Hong Kong Stock Concept Tracking | The Civil Aviation Administration is about to start eVTOL pilot projects, and the trillion-dollar new "blue ocean" is taking off strongly (with concept stocks)

On November 18th, Sun Weiguo, Director of the General Aviation Department and Unmanned Aircraft Working Committee of the China Air Transport Association, revealed at the 2024 International Electric Aviation (Kunshan) Forum that the Central Air Traffic Management Commission is about to launch eVTOL pilot projects in six cities. Previously, China Mobile Limited's general manager He Biao had stated that the low-altitude economy industry is facing unprecedented development opportunities. It is estimated that by 2025, the market size of China's low-altitude economy will reach 1.5 trillion yuan, and by 2035, it is expected to reach 3.5 trillion yuan. According to media reports, the six pilot cities have been preliminarily determined to be Hefei, Hangzhou, Shenzhen, Suzhou, Chengdu, and Chongqing. The pilot project documents have plans for routes and regions, with some local governments being authorized for airspace below 600 meters, meaning that the relevant local governments will have to take on more management responsibilities. It is reported that eVTOL, or electric vertical takeoff and landing aircraft, can be understood as an electric aircraft that can take off and land vertically without the need for a runway, and is considered one of the important carriers of the low-altitude economy. An internal employee of an eVTOL manufacturing company said that eVTOL can achieve vertical takeoff and landing without the need for a runway. Compared to helicopters, eVTOL has simpler mechanical structures, lower manufacturing and maintenance costs, and when taking into account the cost savings from unmanned driving and the advantages of pure electric power, the comprehensive operating cost of eVTOL is expected to be about on-fifth that of a helicopter, or even lower. Lower costs than helicopters, faster speeds than same-city logistics, also lay the foundation for the commercial application of eVTOL in various scenarios. China has advantages in the development of low-altitude economy, such as policy support, market demand, and technological innovation. In December 2023, the "low-altitude economy" was listed as a strategic emerging industry in the Central Economic Work Conference. On January 1, 2024, the "Interim Regulation on the Flight Management of Unmanned Aerial Vehicles" came into effect. During this year's "Two Sessions," the low-altitude economy was mentioned for the first time in the government work report. On March 18th, the Civil Aviation Administration held a meeting of the General Aviation Work Leading Group to study and implement the major decisions on building the low-altitude economy as a strategic emerging industry and promote high-quality development of the low-altitude economy. In fact, various regions have been speeding up to seize the low-altitude economy track. Currently, more than 20 provincial and municipal governments, including Beijing, Anhui, Shandong, Shenzhen, Guangzhou, Chengdu, and Nanjing, have issued policies to support the development of the low-altitude economy. On November 5th, the Ministry of Industry and Information Technology held the first plenary meeting of the Leading Group for the Development of the Low-altitude Industry, discussing and deploying key tasks to promote the high-quality development of the low-altitude industry. The meeting emphasized actively and steadily developing the low-altitude industry and creating a new model of industrialization. It is necessary to focus on top-level planning, layout of the innovation system for low-altitude equipment, the construction of the industrial system, and the construction of low-altitude information infrastructure to create a good industry development ecosystem. Industry insiders analyze that the introduction of this pilot policy signifies that China's low-altitude economy development has entered the fast lane. As a key development area in the "14th Five-Year Plan," the low-altitude economy is expected to exceed trillion yuan in market size by 2025. This eVTOL pilot project will bring huge development opportunities for related companies, especially in the fields of urban air traffic, emergency rescue, and logistics delivery, which are expected to foster a batch of emerging business models. Qu Fang, an investment advisor at Wanjian Securities, pointed out that the government will need to improve management in areas such as charging piles, aprons, and route planning. The low-altitude economy is currently focused on commercial attempts such as unmanned intelligent driving, and with the expansion and maturity of the application market, these pain points are expected to be gradually overcome. According to CCID CONSULTING's "Research Report on the Development of China's Low-altitude Economy," the national low-altitude economy scale was 291.18 billion yuan in 2021, 378.07 billion yuan in 2022, and 505.95 billion yuan in 2023. It is predicted that by 2026, the market size of the low-altitude economy will exceed trillion yuan. Haitong Research released a research report stating that the low-altitude economy, as an emerging technology, is an important component of new quality productivity and the forefront of technological innovation. Local policies in the low-altitude field continue to be introduced, and the industrial chain is relatively mature, with broad development space. Huachun Securities divides the trend of the low-altitude economy into four stages: logic, product, order volume, and mergers and acquisitions, indicating that the third stage is approaching. It is expected that the core driver of the third stage is "order volume," and believes that by 2025, the low-altitude sector may usher in a wave of orders. Among companies with products, those with competitive products that can open up the market will attract more focused attention. Related concept stocks: - XPENG-W(09868): On January 10th, at the 2024 CES exhibition, Xpeng Huitian's co-founder and vice president Wang Tan announced that the company's modular flying car "Land Carrier" will begin reservations in the fourth quarter of this year, with plans to start mass production deliveries in the fourth quarter of next year. - GEELY AUTO(00175): Geely's subsidiary Volocopter has completed the first flight of the 5-seater eVTOL AE200. At the end of July last year, Volocopter and Hualong Aviation signed an exclusive strategic cooperation agreement and a purchase agreement for 100 AE200 aircraft in Chengdu. - Guangzhou Automobile Group(02238): On June 26th last year, at the 2023 GAC Technology Day, Guangzhou Automobile Group's flying car GOVE made its debut and first flight. - EHang Holdings Ltd. Sponsored ADR Class A(EH.US): EHang Holdings Ltd. Sponsored ADR Class A is a global leader in urban air transport technology companies. On April 7th, the Civil Aviation Administration of China awarded EHang Holdings Ltd. Sponsored ADR Class A the production certificate (PC) for the EH216-S unmanned aerial vehicle system, which is the world's first manned eVTOL production certificate. - AVICHINA(02357): The only company in the Hong Kong capital market.Flagship company of aviation high-tech military and civilian products. The company is backed by Air Industries Group, with the controlling shareholder being the State-owned Assets Supervision and Administration Commission of China. Important subsidiaries include AVICOPTER PLC, Jiangxi Hongdu Aviation Industry, AVIC Airborne Systems, and AVIC Jonhon Optronic Technology. In 2022-2023, the company is continuing to push forward a major asset restructuring, with the subsidiary AVIC Electronic Technology absorbing and merging with AVIC Electromechanical, and the subsidiary AVICOPTER PLC planning to acquire 100% equity of HAIFEI and CHANGFEI."Bonjour, comment a va?" "Hi, how are you?"