国防军工行业投资策略周报：景气趋势环比改善，重视板块向上弹性

Investment Rating - The report rates the defense and military industry as "Buy" [3] Core Viewpoints - Recent policy changes in new productivity areas such as satellite internet and low-altitude economy are positive, indicating a high certainty of long-term demand in the satellite internet sector [3][8] - The military sector has seen a rebound over six consecutive trading days, with significant attention and a two-week increase of 14.12% and 10.85%, outperforming the Shanghai Composite Index by 1.31 and 2.79 percentage points [3][8] - The report anticipates broad potential demand in Q4 2024 and 2025, driven by sectors like large aircraft, satellite internet, and low-altitude economy, supported by improving industry trends and policy backing [3][8] - The report emphasizes the importance of focusing on long-term growth potential and the "supply-demand" and "pattern" scarcity of key targets, while suggesting to downplay short-term order release predictions [3][9] Summary by Sections Recent Trends - The military sector is experiencing a significant rebound, with core stocks nearing their valuation lows since 2020, indicating a potential for recovery [3][8] - The report highlights the importance of the fourth quarter for traditional military supply chains, with concentrated deliveries and procurement progress expected to enhance attention on the sector [3][8] Investment Recommendations - The report suggests a low valuation strategy, focusing on military beta recovery, and highlights key companies such as Aviation Power, AVIC Heavy Machinery, and China Power as core investment targets [9][10] - Specific companies to watch for improving order trends include AVIC Optoelectronics, Ruichuang Micro-Nano, and Guangwei Composite [9][10] Financial Projections - For Aviation Power, projected revenues for 2024 are estimated at CNY 49.76 billion, with net profits expected to reach CNY 1.66 billion [10][11] - China Power's revenue is projected to increase significantly due to its restructuring, with a focus on the shipbuilding sector [10][11] - AVIC Heavy Machinery is expected to see a profit increase, benefiting from the modernization of the defense aviation industry [11][12] Market Dynamics - The report notes that the global economic recovery is expected to benefit the military sector, with a focus on technological innovation and supply chain reforms [8][9] - The emphasis is placed on the importance of maintaining competitive advantages through technological advancements and efficient management practices [15][16]