GUOTAI HAITONG SECURITIES·2026-03-01 07:25Investment Rating - The report assigns an "Overweight" rating to 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 military goals 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 geopolitical situation is escalating, with significant military actions reported in the Middle East, including attacks on approximately 30 targets in Iran [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 rise of 5.02%, ranking 1st out of 10 [17][18] Major News - Multiple military exercises are being conducted across various regions, including the Southern Theater Command's first flight training after the Spring Festival [9][23] - Internationally, the situation in the Middle East is tense, with significant military actions reported, including attacks on Iranian government facilities [24][23] Investment Recommendations - Recommended stocks include: 1. Assembly: AVIC Shenyang Aircraft (中航沈飞), AVIC Xi'an Aircraft (中航西飞), Aero Engine Corporation of China (航发动力), and High De Infrared (高德红外) 2. Components: AVIC Optoelectronics (中航光电), Zhimin Technology (智明达), Shaanxi Huada (陕西华达), and Ruichuang Micro-Nano (睿创微纳) 3. Subsystems: Aerospace Electronics (航天电子), Guorui Technology (国睿科技), and AVIC Onboard (中航机载) 4. Materials and Processing: Jiachitech (佳驰科技), AVIC High-Tech (中航高科), and West Materials (西部材料) [10][11]