Low altitude economy is becoming the "new transportation in the process of transformation". On January 24th, China Duty Free (Haikou) International Duty Free City successfully completed the country's first normalized customs supervision low altitude economic application scenario - drone delivery of offshore duty-free goods. The duty-free goods worth over 10000 yuan completed a flight distance of 1133.5 meters in just 1 minute and 24 seconds, successfully flying from Haikou International Duty Free City to the pickup point at Haikou Nangang Port, shortening the passenger pickup time from 6 hours to less than 3 hours.
Multiple provinces (cities) pay attention to low altitude economy during the Two Sessions
At the provincial (including municipal) level local two sessions held intensively before the Spring Festival, low altitude economy has once again become a highly concerned area. Provincial deputies to the National People's Congress and members of the Chinese People's Political Consultative Conference actively provided suggestions and proposed to accelerate the development of the low altitude economy.
The 2024 National People's Congress and Chinese People's Political Consultative Conference will include the concept of "low altitude economy" for the first time in the government work report. On January 15th of this year, Wang Weizhong, the Governor of Guangdong Province, delivered a government work report. The report proposes to vigorously develop emerging industries such as integrated circuits, new energy vehicles, artificial intelligence, low altitude economy, new displays, new energy storage, new materials, and biomedicine, and cultivate future industries such as biomanufacturing, quantum technology, embodied intelligence, and 6G. Build a "1+3+N" low altitude economic development platform, improve the low altitude intelligent logistics, urban air traffic, aviation emergency rescue and other systems.
On January 16th, Shanghai Mayor Gong Zheng stated in his "Government Work Report" that efforts should be made to promote industrial transformation and upgrading. Accelerate the construction of innovation highlands in the artificial intelligence industry, cultivate and strengthen strategic emerging and future industries such as low altitude economy, large aircraft, new energy vehicles, intelligent terminals, marine equipment, space information, robots, etc.
From formulating high-quality development action plans for the low altitude economy to setting up industrial investment funds, from issuing implementation plans to building a platform for the development of the low altitude economy, the low altitude economy is rapidly rising in China and is expected to become an important engine for economic development.
Low altitude economy is expected to inject vitality into economic development, and the market size may exceed one trillion yuan by 2026
The low altitude economy includes four major sectors: low altitude infrastructure construction, low altitude aircraft manufacturing, low altitude operation services, and low altitude flight support, spanning the first, second, and third industries. Running from the ground to the sky, low altitude economy can effectively activate three-dimensional space, reshape transportation and logistics methods, expand new market space and consumer demand, while strengthening emergency rescue capabilities and greatly improving service efficiency.
The "2025 Outlook for the Development of Low altitude Economy in China" previously released by the China Electronics Information Industry Development Research Institute shows that 45 cities across the country have launched policy plans for low altitude economy. According to data from CCID Consulting, as of September 2024, the number of low altitude economy related enterprises in China has exceeded 50000, including 118 listed companies, 211 specialized and innovative "little giant" enterprises, and 3991 high-tech enterprises; The number of low altitude economic enterprises in cities such as Shenzhen, Guangzhou, and Beijing ranks among the top in the country.
As one of the future industries, the low altitude economy is gradually emerging. With the continuous increase in demand for low altitude commercialization and the increasing maturity of related technologies, under the support and promotion of policies, the low altitude economy has the characteristics of large market scale, long industrial chain, multiple application scenarios, and great development potential, and its prospects are very promising. According to a research report by Huachuang Securities, the low altitude economy will enter an accelerated landing year in 2025. It is expected that from 2025 to 2027, the low altitude economy will mainly be used in three major application scenarios: "cultural and tourism new consumption, manned (passenger) transportation, and professional use". It is expected that by 2027, there will be a demand for 5000 to 10000 low altitude+cultural and tourism aircraft.
CCID Consulting estimates that the scale of China's low altitude economy is expected to reach 67025 billion yuan by 2024. Among them, the scale of low altitude aircraft manufacturing and low altitude operation services accounts for nearly 55%, and the indirect contribution of economic activities in other fields is close to 40%. It is expected that the scale of China's low altitude economy will reach 859.17 billion yuan by 2025, and it is optimistically predicted that the scale of low altitude economy is expected to exceed one trillion yuan by 2026. The low altitude economy is expected to reach a new height and become a highly dynamic and promising emerging force in China's economic development.
Data source: CCID Think Tank
Since September 24th, the overall low altitude economic index has outperformed the market
Taking advantage of the favorable policies, listed companies in fields such as software, electronics, components, and aerospace equipment are actively exploring low altitude economy related businesses, and these companies are also highly sought after in the capital market.
From the perspective of market performance, the Wande Low altitude Economy Theme Index outperformed the Shanghai and Shenzhen 300 Index for the whole year of 2024, with the Low altitude Economy Theme Index rising by 15.48% and the Shanghai and Shenzhen 300 Index rising by 14.68%; Since September 24th last year, the low altitude economy theme index has risen by nearly 20%, while the Shanghai and Shenzhen 300 Index has risen slightly lower than the former.
From the perspective of a single company, according to Securities Times Data Treasure statistics, since September 24 last year (as of January 27, 2025), more than half of the 70 low altitude economy concept stocks have outperformed the low altitude economy theme index, with Yijiahe, Zongshen Power, and Laisi Information leading the way in cumulative gains, all exceeding 75%.
Since September 24th last year, the stock price of Yijiahe has nearly doubled. The company stated on an interactive platform that it provides customers with products and solutions related to unmanned aerial vehicle autonomous flight inspection systems in the low altitude field. Through the intelligent operation and maintenance technology of unmanned aerial vehicles, it conducts multi-dimensional intelligent analysis and early warning of the operation status of transmission, transformation, and distribution lines.
Zongshen Power's stock price has risen by over 85% since September 24th last year, with the highest increase from the lowest price exceeding 200%. The company stated that its holding subsidiary Zongshen Hangfa mainly provides power equipment for rotary wing, fixed wing general aviation aircraft and unmanned aerial vehicles, and the product application scenarios are in line with the direction of low altitude economic development. At present, local enterprises in Chongqing, such as Xilis and Zongshen Power, have formed project teams to participate in the research and development and manufacturing of intelligent aircraft and core components such as eVTOL.
Lai Si Information's stock price has risen by over 75% since September 24th last year. The company stated on an interactive platform that it is developing low altitude flight service solutions, low altitude navigation service systems, and other navigation products in conjunction with project construction, and planning new developments.
9 stocks with outstanding potential for stagflation reveal low altitude economic progress
Furthermore, among the 70 low altitude economy concept stocks mentioned above, only 9 have underperformed the low altitude economy theme index since September 24th last year. According to the performance forecast, they will achieve profitability in 2024, and institutions predict that the net profit growth rate will exceed 10% in 2025.
The 9 concept stocks are mainly distributed in the aviation equipment, communication services, military electronics, and ground equipment industries. In terms of market performance, the stock prices of the 9 stocks have all risen since September 24, 2024, with Aerospace Electric, Zhongtian Rocket, and Northern Navigation all increasing by less than 10%.
Overall, among the 9 concept stocks mentioned above, Haite High tech and AVIC Xifei are expected to achieve net profit growth in 2024, while the net profits of other companies are expected to decline to varying degrees. However, it will take some time for new businesses to be implemented and put into mass production. According to institutional forecast data, 9 stocks are expected to see a general increase in performance in 2025. For example, Northern Navigation and Putian Technology are expected to see a significant decline in net profit in 2024, but their net profit growth in 2025 is expected to exceed 110% and 75% respectively.
Taking Putian Technology as an example, on December 20, 2023, under the guidance of the Guangdong Provincial Communication Administration, the Guangdong Provincial Communication Society organized and prepared the first "Digital Low Altitude Professional Committee" in China. As a member unit of the committee, Putian Technology focuses on seamless communication and surveillance, digital navigation and other technical fields, actively participates in the collaborative innovation work of industry university research and application, and cooperates to promote the layout and construction of the low altitude intelligent communication network system.
It should be noted that the 9 potential stocks mentioned above have disclosed their business progress on the low altitude economy on the investor relations interactive platform since 2024. For example, Haite High tech stated that its subsidiary Ansheng Company has successfully developed and delivered the first eVTOL simulator in China. With the development of low altitude economy, it will have a positive impact on the company's simulator development, pilot training, aviation engineering technology and services. AVIC Xifei stated that the company has combined its own advantages and capabilities to coordinate the development of products related to low altitude economy, organize and plan the development of low altitude economy and capacity building, and actively expand the application areas of the company's products.
