Guotai Junan Securities·2025-03-14 11:28Investment Rating - The report maintains an "Overweight" rating for the defense and military industry [1] Core Insights - The defense sector has shown an upward trend, with significant increases in indices, particularly a 7.44% rise in the national defense and military index, outperforming the broader market by 5.88 percentage points [4][9] - The report emphasizes that the intensification of great power competition is a long-term trend, leading to increased defense spending and a positive long-term outlook for the military industry [10][11] Summary by Sections Market Review - The national defense and military index rose by 7.44% from March 3 to March 7, outperforming the Shanghai Composite Index, which increased by 1.56% [15][16] - The CSI National Defense Index performed the best among military indices, with an 8.98% increase [17][18] - The report highlights strong performances in the national defense information technology and materials processing sectors [19][21] Major News in the Military Industry - President Xi Jinping emphasized the importance of completing the military's "14th Five-Year Plan" during a meeting with military representatives, which is crucial for achieving the centenary goals of the military [26] - SpaceX's eighth test flight of the "Starship" faced setbacks, and Russia conducted strikes on Ukrainian energy facilities, indicating ongoing geopolitical tensions [28] Investment Focus - Key investment areas identified include: 1. Assembly: AVIC Shenyang Aircraft Corporation 2. Components: AVIC Optoelectronics, Aerospace Electrical Equipment 3. Subsystems: AVIC Onboard, North Navigation 4. Materials and Processing: Fushun Special Steel, AVIC Heavy Machinery, Philit, Tunan Co., Huayin Technology, and Plit [11][12]