Investment Rating - The industry rating is "Outperform the Market" [6] Core Viewpoints - The low-altitude economy index increased by 2.67% this week, ranking 126 out of 338, outperforming the overall market [3][13] - The report indicates that the low-altitude sector is poised for a rebound due to favorable conditions, continuous catalysts since the second half of the year, and new directions in the US-China competition [4][28] - The focus for the low-altitude industry this year is on infrastructure development and the initial deployment of drones in cargo scenarios, with a strong emphasis on military and civilian applications [29][30] Summary by Sections Market Review - The low-altitude economy index rose by 2.67%, outperforming the Shanghai Composite Index, which increased by 1.52% [3][13] - Top gainers in the A-share and Hong Kong markets included companies like Wolong Electric Drive (up 19.87%) and Changyuan Donggu (up 18.41%) [16][23] Industry Dynamics - The establishment of a leadership group by the Civil Aviation Administration of China for general aviation and low-altitude economy is expected to bring favorable policies [4][28] - Recent developments include the successful first flight of China's first dual-seat electric helicopter and the launch of an online platform for low-altitude flight services [32][35] Investment Recommendations - Recommended stocks for infrastructure include: Suzhou Planning and Lais Information [5][31] - Recommended stocks for drones include: Jifeng Technology, Yokogawa Precision, and Tengya Precision [5][31] - Suggested leading companies in capacity include: Wanfeng Aowei, Zongshen Power, and Sichuan Jiuzhou [5][31]

Core Insights - The report outlines the rise of China's low-altitude economy from 2022 to 2025, highlighting its strategic value and the interplay between policy, technology, and market dynamics [1] - The low-altitude economy is projected to grow from 505.95 billion yuan in 2023 to 670.25 billion yuan in 2024, and is expected to exceed 850 billion yuan by 2025, with a potential to reach a trillion yuan by 2026 [1] Policy Framework - China's low-altitude economy has transitioned from industry regulation to a national strategic focus, with key policies established in 2022 and 2023, including standards for urban logistics drones and a comprehensive management system for unmanned aerial vehicles [3][4] - By 2024, low-altitude economy was recognized as a "new growth engine" in government reports, and a dedicated department was established to oversee its strategic planning [4] - The revision of the Civil Aviation Law in 2025 aims to legally support the allocation of airspace resources for low-altitude economic development [4] Regional Practices - All 31 provinces have incorporated low-altitude economy into their 2025 government work reports, with Guangdong aiming for a 300 billion yuan industry scale by 2026 [5] - Hunan has established a collaborative management mechanism for low-altitude operations, achieving a 95% monitoring coverage in airspace below 3000 meters [5] - Inner Mongolia is focusing on diverse applications of low-altitude economy, with plans to establish a research institute and develop a low-altitude economic zone [6] Institutional Innovations - The rapid development of the low-altitude economy necessitates reforms in airspace management, moving from a traditional approval model to a more flexible, categorized management approach [7] - The establishment of a dual system combining legal regulations and technological empowerment is crucial for ensuring the safe development of the low-altitude economy [7] Industry Ecosystem - The low-altitude economy encompasses a complete industrial chain, including infrastructure, aircraft manufacturing, operational services, and support systems [9] - The number of general airports in China is increasing, but still lags behind the U.S., with innovative facilities being developed in urban areas [9] - The drone manufacturing sector is led by civilian drones, with significant growth in eVTOL technology expected in the coming years [9][10] Market Dynamics - The low-altitude economy is experiencing rapid growth, with a market size of 505.95 billion yuan in 2023 and a projected increase to 859.17 billion yuan by 2025 [13] - Key growth drivers include supportive government policies, technological advancements, and rising demand for low-altitude services [13] - The market is characterized by leading companies like DJI and EHang, with significant investment flowing into the sector [14] Academic Research - Research indicates that cities with strong industrial foundations and policy support will experience faster growth in the low-altitude economy [16] - Studies highlight the need for a dynamic airspace allocation mechanism to enhance resource utilization and address the challenges of traditional management systems [17] Challenges and Recommendations - The low-altitude economy faces challenges such as insufficient market demand, uneven infrastructure development, and regulatory gaps [18][20] - Recommendations include enhancing airspace management reforms, improving infrastructure planning, and fostering technological innovation to overcome existing barriers [26][27] Future Outlook - By 2026, the low-altitude economy is expected to see accelerated technological integration and the establishment of a comprehensive industrial ecosystem, with a market size potentially exceeding one trillion yuan [25] - The development will likely follow a "three-pole leading, multi-point support" model, with distinct regional strengths in manufacturing, technology, and application [25]

Industry Overview - The low-altitude economy in China is gaining momentum, driven by technological advancements, policy incentives, and economic transformation [1][3] - The low-altitude economy is expected to exceed 670 billion yuan by 2024, with projections indicating it could surpass 1 trillion yuan by 2026 [4] Company Developments - Nanjing Aerospace Guoqi Intelligent Equipment Co., Ltd. has developed various unmanned aerial vehicles (UAVs) with capabilities such as a maximum load of 300 kilograms and flight duration of approximately 30 minutes [2] - The PT6A engine maintenance base established by Huaxia Yuntian Aviation Engine Maintenance Co., Ltd. in Wuhu is the first authorized overhaul facility for PT6A engines in China, aiming for an annual repair capacity of 100 engines [4] Policy and Regulatory Framework - The Chinese government has integrated the low-altitude economy into national planning since 2021, with continuous emphasis in key meetings and government reports [3] - Various ministries are working on establishing a standard system for the low-altitude economy and enhancing safety regulations [3][4] Market Dynamics - As of the end of 2024, there are over 200,000 enterprises in the low-altitude economy sector, reflecting a year-on-year growth of 10.46% [4] - The industry is characterized by a growing ecosystem that includes production, operation services, and airspace management [1][3]

Group 1 - The low-altitude economy in China is experiencing significant growth, driven by technological advancements, policy incentives, and economic transformation [1][3] - The 2025 Low Altitude Economy Development Conference showcased a full industry chain from aircraft to operational services and airspace management, indicating a rapidly approaching three-dimensional economic ecosystem [1][3] - The low-altitude economy is expected to exceed 670 billion yuan by 2024, with projections suggesting it could surpass 1 trillion yuan by 2026 [4] Group 2 - The establishment of the Low Altitude Economy Development Department by the National Development and Reform Commission and the formation of a leadership group by the Civil Aviation Administration of China highlight the government's commitment to this sector [3] - Various regions are exploring unique paths for low-altitude industry development, such as Guangdong's "air taxi" pilot projects and Chongqing's expedited airspace approval processes [3] - The number of enterprises in the low-altitude economy has exceeded 200,000, reflecting a year-on-year growth of 10.46% [4] Group 3 - The PT6A engine maintenance base in Wuhu, authorized by Pratt & Whitney Canada, represents a significant development in the low-altitude economy, aiming for an annual repair capacity of 100 engines [4] - Despite the growth, there are still many bottlenecks to overcome, including the need for comprehensive regulations, standards, and management systems to support the industry [4] - Safety is emphasized as the primary prerequisite for the development of the low-altitude economy, necessitating a new governance system that is both cautious and inclusive [4]

Core Insights - Ping An Property & Casualty has insured over 150,000 drones, providing risk coverage exceeding 90 billion yuan, with compensation amounts surpassing 1.17 billion yuan for drones and aircraft [1][2] Group 1: Low Altitude Economy Development - The low altitude economy is recognized as a strategic emerging industry during the 14th Five-Year Plan, transitioning from policy trials to large-scale applications, including drone logistics, urban air traffic, and emergency rescue scenarios [2][3] - The complexity and risks associated with low altitude flying activities necessitate the role of insurance as a critical component for commercial viability [2][3] Group 2: Insurance Product Development - Ping An Property & Casualty aims to develop specialized insurance products tailored to the entire low altitude economy industry chain, addressing risk management needs while leveraging its technological capabilities for risk reduction [2][3] - The company has established a new risk research institute in collaboration with Zhongcai Property & Casualty, focusing on risk points throughout the operational processes of low altitude activities [2][3] Group 3: Emerging Risk Management - The "White Paper" highlights that low altitude economy presents unique challenges compared to traditional aviation and ground transportation, requiring targeted safety and risk prevention systems [3] - The demand for low altitude economy insurance is expected to exhibit characteristics of "full chain, high adaptability, and strong professionalism," covering various aspects from flight activities to data security and navigation system failures [3] Group 4: Future Industry Integration - By 2035, the low altitude economy is projected to expand to a scale of 3.5 trillion yuan, necessitating insurance to permeate every segment of the low altitude economy [4] - The "White Paper" suggests that the insurance industry should innovate product offerings, optimize business models, enhance service capabilities, and improve supporting measures to facilitate high-quality development of the low altitude economy [4][5]

Group 1 - The 2025 China Automotive Industry Development (Teda) International Forum was held in Tianjin, focusing on the new ecological development of the low-altitude economy and its integration with digital technologies in the automotive industry [1] - The low-altitude economy requires a certain scale, low cost, and high density to achieve economic viability, with flying cars being a significant vehicle for this development [3] - The definition of flying cars needs clarification, distinguishing between eVTOL (electric vertical takeoff and landing) and flying cars, with the latter being a broader concept that includes various smart transportation vehicles [4] Group 2 - Approximately 70%-80% of the supply chain and production processes for flying cars can leverage existing foundations from new energy and intelligent connected vehicles, indicating a strong automotive lineage [5] - The electric aircraft is expected to address the high costs and scalability challenges of the low-altitude economy, emphasizing the need for safety improvements through advanced technologies [5] - The market sentiment for the low-altitude economy is becoming more rational, with a focus on ecosystem development and collaboration among partners and local governments to build necessary infrastructure [6] Group 3 - The integration of low-altitude logistics is accelerating the development of the express delivery industry, bringing low-altitude travel closer to daily life, with significant technological breakthroughs in key areas [6] - The overlap in the supply chains of eVTOLs and electric vehicles is about 70%, highlighting the fundamental connection between the automotive industry and the low-altitude economy [6] - The core foundation for cross-industry layout is technological integration, with recommendations for establishing joint R&D platforms and a coordinated mechanism among government departments to promote low-altitude economic development [7]

Core Insights - The article discusses a recent inspection by the municipal political consultative conference in Kunshan, focusing on the development of the low-altitude economy as part of China's modernization efforts [1] Group 1: Low-altitude Economy Development - The Huqiao Low-altitude Economy Industrial Park is one of the first pilot parks in Suzhou, covering an area of 500 acres, with a startup area of 190 acres, a total construction area of 170,000 square meters, and a total investment of 1.43 billion yuan [1] - The park focuses on sectors such as air-ground communication, unmanned driving, and chip research and development, having attracted over 30 key projects related to the low-altitude economy, including drone research, assembly, manufacturing, testing, training, and commercial satellites [1] Group 2: Key Companies and Technologies - The leading enterprise in the park, Times Feipeng, is recognized for its strong capabilities in drone product research and development, offering a comprehensive product range and optimal solutions, with its FP-98 large unmanned transport aircraft successfully obtaining TC and PC certifications [1] - Fengfei Aviation Technology (Kunshan) Co., Ltd., established in 2017, is one of the few companies globally that has mastered the conversion flight technology for eVTOL (electric vertical takeoff and landing) aircraft with a capacity of over one ton [1]

Core Insights - The report focuses on the development trends and pathways of China's low-altitude economy, highlighting its strategic importance and the challenges it faces in terms of uneven regional development and structural imbalances within the industry [1][2]. Group 1: Current Status and Challenges - The low-altitude economy has become a strategic emerging industry, with numerous national and local policies being introduced, such as the inclusion of low-altitude economy in the 2025 Civil Aviation Law revision [1]. - The industry structure shows a contradiction of "strong upstream, weak midstream, and hot downstream," with innovation resources concentrated in the Yangtze River Delta and Pearl River Delta regions, leading to uneven regional development [1][2]. - The report predicts that by 2030, the low-altitude economy will enter an explosive growth phase, reaching a scale of over 1 trillion yuan and contributing nearly 3% to GDP [1][2]. Group 2: Regional Assessment and Characteristics - A three-dimensional evaluation system categorizes the country into four tiers, with Guangdong, Jiangsu, and Beijing in the first tier, showcasing distinct regional development characteristics [2]. - Typical regional pathways include Shenzhen's startup-driven infrastructure upgrades, Beijing's reliance on innovation resources to build a full industry chain, and Jiangsu's establishment of a drone operation management system [2]. Group 3: Investment Trends - Investment in the low-altitude economy is increasing, with 156 financing events in 2024 amounting to approximately 24.54 billion yuan, a 47.7% increase year-on-year [15]. - The focus of investment is primarily on early-stage projects, particularly in the eVTOL and drone manufacturing sectors, which accounted for over 50% of financing events [16][18]. Group 4: Innovation and Technology - The number of patents related to low-altitude economy technologies has been increasing since 2021, with a significant rise expected in 2024 due to an improved policy environment [10][12]. - The report emphasizes the need for a collaborative mechanism among policy, technology, scenarios, and capital to drive innovation and address challenges such as the maturity of eVTOL technology [2][22]. Group 5: Future Outlook - The low-altitude economy is expected to experience rapid growth, with a projected market size of 1.3 trillion yuan by 2030, contributing approximately 2.8% to GDP [26]. - The development will be characterized by cross-industry integration, with applications in agriculture, energy inspection, and passenger transport forming a diverse development pattern across different regions [30].

Core Viewpoint - The State Council has approved a two-year pilot program for market-oriented allocation of factors in ten key urban areas, including the Guangdong-Hong Kong-Macao Greater Bay Area, aimed at enhancing economic vitality and efficiency in resource allocation [1][2]. Group 1: Market-Oriented Allocation of Factors - Market-oriented allocation of factors means that the prices and ownership of these factors are determined by the market [2]. - The reform aims to eliminate institutional barriers and address key issues in various factors, such as technology, land, and data [2][3]. Group 2: Objectives and Challenges - The core objective of the reform is to establish a unified, open, and competitively ordered factor market system [3]. - The Greater Bay Area faces complex challenges due to its unique status as a "one country, two systems, three tariff zones" region, necessitating improved efficiency in factor allocation [3]. Group 3: Focus on New Factors - The pilot program emphasizes the efficient allocation of new factors, particularly data, which is crucial in the digital economy [4]. - The proposal includes exploring mechanisms for data property rights, circulation, and cross-border transmission to unlock data value and position the Greater Bay Area as an international data hub [4]. Group 4: Integration of Government Services - Promoting integrated government services is a key direction of the reform, requiring rule alignment, standard recognition, and regulatory collaboration [5]. - The pilot program aims to facilitate the flow of human resources, technology transfer, and capital allocation across the nine cities, enhancing cooperation in areas like household registration and social security [5]. Group 5: Broader Implications - The reform is expected to strengthen the flow and cooperation of factors between the nine cities in the Greater Bay Area and Hong Kong-Macao, creating a model for factor allocation that accommodates different systems and economic frameworks [5]. - The initiation of this pilot program represents a significant opportunity for regional development and a strong declaration of China's commitment to deepening reforms and expanding openness [5].

Core Points - The State Council approved the "Comprehensive Reform Pilot Implementation Plan for Market-oriented Allocation of Factors" on September 11, selecting 10 regions for pilot reforms, including Beijing's urban sub-center and cities in the Guangdong-Hong Kong-Macao Greater Bay Area [1] - The plan aims to address the underdevelopment of factor markets compared to goods and services markets, which hinders the establishment of a unified national market [1] - The plan emphasizes the need for reform of the household registration system, particularly in the nine cities of the Guangdong-Hong Kong-Macao Greater Bay Area, to facilitate labor mobility and improve public services [2][3] Factor Market Reforms - The pilot regions will focus on traditional factors like labor, capital, and land, as well as new factors such as data, computing power, airspace, and frequency spectrum [1] - The plan aims to break down administrative and regional barriers to ensure smooth flow of factors, enhancing the efficiency of resource allocation [2] - Specific measures include implementing a residence permit system and expanding access to public services for non-employed residents [2][3] Data and New Factor Markets - The Guangdong-Hong Kong-Macao plan outlines initiatives to enhance data sharing, develop standardized data usage scenarios, and strengthen data security [5][6] - The plan highlights the importance of data as a new factor, emphasizing the need for regulations on data circulation and privacy protection [5] - The plan also includes the establishment of a comprehensive unmanned system across land, sea, and air, focusing on innovative configurations of production factors [6] Economic Growth and Innovation - The Guangdong province is projected to see significant growth in sectors such as new energy vehicles, industrial robots, and smartphones, with substantial market shares in the national context [5] - The plan encourages the introduction of high-level talent and innovative teams, with flexible policies regarding employment and compensation [3] - The focus on new industries such as artificial intelligence and modern agriculture aims to attract advanced production factors and foster new economic growth [6]