Debon Securities: Accelerated eVTOL industry verification is expected to bring incremental contributions to upstream carbon fiber

The Zhitong Finance App learned that Debon Securities released a research report saying that drones, which are currently one of the carriers of the low-altitude economy, have been used on a small scale in logistics, agriculture, etc. The bank believes that with the accelerated promotion of the low-altitude economy with current policy support, it is expected to open up more potential application scenarios, such as tourism, inspection, emergency rescue, and intra-city transportation. The bank said that the restrictions on in-depth expansion of the downstream carbon fiber sector in the early stages were mainly affected by higher prices, and the price of large carbon fiber wire bundles was lowered several times in 23, and downstream industry verification is expected to open up, bringing incremental contributions to upstream carbon fiber.

Recommended attention: Jilin Chemical Fiber (000420.SZ) (the company's products have been tested intelligently by Ehang); Jilin Carbon Valley (836077.BJ) (the largest domestic raw wire supplier); Zhongfu Condor (688295.SH) (civilian high-performance carbon fiber faucet, growth certainty is strong during capacity expansion); Guangwei Composite (300699.SZ) (military carbon fiber faucet. The product has been used in drone structural parts and can be used in eVTOL related scenarios).

Debon Securities views the following:

Low-altitude economic policies are in full swing, and the trillion-level market is poised to begin.

The definition of low-altitude economy refers to economic activity based on an airspace within 1000 meters of the vertical distance directly below the ground surface (actual needs can be extended to 3000 meters), including civilian manned pilots, unmanned aerial vehicles, and multi-scenario low-altitude flight activities such as manned, cargo, and other operations, and related fields driven by radiation.

1) Central policy has arrived: The Central Economic Work Conference first proposed the low-altitude economy in December '23, and the low-altitude economy was listed as a strategic emerging industry. The March '24 government work report mentioned building new growth engines, such as the low-altitude economy, and the low-altitude economy strategy was highly elevated; in December '23, the Civil Aviation Administration of China issued the “National Airspace Basic Classification Method”, adding G and W unregulated airspace to release airspace resources and help the low-altitude economy move towards standardized development.

2) Local governments have responded positively to increased policies: The report on the work of 26 provincial governments across the country mentioned the development of the low-altitude economy. Cities such as Shenzhen, Zhuhai, Hefei, Wuhu, and Suzhou clearly formulated implementation plans for the high-quality development of the low-altitude economy, which is expected to accelerate the development of the low-altitude economy on the policy side, industrial chain, infrastructure and application fields. According to Xinhua News Agency, China's low-altitude economy will exceed 500 billion yuan in 2023; according to the Civil Aviation Administration of China, the market size of China's low-altitude economy is expected to reach 1.5 trillion yuan in 2025, and 3.5 trillion yuan in 2035.

Currently, domestic low-altitude economic development is still facing insufficient top-level design, rigid mechanisms, insufficient market application development, and technical pain points. The bank believes that since the Central Economic Work Conference in '23, the low-altitude economy has reached a new strategic height, the trend of industrial development is quite obvious, and various pain points are expected to be gradually resolved under policy impetus.

eVTOL industry validation accelerates, and upstream carbon fiber benefits.

eVTOL is one of the important carriers of the low-altitude economy, and has significant advantages over traditional aircraft in terms of flight safety, environmental protection, and experience comfort. Carbon fiber is the main structural material for eVTOL airframes, which meets the requirements of lightweighting and high strength. Currently, mainstream eVTOL design schemes use carbon fiber as the main airframe structural material, and more than 90% of the composite materials used are carbon fiber. Looking at composite application scenarios, about 75-80% are used for structural components and propulsion systems, followed by internal applications such as beams and seat structures accounting for 12-14%, and battery systems, avionics and other small applications accounting for 8-12%. According to the design plans announced by the leading domestic eVTOL manufacturers Ehang Intelligence, Xiaopeng Huitian, Fengfei Airlines, etc., the fuselage structures all use carbon fiber composites, and the rotor blades and landing gear of the Xiaopeng Huitian Traveler X2 are also made of carbon fiber composites. The bank estimates that the demand for carbon fiber for a single eVTOL is between 100-400 kg. According to Cirium Ruisiyu data, global eVTOL orders were about 6,300 units as of May 23. Assuming they are all released before 2030, it is expected to drive demand at the kiloton level.

There are frequent favorable events in the industrial chain, and eVTOL industry verification continues to accelerate.

Recently, leading eVTOL manufacturers such as Ehang Intelligence, Xiaopeng Huitian, and Fengfei Airlines have continued to have good news in terms of test flights, new orders, airworthiness certification, etc. The bank believes that it marks an official acceleration in the development of the industrial chain. After large-scale commercialization, it will have a positive driving effect on upstream materials and the entire low-altitude economy industry chain. Airworthiness certification is the prerequisite and foundation for commercialization of civil aircraft. The bank believes that in the current context of the high rise in low-altitude economic strategies and the introduction of central and local support policies, the subsequent eVTOL certification process is expected to accelerate.

Risk warning: The low-altitude economic policy falls short of expectations, the price of raw materials has risen sharply, and the development of new products falls short of expectations.