Intelligent Wealth News APP learned that Tianfeng Securities released a research report stating that the low-altitude economy has multiple applications, and drones and eVTOLs are expected to experience rapid growth. The weight of composite materials can reach more than 70% for eVTOLs, and more than 90% of them are carbon fiber. In addition, shock absorption and noise reduction are the two major pain points for eVTOLs, which are driving the rapid development of related new materials. Carbon fiber-related enterprises include Guangwei Composites (300699.SZ) (with military and civilian fibers, composites, etc.) and Zhongfu Shenying (688295.SH) (high-performance fibers), while shock-absorbing and noise-reducing related enterprises include Times New Materials (600458.SH) (leading enterprises in rail transit/automotive shock absorption) and Guanglian Aviation Industry (300900.SZ) (aeronautical and aerospace supporting enterprises that may develop eVTOL business).

The opinion of Tianfeng Securities is as follows:

Low-altitude economy has multiple applications, and drones and eVTOLs are expected to experience rapid growth.

Since the concept of "low-altitude economy" was first proposed in 2009, the government has promoted the rapid development of the industry through multiple policies. Currently, the low-altitude economy has applications in multiple fields such as agriculture, logistics, tourism, inspection, and security. Among them, agriculture and tourism are stable and growing, while logistics, inspection, and security are growing rapidly. The market size of low-altitude economy in 2022 is approximately 2.5 trillion yuan, and it is expected to grow to more than 6 trillion yuan by 2035, with a CAGR of +6.9% from 2022 to 2035, and the overall market size is showing steady growth. The number of registered drones in 2022 is 958,000, and it is expected to increase to 26 million by 2035, with a CAGR of +31%, and the number of drones is expected to increase rapidly. The market for eVTOL (electric vertical take-off and landing) aircraft is still in its infancy and is growing at a high rate.

The weight of composite materials can reach more than 70% for eVTOLs, and more than 90% of them are carbon fiber.

As an important part of the low-altitude economy, eVTOL aircraft is rapidly developing in China, especially in the Guangdong-Hong Kong-Macao Greater Bay Area and the Yangtze River Delta urban agglomeration. More than 30 domestic companies have entered the field of eVTOL whole-machine research and development, mainly divided into start-ups, large aerospace state-owned enterprise subsidiaries, automobile industry companies, and drone companies. Since most flying cars will use battery power systems, lightweighting is necessary in many aspects. Composite materials meet the weight reduction needs of eVTOLs, and their weight proportion can reach more than 70%.

Mainly used for structural components and propulsion systems (75-80%), followed by internal crossbars, seat structures, etc. (12-14%); battery systems, aviation electronic equipment, and other small applications (8-12%). In terms of the amount of composite materials used, more than 90% of the composite materials are carbon fiber, and about 10% of the composite materials will be used in the form of glass fiber reinforced protective film. The amount of composite materials used by eVTOLs is expected to increase from 500 tons in 2024 to about 11,750 tons in 2030, with a CAGR of +69%.

Shock absorption and noise reduction are the two major pain points for eVTOLs, driving the rapid development of related new materials.

The shock absorption system of eVTOLs is an important component in its design, mainly due to the need for the aircraft to absorb large impacts during landing, and provide sufficient comfort when driving on the ground. Another pain point for flying cars is noise reduction. In addition to improving engines and propellers, research on new materials and technologies, such as new foam metal sound-absorbing materials, is also included.

From an industry perspective, porous materials, especially polymer foams, are one of the most effective sound-absorbing materials among many existing vibro-acoustic functional materials; polyurethane (PU) foam is the most important type of polymer foam in sound-absorbing applications due to its low density, lightweight, good mechanical properties, and ease of manufacture. Times New Materials has organic silicon foam seals/vibration damping pads, tuning mass dampers, polyurethane automotive cushions, and elastic rings for locomotive traction devices and other shock-absorbing and noise-reducing products, and has high-performance polyurethane materials as one of the raw materials for cushions and sound absorption applications; Guanglian Aviation Industry has been deeply engaged in the general aviation field for many years, with composite process equipment, components, and sections processing and manufacturing technology at the advanced level in the industry, and will promote the rapid development of businesses such as drones and eVTOLs.

Risk Warning: Slow development of low-altitude economy and slow mass production progress of drones/eVTOLs, resulting in decrease in price of carbon fiber and shock-absorbing noise-reducing products. Exceeding expectations of production capacity expansion of carbon fiber and shock-absorbing noise-reducing products, other materials used for drones/eVTOLs.