Core Viewpoint - The A-share market experienced a collective pullback on September 26, but the military industry sector rebounded sharply, particularly the aerospace ETF (159227), which saw a 0.44% increase and a trading volume of 45.7 million yuan, indicating strong market interest in military stocks [1]. Group 1: Market Performance - The aerospace ETF (159227) is the largest in the market, tracking the National Aerospace Index, with a high concentration of military-related stocks, achieving a 97.96% allocation in the primary military industry sector [1]. - Key stocks within the ETF, such as Aerospace Technology, surged over 5%, with other companies like Aero Engine Corporation of China and AVIC Aircraft also showing positive movement [1]. Group 2: Industry Insights - According to Galaxy Securities, during the 14th Five-Year Plan period, the production of main battle equipment and the construction of new combat capabilities are advancing simultaneously [1]. - In the air force sector, the new generation of fighter jets is entering the deployment phase, with major manufacturers like AVIC Shenyang Aircraft Corporation and AVIC Chengdu Aircraft Industry Group collaborating on domestic upgrades [1]. - The ETF focuses on the military sub-sector of aerospace, covering a full industry chain that includes fighter jets, transport aircraft, helicopters, aircraft engines, missiles, satellites, and radar, aligning perfectly with the "aerospace integration" strategic direction [1].

Core Viewpoint - The military industry is experiencing a positive shift driven by advancements in AI technology, which is expected to enhance the role of military software within the equipment system and lead to significant changes across the entire military supply chain [1]. Group 1: Market Performance - On September 26, major stock indices continued to decline, while the military industry sector showed resilience, with the largest aerospace ETF (159227) rising by 0.97% and surpassing a trading volume of 100 million [1]. - Key stocks within the ETF saw significant gains, including Aerospace Technology rising over 10%, Huayin Technology increasing over 6%, and Aero Engine Corporation rising over 5% [1]. Group 2: AI Impact on Military Industry - The advancement of AI technology is expected to drive a dual-force impact on the military supply chain, with improvements in core software performance leading to profound changes in warfare dynamics and an increase in software demand across various downstream sectors [1]. - AI empowerment is anticipated to accelerate the deployment of unmanned equipment, which may lead to transformative changes in both upstream and downstream industries [1]. Group 3: ETF and Industry Composition - The aerospace ETF (159227) closely tracks the Guozheng Aerospace Index, with a high concentration of 97.96% in the primary military industry, making it the highest "military purity" index in the market [1]. - The ETF covers critical industry chain segments, including aerospace equipment, satellite navigation, and new materials, featuring leading companies in the military sector involved in large aircraft development, low-altitude economy, and commercial aerospace [1].

Group 1 - The core viewpoint of the news is that China Aviation Power Co., Ltd. has seen a significant increase in its stock price, rising by 5.01% to 39.37 CNY per share, with a trading volume of 1.054 billion CNY and a market capitalization of 104.944 billion CNY as of September 26 [1] - The company, established on December 23, 1993, and listed on April 8, 1996, specializes in the manufacturing of aircraft engines and related products, with its main business revenue composition being 91.55% from aircraft engines and derivatives, 6.17% from foreign trade exports, and 2.28% from non-aerospace products [1] Group 2 - From the perspective of fund holdings, Jin Ying Fund has a significant position in China Aviation Power, with its Jin Ying Advanced Manufacturing Stock (LOF) A (162107) increasing its holdings by 1,000 shares in the second quarter, totaling 18,800 shares, which represents 4.82% of the fund's net value, ranking as the seventh largest holding [2] - The Jin Ying Advanced Manufacturing Stock (LOF) A (162107) was established on August 25, 2016, with a latest scale of 9.7531 million CNY, achieving a year-to-date return of 10.96% and a one-year return of 35.5%, ranking 2,596 out of 3,824 in its category [2]

Summary of Key Points from the Conference Call Industry Overview - The aviation engine industry is on an upward trend, with revenue increasing from over 30 billion RMB in 2019 to over 80 billion RMB by 2024. However, profits are expected to decline in 2024 due to changes in the competitive landscape and one-time pricing adjustments leading to lower gross margins [1][3] - 2025 is anticipated to be a pivotal year for the aviation engine industry, with new models gradually ramping up production to offset declines in main models, alongside growth in the maintenance and commercial engine markets [1][6] Company Insights Huqin Technology - Huqin Technology, a leader in special stealth materials, has not performed as expected in stock price but remains technically advanced. It is projected to see significant changes by 2026, with revenue in the first half of this year already matching last year's total [1][7][13] - The company has actively diversified its business through the establishment and acquisition of subsidiaries, aiming to reduce reliance on a single revenue source [1][9] AVIC Heavy Machinery - AVIC Heavy Machinery has seen stable revenue but increased operating costs, leading to a significant one-time provision and a decline in net profit. The company is currently undergoing an adjustment period, but long-term prospects remain optimistic [1][8] - The company’s operating profit dropped from 1.6 billion RMB to 860 million RMB, indicating challenges in the current market environment [5][8] Aero Engine Corporation of China (AECC) - AECC reported total revenue of 47.88 billion RMB in 2024, with core factory revenues totaling approximately 56 billion RMB, indicating internal offsets. Financial expenses have significantly increased, reflecting a weaker position in the industry, but improvements are expected [4][18] - The company faces high contract liabilities and is gradually digesting prepayments, with inventory issues expected to be resolved this year. Future profitability is anticipated to come from aftermarket maintenance and refurbishment services [4][19] Financial Performance - The aviation engine industry has experienced a divergence between revenue and profit due to changes in the competitive landscape and one-time pricing adjustments. For instance, AVIC Heavy Machinery's operating costs increased by about 1 billion RMB in 2024, leading to a drop in net profit margin [5][8] - Huqin Technology's revenue has grown from less than 50 million RMB in 2018 to over 1.1 billion RMB in 2024, despite experiencing fluctuations in profit [12][13] Future Outlook - The aviation engine industry is expected to rejuvenate by 2030, driven by new model demand and growth in the commercial engine market [6] - Huqin Technology is projected to break through its current bottleneck and achieve rapid growth starting in 2026, with expectations of maintaining a growth rate of over 30% [13][14] - AECC's stock performance has lagged behind indices, but it is still considered to have significant research value and investment potential, with a market cap expected to rise from 18 billion RMB to 30-50 billion RMB [14][20] Conclusion - Despite facing challenges in recent years, both Huqin Technology and AECC are viewed as having strong long-term investment potential due to their strategic positioning and market demand growth [20]

Core Viewpoint - The stock of Aviation Power has experienced a decline of 9.68% year-to-date, with recent trading showing mixed performance, indicating potential volatility in the market [1][2]. Company Overview - Aviation Power, established on December 23, 1993, and listed on April 8, 1996, is located in Xi'an, Shaanxi Province. The company specializes in the manufacturing of aircraft engines and related products, with 91.55% of its revenue coming from aircraft engines and derivatives, 6.17% from foreign trade exports, and 2.28% from non-aerospace products [1][2]. Financial Performance - For the first half of 2025, Aviation Power reported a revenue of 14.098 billion yuan, a year-on-year decrease of 23.99%. The net profit attributable to shareholders was 91.778 million yuan, down 84.57% compared to the previous year [2][3]. - Cumulatively, the company has distributed 4.057 billion yuan in dividends since its A-share listing, with 1.072 billion yuan distributed over the past three years [3]. Shareholder Structure - As of June 30, 2025, the number of shareholders for Aviation Power reached 149,900, an increase of 6.41% from the previous period. The average number of tradable shares per shareholder decreased by 6.03% to 17,778 shares [2][3]. - The top ten circulating shareholders include Hong Kong Central Clearing Limited as the third-largest shareholder with 73.4625 million shares, an increase of 15.3358 million shares from the previous period. The new shareholder, Fortune China Securities Military Industry Leader ETF, holds 25.5778 million shares [3].

Core Viewpoint - The successful training of multiple advanced carrier-based aircraft on China's Fujian aircraft carrier marks a significant advancement in naval capabilities, enhancing operational range and combat effectiveness [1][2]. Group 1: Military Capabilities - The Fujian aircraft carrier's strike range can cover the second island chain, with the electromagnetic catapult system enabling carrier-based aircraft to take off with full fuel and armament, thus increasing operational radius and strike power [1]. - The electromagnetic catapult system has a fast response time, improving the sortie efficiency of carrier-based aircraft and allowing for a high-intensity combat mode known as "full deck launch" [2]. - The introduction of various aircraft types, such as the KJ-600 and J-35, highlights the systemic operational advantages of the Fujian carrier, significantly enhancing its comprehensive combat capabilities against air, sea, and land targets [2]. Group 2: Market Performance - The defense and military industry is steadily rising, with the CSI Defense Index experiencing a slight increase of 0.30%, although trading volume has significantly decreased to 24.3 billion [2]. - The market's reaction to the Bashar joint defense agreement has been relatively muted, with a focus on the lack of substantial orders, indicating that breakthroughs in advanced fighter aircraft military trade orders are crucial [2]. - The CSI Defense Index's PH value has recently risen from around 10% to approximately 33%, suggesting a positive trend, while monitoring single transaction volume or transaction volume ratio may provide more effective insights at market peaks [2]. Group 3: ETF and Index Tracking - The National Defense ETF closely tracks the CSI Defense Index, which includes listed companies under the ten major military industrial groups and those providing weaponry to the armed forces [3]. - Among the 13 ETFs tracking the defense and military sector, the National Defense ETF has the lowest management and custody fees at 0.40%, making it unique in its category [3]. - As of August 29, 2025, the top ten weighted stocks in the CSI Defense Index account for 43.88%, with companies like AVIC Shenyang Aircraft (600760) and AVIC Xi'an Aircraft (000768) among the leaders [3].

Core Insights - Emergency rescue capability is a key indicator of a country's social service level and modernization, with a focus on developing aviation rescue to enhance China's emergency rescue system [1][10] - The Chinese aviation emergency rescue market is experiencing rapid growth, with the market size projected to increase from 500 million yuan in 2015 to 1.259 billion yuan in 2024, representing a compound annual growth rate (CAGR) of 10.81% [11] - The market is expected to reach 1.332 billion yuan by 2025, driven by increased government investment and rising societal demand for rescue services [11] Industry Overview - Aviation rescue refers to the use of aircraft for rescue operations, providing rapid and efficient assistance in remote or difficult terrains [3] - The industry has evolved through various stages, including initial development, establishment of a comprehensive system, and enhancement of capabilities [6] Policy Framework - Recent policies have integrated aviation rescue into the national emergency management system, emphasizing its importance for public safety and emergency management [6][10] - Key policies include the "14th Five-Year Plan for Emergency Rescue Force Construction" and the "Green Aviation Manufacturing Development Outline (2023-2035)" [6] Market Dynamics - The aviation emergency rescue market is segmented into aviation medical emergency rescue and other aviation emergency rescue, with the medical segment expected to grow from 37 million yuan in 2015 to 183 million yuan in 2024, a CAGR of 19.44% [11] - Other segments are projected to grow from 463 million yuan in 2015 to 1.076 billion yuan in 2024, with a CAGR of 9.82% [11] Competitive Landscape - The market features a variety of players, including listed companies like CITIC Offshore Helicopter (000099) and AVIC Shenyang Aircraft (600760), as well as numerous private firms [2][12] - Companies are increasingly participating in the aviation rescue sector, driven by policy support and market potential [12] Future Trends - The industry is expected to see technological upgrades, including the introduction of high-performance helicopters and drones, enhancing response capabilities in complex environments [15] - Application scenarios are expanding beyond natural disaster response to include urban firefighting, maritime search and rescue, and cross-border rescue collaboration [16] - The focus will be on improving response speed and operational efficiency through optimized processes and the integration of artificial intelligence for decision-making [18]

Meeting Overview - The second extraordinary general meeting of shareholders was held on September 19, 2025, at the Dalian International Cultural Exchange Center, Liaoning Province [2] - The meeting was presided over by Chairman Mr. Mu Xin, and voting was conducted through a combination of on-site and online methods, complying with the Company Law and Articles of Association [2][3] Attendance - Out of 10 current directors, only 1 attended the meeting, with Chairman Mu Xin present [3] - Among 3 current supervisors, only 1 attended, with employee supervisor Mr. Tang Hongwei present [3] - The Vice General Manager, Chief Accountant, and Secretary of the Board, Mr. Ren Lixin, also attended the meeting [3] Resolutions - The following resolutions were passed: 1. Resolution on the reappointment of the accounting firm [4] 2. Resolution to abolish the supervisory board and amend the Articles of Association and rules of procedure [4][5] - The second resolution required a special resolution, which was approved by more than two-thirds of the voting rights held by shareholders present at the meeting [5] Legal Verification - The meeting was witnessed by Beijing Jiayuan Law Firm, with lawyers Mr. Lai Yi and Mr. Xiong Jingkun present [6] - The lawyers concluded that the meeting's convening, attendance, voting procedures, and results were in compliance with relevant laws, regulations, and the Articles of Association, making the resolutions legal and valid [6]

Core Viewpoint - The China Aviation Engine Group Co., Ltd. made its debut at the Air Force Aviation Open Day and Changchun Aviation Expo, showcasing several key products including the AEF1200 engine and the "Taihang" series engines [1] Group 1: Product Showcase - The company presented the AEF1200 engine, which is part of its advanced engine lineup [1] - The "Taihang" series engines were also highlighted, indicating the company's focus on high-performance aviation technology [1] - A 60-kilowatt hybrid power system was publicly displayed for the first time, featuring a turbojet hybrid system with a maximum power output of 80 kilowatts, aimed at eVTOL applications [1] Group 2: Market Focus - The hybrid power system is designed for extended-range eVTOL power supply pods and serves as the main power source for 1-ton class eVTOLs, reflecting the industry's shift towards innovative aerial mobility solutions [1]

Core Insights - The China Aviation Engine Group made its debut at the 2025 Air Force Aviation Open Day and Changchun Airshow, showcasing its latest achievements in independent innovation and development of aviation engines [1] - A large domestic engine, the first large bypass dual-rotor turbofan engine in China, was prominently displayed, featuring a fully digital control system and health management system [1] - The "Taihang" series engines, developed independently by the company, have undergone significant upgrades in performance reliability, safety, stealth, and thrust vectoring capabilities, enhancing the combat and survival capabilities of aircraft [5] Product Highlights - The exhibition featured three models of the domestic "Taihang" engines prominently displayed at the center of the booth [3] - The F918 engine, which was publicly showcased for the first time, has a thrust of 2000 kg and can operate at altitudes of up to 20 kilometers, suitable for high-altitude, high-speed reconnaissance and strike drones [8] - The AEP50, a 500 kW turboprop engine, is designed for the Wing Loong II drone and has undergone various modifications to meet diverse customer needs for all-weather and multi-regional tasks [10]