国防装备行业周报（2024年11月第2周）：航空主战装备齐聚珠海；重视航空装备、船舶、低空经济、商业航天等

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The core logic of the defense industry is summarized as: endogenous + external, domestic demand + foreign trade, military products + civilian products. The "endogenous" growth trend is strong, driven by factors such as scale effects, equity incentives, and pricing reforms. The "external" growth direction is clear, with ongoing state-owned enterprise reforms and potential for military asset securitization and core military product restructuring. The combination of "civilian products + foreign trade" will provide growth momentum, with Chinese military products gaining global competitiveness and emerging strategic industries like low-altitude economy and commercial aerospace being emphasized [1][2][3]. Market Performance - The defense index increased by 12.23% in the week from November 4 to November 8, 2024, outperforming the Shanghai Composite Index, which rose by 5.51%, and the ChiNext Index, which rose by 9.32%. Year-to-date, the defense index has risen by 21.61% [12][13]. - Notable stock performances include Shengnan Technology, which surged by 81.4%, and other significant gainers such as Chengxi Aviation (56.4%) and Shanghai Hanyun (53.0%) [13][14]. Key Company Profit Forecasts and Valuations - Key companies in the defense sector include China Shipbuilding, China Heavy Industry, and AVIC, with projected earnings and valuations indicating growth potential. For instance, China Shipbuilding is expected to have a net profit of 42.17 billion yuan in 2024, with a PE ratio of 40 [16][17]. - The average PE ratio for the shipbuilding sector is projected at 73, while the aircraft sector averages a PE of 67, indicating strong market expectations for growth [16][17]. Industry Dynamics - Recent developments include the successful return of the Shenzhou 18 manned spacecraft and the signing of a strategic cooperation agreement between China National Nuclear Corporation and Sichuan Province. Additionally, the unveiling of the J-35A stealth fighter at the upcoming airshow is a significant milestone for China's aviation industry [18][19]. - The upcoming 15th China International Aviation and Aerospace Exhibition will showcase various military and civilian aerospace products, highlighting the industry's innovation and growth potential [23].