AVIC SAC(SH:600760) Xin Lang Ji Jin·2025-07-18 12:00Market Overview - On July 18, the A-share market experienced an upward trend, with the Shanghai Composite Index rising by 0.5% to close at 3534.48 points, and the ChiNext Index increasing by 0.34%. Market sentiment improved, leading to a trading volume of 1.59 trillion yuan [1]. Defense and Military Industry Performance - The defense and military sector continued to show strong performance, with the popular defense and military ETF (512810) rising by 1.06%, marking its highest closing price since November 14, 2024. The ETF recorded a trading volume of 92.06 million yuan for the day [1]. - For the week of July 14-18, the defense and military ETF (512810) accumulated a gain of 2.45%, achieving a four-week consecutive increase, with a total weekly trading volume of 404 million yuan, significantly higher than the previous week [2]. Earnings Forecasts and Stock Performance - As of July, the defense and military sector was primarily in a phase of adjustment, influenced by mid-year earnings expectations. However, from July 17 onwards, the sector began to rebound as several companies released positive earnings forecasts, indicating a recovery in the sector's fundamentals [3]. - Among the 29 component stocks of the defense and military ETF that have released mid-year earnings forecasts, 23 are expected to report profits. Notably, 11 companies are projected to see their net profits double, with Aerospace Science and Technology showing a growth rate exceeding 23 times [3]. Notable Stock Movements - The defense and military ETF's component stocks saw 59 stocks rise and 21 decline, with several stocks reaching historical or recent highs. Notable performers included AVIC Shenyang Aircraft Company, which rose by 2.92%, and Yingliu Co., which surged by 3.44% [4]. Future Outlook - The outlook for the defense and military sector appears promising, with multiple catalysts expected to drive growth. Short-term improvements in Q2 earnings are anticipated due to increased orders and a stabilization in military component orders. The sector is expected to gain further attention as the September 3 military parade approaches, potentially leading to structural investment opportunities [6]. - Long-term prospects are bolstered by geopolitical factors, such as the India-Pakistan conflict, which may enhance China's defense industry's profile and stimulate military trade. The upcoming centenary of the military in 2027 is also expected to sustain high demand for military equipment [6]. Investment Strategy - The defense and military ETF (512810) is highlighted as a strategic investment option, offering exposure to both traditional and emerging military capabilities. It includes a diverse range of sectors such as commercial aerospace, low-altitude economy, large aircraft, deep-sea technology, and military AI. The ETF is considered a low-risk investment vehicle with a lower entry threshold compared to individual stocks [7].