Tianfeng: Policy support helps low-altitude economy three-dimensional resonance. Airspace reform accelerates industrial landing.

Tianfeng released a research report stating that the draft amendment of the Civil Aviation Law in China for the first time proposes to include the economic development needs of low-altitude airspace in the basis for airspace delineation, legally clarifies the rules for the use of airspace resources, and combines technological breakthroughs and order volume. The bank believes that the low-altitude sector is expected to benefit from the acceleration of host factory production and certification by 2025, combined with the current high demand for low-altitude aircraft orders, downstream public governance and other low-altitude aircraft demand directions may have significant elasticity. At the same time, the low-altitude economic policy side is once again receiving favorable treatment, with the potential to trigger a three-dimensional resonance of policy, technology, and orders. Tianfeng's main points are as follows: Event: China plans to amend the law to clarify that airspace delineation should take into account the needs of low-altitude economic development. The draft amendment to the Civil Aviation Law was submitted for initial review by the Standing Committee of the Fourteenth National People's Congress on the 24th. The amended draft stipulates that airspace delineation should take into account the reasonable needs of low-altitude economic development, and it clearly states that airspace delineation should consider the needs of low-altitude economic development. Article 74 of the amended draft stipulates that in delineating airspace, consideration should be given to the needs of civil aviation and national defense security, low-altitude economic development, as well as public interests, in order to make effective and efficient use of airspace. The bank believes that legal clarification of airspace delineation is a necessary condition for promoting the high-quality development of low-altitude economy, or it will effectively improve the efficiency of airspace resource utilization and accelerate the implementation of airspace reform, forming an industrial resonance with orders and technology. Policy side of the low-altitude sector: Domestic support policies for low-altitude economy continue to strengthen: Six major pilot cities for low-altitude economy are expected to resonate with supporting enterprises to boost the development of the low-altitude sector, while policy funding support continues to be implemented. Shenzhen plans to build more than 1,000 low-altitude aircraft takeoff and landing platforms by 2025 and introduce multi-level subsidy policies to accelerate industrial landing; in addition, the Civil Aviation Administration subsidizes general aviation airports (with a budget of over 700 million yuan in 2025) and airspace management reforms to further optimize the industry ecology on the policy side. The bank believes that after the addition of low-altitude economic subsidy policies in various regions, the low-altitude economy has received legal support, and subsequent development is expected to continue to receive policy support. Technical side of the low-altitude sector: Low-altitude aircraft companies continue to explore application scenarios, with various eVTOL models advancing through the certification process. Following EHang Intelligent EH216-S obtaining certification, PeakFlight Aviation V2000CG CareySeagull obtained a production permit for PC, and the Civil Aviation Administration has accepted the application for the certification of PeakFlight Aviation's manned aircraft model, Shengshilong TC, and officially launched the type approval work. Future companies such as PeakFlight and Yufeng Future are expected to be the first to obtain airworthiness certification for cargo low-altitude aircraft. The subsequent airworthiness certification of manned aircraft is expected to be accelerated, and the airworthiness certification work for low-altitude eVTOL is expected to continue to advance to the implementation stage. The bank believes that low-altitude economic application scenarios are continuously expanding and landing, leading companies are continuously exploring new scenarios such as logistics, cultural tourism travel, agricultural pest control, and government governance support, and the low-altitude economic sector is expected to see improvement by 2025. Order situation in the low-altitude sector: Currently, orders for low-altitude aircraft have seen rapid growth, with significant elasticity in markets such as public governance. According to sources from DJI, the industry's business is showing significant growth in 2024, with demand increasing significantly and continuing to penetrate more markets. Orders for security, inspections, and water conservancy related to people's livelihood have been received from several regions, with DJI's water conservancy-related business achieving at least a doubling of performance in 2024, with a more than 60% year-on-year growth in the past two years. The Electric Power Network Headline Video recently released a scene of intelligent inspection drones for integrated transmission and distribution, and the bank believes that the ToG side may become one of the first entry directions for the downstream of the low-altitude sector, helping companies in the low-altitude industry to see a significant increase in demand.