军工2025年度策略：风劲好扬帆，奋进正当时

Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [1] Core Insights - The report indicates that negative factors affecting the industry have been largely priced in, with expectations for recovery in demand and earnings per share (EPS) improvement in 2025 [4][14] - The investment focus is on traditional sectors such as aircraft, engines, and missiles, as well as new technologies and markets driven by the "14th Five-Year Plan" [4][6] Summary by Sections Historical Review and 2025 Outlook - The report reviews the period from 2023 to the first half of 2024, noting that negative factors have been largely absorbed by the market, with a forecast for recovery in 2025 as demand stabilizes [4][14] - The "14th Five-Year Plan" is expected to drive a focus on specialization and precision in the industry [4] Investment Focus One: Traditional Sectors - Aircraft: Advanced fighter jets are expected to see demand recovery in 2025, with key companies to watch including AVIC Shenyang Aircraft Corporation and AVIC Electromechanical Systems [4] - Engines: The report highlights a new generation of engines, recommending attention to upstream materials and midstream manufacturing companies [4] - Missiles: Following the resolution of negative factors, a diverse growth trend is anticipated, with companies like Chujian New Materials and Feiliwa recommended [4] Investment Focus Two: Transitioning Through the 14th Five-Year Plan - Companies in niche segments driven by new technologies and operational methods are expected to see prolonged growth, with recommendations for companies in new materials, commercial engines, and drones [4][6] Financial Performance Review - The report outlines the financial performance of the defense industry, indicating a decline in net profit growth relative to revenue growth in 2023, with expectations for stabilization in 2025 as demand recovers [4][23] - The analysis of the aircraft and engine sectors shows a trend of increasing revenue and profit margins, with expectations for continued improvement in 2025 [4][30][48] Asset and Liability Review - The report discusses the high levels of accounts receivable and inventory in the industry, with expectations for normalization in 2025 as demand recovers [55][59] - It highlights the capital expenditure trends in the industry, indicating that the peak expansion phase occurred in 2022-2023, with potential for further investment in 2024 [61]