国防军工行业投资策略周报：不确定性中寻找确定性，长景气成长可期

Investment Rating - The report rates the defense and military industry as "Buy" [2] Core Viewpoints - The consensus on the end of the small cycle adjustment in the industry has increased, and marginal improvements in the sector's prosperity are expected. The defense and military sector experienced a year-on-year revenue decline of 47% and a net profit decline of 14% in Q3 2024, ranking among the bottom third of 30 industry indices. However, the stock performance of leading companies like AVIC Shenyang Aircraft Corporation and Aero Engine Corporation has shown positive trends post-earnings disclosure, indicating a potential recovery [2][8] - The report emphasizes the importance of seeking certainty amid uncertainty, focusing on performance, structure, and policy support as core factors. Major military groups are holding quarterly operational meetings to strive for annual targets, with expectations for better performance in Q4 2024 and 2025 due to improved delivery and the conclusion of the 14th Five-Year Plan [2][8] - The report highlights three main investment lines: 1) Large aircraft and civil ship sectors with military trade growth potential; 2) Technology-driven sectors such as semiconductor chips and new materials; 3) Recovery in core businesses alongside satellite internet and low-altitude economy growth [9][10] Summary by Sections Weekly Insights - The consensus on the end of the small cycle adjustment in the defense and military sector has increased, with expectations for marginal improvements in performance [8] - The report notes that active funds have increased their holdings in the military sector for two consecutive quarters, indicating a positive outlook [8] Market Performance - The report provides insights into the performance of leading companies and the overall market trends within the defense and military sector [8] Valuation Analysis - The report includes a detailed valuation analysis of various companies within the sector, highlighting their earnings per share (EPS) and price-to-earnings (PE) ratios for 2024 and 2025 [3][4] Holdings Analysis - As of Q3 2024, the defense sector's heavy holdings accounted for 3.58% of active fund portfolios, indicating a significant interest in the sector [4] Investment Recommendations - The report suggests a low-valuation strategy, focusing on companies like Aero Engine Corporation, AVIC Heavy Machinery, and AVIC Xi'an Aircraft Industry Group, among others, as potential investment opportunities [10]