GUOTAI HAITONG SECURITIES·2026-03-01 06:17Investment Rating - The report assigns an "Accumulate" rating for the defense industry [5] Core Insights - The defense sector is experiencing a long-term positive trend, supported by the 20th National Congress of the Communist Party's emphasis on achieving the centenary goal of building a strong military and modernizing national defense [8][9] - The defense industry index rose by 4.83% from February 23 to February 28, outperforming the broader market by 2.85 percentage points [9][13] - The report highlights significant international geopolitical tensions, including attacks on approximately 30 targets within Iran, which may impact defense spending and investment opportunities [2][24] Summary by Sections Industry Performance - The defense industry index increased by 4.83%, ranking 8th out of 29 sectors, while the Shanghai Composite Index rose by 1.98% and the ChiNext Index by 1.05% [13][14] - The CSI Defense Index performed the best among indices, with a 5.02% increase, ranking 1st out of 10 [17][18] Major News - The report notes ongoing military training exercises in multiple regions, including the Southern Theater Command's first flight training after the Spring Festival [9][23] - Internationally, the situation in the Middle East has escalated, with significant military actions reported in Iran and ongoing tensions in Ukraine and Pakistan [24][23] Investment Recommendations - Recommended stocks include: 1. Assembly: AVIC Shenyang Aircraft (600760), AVIC Xi'an Aircraft (002389), Aero Engine Corporation of China (600893), and GD Infrared (002414) [10] 2. Components: AVIC Optoelectronics (002179), Zhimin Technology (688002), Shaanxi Huada (301517), and Unisplendour (002049) [10] 3. Subsystems: Aerospace Electronics (600879), Guorui Technology (600562), and AVIC Onboard (600372) [10] 4. Materials and Processing: Jiachih Technology (688708), AVIC High-Tech (600862), and West Materials (688122) [10]