军工行业：困境反转，把握行业翻转趋势

Investment Rating - The report assigns a rating of "Outperform" for the military industry, indicating an expectation that the industry will perform better than the market over the next six months [1]. Core Insights - The military industry is expected to be one of the sectors with the greatest marginal improvement. Despite a relatively weak performance since 2023, the market has priced in most negative expectations, suggesting a potential turnaround [2]. - The themes of asset securitization, restructuring, and mergers and acquisitions are anticipated to regain prominence. With increased focus on market capitalization management by state-owned enterprises and support from regulatory bodies, these themes are likely to receive higher premiums and market recognition as risk appetite improves [2]. - The military industry represents a new type of productive force, particularly exemplified by the low-altitude economy, which integrates various applications such as tourism, urban security, medical rescue, and agricultural protection [2]. - Military trade is emerging as a new trend in industry development, with China's military industry now possessing a strong technical foundation and competitive pricing, which is expected to enhance international market access and support domestic cost management [4]. - The rising geopolitical tensions are significantly boosting the military sector's performance, with an anticipated 7.2% increase in military spending in 2024, despite economic pressures [4]. - The military industry is in a major cyclical upturn, with the upcoming "14th Five-Year Plan" and "15th Five-Year Plan" indicating a potential "V" shaped recovery. Key areas of focus include unmanned equipment, satellite internet, and military-civilian integration [4].