Investment Rating - The report gives a "Cautious Recommendation" rating for the company, marking its first coverage [6]. Core Views - The company's main business in general aviation shows steady growth, with a significant contribution from the transportation segment, which generated revenue of 10.33 billion yuan in the first half of 2025, accounting for 99.5% of total revenue, reflecting an 8.8% year-on-year increase [2][3]. - The company is positioned as the largest civil helicopter operator in Asia, with 88 helicopters and 4 helipads operational as of June 2025, providing a solid growth foundation [3]. - The low-altitude economy is identified as a new growth point, with the company launching various air tourism services and collaborating with telecom companies to enhance its offerings [4]. Summary by Sections Financial Performance - In the first half of 2025, the company achieved a revenue of 10.38 billion yuan, a year-on-year increase of 7.9%, and a net profit attributable to shareholders of 1.53 billion yuan, up 15.9% year-on-year [1]. - The gross profit margin improved to 23.3%, an increase of 2.9 percentage points year-on-year, driven by effective cost control and operational efficiency [2]. Business Growth - The general aviation business is experiencing stable growth, supported by active offshore oil extraction activities and new market demands such as port pilotage and emergency rescue services [2]. - The company is actively exploring opportunities in the low-altitude economy, including the integration of various business models such as tourism and emergency services [4]. Future Projections - The report forecasts the company's net profit attributable to shareholders to be 3.41 billion yuan, 3.65 billion yuan, and 4.06 billion yuan for the years 2025, 2026, and 2027, respectively [5]. - The current stock price corresponds to a price-to-earnings (PE) ratio of 55, 52, and 47 for the years 2025, 2026, and 2027, indicating a favorable valuation outlook [5].

Core Viewpoint - The article highlights the growing opportunities in the low-altitude economy, particularly in the drone sector, showcased at the third China International Supply Chain Promotion Expo, with a focus on innovation and international expansion [1][4]. Group 1: Low-altitude Economy Development - The low-altitude economy is projected to create a trillion-level industrial ecosystem, with estimates suggesting a market size of 1.5 trillion yuan by 2025 and 3.5 trillion yuan by 2035 according to the Civil Aviation Administration of China [8]. - Guangdong province aims to achieve a low-altitude economy industry chain scale of 300 billion yuan by 2026 [9]. Group 2: Drone Industry Innovations - The newly established Advanced Manufacturing Chain Innovation Integration Exhibition Area at the expo showcased the latest technologies and applications in the drone field, including multifunctional drones capable of delivering over 1 ton of supplies [3]. - The drone industry is experiencing significant growth, with each 100 million yuan in core industry output potentially driving an additional 500 million yuan in related industry growth [3]. Group 3: International Market Expansion - Chinese drones are gaining traction in international markets, with companies like Zongheng covering over 40 countries, primarily in Asia, Africa, and Latin America [4]. - Companies expressed a desire to "team up" for overseas expansion, enhancing bargaining power and risk resilience by collaborating with upstream suppliers and downstream service providers [5]. Group 4: Challenges and Opportunities - Despite the initial formation of the low-altitude economy industry chain, there are still challenges in achieving sustainable commercialization, with many applications currently in demonstration phases [9]. - The overseas market is viewed as a blue ocean opportunity, with companies aiming to showcase high-value applications of large drones in emergency rescue, meteorological services, and logistics [9].

Core Insights - The third China International Supply Chain Promotion Expo (referred to as "Chain Expo") highlighted the growing opportunities in the low-altitude economy, showcasing advancements in drone technology and applications in various sectors [1][2] - The low-altitude economy is projected to develop into a trillion-yuan industry, with estimates suggesting a market size of 1.5 trillion yuan by 2025 and 3.5 trillion yuan by 2035 [5][6] Industry Developments - The newly established Advanced Manufacturing Chain Innovation Integration Exhibition Area showcased the multifunctionality of drones, with examples such as the dual-tail scorpion A drone capable of continuous flight for 40 hours and delivering over 1 ton of rescue supplies [2] - The drone industry in China is experiencing significant international expansion, with companies like Zongheng covering over 40 countries, primarily in Asia, Africa, and Latin America [3][7] - The drone supply chain is extensive, with estimates indicating that every 100 million yuan of core drone industry output can drive approximately 500 million yuan in related industry growth [2] Market Opportunities - Companies expressed a desire to collaborate for overseas market expansion, emphasizing the importance of forming alliances with upstream suppliers and downstream service providers to enhance bargaining power and risk resilience [4] - The Guangdong province aims to achieve a low-altitude economy industry chain scale of 300 billion yuan by 2026, indicating regional commitment to developing this sector [6] Future Outlook - The low-altitude economy is still in the demonstration and validation phase for applications like drone delivery and low-altitude tourism, presenting significant potential for future market growth [6] - The Chain Expo provided a platform for companies to showcase their capabilities in high-value scenarios such as emergency rescue and logistics, aiming to promote the "China creation, global sharing" goal [7]