Futu Securities learned that the low-altitude economy industry is entering a period of intensive policy releases. On November 5, the Ministry of Industry and Information Technology held the first full meeting of the Low-Altitude Industry Development Leading Group to discuss and deploy key tasks to promote the high-quality development of the low-altitude industry. The meeting emphasized the proactive and steady development of the low-altitude industry, creating a new industrialization model. It is important to focus on top-level planning, planning the layout of the low-altitude equipment innovation system, industrial system, and low-altitude information infrastructure construction, and create a good ecosystem for industry development. Haitong Research released a research report stating that the low-altitude economy, as an emerging technology, is an important component of new production forces and the frontier of technological innovation. Local policies in the low-altitude field are constantly being introduced, the industrial chain is relatively mature, and there is vast development space.

In September, the Chongqing Municipal Government announced that it will build a "city for innovation and development of low-altitude economy". By 2025, breakthrough progress will be made in the reform of low-altitude airspace management. The basic infrastructure system for the development of the low-altitude economy supported by Beidou applications will be basically completed. More than 200 new general aviation take-off and landing points will be established to achieve widespread low-altitude flights, and all airports and temporary landing points for "trunks" and "branches" will be fully interconnected.

According to the Civil Aviation Administration's announcement on October 14, the budget plan for the Civil Aviation Development Fund's related subsidies in 2025 was made public. Over 200 units received a total of over 0.7 billion yuan in general aviation subsidies; subsidies for small and medium airports exceeded 2.4 billion yuan.

Also on November 5, the Shenzhen Transportation Bureau solicited opinions on the detailed implementation rules of the "Several Measures to Support the High-Quality Development of the Low-Altitude Economy in Shenzhen". The draft proposal put forward specific subsidy schemes, with a total funding of no more than 0.16 billion yuan in 2024, no more than 0.22 billion yuan in 2025, and no more than 0.21 billion yuan in 2026, with no adjustments to the amount of funding for each year.

Subsidized projects include low-altitude economic enterprise settlement subsidies, eVTOL aircraft and unmanned aerial vehicle airworthiness certification subsidies, expansion of the low-altitude logistics market subsidies, subsidies for opening up short-haul air transport routes, subsidies for nurturing new urban transportation formats, subsidies for low-altitude infrastructure construction, subsidies for building high-end innovation carriers, subsidies for promotional activities, etc. The plan clearly defines the subsidy conditions and standards, application and disbursement of subsidies, performance and supervision management, standardizing the execution management of subsidy funds.

In addition, the Hong Kong Policy Address mentioned the establishment of a "Low-Altitude Economy Development Working Group", chaired by Hong Kong's Under Secretary for Financial Services and the Treasury, Michael Wong Wai-lun, to formulate strategies and action plans for the development of the low-altitude economy, promote regulatory reforms, and deploy infrastructure construction.

Michael Wong Wai-lun stated that low-altitude flight activities can be widely used in various fields, such as rescue, measurement, logistics, transportation, and can also drive the development of communication technology, artificial intelligence, and digital industries. He hopes to gradually implement a "regulatory sandbox" starting early next year.

CITIC Securities' research report points out that as a key carrier of the trillion-dollar low-altitude economy, flying cars have a huge potential market size.

The Zhuhai Airshow will be held on November 12-17. According to the official website of the Zhuhai Airshow, in 2024, the Zhuhai Airshow will use 13 exhibition halls, with the exhibition space increased to 0.45 million square meters. A low-altitude economy hall will be established to showcase low-altitude operation monitoring platforms and innovative application scenarios. Xpeng's Huitian "Land Aircraft Carrier" will publicly demonstrate manned flights for the first time.

Soochow Securities stated that various regions have issued their respective action plans and plans for the development of low-altitude economy, while the national-level plan has not yet been released. If future national-level plans can be implemented, they are expected to provide more specific quantitative indicators on setting specific development goals, achieving paths, and technological directions, and provide guidance on the industrial layout of key low-altitude economic areas such as the Guangdong-Hong Kong-Macau Greater Bay Area, Chengdu-Chongqing, and the Yangtze River Delta.

Huachuang Securities divides the low-altitude economic market into four stages: logic; product; order volume; and mergers and reorganization, indicating that it is entering the third stage. It predicts that the core driver of the third stage is "order volume", believing that 2025 might see an influx of orders in the low-altitude sector. Among companies with products, those with truly competitive products that can open up the market will attract more concentrated market attention.

Related Concept Stocks

AVIC Aircraft Industry Corporation is the flagship company for aviation high-tech military-civilian products in the Hong Kong capital markets. Backed by the Aviation Industry Corporation of China and controlled by the State-owned Assets Supervision and Administration Commission, it has important subsidiaries such as AVIC plc, Jiangxi Hongdu Aviation Industry, AVIC airborne systems, and AVIC Jonhon Optronic Technology. From 2022 to 2023, the company will continue to promote major asset restructuring. Subsidiary AVIC Electronics will absorb and merge with AVIC electromechanical by stock exchange, while subsidiary AVIC plc plans to acquire 100% equity in Hafei and Changfei.

XPeng Auto (09868): On January 10th, during the 2024 CES exhibition, Xiaopeng Huitian cofounder and vice president Wang Tan announced that the company's split-type flying car, the 'Land Carrier', will start booking in the fourth quarter of this year and plans to start mass production next year in the fourth quarter.

guangzhou automobile group (02238): Recently, Guangzhou Automobile Group stated on the investor interaction platform that in June 2023, the independently developed flying car GOVE by Guangzhou Automobile Group made its first flight appearance. GAC is accelerating the industrialization of the new model of 'flying + automobile' and plans to launch a demonstration operation plan for flying cars in 2027, creating an intercity three-dimensional transportation model in 2-3 cities within the Guangdong-Hong Kong-Macao Greater Bay Area.