Investment Rating - The report rates the military industry as "Overweight" [5][12]. Core Viewpoints - The intensification of great power competition is a long-term trend, indicating a positive long-term outlook for the military industry. Increased defense spending is essential to ensure peace and security, especially as tensions around China may escalate [2][8]. Summary by Sections Investment Highlights - Key investment themes include: 1. General Assembly: AVIC Shenyang Aircraft Corporation, Aerospace South Lake, AVIC Xi'an Aircraft Industry [11]. 2. Components: AVIC Optoelectronics, Aerospace Electric, Guobang Electronics, Ruichuang Micro-Nano [11]. 3. Subsystems: AVIC Onboard, North Navigation [11]. 4. Materials and Processing: AVIC Heavy Machinery, Feilihua, Guangwei Composite, Huayin Technology, Bolite, Western Materials, Aviation Materials [11]. Market Review - The military industry index rose by 1.22% from July 20 to July 25, underperforming the broader market by 0.45 percentage points, ranking 24th out of 29 sectors [13][16]. - The Shanghai Composite Index increased by 1.67%, and the ChiNext Index rose by 2.76% during the same period [13][16]. Major News in the Military Industry - The 155th joint patrol operation in the Mekong River concluded successfully, highlighting international cooperation in regional security [9][24]. - The China Weapon Industry Group showcased new unmanned and anti-unmanned combat systems, emphasizing advancements in military technology [23]. - The successful first flight of the Xinzhou 60 civil rescue aircraft marks a significant step in enhancing China's emergency response capabilities [23]. International Military Situation - The report notes a complex international military landscape, with various nations calling for an end to the Gaza conflict and highlighting the importance of defense construction amid ongoing tensions [10][25]. - The U.S. has increased its military presence in the Pacific, deploying additional submarines in response to perceived threats from China [10][30].

Core Viewpoint - Recently, AVIC Heavy Machinery (600765.SH) revised its company articles to include a commitment to distribute at least 30% of the annual net profit attributable to shareholders as cash dividends, reflecting the company's dedication to enhancing investor returns and market value management [1][2]. Group 1: Dividend Policy and Corporate Governance - The new articles of association institutionalize a minimum cash dividend distribution of 30% of the annual net profit, showcasing the company's commitment to stable returns for investors [1]. - This move aligns with national policies aimed at improving the quality of listed companies and enhancing investor return mechanisms, particularly encouraging state-owned enterprises to adopt stable dividend and buyback strategies [1][2]. - AVIC Heavy Machinery has maintained a leading position in shareholder returns over the past two years, with a consistent 30% dividend payout ratio, indicating strong fundamental support [2]. Group 2: Financial Performance and Market Position - In 2023, the company achieved a net profit of 1.329 billion yuan, with cash dividends totaling 399 million yuan, maintaining a 30% payout ratio [2]. - For 2024, the projected net profit is 640 million yuan, with cash dividends expected to be 192 million yuan, again sustaining the 30% payout ratio [2]. - The company reported a revenue of approximately 5.751 billion yuan for the first half of 2025, a year-on-year decrease of about 4.5%, but still meeting 50.01% of its annual target [2]. - In Q2, the company achieved revenue of approximately 3.445 billion yuan, a year-on-year increase of about 11.20%, while net profit attributable to shareholders was approximately 289 million yuan, reflecting a year-on-year decrease of about 28.82% [3]. - The commercial aviation business grew by approximately 22% year-on-year, and the civil business grew by approximately 25%, indicating strong operational resilience during industry adjustments [3].

Meeting Information - The third extraordinary general meeting of shareholders for 2025 will be held on August 5, 2025, at 9:00 AM [1] - The meeting will take place at the conference room of AVIC Heavy Machinery Co., Ltd., located at No. 16, Airport Road, Shuanglong Aviation Port Economic Zone, Guiyang, Guizhou Province [1] - Voting will be conducted through a combination of on-site and online methods using the Shanghai Stock Exchange's online voting system [1] Voting Procedures - Shareholders can vote via the Shanghai Stock Exchange's online voting system, with voting available from 9:15 AM to 3:00 PM on the day of the meeting [1][3] - Shareholders holding multiple accounts can aggregate their voting rights across all accounts for the same category of ordinary and preferred shares [3] - Votes exceeding the number of shares held or multiple votes for the same proposal will be considered invalid [3] Attendance and Registration - Shareholders registered with the China Securities Depository and Clearing Corporation Limited Shanghai Branch as of the close of trading on July 30, 2025, are eligible to attend the meeting [5] - Directors, supervisors, senior management, and appointed lawyers are also allowed to attend [4][5] - Registration requires shareholders to present their stock account card and identification [6]

Core Viewpoint - The company, AVIC Heavy Machinery Co., Ltd., has announced the cancellation of its supervisory board and the revision of its articles of association, which will require approval from the shareholders' meeting [1]. Group 1: Cancellation of Supervisory Board - The supervisory board will be abolished in accordance with the Company Law and relevant regulations, with its powers transferred to the audit and risk control committee of the board of directors [1][2]. - The original supervisors will be relieved of their duties, and the relevant personnel will be managed by their original appointing units [1]. Group 2: Main Revisions to Articles of Association - The revisions include the cancellation of the supervisory board, the assignment of its responsibilities to the audit and risk control committee, the addition of employee directors, and the renaming of "shareholders' meeting" to "shareholders' assembly" [2]. - Specific changes in the articles of association include updates to the company's legal status, governance structure, and operational scope [3][4][5]. Group 3: Governance Structure Changes - The articles now emphasize the establishment of a governance mechanism that strengthens the leadership of the Communist Party and ensures transparency and accountability [3][4]. - The company will maintain its independent operation and financial accountability, with shareholders limited to their subscribed shares in terms of liability [6][7]. Group 4: Responsibilities and Rights of Shareholders - The articles outline the rights of shareholders to propose temporary motions and the requirements for such proposals to be submitted [18][19]. - Shareholders are entitled to access company information and materials, ensuring transparency in governance [10][11]. Group 5: Independent Directors and Committees - The board will include independent directors who will play a crucial role in decision-making and protecting the interests of minority shareholders [32][33]. - The audit and risk control committee will be responsible for overseeing financial disclosures and internal controls, ensuring compliance with legal and regulatory requirements [34][35].

General Principles - The company aims to strengthen the management of related party transactions to control risks and ensure compliance with principles of openness, fairness, and justice, thereby protecting the rights of the company and all shareholders [1] - Related party transactions should be minimized, and when they occur, they must adhere to market principles, ensuring that prices do not deviate from those offered by independent third parties [1][2] - The board of directors and shareholders must avoid voting on related party transactions if they have a conflict of interest [1][4] Definition of Related Parties - Related parties include both legal entities and natural persons that have a significant stake or control over the company [2][3] - Legal entities that control the company or are controlled by the same entity are considered related parties [2] - Natural persons who hold more than 5% of the company's shares or are directors or senior management are classified as related parties [2][3] Related Transactions - Related transactions involve the transfer of resources or obligations between the company and its related parties, including asset purchases, financial support, and management services [5][6] - The board must ensure that related directors abstain from voting on related transactions, and decisions must be made by a majority of non-related directors [5][6] Decision-Making and Disclosure - Transactions exceeding certain thresholds must be submitted for board or shareholder approval, with specific monetary limits set for related natural persons and legal entities [13][14] - For significant transactions, the company must disclose audit or evaluation reports to ensure transparency [8][12] Daily Related Transactions - Daily related transactions must follow specific procedures for approval and disclosure, including annual reporting on their execution [19][20] - The company can estimate annual transaction amounts and must disclose any significant deviations from these estimates [19][20] Exemptions from Related Transaction Rules - Certain transactions that provide unilateral benefits to the company without any obligations, such as receiving cash gifts or debt relief, may be exempt from related transaction rules [12]

Core Points - The article outlines the information disclosure management system of AVIC Heavy Machinery Co., Ltd, aiming to enhance the quality and timeliness of information disclosure to protect investors' rights [1][2] - The system is established by the board of directors and applies to various stakeholders, including board members, management, and shareholders [2][3] - The principles of information disclosure emphasize timely, fair, and accurate reporting without misleading statements or omissions [5][6] Group 1: Information Disclosure Principles - Information must be disclosed simultaneously to all investors, preventing any premature leaks to specific individuals or entities [3][4] - Directors and senior management are required to ensure the accuracy and completeness of disclosed information [6][7] - Major events affecting the company must be disclosed promptly, including significant financial changes or legal issues [9][10] Group 2: Reporting Requirements - The company must prepare and disclose annual, semi-annual, and quarterly reports within specified timeframes [12][13] - Annual reports should include details on stock and bond issuance, major shareholders, and any changes in control [14][15] - If there are delays in reporting, the company must announce the reasons and expected timelines for disclosure [13][14] Group 3: Temporary Reporting - Significant events that could impact stock prices must be disclosed immediately, detailing the event's cause and potential effects [20][21] - Changes in company structure, such as mergers or name changes, require immediate disclosure [22][23] - The company must monitor unusual trading activities and media reports that may affect its securities [26][27] Group 4: Voluntary Announcements - The company may voluntarily disclose information that, while not legally required, is deemed important for investor decision-making [28][29] - Such disclosures must be truthful and not conflict with legally required information [30][31] Group 5: Internal Control and Responsibilities - The board of directors is responsible for establishing and executing internal controls related to financial management and accounting [60][61] - The company must maintain records of all information disclosure activities for a minimum of ten years [46][47] - The board secretary plays a crucial role in coordinating disclosure activities and ensuring compliance with regulations [36][37]

Core Points - The company aims to protect the legal rights of shareholders, employees, and creditors while adhering to a governance structure that emphasizes transparency and accountability [4][6] - The company was established as a joint-stock company in accordance with Chinese laws and has a registered capital of RMB 1,575,492,153 [5][7] - The company operates in the aerospace and military sectors, focusing on hydraulic components and systems, and aims to expand into civilian markets [16][17] Group 1: Company Overview - The full name of the company is AVIC Heavy Machinery Co., Ltd., and it is located in Guiyang, Guizhou Province [5] - The company was approved for its initial public offering in 1996, issuing 15 million shares [4][5] - The company is committed to independent operation and assumes civil liability for its debts [6][7] Group 2: Governance Structure - The company has established a governance mechanism that includes a board of directors and a legal representative [5][6] - The company emphasizes compliance with national laws and regulations, and it has a system for internal supervision and risk management [12][13] - The company is required to establish a party organization to conduct activities in accordance with the Communist Party's regulations [13] Group 3: Business Objectives - The company's business objectives include enhancing market competitiveness and achieving good economic returns for shareholders [16] - The company engages in various activities, including investment management, manufacturing, and sales of hydraulic components and systems [17][18] - The company aims to create a diversified and technologically strong enterprise group [16][17] Group 4: Shareholder Rights and Responsibilities - Shareholders have the right to receive dividends and participate in decision-making processes [36][37] - The company maintains a shareholder registry to document ownership and rights [34][35] - Shareholders are obligated to comply with laws and the company's articles of association [42][43]

Group 1 - The company announced the resignation of its Chief Financial Officer, Song Guiqi, due to work relocation, effective immediately upon delivery of the resignation report to the board [1][2] - Despite resigning as CFO, Song Guiqi will continue to serve as a director and general legal counsel for the company [1] - The company appointed Shi Yongyong as the new Chief Financial Officer, with his term starting from the date of the board's approval until the end of the current board's term [2][3] Group 2 - Shi Yongyong possesses the necessary professional qualifications and experience to serve as the Chief Financial Officer, in compliance with relevant laws and the company's articles of association [3] - Shi Yongyong has a background in finance, having held various positions within the company and its subsidiaries since 2012 [3]

Core Points - The article outlines the insider information management system of AVIC Heavy Machinery Co., Ltd, emphasizing the importance of confidentiality and compliance with relevant laws and regulations [1][14] - The board of directors is responsible for managing insider information, ensuring the accuracy and completeness of insider information records, with the chairman as the primary responsible person [1][2] - Insider information is defined as non-public information that could significantly impact the company's stock price or trading of its derivatives [7][8] Group 1 - The board office is designated as the daily management department for insider information, responsible for supervision, management, registration, disclosure, and filing [2] - Unauthorized disclosure of insider information by any department or individual is prohibited, requiring approval from the board secretary [2][3] - All directors, senior management, and relevant personnel have a duty to maintain the confidentiality of insider information and are prohibited from insider trading [2][6] Group 2 - Insider information includes significant changes in business policies, major investments, important contracts, and other events that could materially affect the company's financial status [8][9] - The definition of insider information recipients includes individuals and entities that can access insider information directly or indirectly before it is publicly disclosed [9][10] - The company must maintain a detailed record of insider information recipients, including their names, contact information, and the context in which they received the information [6][10] Group 3 - The company is required to submit insider information recipient records and significant event progress memos to the Shanghai Stock Exchange within five trading days after the information is publicly disclosed [7][8] - The company must ensure that all insider information recipients are aware of their confidentiality obligations and the legal implications of insider information [8][12] - Violations of the insider information management system can lead to disciplinary actions, including warnings, demotions, or legal consequences [12][13]

General Provisions - The rules are established to regulate the behavior of AVIC Heavy Machinery Co., Ltd. and ensure shareholders exercise their rights according to relevant laws and regulations [1][2] - The company must strictly follow legal and regulatory requirements when convening shareholder meetings [3] Shareholder Meeting Structure - Shareholder meetings are categorized into annual and extraordinary meetings, with annual meetings held once a year within six months after the end of the previous fiscal year [5] - If a shareholder meeting cannot be held within the specified timeframe, the company must report to the local regulatory authority and the stock exchange [3][5] Shareholder Rights and Responsibilities - The shareholder meeting is the company's authority body, responsible for electing directors, approving financial reports, and making decisions on significant transactions [7][8] - Shareholders holding more than 10% of shares can request the board to convene an extraordinary meeting [9][10] Meeting Procedures - The board must notify shareholders of the meeting at least 20 days in advance for annual meetings and 15 days for extraordinary meetings [18] - The meeting must be held at the company's registered address or another designated location, allowing for both in-person and proxy attendance [23] Voting and Decision-Making - Each share carries one vote, and shareholders must express their opinions as agree, disagree, or abstain [17] - The voting results must be announced immediately after the meeting, and the resolutions must be disclosed promptly [42][43] Legal Compliance and Accountability - Any resolutions that violate laws or regulations are deemed invalid, and shareholders can request the court to annul such resolutions within 60 days [20][21] - The company must ensure that all decisions made at the shareholder meeting are executed in accordance with the law and the company's articles of association [20][21]