Introduction to this report:

Policies were announced at the Suzhou Low Altitude Economic Development Promotion Conference, which proposed drawing the future with clear goals, using real money to build engines, and using strong measures to promote development. HuaShi Group recently won the bid for the Taicang drone test flight base project in Suzhou.

Incidents:

On April 18, Suzhou held a conference to promote low-altitude economic development.

Commentary:

Maintain the increase in holdings. Maintain the forecast for 2024-2026 EPS of 1.16/1.25/1.35 yuan, an increase of 13%/8%/7%.

Maintain the target price of 13.1 yuan, corresponding to 11.3 times PE in 2024.

Suzhou held a conference to promote low-altitude economic development and strive to become a national low-altitude economic demonstration zone by 2026. (1) The “Suzhou Low-Altitude Economic Development System and Vision” suggests that Suzhou takes safe development as its first priority and builds a leading low-altitude economic development zone, agglomeration area and pioneering zone with national influence. (2) The “Certain Measures to Support the High-Quality Development of the Low-Altitude Economy in Suzhou” proposes that Suzhou will study 15 specific support measures in four areas: introducing and cultivating key low-altitude enterprises, encouraging low-altitude science and technology innovation leadership, expanding low-altitude flight application scenarios, and optimizing the low-altitude economic development environment, and using “real money” to build a new growth engine for the low-altitude economy. (3) HuaShi Group won the bid for the Suzhou Taicang drone test flight base project covering low-altitude 5G intelligent networking capacity building, low-altitude service management platform, and construction of supporting facilities.

The Ministry of Industry and Information Technology said that the low-altitude economy will definitely form a trillion-level industry in the future, and the Development and Reform Commission said that actively and steadily promoting low-altitude economic development is significant and has bright prospects. (1) The Ministry of Industry and Information Technology stated at the press conference of the State Information Office on April 18 that the low-altitude economy is a typical emerging industry, a typical representative of new quality productivity, and an important direction for cultivating new momentum for development. It has characteristics such as innovation leadership, green and low carbon, and integration of numbers and reality.

The low-altitude economy is an important direction for the future development of emerging industries, and it will definitely form a trillion-level industry scale in the future. (2) On April 17, the NDRC stated at the macroeconomic situation and policy press conference that actively and steadily promoting low-altitude economic development is significant and has bright prospects. Next, the NDRC will promote the formation of a good situation for the healthy development of the low-altitude economy with rich and diverse scenarios, smart and efficient supply, and regulatory safety standards.

HuaShi Group currently has more than 400 aviation professionals, and its business covers the entire chain of commercial development. Since 2015, various professional teams such as the Transportation Planning Institute's aviation team, the Beijing Civil Aviation Institute of China, and China Construction Aviation have been deployed. The business covers the entire chain of aviation and low-altitude planning and design, platform systems, construction management, operation services, and commercial development. Huashi Group has participated in the design consulting work of the Nanjing Civil Unmanned Aeronautics Test Zone, one of the first 13 bases in the country, and one of the top 3 airworthiness certification centers in the country, and undertook more than 100 low-altitude related businesses such as “Jiangsu Transportation Holdings Low Altitude (Drone) Integrated Service Management System Construction” and “Jiangxi Ganzhou Nankang District Drone Industrial Park Standard Plant and Supporting Infrastructure Design”. It has the “Civil Aviation Airport Safety and Operation Engineering Technology Research Center” approved by the Civil Aviation Administration of China, and undertook the “Civil Aviation Airport Safety and Operation Engineering Technology Research Center” approved by the Civil Aviation Administration of China. The preparation of the “Guidelines” is a pioneer in developing low-altitude business in China.

Risk warning: macroeconomic policies have been tightened beyond expectations, infrastructure investment has fallen short of expectations, etc.