Hong Kong Stock Concept Tracking | CHINA MOBILE Joins Hands with Central Enterprises to Build a Low-Altitude Economic Ecosystem, Trillion-Dollar Market Awaits Explosion (with Concept Stocks)

According to the Zhitong Finance and Economics APP, the concept of low-altitude economy has been frequently mentioned recently. At the China Mobile 2024 Low-Altitude Economy Industry Innovation and Development Conference held on October 12, China Mobile, together with 15 leading central enterprises and 15 pilot cities, announced the joint construction of a low-altitude economic ecosystem to explore new fields and scenarios in the low-altitude economy, forming new experiences and models for low-altitude development. In addition, the Second National Low-Altitude Economy (Suzhou) Industry Innovation Expo will be held in Suzhou from October 18 to 20. The Global Low-Altitude Economy Forum 2024 Annual Meeting will take place in Beijing on October 27.

He Biao, the General Manager of China Mobile, stated that the low-altitude economy industry is currently facing unprecedented development opportunities. It is estimated that by 2025, China's low-altitude economy market size will reach 1.5 trillion yuan, and is expected to reach 3.5 trillion yuan by 2035. China Mobile has built the world's largest 5G communication network, with over 2.3 million 5G base stations and over 330 5G commercial cities. The establishment of the 5G+ Beidou high-precision positioning network, with 4,400 ground-based augmentation stations deployed, has achieved dynamic centimeter-level positioning, effectively supporting and driving the development of the low-altitude economy. The next step is to work with all parties to create an integrated low-altitude intelligent network.

Since the beginning of this year, driven by policy guidance and technological innovation, the low-altitude economy is rapidly rising and becoming a new focus of the industry. Many regions have clarified the development path of the low-altitude economy.

Recently, the Beijing Municipal Bureau of Economy and Information Technology and other four departments released the "Beijing Municipality Action Plan for Promoting High-Quality Development of the Low-Altitude Economy Industry (2024-2027)" to the public. According to the plan, Beijing aims to have over 5,000 low-altitude economy-related enterprises within three years, with low-altitude technology services covering the Beijing-Tianjin-Hebei region and radiating nationwide. The international and domestic influence and brand recognition of the low-altitude industry will significantly increase, and the development of industry clusters will achieve obvious results. The low-altitude industry system will be more sound, leading the nation in areas such as technological innovation, standard policies, low-altitude safety, and application demand, with the industry scale reaching 100 billion yuan.

In September of this year, the Jiangsu Provincial Government website published the "Implementation Opinions of the General Office of the Provincial Government on Accelerating the High-Quality Development of the Low-Altitude Economy," which clearly outlines the overall goals and specific paths for the development of the low-altitude economy.

In the same month, the General Office of the Chongqing Municipal Government issued the "Chongqing Municipality Action Plan for Promoting Low-Altitude Airspace Management Reform to Promote High-Quality Development of the Low-Altitude Economy (2024-2027)." The plan aims to achieve breakthrough progress in low-altitude airspace management reform by 2025.

In August, the General Office of the Shanghai Municipal Government issued the "Shanghai Municipality Action Plan for the High-Quality Development of the Low-Altitude Economy Industry (2024-2027)," which proposes that by 2027, Shanghai will establish a complete industrial system for the research and development, design, assembly manufacturing, airworthiness testing, and commercial application of new low-altitude aircraft. It aims to create a highland for innovation, commercial application, and operational services in the low-altitude economy industry, with the core industry scale exceeding 50 billion yuan In addition to setting industry development goals and developing related infrastructure, the cultivation of low-altitude economic application scenarios is also continuously advancing, with a series of industrial chains including low-altitude logistics, low-altitude cultural tourism, and others growing continuously.

For example, in August of this year, the first batch of low-altitude passenger and cargo air logistics distribution routes in Fujian Province officially opened on Yuzhendao Island and Wuyu Island in Longhai District, Zhangzhou City, bringing a new experience of "low-altitude economy + logistics" to island residents. In June, the first inter-provincial low-altitude logistics route in China successfully made its maiden flight at Huizhou Airport in Chengdu.

Furthermore, in the capital market, several listed companies recently disclosed their latest developments in the field of low-altitude economy.

On October 8th, Digital Government stated during research visits by over 120 institutions that the company's "Xingkui Plan" is focusing on key areas such as Shandong, Zhejiang, and Hunan. The company's semi-annual report shows that in May of this year, during the 7th Digital China Construction Summit, Digital Government launched an integrated urban low-altitude economic SaaS platform called the "Xingkui Plan". In the first half of the year, Digital Government has deployed the "Xingkui business" in Inner Mongolia, Liaoning, Jilin, Hebei, Shandong, Fujian, and Guangdong, and the "Xingkui Plan" will bring new growth points to Digital Government's business. The company attaches great importance to the market opportunities brought by the vigorous development of low-altitude economy in various regions, and is developing a low-altitude airspace comprehensive management system based on the integration of air, space, and ground grids according to specific customer needs, striving to be the first to land and put into practical use nationwide.

On the investor interaction platform, Hainan Airport recently stated in response to investor inquiries that the company's Meilan Aviation Industry Park is closely following the development plan of the free trade port, successfully introducing core industries such as aircraft maintenance and aviation logistics, and further extending the low-altitude economic industrial chain in areas such as research and development, manufacturing, support, and training, laying a solid foundation for the company's aviation economy development, and will accelerate the layout of the low-altitude economy in the future.

Jiechuang Intelligence revealed that the company has developed a drone control platform based on independently developed specialized high-performance computing technology and wireless communication processing technology, which can achieve positioning management and data collection of controlled airspace drones. Since 2018, it has been applied in Hainan, Zhejiang, Jiangsu, Guangdong, and other places to provide low-altitude airspace monitoring and defense services for major events and key locations.

AVIC Xifei previously stated that based on its product development lineage, the company has made breakthroughs in key technologies such as digital connection, digital measurement, precise manufacturing of aviation aluminum alloy structures, numerical control shot peening, and strengthening, and has the capability to develop large and medium-sized manned/unmanned aerial vehicles to meet the research and development needs of products related to the low-altitude economy.

Ping An Securities believes that the low-altitude economy is a comprehensive economic form driven by eVTOL aircraft, with drones and general aviation industries as the core industries for the development of the low-altitude economy. Currently, policy promotion has led the low-altitude economy into a rapid development period. Against the backdrop of national attention and active local layout, industries such as drone research and manufacturing, low-altitude infrastructure, and low-altitude flight support services will all benefit from the development of the low-altitude economy. It is recommended to pay attention to the following low-altitude economic industry chain related targets: 1) eVTOL aircraft manufacturers: EHang Intelligent, Wanfeng Aowei; 2) Infrastructure service providers: Zhongke Xingtu, Laisi Information, Guorui Technology, Sichuan Jiuzhou; 3) Drone manufacturers: Zongheng Shares; 4) General aviation operations: CITIC Offshore Helicopter; 5) Transportation planning: Shenzhen Citylink.

From the industry perspective, Caitong Securities believes that there are five major driving factors for the development of low-altitude economy in China: first, the unresolved ground traffic congestion issues, China's airspace resources have not been fully tapped; second, eVTOL (electric vertical take-off and landing aircraft) is economically feasible, with vast cost reduction potential; third, autonomous driving technology is gradually maturing, China's three-electric system leads globally; fourth, aircraft standards are being implemented, with the world's first certificate issued in China; fifth, low-altitude economy is highly compatible with downstream applications, leading enterprises are strategically positioning themselves early.

Related concept stocks:

AVIC Aircraft (02357): The flagship company in aviation high-tech military and civilian general products in the Hong Kong capital market. The company is backed by Aviation Industry Corporation, with the State-owned Assets Supervision and Administration Commission as the controlling shareholder, and important subsidiaries including AVIC Aircraft, Hongdu Aviation, AVIC Avionics, AVIC Optoelectronics, etc. In 2022-2023, the company continues to promote major asset restructuring, with subsidiary AVIC Electronics absorbing and merging AVIC Mechatronics through stock exchange; subsidiary AVIC Aircraft intends to acquire 100% equity of Hafei and Changfei.

XPeng Motors-W (09868): On January 10th, at the 2024 CES exhibition, XPeng Heavens Co-founder and Vice President Wang Tan announced that the company's split-type flying car "Land Carrier" will open for reservations in the fourth quarter of this year and is planned to start mass production and delivery in the fourth quarter of next year.

Geely Automobile (00175): Geely's subsidiary Volocopter has completed the maiden flight of the 5-seater eVTOL AE200. At the end of July last year, Volocopter signed an exclusive strategic cooperation agreement and a purchase agreement for 100 AE200s with Hualong Airlines in Chengdu.

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