航发集团召开集体业绩说明会，航发赛道保持高景气度

Investment Rating - The report does not explicitly state an investment rating for the defense and military industry Core Insights - The defense and military sector is experiencing a recovery in demand, with significant growth potential driven by military aircraft quantity and generational structure improvements [4][5] - The report highlights the importance of the low-altitude economy, which is entering a phase of accelerated commercialization and policy support, indicating a promising investment opportunity [34][36] - The report emphasizes the long-term growth certainty of the defense and military sector, with a clear roadmap for modernization by 2035 and 2050 [5] Summary by Sections Market Review - The Shenwan Defense and Military Index rose by 0.15%, ranking 22nd among 31 Shenwan primary industries [3][14] - The PE (TTM) for the Shenwan Defense and Military sector is 72.51 times, with sub-sectors showing varied valuations: Aerospace Equipment at 104.77 times, Aviation Equipment at 59.03 times, Ground Armament at 115.87 times, Marine Equipment at 83.42 times, and Military Electronics at 82.55 times [3][23] Key Recommendations - Focus on downstream manufacturers: Hongdu Aviation, AVIC Shenyang Aircraft, AVIC Xifei [5] - Highlight military new technologies: Lianchuang Optoelectronics, Guangqi Technology, Zhongjian Technology [5] - Emphasize shipbuilding: Hailanxin [5] - Target missile industry chain: Feilihua, Guoke Military Industry [5] - Military titanium materials: Western Superconducting [5] - Military trade direction: Aerospace Nanhu, Zhongwu Drone [5] Industry Dynamics - The military aviation engine market is expected to grow due to the increase in military aircraft numbers and the introduction of new engine models [4][38] - The report notes that the domestic commercial aircraft production has made significant progress, with over 1,000 orders for the C919 aircraft [4][46] - The aftermarket for aviation engines is substantial, supporting a large maintenance market even if new aircraft purchases decline [4] Company Performance - Aviation Industry Corporation of China (AVIC) reported a revenue of 478.8 billion yuan for 2024, with a year-on-year growth of 9.48%, although net profit decreased by 39.48% due to high R&D costs [37][39] - Other subsidiaries of AVIC showed stable growth in net profit [37]