Group 1 - The A-share market experienced a decline across all major indices, with the Shanghai Composite Index down 0.09%, the Shenzhen Component Index down 0.53%, and the ChiNext Index down 1.01% as of July 7, 2025 [1] - The Aerospace ETF (159227.SZ) saw an increase of 0.37%, with a latest price of 1.098 yuan and a trading volume of 0.28 billion yuan, resulting in a turnover rate of 6.99% [1] - The fund has recorded net inflows for seven consecutive trading days, with a maximum single-day net inflow of 37.52 million yuan, totaling 175 million yuan in net inflows, averaging 24.99 million yuan per day [1] Group 2 - The Aerospace ETF (159227) tracks the National Aerospace Index, which has a strong military attribute, with 98.2% of the index comprising military-related sectors, making it the highest military content index in the market [2] - The index has a significant focus on aerospace equipment, with a weight of 66.5%, surpassing both the CSI Military and CSI National Defense indices [2] - This ETF provides investors with an efficient way to capture core military aerospace opportunities [2]

Group 1 - The "discounted share subscription" business of private placements is gaining momentum, with public funds participating in subscriptions totaling nearly 2.6 billion yuan, and the floating profit ratio for most projects exceeding 200% [1][2] - In 2023, 21 public fund companies participated in private placements, with a total subscription amount of 2.591 billion yuan, compared to 17 companies and 2.921 billion yuan in 2022 [2] - E Fund has the highest participation amount, contributing 1.162 billion yuan across 28 products in four companies' private placements [2][3] Group 2 - The participation of public funds in private placements is driven by both supply and demand factors, with policies encouraging companies to raise funds through mergers and acquisitions, and high-growth industries needing capital [3] - The discount rates for private placements have been lower this year, with overall enthusiasm from public funds remaining high, and the market showing a trend of increased participation from local state-owned assets [3][4] - The concept of "new productive forces" is becoming a key focus in private placement investments, with an increasing number of projects related to new energy and new materials [3][6] Group 3 - Public funds participating in private placements are generally experiencing floating profits, with some projects showing significant gains, such as Leshan Power's floating profit ratio reaching 205.79% [4][5] - Despite the overall positive performance, there are exceptions, such as Aibo Medical's private placement, which is currently facing a floating loss of approximately 14.28% [5] - Analysts suggest that private placements typically offer discounts but come with liquidity risks during lock-up periods, which can lead to losses if market conditions worsen [5] Group 4 - The "small and fast" private placement mechanism is expected to gain popularity, allowing companies to raise up to 300 million yuan efficiently, which could support industrial upgrades and economic development [6] - Financial institutions recommend focusing on private placement opportunities, especially during market downturns, and highlight the importance of valuation and market conditions [6][7] - E Fund emphasizes selecting investment targets based on deep value exploration and forward-looking assessments in key industries with solid technological barriers [7]

Investment Rating - The report maintains a "Positive" investment rating for the defense and military industry [3] Core Insights - The report emphasizes the importance of new equipment showcased in military parades since the 18th National Congress, which is expected to drive independent market trends in the sector [8] - The mid-term investment strategy for the defense and military industry in 2025 focuses on long-term profitability while also considering thematic investments [22] - The deep-sea technology sector, particularly Unmanned Underwater Vehicles (UUVs), is highlighted as a leading area for new equipment development, with the U.S. military market projected to exceed $50 billion over the next decade [56] - The commercial aerospace sector is experiencing intense competition for quality frequency resources, with domestic satellite constellations expected to accelerate deployment [84] Summary by Sections Military Parades and National Defense Achievements - Military parades since the 18th National Congress have showcased national defense achievements, with new equipment expected to drive independent market trends [10][13] - The 2019 National Day parade featured 580 pieces of equipment, 40% of which were making their debut [16] Investment Strategy for 2025 - The report outlines a mid-term investment strategy that emphasizes profitability and thematic investments, including commercial aerospace, low-altitude economy, deep-sea technology, and controlled nuclear fusion [22][26] Deep-Sea Technology - The report notes that deep-sea technology was first mentioned in the 2025 government work report, indicating its emerging importance as a new industry [63] - UUVs are highlighted for their cost-effectiveness and operational flexibility, with the U.S. military's UUV market projected to exceed $50 billion over the next decade based on demand for intelligence, surveillance, and reconnaissance (ISR) [74] Commercial Aerospace - The report discusses the growing demand for satellite constellations in the commercial aerospace sector, with over 20,000 satellites expected to be launched by 2030 [84]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The aerospace and defense industry is driven by multiple factors, including the 14th Five - Year Plan, the development of military intelligence, and the growth of military trade. It has long - term growth potential and short - term catalysts [3][8][11][17][32]. - The aerospace and aviation sectors are the two core areas to focus on, with increasing downstream demand in high - end fighter jets, aero - engines, and related supporting materials [40]. - The Guozheng Aerospace and Aviation Industry Index has strong industry theme attributes, high elasticity, and relatively stable fundamentals, making it a representative military - related index [3][68][83][88]. - The Aerospace and Aviation ETF Tianhong (159241) closely tracks the Guozheng Aerospace and Aviation Industry Index, with low management and custody fees, and shows good performance in terms of share growth and liquidity compared to comparable ETFs [3][94][96]. 3. Summary by Directory 3.1 Multiple Logics Driving the Rapid Development of the Industry and Grasping the Two Main Lines of Aerospace and Aviation 3.1.1 Multiple Logics Supporting the Military Fundamentals and the Industry's Long - term Growth - The 14th Five - Year Plan is in its critical period, promoting the transformation of "point - like orders" to "line - like orders", and factory performance is expected to be realized. The demand for improving quality and increasing quantity remains strong to achieve the goal of a powerful military by 2027 [8][10]. - The construction of military intelligence and unmanned systems at home and abroad is expanding the growth boundary of the military industry. Military AI is reshaping the battlefield rules, and military robots are becoming new combat forces [11][13][15]. - China's military trade net export has been increasing steadily, and there is still much room for market share growth. The military achievements during the 14th Five - Year Plan and improved diplomatic relations are conducive to the development of the military trade market [17][21][26]. 3.1.2 Short - term Catalysts Increasing Industry Attention - The "15th Five - Year Plan" is being formulated, which will promote the high - quality construction of the military industry and may increase the industry's valuation. The 80th anniversary of the victory of the Chinese People's War of Resistance against Japanese Aggression and the World Anti - Fascist War parade will be a short - term catalyst to boost the industry's attention [32][36]. 3.1.3 Focusing on the Two Core Main Lines of Aerospace and Aviation - **Aviation Equipment**: The downstream demand for high - end fighter jets and aero - engines is accelerating, and the market space is expanding. This includes aircraft manufacturers, aero - engine manufacturers, and high - end supporting materials suppliers. The future market space for military aero - engines in the next decade is estimated to be about 1.2 trillion yuan [40][52]. - **Space Equipment**: The demand for guidance equipment is increasing due to the growing importance of missiles in modern warfare. The satellite industry chain has a large market potential, with the downstream ground equipment and satellite services accounting for over 90% of the market value [59][64]. 3.2 Guozheng Aerospace and Aviation Industry Index: Focusing on Guozheng Aerospace and Aviation Industry Stocks with Strong Industry Theme Attributes and High Theme Elasticity 3.2.1 Index Compilation Method - The index is designed to reflect the stock price changes of aerospace and aviation - related listed companies in the Shanghai, Shenzhen, and Beijing stock exchanges. It selects large - market - value stocks in the Guozheng tertiary industry "Aerospace and Aviation". The sample space has certain requirements, and the selection method is based on free - floating market capitalization, with a semi - annual adjustment frequency [68][70]. 3.2.2 Index Weight and Market Value Distribution - As of July 1, 2025, the index has 50 constituent stocks, with relatively dispersed weights. It has a strong defense - military attribute, focusing on aviation equipment and military electronics. The average free - floating market capitalization is 130.75 billion yuan, and the average total market capitalization is 304.40 billion yuan [71][75]. 3.2.3 Index Industry/Theme Characteristics - The index has a high concentration in the defense - military industry, with 98.02% of the weight belonging to this industry, mainly in the aviation equipment and military electronics sectors. Compared with comparable indices, it has the highest concentration in the military industry and a more prominent industry theme [80][81]. 3.2.4 Fundamental Characteristics - The index shows a high and steadily increasing R & D investment ratio, reaching 4.53% by the end of 2024. It has strong growth attributes and relatively stable profitability compared to comparable indices. Its net profit stability is the strongest since 2022 [83][87]. 3.2.5 Index Investment Value Analysis - It is a representative military - related index with a similar long - term trend to comparable indices. It shows high elasticity during market rebound periods, outperforming comparable military indices in terms of returns during several rebounds [88][90]. 3.3 Aerospace and Aviation ETF Tianhong (159241) - The fund was established on May 21, 2025, and listed on May 29, 2025. Managed by Mr. Sha Chuan and Mr. Qi Shichao, it closely tracks the Guozheng Aerospace and Aviation Industry Index, aiming to minimize tracking deviation and error. It has a management fee of 0.50% and a custody fee of 0.10%. It has a relatively low discount rate and shows good performance in share growth and liquidity [94][95][96]. 3.4 Fund Manager and Fund Manager Information 3.4.1 Fund Manager Introduction - Tianhong Fund was established on November 8, 2004, and is a national public - offering fund management company. As of March 31, 2025, its total asset management scale is 124.3409 billion yuan, with 29 public - offering ETF products and a total ETF scale of 79.79 billion yuan [99]. 3.4.2 Fund Manager Introduction - Mr. Sha Chuan has 14 years of securities experience and manages 12 products with a total non - linked fund scale of 155.27 billion yuan. Mr. Qi Shichao has rich experience in Tianhong Fund and manages 17 products with a total non - linked fund scale of 203.69 billion yuan [100].

Group 1 - The core index, the China Securities National New State-Owned Enterprise Aerospace Technology Index, closed at 2449.8 points, down 0.42%, with a trading volume of 17.88 billion [1] - Over the past month, the index has increased by 6.55%, by 11.66% over the past three months, and by 5.93% year-to-date [1] - The index comprises 40 representative listed companies from state-owned enterprises involved in aerospace equipment, materials, information, and security, reflecting the overall performance of state-owned enterprises in the aerospace technology sector [1] Group 2 - The top ten weighted companies in the index include: Aero Engine Corporation (9.37%), AVIC Xi'an Aircraft Industry (8.48%), AVIC Optoelectronics (7.71%), AVIC Shenyang Aircraft Corporation (5.9%), Hongdu Aviation (4.7%), Northern Navigation (4.12%), AVIC Aircraft (3.97%), Aerospace Electronics (3.9%), AVIC High-Tech (3.88%), and China Science and Technology Star Map (3.76%) [1] - The market segments of the index holdings show that the Shanghai Stock Exchange accounts for 63.79%, the Shenzhen Stock Exchange for 35.60%, and the Beijing Stock Exchange for 0.60% [1] Group 3 - From an industry perspective, the index holdings are composed of 82.72% in industrials, 5.87% in materials, 5.03% in information technology, 4.73% in communication services, and 1.65% in consumer discretionary [2] - The index samples are adjusted semi-annually, with adjustments implemented on the next trading day following the second Friday of June and December each year [2] - In special circumstances, the index may undergo temporary adjustments, such as when a sample company is delisted or undergoes mergers, acquisitions, or spin-offs [2]

Group 1 - The core index, the China Securities National New State-Owned Enterprise Technology Leading Index, experienced a slight decline of 0.22%, closing at 1262.6 points with a trading volume of 27.628 billion yuan [1] - Over the past month, the index has increased by 5.31%, while it has seen a 4.44% rise over the last three months, and a negligible decline of 0.01% year-to-date [1] - The index is customized by Guoxin Investment Co., Ltd., comprising 50 listed companies in sectors such as aerospace, defense, computer, electronics, semiconductors, and communication equipment [1] Group 2 - The top ten weighted stocks in the index include Hikvision (9.46%), AVIC Shenyang Aircraft (6.92%), AVIC Optoelectronics (6.58%), Changjiang Electronics (6.49%), and others [1] - The index's holdings are primarily listed on the Shanghai Stock Exchange (58.27%) and the Shenzhen Stock Exchange (41.73%) [1] - The industry composition of the index shows that information technology accounts for 49.75%, industrials for 39.66%, and communication services for 10.59% [2] Group 3 - The index samples are adjusted biannually, with adjustments occurring on the next trading day after the second Friday of June and December [2] - In special circumstances, the index may undergo temporary adjustments, such as when a sample company is delisted or undergoes mergers or acquisitions [2] - Public funds tracking the index include various funds from E Fund, Yinhua, and Southern Asset Management [2]

Group 1 - The core index, the China Securities Strategic Emerging Industries Index, experienced a decline of 0.3%, closing at 1429.57 points with a trading volume of 21.067 billion yuan [1] - Over the past month, the index has increased by 4.72%, by 2.27% over the last three months, and by 2.28% year-to-date [1] - The index is customized by China Chengtong Holdings Group and includes 50 state-owned enterprises with significant growth potential in the strategic emerging industries [1] Group 2 - The top ten weighted stocks in the index include BOE Technology Group (9.83%), Northern Rare Earth (9.42%), and Shengyi Technology (5.74%) [1] - The index's holdings are primarily listed on the Shanghai Stock Exchange (57.42%), followed by the Shenzhen Stock Exchange (42.40%) and the Beijing Stock Exchange (0.18%) [1] Group 3 - The industry composition of the index shows that Information Technology accounts for 40.85%, Industrial for 32.00%, and Materials for 19.19% [2] - The index samples are adjusted biannually, with changes implemented on the next trading day after the second Friday of June and December [2] - In special circumstances, the index may undergo temporary adjustments, such as when a sample company is delisted or undergoes mergers or acquisitions [2]

Core Viewpoint - The aerospace and defense sector is experiencing significant market activity, with notable stock performance and increased liquidity in related ETFs, driven by strong expectations for military-related developments in the near future [1][2]. Group 1: Market Performance - As of July 4, 2025, the CN5082 aerospace and defense industry index shows mixed performance among its constituent stocks, with AVIC Shenyang Aircraft (600760) leading with a 2.54% increase [1]. - The Aerospace and Defense ETF (159227) has an active trading environment, with a turnover rate of 20.04% and a transaction volume of 79.01 million yuan [1]. - Over the past week, the Aerospace and Defense ETF has averaged daily transactions of 80.54 million yuan, ranking it first among comparable funds [1]. Group 2: Fund Flows - The Aerospace and Defense ETF has seen continuous net inflows over the past six days, with a peak single-day net inflow of 37.52 million yuan, totaling 139 million yuan in net inflows [1]. - The defense and military sector index ranked 4th among 31 industries in terms of performance for the first half of 2025, with a record high trading volume [2]. Group 3: Sector Insights - More than 10% of military-listed companies reached historical highs in stock prices during the first half of 2025, driven by strong market expectations [2]. - The Aerospace and Defense ETF tracks the CN5082 index, with a high concentration of 98.2% in the defense and military sector, making it the most "pure" military ETF in the market [2]. - The top ten weighted stocks in the CN5082 index account for 49.42% of the total index, indicating a concentrated investment in key players within the aerospace and defense sector [3].

Group 1 - The A-share market saw a rebound in the afternoon on July 4, with the military industry sector remaining active, particularly the aerospace ETF Tianhong (159241), which rose by 0.54% with a trading volume exceeding 69 million yuan and a turnover rate over 22% [1] - The aerospace ETF Tianhong (159241) closely tracks the National Securities Aerospace Index, which has over 98% weight in the defense and military industry, making it the index with the highest military content in the market [1] - According to Guotou Securities, the current timing is at the intersection of two five-year periods, with expectations for structural upward trends in industry EPS after 2025, driven by the "14th Five-Year Plan" [1] Group 2 - Dongfang Securities believes that the military trade is expected to become a second growth driver as the "14th Five-Year Plan" concludes, with a continued recovery in industry prosperity [2] - The importance of upstream components and key raw materials in weapon equipment research and production is highlighted, as they support the entire lifecycle of various equipment such as missiles, radars, and aircraft, which may benefit from amplified demand transmission effects [2]

Investment Rating - The report rates the military industry as "Buy" [1] Core Viewpoints - The military industry is expected to perform well in the long term due to increasing great power competition and rising defense expenditures [3][9][10] - A grand military parade is scheduled for September 3, 2025, showcasing domestic military equipment and advancements [8][20] - Japan is set to deploy F-35B stealth fighters as early as August, indicating a shift in regional military dynamics [8][10] Summary by Sections Investment Highlights - Key investment areas include: 1. Assembly: AVIC Shenyang Aircraft Corporation, Aerospace South Lake, AVIC Xi'an Aircraft Industry [4] 2. Components: AVIC Optoelectronics, Guobang Electronics, Ruichuang Micro-Nano [4] 3. Subsystems: AVIC Avionics, North Navigation [4] 4. Materials and Processing: Feilihua, Guangwei Composite, Huaqin Technology, Bolite, Western Materials, Aviation Materials [4] - Notable stocks include: - Assembly: Aerospace Rainbow, AVIC Chengfei [4] - Components: Unisoc, Aerospace Electric, Hongyuan Electronics, Zhenhua Technology, Torch Electronics [4] - Subsystems: Aero Engine Corporation, Jianghang Equipment [4] - Materials and Processing: AVIC Heavy Machinery, AVIC High-Tech, Western Superconducting, Aerospace Technology [4] Market Review - The military sector saw a 7.46% increase last week, outperforming the market by 5.54 percentage points [12][13] - The Shanghai Composite Index rose by 1.91%, while the ChiNext Index increased by 5.69% [12][13] - The China Securities National Security Index performed the best, rising by 8.31% [16] Major News in the Military Industry - The Shanghai Cooperation Organization defense ministers' meeting was held in Qingdao, emphasizing regional security cooperation [20] - The upcoming military parade will feature all domestically produced active combat equipment, highlighting advancements in military capabilities [21][23] - The focus of the parade will be on commemorating the victory in the Anti-Japanese War and showcasing the modernization of the military [24][25]