Core Viewpoint - The rapid development of drone technology has led to significant applications in aerial photography, logistics, and rescue operations, but it has also raised concerns about illegal drone flights, known as "black flights," which disrupt public order and violate legal and safety standards [1]. Regulatory Framework - The revised Public Security Administration Punishment Law of the People's Republic of China explicitly categorizes "black flight" activities as a violation of public safety, providing a legal basis for regulation [1]. - Collaboration among law enforcement agencies, including cyber police, air traffic control, and market regulation, is essential to enhance monitoring networks and ensure proactive risk management [1]. Technical Prevention - Companies are responsible for upgrading encryption algorithms and establishing early warning mechanisms for flight control system tampering to prevent illegal modifications [1]. - Utilizing big data and artificial intelligence for monitoring abnormal flights can facilitate timely remote interventions, helping to curb "black flight" activities at an early stage [1]. Behavioral Norms - Every drone operator should cultivate a "compliance flying" awareness, strictly adhering to real-name registration and flight reporting systems to promote lawful and safe flying as an industry consensus [2]. Safety Importance - Safety is deemed the lifeline of the low-altitude economy, necessitating multiple measures to create a robust safety defense that ensures drones can fly effectively and safely [3].

Core Viewpoint - The article highlights the successful deployment of the Yuhang Low-altitude Anti-UAV Platform by Zhongke Xingtou during the 80th anniversary of the victory in the Anti-Japanese War, ensuring low-altitude security for the event through advanced technology and strategic implementation [1][3]. Group 1: Technology and Implementation - The Yuhang Low-altitude Anti-UAV Platform utilizes a high-precision digital twin base and low-altitude holographic grid technology for comprehensive detection and countermeasure analysis, integrating various data sources to generate optimal defense strategies [2][3]. - The platform features a layered decoupled design, creating a four-layer architecture that connects device perception, countermeasure execution, data integration, and intelligent decision-making, providing a systematic approach to low-altitude security management [2][3]. Group 2: Achievements and Future Plans - During the September 3 military parade, the platform successfully established an intelligent low-altitude defense system, achieving precise integration of urban spatial information and unified airspace management, which are critical for effective low-altitude security [3]. - Looking ahead, Zhongke Xingtou aims to further integrate "digital earth + AI + low-code" technologies, expanding the application of the Yuhang platform to various sectors such as airports and urban management, while fostering an open collaborative industrial ecosystem [3].

Core Viewpoint - The company aims to lead the exploration and layout of a counter-drone detection and defense system in the low-altitude economic security field, leveraging its extensive experience in infrared optoelectronic technology and complex large-scale project integration [1] Company Summary - The company has over 20 years of experience in the field of domestic full-band infrared detection and imaging technology, with main products including mid- and long-wave basic components, high-resolution infrared imaging components, continuous zoom infrared cameras, and infrared thermal imaging systems [1] - The subsidiary, Changfeng Kewei, has developed AI scene algorithms for infrared images based on deep learning, enabling high-precision detection, identification, and early warning of low, slow, small targets like drones in complex scenarios and extreme weather conditions [1] - The company possesses top-level planning and full-process integration construction capabilities for complex large-scale projects, as well as the ability to build a three-dimensional low-altitude security prevention and control system [1] Industry Summary - The company has been engaged in the border and maritime defense field for 17 years, developing a command and dispatch platform based on heterogeneous big data that utilizes advanced fusion algorithms to process multi-modal data [1] - The platform integrates information collection, display, comprehensive analysis, and real-time control functions, capable of capturing target dynamics in complex and variable low-altitude environments [1] - The integrated low-altitude near-sea security management solution provides users with situational awareness against drone swarms and multi-domain joint command and control [1]

Core Viewpoint - The company aims to lead the exploration and layout of a counter-drone detection and defense system in the low-altitude economy security field, leveraging its extensive experience in infrared optoelectronic technology and complex large-scale engineering project integration [1] Group 1: Company Capabilities - The company has over 20 years of experience in the field of domestic full-band infrared detection and imaging technology, with products including mid- and long-wave basic components, high-resolution infrared imaging components, continuous zoom infrared cameras, and infrared thermal imaging systems [1] - The subsidiary, Changfeng Kewai, has developed AI scene algorithms for infrared images based on deep learning, enabling high-precision detection, identification, and early warning of low, slow, small targets like drones in various challenging conditions [1] - The company possesses top-level planning and full-process integration construction capabilities for complex large-scale projects, along with the ability to build a three-dimensional low-altitude security prevention and control system [1] Group 2: Technological Innovations - The company has 17 years of experience in the border and maritime defense field, developing a command and dispatch platform based on heterogeneous big data that utilizes advanced fusion algorithms to process multi-modal data [1] - The platform can efficiently integrate data from radar, optoelectronic, and spectrum detection, providing multiple functions such as information collection, display, comprehensive analysis, and real-time control [1] - In a complex and dynamic low-altitude environment, the platform can capture target dynamics in real-time, offering integrated low-altitude coastal security management solutions for users [1]

Group 1 - The core focus of the low-altitude economy is on safety, with multiple experts emphasizing that low-altitude operations present more challenges than high-altitude ones, highlighting the mantra "no safety, no low-altitude" [1][3] - In 2023, the government has prioritized the safe and healthy development of the low-altitude economy, as indicated in the government work report and subsequent statements from the National Development and Reform Commission (NDRC) [1][2] - The NDRC has outlined principles for low-altitude consumption development, including "cargo first, then passengers; isolation before integration; and rural areas before urban areas" [1][2] Group 2 - The challenges of low-altitude flight include strong convective phenomena below 1000 meters, urban heat sources causing turbulent airflows, and complex wind patterns created by tall buildings [2][3] - Establishing safety standards is crucial for the scale-up of the low-altitude economy, which requires extensive research, development, and data support [3] - The NDRC's emphasis on safety in low-altitude economic development suggests that infrastructure is currently insufficient, and a coordinated approach is necessary to avoid chaotic growth in the sector [3][4] Group 3 - Capital investment in the low-altitude economy should not only provide funding but also facilitate policy, technology, and local government connections to help leading companies secure substantial orders and achieve industry scale [4]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 16.00 RMB [8][9]. Core Views - The company's revenue for 2024 was 529.28 million RMB, a year-over-year decrease of 5.71%, while the net profit attributable to the parent company was 36.81 million RMB, a slight decrease of 0.42%. However, the non-recurring net profit increased significantly by 233.45% to 15.69 million RMB, indicating a shift towards higher-margin business segments [1][2]. - The company is expected to recover its performance in 2025, driven by the expansion into new industry clients such as judiciary, telecommunications, and tobacco, as well as overseas clients along the Belt and Road Initiative [1][3]. Summary by Sections Financial Performance - In 2024, the company's revenue from PKI infrastructure products, PKI security application products, and general security products was 1.58 billion RMB, 2.48 billion RMB, and 1.23 billion RMB respectively, showing year-over-year growth of 41.41%, 10.64%, and a decline of 45.28% [2]. - The overall gross margin improved by 4.52 percentage points to 51.99% due to the increased revenue share from high-margin businesses [2]. Business Opportunities - The company is focusing on new security scenarios such as quantum security and AI security, and has made significant progress in product development [3]. - New industry clients are expected to contribute to sustained growth in 2025, with successful projects like the digital trust system in Algeria indicating potential for international expansion [3]. Earnings Forecast and Valuation - The revenue projections for 2025, 2026, and 2027 are 642.05 million RMB, 774.72 million RMB, and 919.08 million RMB respectively, with corresponding EPS estimates of 0.37 RMB, 0.54 RMB, and 0.74 RMB [5][7]. - The report adjusts the revenue and profit forecasts downward due to the transition period affecting low-margin businesses, but maintains a target price based on a 43.3x PE ratio for 2025 [5].