Aerospace sector, has also shown strong performance with a year-to-date increase of 2.4% and a significant EPS estimate increase of 870.3% over the past three months [4][5] Future Outlook - Investors are encouraged to monitor EHang Holdings Limited and Spirit Aerosystems for potential continued strong performance in the Aerospace sector [7]

Group 1: Advanced Equipment Development - Guangdong Province allocated 38.86 million yuan for the first set of major technological equipment, focusing on intelligent robots and new energy vehicles [1] - The advanced equipment sector shows strong industrial clustering, with significant product development and enhanced manufacturing capabilities [1] - Guangdong has cultivated 4 competitive national-level small and medium-sized enterprise clusters and 2 trillion-yuan international competitive industrial clusters in the machinery sector [1] Group 2: Innovations in Aviation - EHang received the first operational qualification certificate for manned civil unmanned aerial vehicles in China, marking a significant step towards commercializing low-altitude manned services [2] - The AG600 amphibious firefighting aircraft developed by AVIC has also received its type certificate, indicating successful market entry [2] - Guangdong plans to accelerate the development of advanced equipment, implementing policies to support new projects and enhance industry collaboration [2] Group 3: Biopharmaceutical Innovations - In Q1, Guangdong approved 3 first-class innovative drugs and 2 third-class innovative medical devices, nearing half of the total approvals for the previous year [3] - The province aims to establish a mechanism for regularly publishing approved innovative drug and device lists and will support the application of these innovations [3] - Guangdong will focus on reforming medical institution preparations as a breakthrough in biopharmaceutical R&D, promoting collaboration between medical institutions and biopharmaceutical companies [3] Group 4: Strategic Planning - The "Three-Year Attack Plan for Key Areas of Advanced Equipment in Guangdong Province (2025-2027)" is being developed, focusing on artificial intelligence, biomanufacturing, marine engineering, and aerospace [4]

Investment Rating - The industry rating is optimistic, indicating a positive outlook for the eVTOL sector in the coming months [53]. Core Insights - The eVTOL industry is rapidly developing due to intensive low-altitude policies and has significant future potential, particularly in the electric motor segment [8][26]. - eVTOL systems offer advantages in safety, environmental sustainability, and efficiency compared to traditional transportation methods [16][17][18]. - The market for eVTOL electric motors is projected to reach a substantial value, with a significant portion of the costs attributed to the power and energy systems [29][26]. Summary by Sections 1. Rapid Development of the eVTOL Industry - The eVTOL industry is experiencing swift growth driven by supportive government policies and technological advancements [8]. - The value contribution of eVTOL motors is high, indicating a large potential market space in the future [26]. 2. Diverse eVTOL Configurations and Power Solutions - eVTOL designs vary widely, with different manufacturers adopting unique propulsion systems, leading to diverse performance characteristics [30]. - The core barriers include high power density requirements for eVTOL motors and lengthy product development cycles [30][43]. 3. Technological Trends - The acceleration of power density improvements in eVTOL motors is driving advancements in materials and manufacturing processes [43]. - Innovations in high-performance magnetic and conductive materials are essential for enhancing motor efficiency and performance [44][45]. 4. Market Potential - The mid-term market potential for eVTOL motors is estimated at 107.9 billion yuan from 2025 to 2030, with power systems and energy systems accounting for 50% of costs [29]. - The operational costs of eVTOL are expected to drop significantly, potentially reaching one-fifth of helicopter costs, enhancing their competitiveness [23][24]. 5. Key Players and Configurations - Various eVTOL configurations include multi-rotor, lift and cruise, tilt-rotor, and tilt-duct types, each with distinct advantages and applications [30][31]. - The report highlights specific models and their respective configurations, showcasing the diversity in design and functionality [35][37].