Core Viewpoint - The company, Zongheng Co., Ltd. (688070.SH), plans to raise up to 548 million yuan through a private placement to enhance its capabilities in drone systems and AI technology, marking a significant step in its low-altitude digital economy strategy and driving performance improvement [1] Group 1: Investment and Project Focus - The private placement will focus on three main areas: the development of new unattended aerial inspection systems, key technology research for large fixed-wing drones, and AI capability enhancement, with a total investment of 144 million yuan [3] - The company aims to create a low-altitude AI model and automated training system tailored for specific industries such as transportation, agriculture, and emergency response, facilitating rapid integration and deployment of AI solutions [3] Group 2: AI and Industry Integration - The integration of AI technology with low-altitude drones is a confirmed industry trend, supported by government policies aimed at advancing autonomous flight and intelligent decision-making capabilities [2] - The company has developed a comprehensive AI solution that enhances drone capabilities in complex environments, providing end-to-end intelligent services and achieving a transformative upgrade in the integration of AI and drone technology [4] Group 3: Business Development and Performance - The company has successfully implemented its "unattended + cloud platform + AI" model across various regions, demonstrating the scalability of low-altitude economic applications and providing a replicable development framework for the industry [5] - For the first nine months of 2025, the company reported a 57.01% year-on-year increase in revenue, with a significant reduction in net losses, indicating a positive growth trajectory [6] Group 4: Dividend Policy and Future Outlook - The company has announced a dividend plan for the next three years (2026-2028), committing to distribute at least 10% of its distributable profits as cash dividends, reflecting confidence in future profitability [7]

Investment Rating - The report assigns an "Add" rating for the company for the first time, with a target valuation of 50.00 - 58.00 CNY, while the current stock price is 49.4 CNY [2]. Core Insights - The company is a leading player in the industrial drone sector in China, focusing on the development of drone hardware platforms, flight control systems, and industry application software, while actively exploring new business opportunities in the low-altitude digital economy [1]. - The company is expected to benefit from the continuous expansion of the domestic industrial drone market and the accelerated release of low-altitude economic policy dividends, leading to rapid growth in performance [1]. - The company has a comprehensive product line and has established a strong research and development system, which positions it well for future growth [7]. Summary by Sections Company Overview - The company was established in 2010 and specializes in the research, production, sales, and service of industrial drone-related products, becoming the first listed company in China with drones as its main business in February 2021 [13]. Financial Analysis - The company has seen stable revenue growth since its listing, with a significant increase in revenue to 4.74 billion CNY in 2024, a 57.14% increase year-on-year, while losses narrowed to 36 million CNY due to successful emergency project bids exceeding 200 million CNY [17][19]. - The main business segments include drone systems, services, and accessories, with drone systems contributing 76% of revenue in 2024 [19][69]. Low-altitude Economy - The low-altitude economy is identified as a key growth area, with the market expected to reach over 1 trillion CNY by 2026, driven by the rapid growth of the drone and eVTOL sectors [44][49]. - The report highlights the importance of drones as the core carrier and value creator in the low-altitude economy, with the industrial drone market projected to grow significantly [58]. Product Development - The company has a complete product line, including vertical take-off and landing fixed-wing drones, multi-rotor drones, and large fixed-wing systems, which cater to various industry needs [70]. - The company is advancing its "unmanned drone system + cloud platform + AI" solutions, enhancing its capabilities in social governance and digital economy applications [39][71]. Profit Forecast - Revenue forecasts for 2025-2027 are projected at 5.81 billion CNY, 9.39 billion CNY, and 13.52 billion CNY, with year-on-year growth rates of 22.6%, 61.5%, and 44.0% respectively [8].

Core Viewpoint - Chengdu Zongheng Automation Technology Co., Ltd. has made significant progress in the low-altitude economy sector, evidenced by its recent winning of contracts totaling approximately 120 million yuan, which represents about 25.38% of its projected revenue for 2024 after excluding non-core business income [1][2]. Group 1: Company Developments - Zongheng Dapeng, a wholly-owned subsidiary, won contracts for the "Smart Bazhong" low-altitude digital economy unmanned system and supporting facilities, with contract amounts of 106 million yuan and 13.6 million yuan respectively [1]. - The company aims to deepen its low-altitude digital economy business layout by promoting the integration of "unmanned systems + Zongheng Cloud + AI" [1][3]. - Zongheng has established strategic partnerships with over ten local governments and enterprises to jointly develop low-altitude economy projects in 2024 [3]. Group 2: Industry Insights - The low-altitude economy is viewed as a burgeoning field with vast development potential, driven by technological advancements in drones and artificial intelligence [3]. - The successful contract wins are expected to enhance Zongheng's market position in the low-altitude economy, positively impacting its revenue, business expansion, and brand influence [2]. - The company has a competitive advantage in the low-altitude economy sector due to its strong technical foundation in industrial drones and a diverse product line that meets various operational needs [2].