Sichuan Jiuzhou Electronic Co Ltd

China has declared the low-altitude economy a national strategy under the concept of New Productive Forces. By 2026, cargo drones, agricultural drones, and flying taxis (eVTOL) will begin commercial services in several provinces, creating enormous economic value from the supply chain in airspace below 1,000 meters. Two standout case studies are EHang Holdings, the first Chinese company to receive a Type Certificate from the Civil Aviation Administration of China (CAAC) for commercial eVTOL, and Sichuan Jiuzhou, a state-owned enterprise that produces radar and ADS-B systems and controls air traffic infrastructure. Both companies have strong business moats in terms of regulation and national security. While the world is focused on the EV price war, a new battleground over China's skies has opened, and the winners will be those who secure licenses and infrastructure first.

Sichuan Jiuzhou released its 2026 interim report. Total operating revenue was 2.596 billion yuan, up 19.81% year on year. Net profit attributable to the parent company was 81.1984 million yuan, up 43.79% year on year. Net cash flow from operating activities was negative 157 million yuan. The asset-liability ratio was 65.09%, and the gross margin was 18.16%, ranking third among comparable companies that have already disclosed results. Diluted earnings per share were 0.08 yuan, up 44.75% year on year. Total asset turnover was 0.30 times, up 12.84% year on year. The number of shareholders was 68,200, and the top ten shareholders held 53.70% of the total share capital.

Sichuan Jiuzhou released its 2026 half-year report, showing first-half net profit attributable to the parent of 81.2 million yuan, up 43.79% year on year. Operating revenue was 2.596 billion yuan, up 19.81% year on year. Net profit attributable to the parent after deducting non-recurring items was 48.61 million yuan, up 26.2% year on year. Net operating cash flow was negative 157 million yuan, down 224.9% year on year. Earnings per share were 0.0799 yuan. In the second quarter, operating revenue was 1.59 billion yuan, up 52.6% year on year, and net profit attributable to the parent was 66.38 million yuan, up 29.6% year on year. As of the end of the second quarter, total assets were 9.274 billion yuan, up 11.71% from the end of the previous year, while net assets attributable to the parent were 2.918 billion yuan, down 19.53% from the end of the previous year. The company's main businesses include air traffic control, microwave and radio frequency, and smart terminal operations. In air traffic control, it is actively expanding into the low-altitude economy and defense markets. Its microwave and radio frequency business is moving into high-value-added areas, and its smart terminal business has achieved significant growth in automotive electronics.

Huayang Group announced that its controlling shareholder, Huizhou Huayue, is planning to transfer its shares in the company to Sichuan Jiuzhou Investment Holding Group, which may lead to a change in the company's controlling shareholder and actual controller. Trading in the company's shares will be suspended from the market open on August 18, 2026, with the suspension expected to last no more than two trading days. Sichuan Jiuzhou Investment Holding Group is a large state-owned high-tech enterprise group and also the controlling shareholder of the listed company Sichuan Jiuzhou, holding 47.91 percent of its shares, with the actual controller being the Mianyang Municipal State-owned Assets Supervision and Administration Commission. Huayang Group is mainly engaged in automotive electronics and precision die-casting, and has also laid out plans for AI and robot-related components. Before the suspension, the company received research visits from multiple institutions, stating that orders in hand for automotive electronics continued to increase, the order value of AI-related products kept growing, and it has planned to expand production capacity for optical module components and liquid cooling heat dissipation components at its Huizhou Dongxing base, with capacity expected to be gradually released in 2026.