GUOTAI HAITONG SECURITIES·2025-05-28 11:03Investment Rating - The report assigns an "Accumulate" rating for the military industry [1] Core Viewpoints - The J-10CE fighter jet has garnered attention from multiple countries, and the U.S. plans to develop the "Iron Dome" missile defense system [5][6] - The military industry is expected to perform well in the long term due to increasing geopolitical tensions and defense spending [8] Summary by Sections Investment Highlights - Key investment themes include: 1) Assembly: AVIC Shenyang Aircraft Corporation, Aerospace South Lake, AVIC Xi'an Aircraft Industry [8] 2) Components: AVIC Optoelectronics, Aerospace Electric, Guobang Electronics, Ruichuang Micro-Nano [8] 3) Subsystems: AVIC Avionics, North Navigation [8] 4) Materials and Processing: AVIC Heavy Machinery, Feilihua, Guangwei Composite, Huaqin Technology, Bolite, Western Materials, Aviation Materials [8] - Beneficiary stocks include: 1) Assembly: Aerospace Rainbow, AVIC Chengfei [9] 2) Components: Unisoc, Hongyuan Electronics, Zhenhua Technology, Torch Electronics [9] 3) Subsystems: Aero Engine Corporation, Jianghang Equipment [9] 4) Materials and Processing: AVIC High-Tech, Western Superconducting, Aerospace Technology [9] Market Review - The military industry index fell by 0.72%, underperforming the broader market by 0.15 percentage points, ranking 16th out of 29 sectors [11][12] - The first domestically built aircraft carrier is undergoing sea trials, enhancing operational flexibility [20] - The J-10CE has achieved combat success, demonstrating its capabilities in international military trade [7][28] Major News in the Military Industry - The J-10CE was a highlight at the Langkawi International Maritime and Aerospace Exhibition, showcasing its combat effectiveness and cost competitiveness [6][7] - The U.S. plans to invest $25 billion in the "Iron Dome" project, with total costs projected to reach $175 billion [28] - The report emphasizes the need for advanced aircraft and missile systems to support modern warfare, suggesting a focus on aerospace and satellite internet sectors [8]