As of August 28, the 2026 semi-annual reports of listed companies in the low-altitude economy sector — including AVIC (Aviation Industry Corporation) Zhongwu UAV (688297.SH), Aerospace Rainbow (002389.SZ), Zongheng Co. (纵横股份，688070.SH), and EHang (NASDAQ: EH) — show that, on the one hand, with military trade and civilian markets advancing in parallel, industrial drones (currently mostly applied in scenarios such as geographic surveying and mapping, low-altitude inspection, and emergency management) have become a key growth engine for the industrialization of the low-altitude economy and have entered a phase of rapid development; on the other hand, the commercialization process of eVTOL (electric vertical take-off and landing) aircraft, whose primary scenarios are "passenger-carrying," has fallen short of expectations.

Industrial Drones Ramp Up

The 2026 semi-annual reports released by drone airframe manufacturers AVIC Zhongwu UAV, Aerospace Rainbow, and Zongheng Co. show that during the reporting period, these three companies achieved operating revenue of approximately 1.634 billion yuan, 891 million yuan, and 177 million yuan respectively, up approximately 272.48%, 9.87%, and 31.22% year-on-year respectively. In terms of net profit attributable to shareholders of the listed companies over the same period, AVIC Zhongwu UAV achieved a year-on-year increase of approximately 72.87%, Aerospace Rainbow swung back to profitability, and Zongheng Co. narrowed its losses by approximately 30%.

In addition, Jifeng Technology (300022.SZ), which has transformed from a traditional agricultural machinery maker into a "low-altitude economy + agricultural machinery" player, also swung back to profitability in the first half of this year. According to the company's 2026 semi-annual report, its low-altitude business achieved operating revenue of approximately 135 million yuan, up approximately 66% year-on-year.

Both AVIC Zhongwu UAV and Aerospace Rainbow stated consistently in their semi-annual reports that the military trade market is the "ballast stone" of company performance, while the civilian market space is showing a trend of "continuous expansion."

Aerospace Rainbow further analyzed in its report that, driven by both the need for national defense intelligent construction and realistic combat training demands, China's military drone market is currently showing development characteristics of steady scale expansion, a self-controllable industry chain, and gradually improving systems. At the same time, market demand for large, long-endurance reconnaissance-strike integrated platforms as well as low-cost, multi-functional, high-payload drones is increasingly prominent, and procurement of related equipment is expected to enter a new phase of accelerating order fulfillment.

In the civilian and low-altitude economy sphere, Aerospace Rainbow also sent a positive signal: the application scenarios of medium-to-large UAV systems are continuously expanding, playing irreplaceable roles in surveying and mapping, logistics, inspection, emergency rescue, and other fields that manned aircraft and small drones cannot fulfill. "The drone industry is currently at a critical stage where the strategic opportunity period, the technology breakthrough period, and the market expansion period overlap. Its development prospects are broad, and the industrial ecosystem will gradually move toward maturity and prosperity," Aerospace Rainbow said in its report.

On August 26, a management-level source from a drone company focused on "smart-city inspection services" told reporters that the company predicts its revenue this year will "grow 30% to 40% year-on-year." He also said the company is upgrading from a traditional drone equipment manufacturer toward a "product manufacturing + operation services" business model step by step.

Zongheng Co. also made clear in its 2026 semi-annual report that it will use low-altitude AI digital solutions built around "unattended systems + Zongheng Cloud + AI" as its core, accelerating deeper penetration into low-altitude county-level applications, smart government affairs, and emergency management, to drive the company's strategic transformation from a "equipment supplier" to a "leader in smart low-altitude scenarios."

Since the beginning of this year, multiple industry insiders in the low-altitude economy have told Economic Observer reporters that although there are still many imperfections in airspace management reform and supporting infrastructure construction, industry players maintain relatively positive expectations for market prospects.

eVTOL Commercialization Slows for Now

Compared with the growth momentum of industrial drones, the star company in the eVTOL field — EHang — saw its 2026 semi-annual report reflect the challenges of landing the low-altitude economy in "passenger-carrying" scenarios.

EHang's financial data shows that in the first half of 2026, the company achieved operating revenue of approximately 104 million yuan, with a net loss attributable to the parent of 254 million yuan, with the loss widening by approximately 40% compared with the same period last year.

On the evening of August 25, Hu Huazhi, founder, chairman, and CEO of EHang, said in a conference call that, affected by recent related safety incidents, China has adopted a more prudent regulatory stance in the field of low-altitude safety, which brings short-term uncertainty to the company's commercialization process. "Given this evolving environment, we have decided to withdraw our previously issued revenue guidance of 600 million yuan for 2026," EHang's management stated clearly in the conference call.

An aviation expert also told Economic Observer reporters that "carrying cargo first, then carrying people" is the principle of low-altitude economy development, and regulators have always been cautious in their attitude toward low-altitude safety. He also believes that the landing of "passenger-carrying" scenarios in the low-altitude field cannot be rushed, and the certainty of the commercialization timeline is relatively weak.

Facing the current situation, Hu Huazhi mentioned the company's diversification strategy and cost-reduction and efficiency-improvement efforts in the above meeting. He said EHang's "passenger-carrying main line remains unchanged," while the company is also advancing the R&D and scenario verification of products such as logistics aircraft and firefighting aircraft, which will in the future target market needs including forest firefighting, port logistics, and emergency support.

"The effects of these efforts will gradually show in the second half of the year," Hu Huazhi said.

Overseas Competition Intensifies

Against the backdrop of industrial drones and eVTOL facing different development circumstances, the overseas market is seen by the industry as a common breakthrough for the low-altitude economy — but international competition is also intensifying further.

In early August, a report released by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) showed that since the beginning of this year, China's drone exports have continued their "high-prosperity" state. According to Chinese customs statistics, in the first half of the year, China's cumulative drone exports reached 1.633 billion USD, up 27.6% year-on-year; export volume reached 2.425 million units, up 25.9% year-on-year, with export value achieving year-on-year growth for 21 consecutive months.

EHang said in its 2026 semi-annual report that since the beginning of this year, compared with the domestic market, the company's overseas market has progressed smoothly. For example, in the Thai market, the company expects to obtain a commercial operation certificate this year, which would be an important breakthrough in its overseas commercialization process; the flight trajectory of its core EH216 series has so far spanned 23 countries worldwide, with a cumulative total of nearly 100,000 safe flights completed.

In the military drone sector, international geopolitical factors are continuously generating overseas military trade demand. AVIC Zhongwu UAV also noted in its 2026 semi-annual report that global geopolitical risks are rising, and defense procurement demand across countries is trending upward.

"With the advantages of high reliability and high cost-performance, China's equipment fits the procurement needs of many countries. Domestic equipment including our company's products has ushered in a favorable opportunity in the military trade market," AVIC Zhongwu UAV said in its report.

In addition, while the overseas market releases growth opportunities, challenges are also increasing.

"International competition in the drone market has further intensified," CCCME said in the above report. Since 2022, the share of developed markets in Europe and the United States in China's drone exports has continued to decline, with the United States having fallen from the previous largest export market to tenth place, with its export share narrowing to 3.0%; in the first half of this year, China's drone exports to the United States and the European Union fell 54.1% and 28.5% year-on-year respectively.