激浊扬清，周观军工行业第89期：冲刺在冬季

Investment Rating - The report maintains a positive outlook on the military industry, indicating that 2024 is a critical year for structural reversal in military investments [36][38]. Core Insights - The military industry is currently in a weak recovery phase, with expectations for a stronger recovery driven by increased risk appetite and marginal changes in industry fundamentals [36][38]. - The report emphasizes the importance of focusing on leading companies in the air force supply chain, as they are expected to benefit from a rebound in performance in Q4 [36][38]. - The report suggests that the military industry has a counter-cyclical property and a comparative advantage in terms of prosperity, with a gradual improvement in the outlook for the next three years [36][38]. Summary by Sections Section 1: U.S. Defense Procurement Mechanism - The U.S. defense procurement system follows a "Planning-Programming-Budgeting-Execution" (PPBE) process, which is crucial for coordinating defense needs and budget allocation [5][7][10]. Section 2: Aerospace Industry and Key Targets - The aerospace industry is focused on achieving annual goals, with significant efforts concentrated in the fourth quarter to ensure successful outcomes [14][18]. - The report highlights the mobilization efforts of major aerospace companies to meet production targets and enhance operational capabilities [17][18]. Section 3: Company Performance Analysis - Huayin Technology reported a revenue of 738 million yuan for the first three quarters of 2023, a year-on-year increase of 22.25%, but its net profit growth lagged behind revenue due to losses from subsidiaries [21][22]. - Tunan Co. faced short-term pressure on its performance in Q3 2023, with revenue of 348 million yuan, a decrease of 7.35% year-on-year [23][25]. - AVIC High-Tech achieved steady growth in the first three quarters, with revenue of 3.821 billion yuan, a year-on-year increase of 5.48%, and a net profit of 912 million yuan, reflecting a strong operational performance [29][31]. Section 4: Future Outlook - The report anticipates a structural reversal in the military industry, with a focus on the air force supply chain and emerging sectors such as hypersonic weapons and long-range rockets [36][38]. - The investment strategy emphasizes the importance of monitoring key milestones in research and production transitions, particularly for high-demand military models [36][38].