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author | huang ruoxi

edited by yang ruiqi and liu yukun

phoenix.com technology news: "china's low-altitude economic industry must be completely independent and must develop on its own. there is no other way to go if we want to go the new energy vehicle route. anything borrowed from others will have problems in the future."

on september 19, the first low-altitude economic innovation and leadership conference "phoenix yufeng·intelligent low-altitude" was held in fengtai, beijing. zhang zhengxi, founder of yuanhe capital, shared relevant work results and industry experience.he stressed that there is no shortcut to china's low-altitude economy.you have to do everything yourself. because of this, there are still many investment opportunities in the niche market.

at present, china's low-altitude economy industry is booming. zhang zhengxi emphasized that the development of the industry should be a scientific matter, and it is necessary to rationally and scientifically develop every sector and every puzzle of the industry with the spirit of craftsmanship. only in this way can the entire industry achieve healthy and sustainable development.

“in the process of promoting the development of the low-altitude economy, local governments must promote it in an integrated manner, rather than focusing on a single breakthrough.it's difficultopportunities for commercial successas an early stage investment expert in the field of science and technology, zhang zhengxi also called on the government to operate the low-altitude economic model. he said that "pilot first, then promote" is the basic model of china's economic development, and the low-altitude economy should also follow this model.

regarding the current hot low-altitude economic investment, zhang zhengxi also issued a friendly reminder to his peers. he explained,complete machinetrackcurrently alreadya lot,newofentrepreneurshipcompanyrecommendationscareful。if there are still investment opportunities, they should be in the field of key components, such as flight control systems, power systems, engine manufacturing and other upstream and downstream directions.

it is understood that the first low-altitude economy innovation leadership conference is themed "phoenix yufeng leading low-altitude smart development" and is co-organized by the beijing low-altitude economy industry development alliance and phoenix.com. the conference brings together top experts and scholars to discuss industry development trends, release the latest innovative achievements, and jointly draw a new picture of low-altitude applications through in-depth exchanges on cutting-edge science and technology.

the following is the full text of the speech:

thank you for the invitation. "the road ahead is long and arduous, but i will keep exploring." we use the "interim regulations on the management of unmanned aerial vehicle flights" jointly issued by the central military commission and the state council as the time node, and the investment industry calls last year the "first year of the low-altitude economy."

now, the low-altitude economy industry is 100% hot, many people say 120% hot, and some say 130% hot. the state has issued a large number of documents to support and encourage, and low-altitude economic development conferences are being held in various places. in 2024, almost all of china will hold conferences. i hope that the state will continue to support this industry, and the window period for the development of the industry has arrived.however, the development of the industry is still a scientific matter. we must rationally and scientifically use the spirit of craftsmanship to develop every sector and every puzzle of the industry, so that the industry can develop healthily.this is the central idea i want to share with you.

first, i want to talk about the “low-altitude economy coming to us”. yuanhe capital is an early-stage investment institution. the core issue of investment is to find high-quality assets.in each industry, the top 3-5high-quality assets have a high probability of making money.-2fame can make a lot of money,so how do we select low-altitude economic investment targets? beijing has its advantages, because beijing is the city with the most universities, the most advanced technology, and the largest number of returnees.

in addition, we need to judge the investment node. for early-stage capital, the best investment node is 5 years in advance of the rigid outbreak of commercial demand, and it is very important to judge this node. according to yuanhe capital's experience in investing in technology projects, the research and development time of technology products will not exceed 20 years, with an average of 5 to 10 years. after the technical achievements are completed in the laboratory, they need to be engineered to make the products; it takes an average of 5 years to find customers. yuanhe capital tracks the timeline of the development of the low-altitude economy and believes that the early stage of the low-altitude economy, that is, the concept proposal and exploration stage, is from 2010 to 2020; the policy promotion and rapid development stage is from 2021 to 2023. when will the maturity period be? i judge it to be about 10 years, so it is not something that can be rushed.

speaking of the development stage, we checked some data to share with you: there are 57,000 registered startups in the low-altitude economy, and it can be said that all of these 57,000 companies have received investment, and none of them have not received commercial investment. among them, 21,000 were registered within 5 years, and more than 30,000 were registered within 10 years, with the former accounting for about 40%. this is the number of low-altitude economy startups, and another is the number of complete machine startups, which currently has nearly 4,000. in general, low-altitude economy startups still need to take root in places with leading technology and economy, such as beijing, shanghai, and shenzhen; the second echelon is in places like hangzhou, nanjing, wuhan, chengdu, and xi'an.

the current state of the low-altitude economy industry is that the entireindustrystartupsit's already a lot,newentrepreneurshipcompanyrecommendationscareful，if there are still investment opportunities, they should be in the areas of key components, such as flight control systems, power systems, and engine manufacturing.

what we are going to talk about next is that low-altitude economy is a system engineering. the core "pearl" of an aircraft is the engine. therefore, the "pearl" of low-altitude economy is also the engine. this is the most difficult thing, and who will do this is also the most difficult. there are many low-altitude economy complete machines now. you can ask yourself, what power is used. if it is pure electric, how much battery energy density can support the endurance and load, what can this aircraft do in the future; if it is hybrid electric, what is the structure, what are the advantages... these are all things that we need to think deeply about.

here is a timeline we compiled, titled “yuanhe tracks the low-altitude economy.”dji was founded in 2006, so china’s low-altitude economy and drones are not something that happened today and are not new at all. don’t get too excited.we must remember that this is an industry that has been developing for more than ten years, but the trend has arrived.with the policy push, the industry can develop better and faster. thanks to dji drones, china's dji drones are the first consumer drones to take the lead.

the postal group is china's national logistics team, and they are the ones who do the most difficult things here. a drone developed by a team from beihang university was selected by the postal service for delivery. i said i would contact you where to test it. there is a county in gansu, where you can test the drone. after flying for a year, the model is mature, and they want to set up a new drone startup company. i said there are too many drone companies, so don't innovate on your own. beihang university has a company that has been in business for 8 years, so you should reorganize it! later, we had a very happy talk. by reorganizing, we helped a company that has been in business for 8 years to take off. the "warp-body" configuration drone of this reorganized company is very suitable for flying the "last mile" in rural areas. because it is electric, it does not require a runway and has high take-off and landing efficiency. it can complete rural logistics and express delivery, revitalize the countryside, and let rural residents experience modern logistics like cities. this is a key link and the "last piece of the puzzle" in the industry.

at the end of 2023, we invested in a new company called anqing technology. this is a company that makes beyond-visual-range flight control platforms, serving industrial and commercial aircraft. industrial aircraft need to fly hundreds or thousands of kilometers, which requires a completely new control and management system. therefore, after a certain number of kilometers of drone logistics, the complexity of the control and management system will also be exponentially upgraded, and the technical difficulty is very high.

anking technology is engaged in electronic fences, avoidance, beyond visual range and route planning. it is a big data platform for drone companies in the future, providing data support and data management for civil aviation. we need such companies, and this is one we invested in in 2023.

in june 2023, we held a yuanhe innovator modern logistics outlook salon. we have a perspective that china has now achieved targeted poverty alleviation in rural areas, which is a great initiative of the chinese nation. in 2021, my country has proposed a new development plan called "rural revitalization", which is to unify the dual structure of chinese people's lives so that rural areas can also enjoy the convenience of urban life. so what is the biggest problem? we have seen the "last mile" problem of logistics and believe that china's logistics market, especially in the rural sector, needs to be upgraded from two-dimensional to three-dimensional, which requires the participation of low-altitude economy-related companies and technologies.

during this process, we invested in many companies that make complete machines and parts, and also invested in an engine company. we believe thatchina's low-altitude economy must be completely independent and developed on its own. there is no other way but to go the new energy vehicle route.everything borrowed from others will have problems in the future. for example, the cargo planes we converted from manned aircraft will be regarded as threats by the united states after development. they can immediately cut off your supply chain. this is a very simple truth. so everyone must realize that there is no shortcut to the low-altitude economy. everything must be done by yourself and from scratch. therefore, there will be many investment opportunities in the segmented market. what we need to do in this process is: first, we must be patient when making early investments; second, we must have macro judgments; and third, we must accompany startups to grow together.

second, i want to talk about the development path of the low-altitude economic industry. the first is low-altitude infrastructure; the second is low-altitude aircraft and complete machine manufacturing; the third is operation services; and the fourth is service guarantee. in the process of promoting the development of the low-altitude economy, local governments must promote it in an integrated manner, and not make breakthroughs in a single point. it is difficult for a single point breakthrough to have a chance of commercial success, because the low-altitude economy market is a complex system, and this system is a three-dimensional promotion system. whether it is a prefecture-level city or a provincial capital city, including the province or the country, the relevant central ministries and commissions are doing such work. i hope that the lower level, the province and the prefecture-level city must pay attention to three-dimensional promotion.

china's economic development model is to pilot first and then promote. this is the basic model, and the low-altitude economy should also follow this model.we must first break through in a certain place, and then drive the development of the whole region. we often tell the companies we invest in that they must secure a position in beijing, shenzhen, and the fastest-growing places. if they fail to do so, they will fall behind, and it will be very difficult to catch up. therefore, we hope that all investors present here will strive to make breakthroughs in the places where the low-altitude economy is developing fastest.

this year, i talked about a few ideas with friends from local governments who came to visit me. building airports, taking-off and landing points, and planning routes involve planning departments, land departments, and transportation departments. it is too difficult for startups to do it. it is best for local governments to do it. for such infrastructure, i suggest that local governments and state-owned enterprises do it. it is like building a highway. after the toll station is set up, the money is collected and that's it. the investment is stable, the return is also stable, but the cycle is a little longer.

then, we must provide market-oriented mechanisms and methods for the operation of our aircraft. i hope that a prefecture-level city in china can create a sample in two to three years. manned aircraft, cargo aircraft, trunk and branch lines, and terminal service management, how the entire industry flies, there is overall promotion and marketization, how to operate, i hope there will be a template.

the "heart problem" of aircraft is the engine problem. we must work hard on hybrid. there are many aircraft companies here. if we want to design it stably, fly for a long time, pass the test, and obtain the airworthiness certificate, this is the key issue. the whole industry, colleges, universities, research institutes, and start-up companies need to work together to solve the technical problems of hybrid, so that unmanned aerial vehicles can fly safely and risk-free for a long time, and contribute to the development of the low-altitude economy.

hybridenginethis is unprecedented in the history of drones.there is nothing mature, and we have to innovate independently, which is extremely difficult.

third, let’s talk about our understanding of the core competitiveness of the low-altitude economy from an investment perspective. business development is very simple, just four words: “reduce costs and increase efficiency”.if your plane is good and cheap, it will definitely work out."we are not afraid of being swept", this is the most common saying in the new energy vehicle industry. i believe that if we want to build the low-altitude economic industry chain into an industry chain that can "roll" the world, we must borrow the experience of new energy vehicles and high-speed rail. we must firmly innovate some key systems and core components.

at the same time, we must open our doors and do this in an open manner. we must absorb all the civilization achievements in the world that are beneficial to the development of our country's low-altitude economy and promote the development and construction of the entire low-altitude economy.

in this part, i want to say that operation management is an important point of value mining. when we talk about low-altitude economy, we like to talk about it from the upstream and downstream of the industrial chain. we like to talk about the whole machine, raw materials, parts, operations, and infrastructure. i want to talk about it in reverse.the maturity and development of any industry must be driven by demand. all participants in the low-altitude economy, whether they are engaged in the production of complete machines, parts, systems, or infrastructure, must ask themselves: who pays the bill for your company, who are your service objects, and who do you serve?the reason why general aviation cannot develop is not because of poor technology, but because of lack of demand. demand-driven investment is the core of all low-altitude economic links, any innovation subject, any innovation point, and any idea of ​​becoming a commercial company. we must know: who will sell the products, who will pay for them, how many people will pay for them, where is the market size boundary, and how big it is.

i often say one thing when communicating with friends in local governments. i suggest that when introducing low-altitude economic enterprises, we should first think about one question: can the scenarios be opened up? can the urban airspace be opened up? the low-altitude economy must be driven by scenarios, and the scenarios should be opened up first. before local governments do this, they must think about whether they can deal with the competent authorities and try to open up the airspace of this city first. as long as it can be opened up, i believe that all participants in the low-altitude economy will go.

another problem is that logistics involves information sharing. our logistics are now isolated islands. sf express, jd.com, sto express, and yto express all have their own logistics data. we need a logistics information management center. i don’t know who will build it. will the ministry of commerce build a national information platform? i don’t know what it is. but breaking the ice requires a high-level solution and a national solution.the construction of a national market, the breaking of information silos, and the establishment of a national information platform are the core elements of the development of the low-altitude economy, and this issue must be resolved.

finally, there is the issue of safety. now we have a car network in two-dimensional transportation. many scientific research institutions, including the school of transportation of beihang university, jiaotong university, and many academician teams of the chinese academy of sciences are working on intelligent land, sea and air networking. in the future, networking will not be a two-dimensional space networking, but a three-dimensional network of land, sea and air.

in the air, safety is the top priority, and safety depends on technical support.finding a balance between safety and cost is the wisdom of the low-altitude economy and the wisdom of the industry. it is cheap and safe. this is a complex process that requires the joint efforts of the entire industry.it requires policy leadership, industry promotion, and active support from the capital market.this is bound to be a long process, and it must require the companionship of patient capital. we must grow together with startups, the entire market and the industry to create a beautiful blue sky with orderly operations.

fourth, build an ecosystem together. "stars are with you" is a brief introduction to yuanhe capital. we focus on early-stage investment, investing in universities, investing in some world-leading projects, and transforming results. china's low-altitude economy requires every piece of the industry to work together to promote the development of the industry. i hope the beautiful blue sky of the low-altitude economy will come as soon as possible. thank you.