兴证军工观察：2024年国防开支预算数据评析-军费增速保持7.2%，行业需求获有力支撑

Investment Rating - The report maintains a "推荐" (recommend) rating for the defense industry [1] Core Views - China's 2024 defense budget is set at 1665.54 billion yuan, a 7.2% increase from 2023, maintaining the same growth rate as the previous year [1][2] - From 2015 to 2023, China's defense budget grew at rates ranging from 6.6% to 10.0%, with 2024 marking the fourth consecutive year of 7%+ growth [1][2] - Defense spending as a percentage of GDP has remained stable at around 1.25% from 2020 to 2023, while its share of total public expenditure has increased from 5.26% to 5.75% [1][2] Global Defense Spending Context - Compared to other major powers, China's defense spending growth is relatively restrained [1][4] - The US 2024 defense budget reached $886 billion, a 3.3% increase, accounting for about 40% of global military spending [1][4] - Other major powers have seen significant defense budget increases: Russia (+68.8%), Japan (+16.5%), France (+7.5%), and Germany (+3.4%) [1][4] China's Defense Spending Structure - Defense expenditure consists of personnel, operations maintenance, and equipment costs [1][7] - Equipment spending increased from 33.2% of total defense expenditure in 2010 to 41.1% in 2017 [1][7] - Budget execution rates for defense spending have consistently exceeded 99.7% from 2015 to 2022, higher than other major expenditure categories [1][6] Industry Performance - From 2020 to 2023 Q1-Q3, median revenue growth for 103 defense-focused companies was 14.65%/20.60%/14.67%/5.46% [1][10] - Median net profit growth for these companies was 27.52%/20.40%/6.75%/-0.48% during the same period [1][10] - Historical data shows defense budget CAGR of 9.1% from 2010-2020 and 12.5% from 2000-2020 [1][10] Long-term Development Goals - China's defense modernization plan includes three stages: achieving mechanization by 2020, basic modernization by 2035, and world-class military status by mid-century [1][5] - The 2027 goal of building a modern military was first proposed in the Fifth Plenary Session of the 19th CPC Central Committee [1][5]