军工行业周报（2024.05.20）：北京市发布低空经济产业发展三年规划

Investment Rating - The industry investment rating is "Positive" with expectations of overall returns exceeding the CSI 300 Index by more than 5% in the next six months [25]. Core Insights - The military industry sector is currently at a historically low average valuation, indicating significant long-term investment value. The demand for military products is in its early stages of explosive growth, and a new industry boom cycle is anticipated. Leading companies across the supply chain have substantial growth potential. China's defense spending has consistently outpaced GDP growth in most years, suggesting further growth potential in defense expenditure, likely to remain above GDP growth in the long term. As personnel adjustments are implemented, military product orders are expected to normalize and gradually release, leading to performance improvements and valuation increases, referred to as the "Davis Double Play." It is recommended to focus on leading companies in niche areas with favorable competitive landscapes and high technological barriers [4][8]. Summary by Sections Industry Insights - The military sector's average valuation is at a historical low, highlighting long-term investment potential. The demand for military products is expected to grow significantly, with a new industry cycle on the horizon. China's defense budget growth has historically exceeded GDP growth, indicating room for further increases. The normalization of military orders is anticipated to enhance industry performance and valuations [4][8]. Market Performance - In the current week, the Aerospace and Defense Index decreased by 2.06%, while the CSI 300 Index rose by 0.37%. Over the month, the Aerospace and Defense Index increased by 9.89%, compared to a 3.63% rise in the CSI 300 Index [9]. Industry News - Beijing has released a three-year plan for the development of the low-altitude economy, aiming to exceed 5,000 related enterprises and generate over 100 billion yuan in economic growth by 2027. The plan includes the establishment of a low-altitude industry fund and the creation of new application scenarios [3][13].