According to a research report published by China International Capital Corporation (CICC), the low-altitude economy policies and mature industrial technologies constitute the core driving forces for agricultural drone development. The report projects that China's potential hardware demand for agricultural drones could reach 6.24 million units (1.248 million units annually), corresponding to a potential market space of 224.6 billion yuan (44.9 billion yuan annually). The annual service market for agricultural drones is expected to reach a potential space of 225.6 billion yuan. Upstream core component suppliers, midstream brand manufacturers, and downstream service operators in the industrial chain are positioned to benefit simultaneously from the rapid industry development wave, jointly advancing technology-driven agriculture. The report highlights relevant targets in the industrial chain including sensors, flight control chips, and positioning technologies.
**Drones Help Alleviate Labor Challenges and Strengthen Agricultural Foundation**
Agricultural modernization is key to Chinese-style modernization, and agricultural drones are emerging as a crucial tool for resolving agricultural development contradictions. From the demand side perspective, food consumption accounts for a significant portion of household expenditure. In 2023, China's population represented 18% of the global total while consuming approximately 30% of the world's rice, 51% of pork, 46% of vegetables, 37% of fruits, and 40% of seafood. For Chinese people, food has never been merely about survival needs, but rather embodies aspirations for a happy life accumulated over thousands of years of history, representing a cultural epitome of "food culture." Stable agricultural products are crucial to people's livelihood and happiness. With China's arable land accounting for only 8.2% of the global total, higher efficiency requirements are placed on Chinese agricultural production. The application of modern agricultural drones can effectively alleviate agricultural labor shortage pressures, improve agricultural product self-sufficiency rates and quality, and ensure national food security.
**Drones Match Agricultural Production's High-Load, Repetitive Characteristics, Contributing Outstanding Value in Production, Quality, Environmental Protection, and Economic Benefits**
Drone applications cover the entire spectrum of agriculture, forestry, animal husbandry, and fisheries, efficiently adapting to seeding, fertilizing, spraying, monitoring, and other processes. Various aircraft types including fixed-wing and multi-rotor designs meet different operational requirements. Through precise pesticide and fertilizer application and rapid pest and disease control, drones can significantly boost yields. As agriculture transforms toward large-scale and intensive operations, drones are breaking traditional production constraints through technological innovation, becoming an important tool for promoting high-quality agricultural development and achieving agricultural powerhouse goals.
**Dual Drivers of Policy Support and Technology Cost Reduction Create Broad Market Prospects**
Low-altitude economy policies and industrial technology maturation constitute the core driving forces for agricultural drone development. On the policy front, the Ministry of Agriculture and Rural Affairs explicitly encourages the cultivation of drone pilots, while the Ministry of Agriculture and Rural Affairs and Ministry of Finance have introduced drone subsidy policies. Large-scale production of core components continues to reduce drone costs, with mature domestic supply chains like DJI and XAG improving product cost-effectiveness.
The report projects that China's potential hardware demand for agricultural drones could reach 6.24 million units (1.248 million units annually), corresponding to a potential market space of 224.6 billion yuan (44.9 billion yuan annually). The annual service market for agricultural drones is expected to reach a potential space of 225.6 billion yuan. Upstream core component suppliers, midstream brand manufacturers, and downstream service operators in the industrial chain are positioned to benefit simultaneously from the rapid industry development wave, jointly advancing technology-driven agriculture.
**Profit Forecasts and Valuation**
Industrial chain related targets include: sensors (Smartsens Technology(Shanghai)Co.,Ltd. (688213.SH), China Wafer Level Csp Co.,Ltd. (603005.SH)), flight control chips (Rockchip Electronics Co., Ltd. (603893.SH), Aixin Yuanzhi (unlisted)), positioning (Ofilm Group Co., Ltd. (002456.SZ)), PCB (Jialichuang (unlisted)), battery and power supply systems (Sunwoda Electronic Co.,Ltd. (300207.SZ)), contract manufacturing (Zhongnuo Communications (unlisted)), and drones (Arashi Vision Inc. (688775.SH)).
**Risk Factors**
Policy dependency risks, intensified market and price competition risks, technology updates and product reliability risks.
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