China Spacesat(SH:600118) Xin Lang Cai Jing·2025-12-16 01:59Core Viewpoint - The defense and military sector experienced a significant pullback, with the popular defense military ETF (512810) dropping over 2% after reaching a two-month high the previous day [1][6]. Group 1: Market Performance - On December 16, the defense military ETF (512810) saw a decline of 2.22%, closing at 0.704, with a trading volume of 18,300 [2][5]. - Key stocks within the sector, such as Aerospace Intelligence, Shanghai Hanhua, and China Satellite, showed weak performance with declines of 8.04%, 5.77%, and 5.52% respectively [5][6]. - Major weighted stocks like China Shipbuilding, Guangqi Technology, and Aero Engine Corporation also experienced losses [5][6]. Group 2: Industry Outlook - The long-term investment value of the military sector is highlighted, with the recent pullback potentially opening up new investment opportunities [3][5]. - The Ministry of Finance's budget draft for 2025 indicates a national defense expenditure of 1.78 trillion yuan, with 40% allocated for equipment costs, and over 30% of that focused on aviation equipment [3][5]. - The State Council's recent guidelines emphasize the importance of "military intelligence and unmanned equipment" and "satellite internet" as key development areas, aiming for significant results by year-end [3][5]. - Analysts from Guotai Junan point out that the increasingly complex international environment and rising defense spending in the U.S. underscore the intensifying great power competition, which will drive demand for advanced military equipment [3][5]. - Zhongtai Securities notes that the commercial aerospace sector is seeing increased activity, with new rocket launches accelerating the development of satellite internet, and a robust demand for aerospace equipment expected in the next five years [3][6].