国防军工行业投资策略周报：板块改善趋势加强，重视当前板块配置价值

Investment Rating - The industry rating is "Buy" [4] Core Insights - The defense and military industry is experiencing an improvement trend, with a focus on the current allocation value of the sector. Recent contracts signed by companies indicate a recovery in demand and a favorable valuation environment [6][13] - Emphasis on new growth areas such as low-altitude economy and commercial aerospace, with government support for low-altitude tourism products and advancements in rocket technology [14] - Investment strategies for 2025 include focusing on stable ROE growth, identifying turnaround opportunities, emphasizing industry trends, and considering state-owned enterprise reforms [15] Summary by Sections Recent Developments - Several companies have secured contracts, including a 176 million CNY contract for an inertial navigation device and a 270 million CNY contract for gyroscope products, both with delivery timelines extending to 2025 [6][13] - Major military groups are holding 2025 work meetings to summarize 2024 and set priorities for the upcoming year, indicating a strategic focus on the "14th Five-Year Plan" [6][13] Investment Strategies - The report outlines four key investment strategies for the military sector in 2025: 1. Focus on stable growth in ROE, particularly in military trade, aviation engines, large aircraft, and maintenance [15] 2. Identify turnaround opportunities by assessing the probability of ROE recovery [15] 3. Emphasize industry trends and potential growth areas such as military AI and commercial aerospace [15] 4. Consider the potential of both the numerator and denominator in ROE, with a focus on state-owned enterprise reforms [15] Company Valuations and Financial Analysis - Key companies in the sector have been analyzed for their valuations and financial performance, with expected net profits and dynamic PE ratios provided for 2024 and 2025 [7][16][18][19][20][28][29] - For example, 航发动力 (Aero Engine Corporation) is projected to achieve a net profit of 15.22 billion CNY in 2024, with a dynamic PE ratio of approximately 68X [16] - 中航沈飞 (AVIC Shenyang Aircraft Corporation) is expected to reach a net profit of 37.59 billion CNY in 2024, with a dynamic PE ratio of about 35X [28] Market Trends - The report highlights the increasing interest in low-altitude economy and commercial aerospace, driven by government initiatives and technological advancements in the aerospace sector [14] - The military industry is expected to benefit from ongoing modernization efforts and increased demand for military equipment, with a focus on both domestic and international markets [19][20]