The Zhitong Finance App learned that on March 27, CICC released a research report saying that on March 27, the four departments jointly issued the “Implementation Plan for Innovative Application of General Aviation Equipment (2024-2030)”. The bank believes that with the establishment of a new model of high-end, intelligent, and green general aviation development, the “short-haul transport+electric vertical take-off and landing” passenger transport network, a “drive-branch-terminal” drone distribution network, and a low-altitude production operation network that meets the needs of workers and farmers are expected to operate efficiently. It is recommended to focus on the drone/eVTOL manufacturing industry chain and targets related to operation/air control/driverless driving training that are the first to benefit from low-altitude tours, air traffic, and unmanned logistics.

Incident: On March 27, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance, and the Civil Aviation Administration of China jointly issued the “Implementation Plan for Innovative Application of General Aviation Equipment (2024-2030)” to develop the general aviation manufacturing industry, accelerate the innovative application of aviation equipment, and promote the development of the low-altitude economy.

CICC's views are as follows:

Establish a two-stage development target for the low-altitude economy, and target a trillion-level market for general aviation equipment.

The “Plan” points out the two-stage goals for low-altitude economic development: basic establishment of a modern general aviation infrastructure support system in 2027 to achieve commercial applications in urban air transport, logistics and distribution, emergency rescue, etc.; in 2030, a new general aviation industry development model characterized by high-end, intelligent, and green development will be basically established, and general aviation equipment will be fully integrated into all fields of people's production and life, becoming a powerful driving force for low-altitude economic growth, forming a trillion dollar market size. The bank believes that the “Plan” sets out clear goals for low-altitude economic development, and is determined to accelerate the layout of the low-altitude economy. The low-altitude economy market is poised to advance, and is expected to become China's new economic growth pole.

It highlights 20 key tasks in five major fields, and encourages the central government and the region to work together to promote the construction of the general aviation industry.

The “Plan” focuses on key tasks in five major areas, including enhancing industrial technological innovation capabilities, enhancing the competitiveness of the industrial supply chain, deepening demonstration applications in key areas, promoting the construction of basic support systems and building an efficient integrated industrial ecosystem, and encouraging the strengthening of departmental collaboration, strengthening coordination between central and local authorities, giving full play to the role of the first (set) major technical equipment insurance compensation policy, and supporting the promotion and application of general aviation equipment. The bank believes that under the guidance of key tasks in the five major fields, some key core technologies such as low-altitude aircraft sensing and obstacle avoidance, autonomous flight, efficient energy storage, and data security are expected to continue to accelerate breakthroughs, and the formation of new business formats for aviation emergency rescue, low-altitude logistics and distribution, and urban air traffic is expected to accelerate.

The development of low-altitude tours, air traffic, and unmanned logistics is accelerating, and enterprises related to the industrial chain are expected to benefit.

With the establishment of a new model for high-end, intelligent, and green general aviation development, the “short-haul transport+electric vertical take-off and landing” passenger transport network, the “driver-branch-terminal” drone distribution network, and the low-altitude production operation network that meets the needs of workers and farmers are expected to operate efficiently. It is recommended to focus on the drone/eVTOL manufacturing industry chain and targets related to operation/air control/driverless driving training that are the first to benefit from low-altitude tours, air traffic, and unmanned logistics:

1) eVTOL/drone manufacturing: Ehang Intelligence (EH.US), Zongheng (688070.SH), Wanfeng Aowei (002085.SZ), Aerospace Electronics (600879.SH), Aerospace Rainbow (002389.SZ), Yingliu (603308.SH);

2) Upstream materials: Jilin Chemical Fiber (000420.SZ), China Aviation Hi-Tech (600862.SH), Guangwei Composites (300699.SSZ);

3) Parts: Guangzhou Union Airlines (300900.SZ);

4) Motor: Wolong Electric Drive (600580.SH); 5) Operation/Air Control/Drone Driving Training: CITIC Haizhi (000099.SZ), Sichuan Jiuzhou (000801.SZ), Rice Information (688631.SH), Zongheng Co., Ltd. (688070.SH), Aerospace Hongtu (). 688066.SH

Risk warning: Low-altitude airspace reform falls short of expectations, and eVTOL airworthiness evidence falls short of expectations.