Xinda Securities·2025-10-26 05:50Investment Rating - The investment rating for the defense and military industry is "Positive" [2] Core Viewpoints - The report emphasizes a "dual-cycle resonance" in 2025, indicating a significant turning point for the industry and a year of substantial military investment [5][48] - It highlights a recovery in industry prosperity, value reassessment, and event-driven catalysts as key factors for growth [5][48] - The report suggests that the military industry is expected to see improved performance starting from Q2 2025, driven by an increase in orders and a favorable geopolitical environment [5][49] Summary by Sections Industry Performance - The Shanghai Composite Index rose by 2.88%, while the defense and military index increased by 2.60%, underperforming the market by 0.28 percentage points, ranking 12th out of 29 sectors [3][22] - Year-to-date, the defense and military index has increased by 17.98%, slightly outperforming the market [25] Key Developments - The Fourth Plenary Session of the 20th Central Committee proposed the development of a "Space Power," marking a strategic focus on aerospace as a new emerging industry [4][12] - The report notes rapid advancements in satellite internet deployment and the aerospace industry, with multiple satellite launches occurring in October [15][16] Investment Focus - The report recommends focusing on "new quality combat capabilities" and low-valuation stocks within the military sector [5][48] - Key investment targets include next-generation combat systems, unmanned equipment, satellite internet, and missile & ammunition sectors [5][48] Stock Performance - Notable stock performances include China Nuclear Engineering leading with a 23.40% increase, followed by Filihua and Aerospace Technology with significant gains [31][34] - The report identifies several companies as core beneficiaries of the anticipated industry growth, including AVIC Shenyang Aircraft, Huazhong Technology, and others [5][48]