The 2026 National People's Congress and Chinese People's Political Consultative Conference sessions in Beijing have delivered a clear signal: the low-altitude economy has been included in the government work report for three consecutive years, officially upgraded from a "new growth engine" to a national emerging pillar industry. It now stands alongside aerospace and integrated circuits as a core sector receiving strategic state support. Furthermore, the sessions emphasized the "deep integration of artificial intelligence and aviation" to create new forms of intelligent economy. This signifies that the low-altitude economy is not a short-term trend but a long-term national strategy, and AI is not optional but essential. The deep integration of low-altitude technology, AI, and data represents the most certain and promising gold rush for breeding super unicorns over the next 3-5 years.

So, where exactly should investment focus lie within China's low-altitude sector? Hardware or software? The perspective here is unequivocal: software, data, and platform operational management systems are the true future and the sole core of value in the low-altitude economy.

This view is not merely subjective but a necessary conclusion drawn from the industry's essence, policy direction, value principles, and extensive practical cases. Today, we will use data, case studies, and patterns to thoroughly clarify the reality of low-altitude investment, helping to avoid herd mentality traps and identify genuine value opportunities.

A prevalent phenomenon in investment circles is the rush into the hardware sector—drones, eVTOL aircraft, core components—anything related to "low-altitude hardware" attracts capital. However, this is not because hardware is inherently superior, but because the specialization and complexity of software and data systems exceed the understanding of most investors. The tendency is to opt for tangible, easily understandable hardware instead of venturing into areas perceived as opaque.

The cost of following the crowd is already evident. In 2025, the failure rate of small and medium-sized domestic drone hardware enterprises reached 37%, with many companies that secured funding last year now exiting the market. Inventory backlog rates hit 38%, leaving numerous unsold drones depreciating in warehouses. In stark contrast, software/data companies achieved an average gross profit margin of 68.5%, demonstrating stable profitability and rapid growth. This disparity serves as a clear warning.

Why does this cognitive bias exist? The core reason is that the operational system of the low-altitude economy differs fundamentally from traditional industries. It involves airspace management, air traffic control, and data exchange, with many aspects related to military and state secrets, requiring high specialization. According to the "2026 China Low-Altitude Economy Investment White Paper," only 37% of institutional investors can clearly distinguish the core functions of UTM (Unmanned Traffic Management) and CAS (Civil Aviation Administration System), and fewer than 20% understand the classification standards for sensitive low-altitude data. This knowledge gap leads to biased investment decisions and missed opportunities in true value areas.

This analysis will deconstruct the core logic of low-altitude investment across six dimensions: current status, core arguments, cognitive breakthroughs, case evidence, investment directions, and practical guidance. The aim is to clarify why software and data are the undeniable core of the low-altitude future.

**I. Current Status: Hardware Overheating, Software Undervalued, Investment Misalignment** To seize low-altitude investment opportunities, one must first recognize the current industrial landscape—a structural misallocation of capital has created an abnormal situation of a "red ocean" in hardware and a "blue ocean" in software. This very imbalance presents the optimal timing for targeting value opportunities.

1. **Imbalanced Investment Structure: 80% Capital Misallocated, Value Opportunities Overlooked** The core conclusion is this: hardware offers short-term excitement, but software/data represents long-term value. Authoritative data supports this. According to Zero2IPO Research Center's Q1 2026 data, total financing in China's low-altitude economy reached 89.7 billion yuan in 2025. Hardware (manufacturing/aircraft/components) accounted for 72.3 billion yuan, or 80.6%. The majority of capital is crowded into the hardware sector, racing to produce aircraft and components, as if sheer volume guarantees a share of the low-altitude economy. The reality is that the hardware sector is already a red ocean, with intense competition and declining profit margins. Follow-on entrants have little long-term investment value. Specifically, the average gross profit margin for drone manufacturers plummeted from 35% in 2023 to 18.7% in 2025, nearly halving in two years. More drastically, some small and medium-sized manufacturers have net profit margins below 3%, struggling to sustain operations and resorting to price wars, trapped in a vicious cycle. A real-world example: A small drone company secured tens of millions in funding in 2024, producing consumer-grade drones with a low-price strategy to gain market share. However, lacking core technology and suffering from product homogenization, its gross margin fell to 12% in 2025, with a net profit margin below 2%. It declared bankruptcy in early 2026 due to broken cash flow—a testament to the cost of following hardware trends. In contrast, software/data (UTM/digital infrastructure/operational platforms) received only 7.8 billion yuan in financing, a mere 8.7% share. Yet, this sub-10% sector represents the core bottleneck for industrial development and an untapped value opportunity. According to Forward Industry Research Institute, its market size is projected to grow from 12.6 billion yuan in 2025 to 114.8 billion yuan by 2030, a compound annual growth rate (CAGR) of 54.2%—more than three times the growth potential of hardware. Crucially, profitability in software/data far exceeds hardware. 2025 data shows software/data companies achieved an average net profit margin of 27.8%, five times that of hardware companies. Leading software firms can even achieve gross margins above 80%, with stability and growth potential hardware cannot match. Simply put, investing in hardware today means competing in a red ocean for short-term gains, while investing in software/data means mining gold in a blue ocean for substantial long-term returns. This is the current investment landscape.

2. **Root Causes of Investor Hesitation: Three Barriers Blocking Real Opportunity** If software/data is so valuable, why are investors hesitant? Three main barriers deter them, but these are not insurmountable; instead, they act as moats for quality enterprises. (1) **High Barriers Involving Military/State Secrets: High Entry Threshold, But Not Impossible** Core low-altitude data, such as airspace and terrain data with precision around ±3cm, falls under state secret categories, restricting access and use. Core management systems, like airspace management and air traffic control, are led by military and aviation authorities. Enterprise participation requires rare qualifications like state secret handling, military industry, and top-tier surveying permits. Nationwide, fewer than 40 companies involved in low-altitude possess top-tier surveying qualifications. Ordinary investors and SMEs find it difficult to cross this threshold, a primary reason for hesitation. However, "high threshold" does not mean "no opportunity." The low-altitude system adopts a three-tier architecture: core secret layer, intermediate desensitized layer, and application open layer. The state controls the core secret layer for security and core data. The intermediate layer (data desensitization, system integration) and application layer (application development, operational services) are open to private capital, allowing value capture without touching core military/authority permissions. Several leading private companies have already broken through.

(2) **Cognitive Gap: Lack of Understanding Leads to Missed Opportunities** The low-altitude economy is not a single industry but an interdisciplinary field combining aviation, communications, geomatics, AI, and military technology. Its high specialization exceeds the knowledge scope of traditional investors. A 2026 low-altitude investment forum survey revealed that 83% of traditional TMT investors do not understand the core logic of airspace management or flight approval processes. 76% of manufacturing investors cannot distinguish the core differences between ADS-B and BeiDou positioning systems. Many investors are even unclear about the core functions of a Flight Service Station (FSS), let alone the value of software/data systems. This "black box" fear leads investors to choose the path of least resistance, opting for understandable hardware over exploring software/data opportunities. History is repeating itself—just as many missed the mobile payment boom a decade ago by doubting its security, many today risk missing the core opportunity of the trillion-yuan low-altitude sector by failing to grasp software/data value.

(3) **Unclear Business Models: Short-term Cash Flow vs. Long-term Returns** Another characteristic of software/data is high upfront investment and long payback periods, lacking immediate cash flow, further reducing investor appetite. Estimates suggest a complete low-altitude software platform requires ~230 million yuan in upfront R&D, qualification applications, and project deployment, with a payback period of about 4.8 years—much longer than hardware's 1.5-3 years. Hardware firms generate cash flow quickly upon sale, while software/data firms require sustained R&D, product refinement, and data accumulation before profitability. However, "no short-term cash flow" does not equate to "no value"; it is often the path to long-term value. Hardware profitability is essentially a one-time sale, while software/data profitability is based on continuous services like SaaS subscriptions, data services, and operational sharing, creating recurring revenue streams with far greater potential. For example, a low-altitude data service company invested 150 million yuan upfront, achieving profitability after four years. Post-profitability, its CAGR exceeded 60%, far above the hardware sector's average of 15%, demonstrating the value of long-term positioning.

3. **Industrial Pattern: The Endgame of All Emerging Industries Lies in Software and Data** Another reason for investor hesitation is the perception that software/data is "intangible" compared to "tangible" hardware. But history consistently shows the same development path for emerging industries: hardware leads initially, but value exponentially concentrates in software, data, and platforms later. This is a verified pattern, not speculation. Consider two representative cases: * **Aviation Industry**: From the Wright brothers in 1903 to today's global network, aviation followed "hardware first, software supreme." Early competition focused on aircraft performance and manufacturing. As the industry matured, operational control, air traffic management, data analysis, and maintenance became the core profit centers. Today, software and data services account for 62% of global aviation profits, far exceeding hardware manufacturing's 28%. Air traffic management software firms average over 70% gross margins, double those of aircraft manufacturers. Without these "invisible" systems, even advanced aircraft are grounded. This is the core value of software and data. * **Online Payments**: Before Alipay and WeChat Pay, payment hardware—credit cards, POS terminals, computers—was paramount. The focus was on hardware performance and coverage. With internet technology, the core shifted to software-driven account systems, clearing platforms, and risk models. Today, software and data services revenue exceeds 90% for WeChat Pay and Alipay, whose commercial value and social impact dwarf hardware POS manufacturers. NetsUnion, as a national clearing infrastructure, derives its core value from software and data integration, not hardware. The low-altitude economy follows this pattern precisely. Hardware is the prerequisite, the foundation for starting the industry. But software/data is the endgame, determining scalability and commercialization. Without software/data systems, hardware is merely a "useless body." Moreover, technological acceleration shortens this process. While Tencent took 28 years and ByteDance 13 years to become giants, companies like DeepSeek achieved it in 3 years. China's low-altitude development will not follow decades-old Western paths; it will grow linearly, then leapfrog. The China Academy of Information and Communications Technology predicts China's low-altitude economy will exceed 10 trillion yuan by 2028, with software/data contributing 58%, becoming the core growth engine. This is the optimal time for strategic positioning.

**II. Core Argument: Why Software/Data is the Sole Core of the Low-Altitude Future** Having established the value of software/data through data and patterns, the question remains: why is it the *only* core? The following closed-loop argument examines industrial essence, policy direction, and value laws.

1. **Industrial Essence: Without Software/Data, Hardware is a "Useless Body"** Understanding the core status of software/data requires recognizing the low-altitude economy's essence—it is not a "manufacturing industry" but a "data-driven three-dimensional digital economy." All flight activities, from approval and scheduling to real-time monitoring, safety management, and emergency response, rely on real-time, precise, comprehensive data. Without data, low-altitude flight is impossible. Civil Aviation Administration tests show a single eVTOL flight generates ~12GB of real-time data per hour—flight attitude, position, weather, airspace status—80% of which is used for safety management to prevent conflicts and accidents. A critical current problem is data silos and lack of interoperability, leading to inefficiency and safety risks. Industry statistics indicate 39% of flight delays and airspace conflicts stem from data disconnection. Some pilot areas face the尴尬 situation of "having aircraft but no routes, having routes but no control"—aircraft are built but cannot fly due to lack of data support for route applications; even with routes, lack of real-time monitoring prevents safe, scalable commercial operations. This is akin to owning a advanced computer without an operating system—it's just parts. Similarly, drones and eVTOLs without software/data support are expensive "metal lumps," ultimately "useless bodies." Crucially, integrating low-altitude + AI + data turns massive data into core productivity. AI algorithms analyzing flight, airspace, and weather data enable intelligent scheduling, dynamic airspace optimization, and safety risk prediction, vastly improving efficiency and safety—capabilities hardware alone cannot provide. Only software and data can赋予 the "intelligent brain" for low-altitude flight. A real case: A private leader's low-altitude data platform integrated regional airspace, weather, and flight data. Its AI algorithm achieved intelligent conflict warning with a 0.3-second response time, far surpassing the industry average of 1.2 seconds. Deployment reduced flight conflicts by 85% and improved approval efficiency by 75%. This is the core value of software/data—solving critical pain points hardware cannot, enabling industrial scale.

2. **Policy Shift: State Explicitly Designates "Software/Data as Core," Dividends Arrived** For investors, policy is the "compass." Following policy mitigates risk and captures dividends. The state has clearly identified the core focus—software and data—with密集 policies signaling an explosive dividend period. * The 2026 NPC/CPCC sessions elevated "AI + aviation deep integration" to an unprecedented strategic height, explicitly promoting the deep integration of low-altitude economy with AI and data to build an intelligent low-altitude ecosystem, directing development towards software/data. * In February 2026, five ministries jointly issued "Opinions on Accelerating the Development of the Low-altitude Economy," explicitly stating: low-altitude information infrastructure (communication/navigation/sensing/data) is the core support, not mere hardware manufacturing. It also set a hard target: by 2028, investment in low-altitude information infrastructure must account for no less than 40%, directly outlining the core investment theme—software/data, not hardware. * 2026 is designated the "Year of Data Element Value Release," with the state promoting market-oriented allocation of data elements. Low-altitude data, as a key resource, will see its value fully unleashed. Local governments are actively responding: Wuhan launched an 80 million yuan low-altitude data infrastructure project covering 1000 sq km; Chongqing and Hangzhou started 65 million and 58 million yuan projects respectively. Incomplete statistics show provincial-level low-altitude data infrastructure project investments exceeded 5 billion yuan nationally in 2026, indicating accelerating policy dividends. * Legally, the revised "Civil Aviation Law" effective July 2026 clarifies management rules for airspace below 300 meters, simplifies flight approvals, and mandates strengthening low-altitude information infrastructure, expected to directly drive over 30 billion yuan in new software/data investment, accelerating system construction.

密集 policies clearly indicate the investment core has shifted from hardware to software/data. Aligning with policy is key to seizing the most certain opportunities and reducing risk.

3. **Value Law: Long-term Value of Software/Data is 3x+ That of Hardware** The core investment objective is return. Examining profit logic and long-term value reveals a significant and widening gap between software/data and hardware across three dimensions.

(1) **Profit Model: Hardware is "One-time Sale," Software/Data is "Recurring Revenue"** Hardware profit model is simple: produce and sell products, earning marginal profit—a one-time sale. Each drone or component sold generates a single profit, with no subsequent revenue. Homogenization drives prices down, compressing margins into "thin profits" or losses. Example: A drone component maker's motor price dropped from 100 yuan (25% margin) in 2023 to 80 yuan (15%) in 2024, to 65 yuan (<8%) in 2025. Profit space shrinks, forcing reliance on capacity expansion and price competition, limiting long-term value. Software/data profit model is "continuous service," offering sustainability and compound effect: building platforms and data resources to provide SaaS subscriptions, data services, operational shares. As long as customers use the service, revenue continues. With more data and better technology, service capability and pricing power increase, expanding profit potential. Example: A low-altitude SaaS platform charges 20,000 yuan/year per agricultural enterprise for flight scheduling and data monitoring. Client growth: 1,000 (2023, 20M revenue) -> 2,000 (2024, 40M) -> 3,500 (2025, 70M), with an 87% CAGR. Client stickiness is high (<5% churn), ensuring stable profitability.

(2) **Gross Margin: Software/Data is 3.7x Hardware, Clear Profit Advantage** Gross margin is a key profitability indicator. Software/data margins vastly exceed hardware. 2025 industry data: Low-altitude hardware average gross margin 18.5% (drone components avg. 5.3%, down 11.2 pts since 2023; some SMEs <3%). Software/data average gross margin 68.5%—3.7 times higher. Top software firms exceed 80%. The advantage is clear. Reason: Hardware requires significant capital for production, procurement, capacity expansion. Software/data's main cost is upfront R&D/qualifications; once the product is built, replication cost is minimal (near-zero marginal cost), enabling high profits with sufficient customers. Example: A data service company invested 120M yuan upfront, achieving stable >82% margins per new client. A drone manufacturer, with costs for materials, labor, equipment per unit, manages only ~18% margin. The profitability gap is vast.

(3) **Growth Potential: Software/Data CAGR 67%, Far Exceeding Hardware** Growth potential in software/data also far outpaces hardware. Forecast: Low-altitude software/data market size grows from 12.6B yuan (2025) to 114.8B yuan (2030), CAGR 54.2%—over 3x hardware growth. Top software firms' average revenue CAGR last 3 years: 67%, dwarfing hardware leaders' 19%. Crucially, software/data sector concentration will increase, strengthening leading firms' advantage. The Civil Aviation Administration predicts the top 3 low-altitude software firms will hold >65% market share by 2030, dominating the landscape. Hardware, due to homogenization, struggles with concentration, leading to high SME failure rates and limited long-term value.

In summary, across profit model, gross margin, and growth potential, the long-term value of software/data is unmatched by hardware, representing the true core of low-altitude economic value.

**III. Key to Breaking Through: Dispelling 2 Major Investor Misconceptions** Despite the arguments for software/data's core value, investor hesitation persists due to two main misconceptions. Let's dispel these with facts.

**Misconception 1: "Core Platforms are State-Run, Private Enterprises Can't Enter"** This common view assumes low-altitude economy's state security/military aspects mean the state/SOEs dominate core platform construction, leaving no room for private firms. The opposite is true: private suppliers are the "main force" in low-altitude software/data. Civil Aviation Administration 2025 data confirms this: 82% of provincial FSS and 90% of ATC data exchange platforms are built/operated by qualified private enterprises. Related leading firms hold 47.8% of the domestic low-altitude software/data market, deeply integrated with the national ATC system, holding core qualifications and projects—they are the de facto "private national team." Why can private firms participate? The state's core role is "safeguarding baselines, setting rules, ensuring security," controlling underlying core tech and data. Translating rules into operational systems and engineering safety requirements into code/platforms requires efficient innovation and agile market response—precisely private enterprises' strengths. Real case: A provincial low-altitude management platform built by a private leader handles flight approvals, conflict warnings, multi-department data exchange, processing over 100,000 flight plans annually. Approval efficiency improved 75%, conflicts reduced 80%, earning recognition from aviation authorities and local government as a benchmark project. This demonstrates private enterprises not only can enter but can become core players, gaining stable returns and long-term growth.

**Misconception 2: "Military/State Secrets = Completely Closed, No Private Capital Opportunity"** Another misconception is that military/state secret involvement implies a completely closed sector. Reality: The low-altitude data/system uses a three-tier architecture (core secret layer, intermediate desensitized layer, application open layer). The state controls the core secret layer, but the intermediate and application layers are fully open to private capital. Private firms can capture value here without touching core military/authority permissions. Specifically: Core secret layer (military zone data, core airspace data, core management systems) is state-controlled. Intermediate layer (data desensitization, cleaning, integration) is accessible to private firms, processing sensitive data into legally usable forms. Application layer (app development, operational services, data services) allows private firms to develop applications and services based on market demand. Statistics: 217 private firms engage in low-altitude data desensitization/application development, with 2025 combined revenue >5.6B yuan, 78% YoY growth. One firm focusing on non-sensitive data labeling and AI training (no core secret data) achieved 320M yuan revenue in 2025, 95% growth, 82% margin—proving significant opportunity. Consider the payments industry analogy: Financial security is a state bottom line. Initially, many believed private firms couldn't enter payments. Result? The giants driving ecosystem explosion were private—WeChat Pay and Alipay now hold 94.7% of the domestic mobile payment market. Low-altitude future mirrors this structure: The state manages bottom lines, rules, safety. Private firms drive intermediate/front-end ecosystems, competing on efficiency, innovation, and commercialization. This is the core opportunity for private capital in low-altitude software/data.

**IV. Core Evidence: Private Suppliers are the "National Team" in Low-Altitude Software/Data** Using data and logic to address misconceptions, let's examine real private leading firms to see their capabilities and investment value.

1. **Core Qualifications and Industry Accumulation of Private Leaders** A group of private leaders with core qualifications and deep industry experience has emerged in low-altitude software/data. They encompass FSS leaders and possess core capabilities in flight slots and ATC data, becoming central forces in the low-altitude software/data "national team." These firms hold qualifications like secondary secrecy permits, ATC communication/navigation/surveillance equipment manufacturing permits, and low-altitude airspace planning permits. Some have decades of experience in ATC informatization, serving multiple provincial ATC authorities, with extensive market coverage and deep understanding of operational systems, rules, and data standards. Crucially, they are integrating AI with low-altitude data, aligning with the "AI + aviation" directive, using AI algorithms to empower data processing, flight scheduling, and safety warnings, building intelligent low-altitude operational systems—the core direction for the future.

2. **Core Product Portfolio: Covering the Entire Low-Altitude Operation Chain, Leading Technology** Their core products cover the entire low-altitude operation chain—flight approval, real-time surveillance, data exchange, emergency command—forming a complete system with leading technology recognized by military and civil aviation authorities. (1) **Low-Altitude Flight Service Station System (FSS)** The FSS is the "central nervous system" for low-altitude flight, handling flight planning, multi-source surveillance, airspace conflict warning, and emergency command. These private leaders' FSS systems are deployed in 23 cities across 17 provinces, certified by both military and civil aviation, achieving international advanced levels. Key advantages: Multi-source surveillance (integrating ADS-B, BeiDou, 5G-A) with ±1m precision (vs. industry avg. ±3m); intelligent conflict warning with 0.3s response (vs. 1.2s avg.); emergency command integration with public security, fire, medical departments for rapid response. The system has ensured over 120,000 flights with zero accidents, becoming a benchmark product.

(2) **ATC Data Exchange and Integrated Surveillance Platform** This platform addresses data silos, enabling data sharing between civil aviation, ATC, weather, public security, etc. These firms' platforms process over 800,000 flight plans annually, improving approval efficiency by 75%, achieving 92% data interoperability rate (vs. 27.3% avg.) across 8 departments. It serves as a core component of the civil aviation "digital brain," offering data visualization and intelligent analysis for airspace planning and scheduling.

3. **Implementation Cases and Commercial Value: Stable Profits, Rapid Growth** These leaders not only have leading technology but also proven implementation cases and stable business models with significant commercial value. Implementation: They have built provincial low-altitude management platforms and FSS in Shanghai, Shandong, Heilongjiang, etc., ensuring 60,000+ general aviation flights with zero accidents. Shanghai's 80M yuan low-altitude data infrastructure project, built by a private leader, covers 1000 sq km, integrating airspace, flight, and weather data, supporting logistics, emergency response, tourism. Annual operational revenue reaches 120M yuan, with a payback period of only 4.2 years. Business Model: They use diversified models: government projects + operational services, data subscriptions, API services. This creates high barriers, high stickiness, and recurring cash flow, distinct from hardware's one-time sale model. Example: A private leader's 2025 low-altitude business revenue reached 1.87B yuan, up 89% YoY. Operational services contributed 62%, data subscriptions/API services 28%, one-time projects only 10%. Net profit was 510M yuan (27.3% net margin), far exceeding hardware averages. Three-year revenue CAGR was 71%, showing strong competitiveness and investment value.

4. **Future Winners: Private Enterprises Possessing the "Triple Gene"** Future winners in low-altitude software/data will be private firms possessing: low-altitude core data qualifications, ATC operational experience, and strong AI capabilities. * Core data qualifications are the "entry ticket." * Operational experience provides the "foundation." * Strong AI capability is the "core competitiveness." Such firms can transform massive low-altitude data into AI-driven scheduling, intelligent warnings, and dynamic airspace optimization, most likely becoming super unicorns, akin to Alipay/WeChat Pay in their early days.

**V. The Long-term Value of Software/Data Cannot Be Overstated** The core value of software/data has been argued repeatedly, but it bears re-emphasis as it is the crux of low-altitude investment and key to avoiding pitfalls and capturing dividends.

1. **Reinforced Industrial Essence: Data is the "Lifeline" of Low-Altitude** Without software/data systems, drones and eVTOLs cannot fly efficiently or safely. Civil Aviation Administration estimates: every 1 yuan invested in low-altitude software/data drives 3.2 yuan in hardware value uplift. Investing solely in hardware drives only 0.8 yuan uplift—a 4x difference. Thus, software/data is not just the core; it is the "engine" pulling the entire industry's growth. Without it, hardware cannot scale, and the low-altitude economy cannot achieve commercial scale. Combined with AI, data's value amplifies, becoming the core driver of industrial upgrade—irreplaceable by hardware.

2. **Reinforced Value Law: Private Leaders Will Dominate the Future Landscape** The hardware sector is intensely competitive. The 2025 failure rate for small/medium drone manufacturers was 37%, most exiting due to low margins and lack of core competitiveness. Software/data leaders, with qualification, technology, and scenario barriers, achieve rapid growth (67% avg. revenue CAGR vs. hardware leaders' 19%). Prediction: By 2030, the top 3 low-altitude software firms will hold >65% market share, dominating the landscape and offering the best investment value. In hardware, aside from a few leaders, follower SMEs have limited long-term value, with an average lifespan of 1.8 years vs. 6.7 years for software firms.

3. **Reinforced Policy Dividends: Software/Data Market Space is Rapidly Opening** 2026 provincial low-altitude data infrastructure project investment exceeded 5B yuan. The new Civil Aviation Law will open ~120,000 sq km of new low-altitude flight areas, forcing accelerated construction of management and data systems. The software/data market is expected to exceed 20B yuan in 2026 and 114.8B yuan by 2030 (54.2% CAGR), with dividends持续释放. Coupled with the "AI + aviation" directive, the software/data + AI track will see even greater explosion. Positioning now is the best time to capture value opportunities. Missing now could mean missing the golden development period.

**VI. Where the Capital Rush into Hardware Goes Wrong** Many investors still chase hardware, even overpaying for projects. But where exactly is the error? The core mistake lies in investors' knowledge structure failing to grasp the core of aviation operations, misunderstanding low-altitude economy's development logic. China's aviation system has long been semi-closed. Aspects like airspace designation, route management, and ATC指挥 fall outside traditional TMT/manufacturing investors' understanding. The 2026 forum survey found only 17% of investors could accurately state an FSS's core functions; <10% knew the process for top surveying permits; many couldn't distinguish UTM from CAS. They understand aircraft appearance, performance, component manufacturing, but miss the core logic: An aircraft is merely a terminal node within a vast operational system. Its value depends entirely on the software/data system's support. Without it, the aircraft is worthless. Deconstructing the logic: * **Without support systems, aircraft cannot take off or land safely.** 42% of low-altitude flight incidents involve lack of support systems. Drones are built, but without FSSs for approval, surveillance, emergency support, they cannot get routes, remaining grounded as "scrap metal." * **Without data systems, military/authorities "cannot see, cannot control," and won't approve airspace/routes.** Only ~1,200 low-altitude routes are approved nationally, 80% of which cannot operate regularly due to data disconnection. Without airspace/routes, operators won't buy aircraft—2025 drone inventory reached 150,000 units (38% backlog), primarily due to incomplete airspace/data systems. * **Without software/data systems, aircraft cannot achieve scaled, commercial operations.** Even with routes, lack of intelligent scheduling, data monitoring, safety warning leads to low efficiency and high risk, preventing scale and sustained revenue, reducing aircraft to "demonstration products."

The core logic, re-emphasized: Hardware is the prerequisite, the foundation. But support and data services are the true core and the only long-term investment direction. Chasing hardware yields short-term "excitement money" or total loss. Positioning in software/data yields long-term "big money"—this is industrial law, verified by countless cases.

**VII. Private Sector Holds the Greatest Opportunity** A major investor concern is: "Aviation/ATC systems are state-run, private sector has no chance." This is profoundly wrong and the biggest obstacle to capturing low-altitude dividends. Let's clarify with a clear analogy. Recall the payments industry: Financial security is a state bottom line. Initially, many believed private firms couldn't enter, thinking "keeping money with private firms is unsafe." Result? The entities that grew massive and drove the ecosystem were private—WeChat Pay and Alipay hold 94.7% market share. Why? The state's core duty is "safeguarding bottom lines, setting rules, ensuring security" (currency issuance, financial regulation, core clearing). Intermediate layer services, front-end applications, commercial ecosystem building require efficient innovation and agile market response—private enterprises' strengths. Low-altitude future has identical structure: The state manages bottom lines, rules, security (core底层, airspace designation, data security). The intermediate layer (data desensitization, integration), front-end service layer (app development, operational services), and commercial operation layer (scenario implementation, value realization) are all opportunities for private firms. Private capital can compete on efficiency, innovation, commercialization. Prediction: By 2030, private firms will hold >85% market share in domestic low-altitude software/data, similar to payments. This was clearly outlined in the CAAC's 2022 "Smart Civil Aviation Construction Roadmap" and "Civil Unmanned Aircraft Development Roadmap." Private forces will be the core dominants. Therefore, discard the "no private opportunity" notion. Conversely, private capital is the biggest winner and most investable group in low-altitude software/data.

**VIII. Three Major Investment Directions in Software/Data** Understanding the core logic and dispelling misconceptions leads to the key question: what are the specific investment opportunities? Opportunities are categorized into three types based on investor needs, balancing certainty, flexibility, and return.

**Core Principle:** Avoid core secret areas. Focus on high-certainty, high-return tracks. Prioritize binding with leaders and aligning with policy dividends (AI+aviation). Reduce risk, achieve stable returns.

**Category 1: Core "National Team" Tracks (Preferred for Institutions/Industrial Capital - High Barriers, High Certainty)** Government-led, SOE-led, private-supported. High barriers, high certainty, high returns. Suitable for institutional/industrial capital. Stable returns, very low risk. 1. **National/Provincial Low-Altitude Management Platforms (UTM/CAS)** *Core Role:* Core hub for low-altitude operations (flight approval, conflict warning, flow management, safety monitoring). Essential for scale. Related firms hold ~58% UTM market share. *Focus:* Prioritize leaders already implementing AI models, possessing ATC data + AI dual基因. Highest certainty, better alignment with "AI+aviation." *Opportunity:* Private capital can participate in data desensitization, application layer development, operational services without touching core secrets, partnering with qualified leaders to share dividends. *Return:* Estimated avg. ROI 28% (vs. hardware 8%). Government projects ensure stable repayment (>95% collection rate).

2. **Low-Altitude Digital Infrastructure (Data Infrastructure)** *Core Role:* The "OS" for all low-altitude apps: high-precision 3D maps, digital twin airspace, BeiDou precision positioning, weather data platforms. Core carrier for data element value release, policy priority. *Opportunity:* Local government-led data infrastructure projects (e.g., Wuhan 80M, Chongqing 65M). Models: government service procurement, data subscriptions. Stable, recurring revenue. *Market Size:* Avg. provincial project scale 62M yuan. 2026 expected 30+ new provincial projects, market >1.8B yuan. Policy dividends will drive continued explosion in 3-5 years. *Return:* Govt service procurement ~15% annual yield; data subscription ~20%. Payback ~4-5 years. Suitable for long-term, very low risk.

3. **Cross-Department Data Integration & Sharing Platforms** *Core Role:* Integrate data from civil aviation, public security, weather, military etc., building open data platforms to solve silos. Key for data value release and operational efficiency. *Profit Model:* Government-authorized operation, data desensitization, API services, SaaS subscription. *Return:* Leading platforms: >1B API calls/year, revenue >800M yuan. SaaS client retention >85%, CAGR 70%. Strong monetization, network effects.

**Category 2: Core Tracks (Binding with Leaders - Suitable for Mid/Small Institutions)** Focus on FSS, data infrastructure, ATC data services. Core is partnering with qualified private leaders, leveraging their qualifications, resources, and scenarios to reduce risk. Suitable for mid/small institutions. Stable returns. *Focus:* Select private leaders with secondary secrecy permits, full FSS qualifications, rich project experience. Cooperate on city/county FSS or data service projects. *Return:* Avg. city FSS project investment ~35M yuan, annual operational revenue ~8M yuan, payback ~4.5 years. Data service projects ~22% annual yield, stable repayment, controlled risk. Suitable for long-term positioning.

**Category 3: Private Sector Gold Tracks (Easy Implementation, Low Risk - Accessible for General Investors)** Avoid core secrets, focus on application layer and commercial scenarios. Easy implementation, low risk, clear monetization. *(Note: The original text was cut off here. The general description suggests tracks like application development for specific use cases - logistics, inspection, agriculture - leveraging open data APIs and platforms provided by leaders, with lower barriers to entry but still tied to the core software/data ecosystem.)*

**IX. Seizing the Low-Altitude Endgame, Positioning at the Value Core** The investment logic for China's low-altitude economy has been thoroughly deconstructed. The core message is singular: Hardware is the first half—exciting but transient. Software and data are the endgame—the sole core of value. Do not be misled by the "tangible" nature of hardware or deterred by perceived barriers. Today's low-altitude economy is at a critical juncture of policy dividend explosion and industrial restructuring. The state directs "AI + aviation deep integration," policies favor software/data. Private forces are already the core主力 in software/data—82% of provincial FSS, 90% of ATC data platforms are privately built/operated. The opportunity for private capital is clear. Looking back at aviation and online payments, the endgame of all emerging industries is the value explosion of software and data. The low-altitude economy is no exception. Without software/data support, advanced drones/eVTOLs are "useless bodies." Without AI/data integration, scale and commercial breakthrough are impossible. 2025 data provides the answer: software/data avg. gross margin 68.5% (3.7x hardware); CAGR 54.2% (3x+ hardware). This is the clear value gap and the most certain investment signal. Final reminder: Low-altitude investment competes on cognition, not herd following; it earns long-term value money, not short-term excitement money. While the hardware sector faces intense competition and high failure rates, the software/data sector remains an underexplored value opportunity. Whether institutions target high-barrier "national team" tracks, mid/small firms partner with leaders, or general investors enter low-risk application layers, the core is to grasp the "software + data + AI"主线, avoid herd traps, and focus on the value core. The trillion-yuan low-altitude track has started, backed by national strategy, policy dividends, and rising private forces. Positioning in software/data now means seizing the golden opportunity and holding the most certain investment trend for the next 3-5 years. May we all break cognitive barriers, position precisely, and partake in the endgame feast of the low-altitude economy, sharing its immense dividends!