Investment Rating - The report maintains a "strongly recommend" rating for several key companies in the military industry, including 中航西飞, 中航光电, 航天彩虹, and others [10]. Core Insights - The military industry is experiencing a significant rebound, with the SW National Defense Military Index increasing by 13.28% year-to-date as of October 17, 2025, although it has underperformed compared to the CSI 300 Index [14][20]. - Key events include the successful launches of two major commercial satellite constellations, which are expected to enhance the industry's growth potential [22][24]. - The upcoming 20th Central Committee's Fourth Plenary Session from October 20 to 23, 2025, is anticipated to outline new directions for the military industry, particularly in unmanned, intelligent, and systematic combat equipment [24]. Summary by Sections Market Review - The military industry has shown a decline of 4.70% in the SW National Defense Military Index this week, underperforming the CSI 300 Index by 2.48 percentage points [14]. - The overall industry has ranked 16th among 31 sub-industries in terms of performance [14]. Key Events - The report highlights the recent launches of the 星网 and 千帆 satellite constellations, with 星网 completing five launches in 21 days and 千帆 planning to accelerate its launch schedule significantly [22][23]. Catalysts - The report emphasizes the importance of the upcoming 20th Central Committee's Fourth Plenary Session, which will focus on the 15th Five-Year Plan and its implications for the military industry [24]. Company Performance - The report lists several companies with strong performance expectations, including 中航沈飞, 中航西飞, and 航发动力, all rated as "strongly recommend" [10]. - The report also notes the financial metrics of these companies, indicating a robust outlook for their earnings per share (EPS) and price-to-earnings (PE) ratios [10]. Industry Valuation - The military industry maintains a high valuation, with the current PE ratio at 83.33 times earnings, reflecting strong investor interest despite recent market fluctuations [20].

Group 1 - Since the beginning of the 14th Five-Year Plan, central enterprises have actively undertaken major national scientific and technological tasks, with an average annual growth of R&D expenditure of approximately 6.5%, exceeding 1 trillion yuan for three consecutive years, effectively supporting steady national economic development [1] - The introduction of TRIZ theory has provided new ideas for overcoming the challenges in the monitoring precision of the oil metal debris monitoring module, which is crucial for the stable operation of aircraft engines [1] - The AEF1200 turbofan engine, which is close to 2 meters in diameter, is the first domestically developed high-bypass dual-rotor turbofan engine for large transport aircraft in China [1] Group 2 - The Y-20B aircraft equipped with a new domestic engine has improved range, payload, and speed, with the new high-bypass turbofan engine providing greater thrust and fuel efficiency [2] - Central enterprises are accelerating the layout of strategic emerging industries, with an average annual investment growth rate exceeding 20%, accumulating investments of 8.6 trillion yuan [2] - The China General Nuclear Power Group's Delingha 1 million kilowatt integrated solar thermal storage project has successfully connected 800,000 kilowatts of photovoltaic power generation to the grid, with the 200,000 kilowatt solar thermal storage power generation expected to officially commence production by the end of this year [2] Group 3 - During the 14th Five-Year period, the total assets of central enterprises increased from 68.8 trillion yuan at the end of the 13th Five-Year Plan to 91 trillion yuan by the end of 2024, with an average annual growth rate of 7.3% [3] - The quality of state-owned assets has improved, and the financial foundation has become stronger [3]

Group 1 - The aerospace ETF Tianhong (159241) has shown a significant rebound, with a premium frequently observed and a turnover rate of 8.62%, resulting in a transaction volume of 38.8378 million yuan [1] - As of October 16, the Tianhong aerospace ETF has experienced a scale growth of 12.1386 million yuan over the past month, indicating substantial growth [1] - The ETF tracks the Guozheng Aerospace Index, which covers the aerospace industry chain, with a combined weight of over 73% in aviation and aerospace equipment, making it the highest "aerospace content" military index in the market [1] Group 2 - On October 15, Indonesia's Defense Minister confirmed the procurement of Chinese-made J-10 fighter jets, marking the first clear indication of such a purchase from Indonesia [2] - Experts suggest that if Indonesia finalizes the procurement of J-10 fighter jets, it would benefit both China by expanding the international market for the J-10 and Indonesia by enhancing its defense capabilities [2] - China Galaxy Securities highlights the potential for military trade and new quality fields, suggesting that the military sector may continue to outperform the market amid trade tensions, with positive earnings expectations for upstream components in Q3 [2]

Core Points - The New Silk Road Index (399429) closed at 1575.16 points, down 0.69%, with a trading volume of 58.815 billion yuan and a turnover rate of 2.12% [1] - Among the index constituents, 23 stocks rose, with Baiyin Nonferrous leading with a 10.0% increase, while 75 stocks fell, with Western Gold leading the decline at 6.2% [1] Index Constituents Summary - The top ten constituents of the New Silk Road Index include: - TBEA Co., Ltd. (6.10% weight, latest price 20.07, 1.01% increase, market cap 101.41 billion yuan) in the Power Equipment sector - Salt Lake Industry (5.25% weight, latest price 22.34, 1.93% decrease, market cap 118.21 billion yuan) in the Basic Chemicals sector - LONGi Green Energy (5.13% weight, latest price 20.25, 2.69% increase, market cap 153.46 billion yuan) in the Power Equipment sector - AVIC Aviation Power (4.56% weight, latest price 41.96, 1.04% decrease, market cap 111.85 billion yuan) in the Defense and Military sector - Shaanxi Coal and Chemical Industry (4.11% weight, latest price 22.54, 3.25% increase, market cap 218.53 billion yuan) in the Coal sector - Shenwan Hongyuan (3.47% weight, latest price 5.45, 0.18% increase, market cap 136.47 billion yuan) in the Non-Bank Financial sector - Zangge Mining (3.33% weight, latest price 57.39, 1.86% decrease, market cap 90.12 billion yuan) in the Nonferrous Metals sector - Yuxing Energy (3.19% weight, latest price 17.13, 1.27% decrease, market cap 125.62 billion yuan) in the Basic Chemicals sector - Goldwind Technology (3.06% weight, latest price 16.00, 4.36% decrease, market cap 67.60 billion yuan) in the Power Equipment sector - Western Mining (3.00% weight, latest price 22.87, 1.42% decrease, market cap 54.50 billion yuan) in the Nonferrous Metals sector [1] Capital Flow Summary - The New Silk Road Index constituents experienced a total net outflow of 1.81 billion yuan from main funds, while retail investors saw a net inflow of 1.744 billion yuan [3] - Notable capital flows include: - Baiyin Nonferrous: 5.16 million yuan net inflow from main funds, 2.30 million yuan net outflow from retail investors - LONGi Green Energy: 172 million yuan net inflow from main funds, 15.1 million yuan net outflow from retail investors - New Mileage: 1.59 million yuan net inflow from main funds, 93.05 million yuan net outflow from retail investors - Other companies like China Western Electric and Zhongcai Zihuan also showed varying degrees of net inflows and outflows [3]

Core Insights - The China Aviation Industry Corporation released the "Civil Helicopter Market Forecast Report (2025-2034)" predicting that by 2029, the civil helicopter fleet in China will exceed 1,700 units, with growth slowing after 2030 due to the impact of new low-altitude equipment like drones and eVTOLs, and by 2034, the fleet is expected to surpass 2,000 units [1][2] Group 1 - The report forecasts a total demand of 685 civil helicopters in the next decade, with over 70% of this demand being for turbine helicopters [1] - By the end of 2024, the civil helicopter fleet in China is projected to reach 1,403 units, a 2.3% increase from the previous year, with light helicopters making up over 40% of the fleet [2] - The report indicates that the total flight hours for civil helicopters in China will show an overall growth trend, surpassing 300,000 hours by 2029 and 370,000 hours by 2034 [2] Group 2 - In 2024, the total flight hours for civil helicopters are expected to be 233,000 hours, a year-on-year increase of 5.9%, with the oil service sector accounting for nearly 60,000 hours, representing over 25% market share [2] - The aerial tourism sector has seen rapid growth, with flight hours exceeding 37,000 in 2024, doubling from 2019 levels [2] - Traditional operational areas such as aerial inspection and agricultural spraying maintain over 20,000 flight hours annually, although their market share is declining [2]

Investment Rating - The report rates the defense and military industry as "Overweight" [2][3] Core Insights - The report anticipates an upcoming performance inflection point in the military industry, with a projected total revenue of approximately 7.178 billion yuan for 50 key companies in Q3 2025, representing a year-on-year increase of 34.0% [3] - The report highlights a divergence in performance across different segments due to customer structure and revenue recognition timing, with significant growth expected in the electronic components sector [3] - The military industry is expected to exceed expectations in Q3 2025, driven by a surge in orders and accelerated customer acceptance [3] - The report indicates that the military industry is entering a new growth cycle with the upcoming 14th Five-Year Plan and the anticipated transition to a "smart and unmanned" military [3] - The report emphasizes a strong resonance between supply and demand in military trade, driven by global geopolitical changes and increased recognition of Chinese military products [3] - The report suggests increasing attention to the military industry, particularly in next-generation equipment and precision-guided weapons, as well as the impact of AI and robotics [3] Summary by Sections Performance Forecast - The total market capitalization of the selected 50 companies is 1,505.8 billion yuan, accounting for 52.4% of the total market capitalization of the Shenwan Defense and Military Index [3] - Q3 2025 performance estimates for key companies include significant growth rates, such as Torch Electronics at 93% and Hongyuan Electronics at 1367% [4][5] Key Companies to Watch - High-end combat capabilities: AVIC Shenyang Aircraft, AVIC Chengdu Aircraft, Inner Mongolia First Machinery Group, and others [3] - New quality combat capabilities: Chengdu Huami, Xindong Link, Aerospace Electronics, and others [3] Market Dynamics - The report notes that military trade is entering a new phase, with systematic exports expected to materialize [3] - The report encourages a focus on flexible and thematic stocks within the military sector [3]

Investment Rating - The report assigns an "Overweight" rating for the defense industry [9]. Core Viewpoints - The report highlights the successful launch of the "Yinli No. 1" rocket, which deployed three satellites, and notes the acceleration of unmanned transformation in multiple navies [2][7]. - It emphasizes that the intensification of great power competition is a long-term trend, suggesting that defense spending will increase as nations seek to ensure peace and security [8][9]. Summary by Sections Investment Highlights - Recommended stocks include: 1) Assembly: AVIC Shenyang Aircraft (600760.SH), Aerospace South Lake (688552.SH), AVIC Xi'an Aircraft (000768.SZ) 2) Components: AVIC Optoelectronics (002179.SZ), Guobo Electronics (688375.SH), Ruichuang Micro-Nano (688002.SH) 3) Subsystems: Aero Engine Corporation of China (600893.SH), AVIC Avionics (600372.SH), Northern Navigation (600435.SH) 4) Materials and Processing: Feilihua (300395.SZ), Guangwei Composite (300699.SZ), Huayin Technology (688281.SH) [9][10]. Market Review - The defense industry index rose by 0.24% last week, underperforming the broader market by 0.13 percentage points, ranking 16th out of 29 sectors [11][12]. - The report notes that the materials and processing sector performed particularly well during this period [11][12]. Major News in the Defense Industry - Domestic news includes the deployment of a naval escort fleet to the Gulf of Aden and the upcoming "Peace and Friendship-2025" joint exercise between China and Malaysia [21][25]. - Internationally, several navies, including those of the UK, France, the US, and South Korea, are advancing unmanned capabilities and enhancing collaborative operations between manned and unmanned systems [27][28].

Group 1 - The aerospace and defense sector is experiencing a rise, with the CN5082 index up by 0.44% and key stocks like Great Wall Military Industry up by 8.67% [1] - The recent completion of the first phase of the Star Glory rocket assembly and testing factory in Hainan, covering an area of 28,800 square meters, is a significant development in the commercial aerospace sector [1] - The factory is set to receive its first reusable rocket by Q4 2025, laying the groundwork for future launches and sea recovery operations [1] Group 2 - The military industry has stabilized recently, with a focus on domestic demand and military trade as the "14th Five-Year Plan" approaches [2] - The importance of upstream components and key raw materials in weapon development and production is highlighted, indicating potential benefits from demand amplification [2] - The military trade is expected to accelerate, particularly with Middle Eastern countries, as Chinese high-end equipment exports increase, presenting a second growth opportunity for the sector [2]

航发动力所属申万行业为：国防军工-航空装备Ⅱ-航空装备Ⅲ。所属概念板块包括：大飞机、央企改 革、航天军工、无人机、通用航空等。 截至6月30日，航发动力股东户数14.99万，较上期增加6.41%；人均流通股17778股，较上期减少 6.03%。2025年1月-6月，航发动力实现营业收入140.98亿元，同比减少23.99%；归母净利润9177.79万 元，同比减少84.57%。 分红方面，航发动力A股上市后累计派现40.57亿元。近三年，累计派现10.72亿元。 10月14日，航发动力盘中上涨2.07%，截至09:53，报43.87元/股，成交3.91亿元，换手率0.34%，总市值 1169.40亿元。 资金流向方面，主力资金净流出1051.30万元，特大单买入2845.34万元，占比7.28%，卖出2534.21万 元，占比6.48%；大单买入7283.33万元，占比18.62%，卖出8645.76万元，占比22.11%。 航发动力今年以来股价涨6.09%，近5个交易日涨8.70%，近20日涨16.74%，近60日涨19.70%。 今年以来航发动力已经1次登上龙虎榜，最近一次登上龙虎榜为4月2日，当日龙虎榜 ...

Investment Rating - The report maintains a "Positive" outlook for the defense and military industry in China [6] Core Views - China's military trade market is expected to achieve new breakthroughs, with the successful establishment of a reusable rocket factory accelerating the low-orbit satellite network [2][11] - The procurement of 20 J-10CE fighter jets by Bangladesh for $2.2 billion signifies the growing recognition of Chinese military products and the potential for market expansion [10][15] - The completion of the first reusable rocket factory in Wenchang, Hainan, marks a significant advancement in commercial aerospace infrastructure, paving the way for scalable and reusable rocket development [10][17] Summary by Sections Military Trade Developments - Bangladesh plans to invest $2.2 billion to purchase 20 J-10CE fighter jets, with the total procurement cost including training and logistics expected to reach $2.2 billion [10][15] - The international competitiveness of Chinese military equipment is increasing due to enhanced technology performance and cost-effectiveness, transitioning from a focus on individual product advantages to comprehensive solution capabilities [16] Commercial Aerospace Advancements - The first reusable rocket assembly and testing factory in Wenchang, Hainan, has been completed, which will significantly enhance the production capacity and testing capabilities for reusable rockets [10][17] - The factory is expected to lower launch costs and accelerate the progress of commercial low-orbit satellite networks [17] Current Market Outlook - The military industry has stabilized recently, with a focus on domestic demand and military trade developments as key growth drivers [20] - The report highlights the importance of upstream components and key materials in supporting the lifecycle of various military equipment, indicating potential benefits from demand amplification effects [20] - The report suggests continued optimism for the military sector, with specific investment recommendations for various companies within the industry [10][20]