Group 1 - The China Securities High-end Equipment Sub-index 50 has seen a strong increase of 3.55%, with notable gains from stocks such as AVIC Chengfei up 14.81% and Zhong UAV up 12.48% [1] - The High-end Equipment ETF (159638) has risen by 3.47%, marking a third consecutive increase [1] - The High-end Equipment ETF has recorded a turnover of 4.39% and a transaction volume of 51.2344 million yuan, with its latest scale reaching 1.145 billion yuan and shares totaling 1.528 billion, a new high for the year [3] Group 2 - The High-end Equipment ETF has experienced continuous net inflows over the past six days, with a maximum single-day net inflow of 11.0926 million yuan, totaling 16.9623 million yuan [3] - The index tracked by the ETF is currently at a historical low valuation, with a price-to-book ratio (PB) of 4.03, which is lower than 80.18% of the time over the past five years, indicating strong valuation attractiveness [3] - As of April 30, 2025, the top ten weighted stocks in the index account for 45.74% of the total, including companies like AVIC Optoelectronics and AVIC Shenyang Aircraft [3] Group 3 - The People's Bank of China announced an increase in the re-lending quota for technological innovation and technological transformation from 50 billion yuan to 80 billion yuan, supporting the implementation of "two new" policies [4] - The head of the Financial Regulatory Bureau emphasized the need for high-quality development of technology insurance to support major technological breakthroughs and promote insurance products in emerging fields such as robotics and low-altitude aircraft [4] - The low-altitude economy is expected to tap into a trillion-level blue ocean market, driven by policy support and technological upgrades, with significant market potential for low-altitude infrastructure [4] Group 4 - Investors can consider the China Securities High-end Equipment Sub-index 50 ETF linked fund (018028) to capitalize on industry rotation opportunities [5]

Group 1 - The core viewpoint is that A-share listed companies represent a resilient and adaptable segment of China's economy, with nearly 90% of their revenue coming from domestic sources, and a net profit growth of 3.6% in Q1 [1] - The A500 index, which tracks core assets in the A-share market, has shown a stable performance, with significant gains in stocks such as AVIC Chengfei and Maiwei Shares, indicating strong market interest [1] - The A500 ETF (159339) covers 63% of total revenue and 70% of total net profit in the A-share market, making it a powerful tool for long-term investment in high-quality development trends in China's capital market [1] Group 2 - The A50 ETF (159592) focuses on large-cap leading stocks across various industries, benefiting from increased market concentration due to supply-side reforms, and is expected to attract more funds during earnings disclosure periods [2] - There is a historical calendar effect in the A-share market, where May typically outperforms April and June, with a rebound expected in July following a tightening of liquidity in June [2]

资金流向上，Wind数据显示，A500指数ETF（159351）昨日获超5400万元资金净流入。 A500指数ETF（159351）紧密跟踪新一代标杆指数中证A500指数，该指数优选各行业市值代表性强、 表征行业龙头的500只股票，兼顾大市值的同时均衡覆盖A股各行业核心龙头资产。 A500指数ETF（159351）还配备了场外联接基金（A类022453；C类022454）。 消息面上，国务院新闻办公室今日举行新闻发布会，介绍"一揽子金融政策支持稳市场稳预期"有关情 况。中国人民银行行长潘功胜在会上宣布，降准0.5个百分点，向市场提供长期流动性约1万亿元，并降 低政策利率0.1个百分点。此外，中国人民银行行长潘功胜还表示，优化两项支持资本市场货币政策工 具，将5000亿元证券基金保险公司互换便利，和3000亿元股票增持回购再贷款两个工具的额度合并，总 额度变为8000亿元。 东方证券研报统计显示：截至2025年4月30日，规模最大的ETF跟踪标的为沪深300，总规模10359.15亿 元，其次为中证A500规模2113.36亿元。 5月7日，A股主要指数盘中反复活跃。主要宽基ETF中，A500指数ETF（159 ...

Summary of the Conference Call Industry Overview - The military industry is showing a downward trend, but the decline is narrowing, indicating signs of bottoming out. The revenue realization in the components segment is catalyzing the industry, with expectations for improved conditions in Q2 [2][4][10]. - The Longjiang Military Group categorizes over a hundred companies into main tracks (military aircraft engines, missiles) and new directions (new equipment, military trade, military-to-civilian transitions). The upstream components are recovering first, with improvements in cash flow and inventory for main manufacturers [2][5][6]. Key Insights - Q2 is expected to see a focus on emerging segments such as rocket forces, navy, army, and information support troops, with significant development potential following management system optimizations [2][8]. - The military industry is anticipated to accelerate recovery in 2025, driven by mobilization orders and systemic improvements, with missiles becoming a preferred investment choice [2][10]. - Military trade is benefiting from optimized national military trade management and global political changes, becoming a crucial aspect of the defense technology industry's international expansion [2][12][13]. Company-Specific Highlights AVIC Shenyang Aircraft Corporation (沈飞) - Selected as the "gold stock" for May due to low holdings, minimal competition, low valuation, and potential. The lack of disclosed 2025 operational targets enhances its safety margin and presents a contrarian investment opportunity [2][3][15][16]. - The company is currently valued at a static P/E ratio of around 30 times, which is at the lower end of its historical valuation range. Expectations for increased production tasks in 2025 are based on improved cash flow and contract signing [17][20]. - Future growth is supported by new aircraft models entering production phases, with a projected ROE close to 20% and significant asset scarcity [18][21]. Tunan Co., Ltd. (图南股份) - Tunan has shown improvement in Q1 2025 after a significant decline in Q4 2024. The company is expected to achieve approximately 330 million yuan in revenue in 2025, with a compound annual growth rate of 35% to 40% over the next two years [2][29]. - The company specializes in high-temperature alloy materials, with a strong focus on casting and deformation alloys, and is gradually extending its business into downstream products [23][26]. - Tunan's profitability is expected to improve significantly, with projections indicating a doubling of revenue and profit over the next three years [28][29][30]. Additional Important Points - The military industry is experiencing a structural shift with a focus on unmanned systems and advanced technologies, which will likely reshape operational dynamics and market opportunities [21][22]. - The management of military companies is increasingly focused on optimizing production and expanding capacity to meet future demands, particularly in the context of national defense strategies [20][14]. - The competitive landscape in the military sector remains relatively stable due to strong regulatory frameworks, which may provide a clearer path for companies to capitalize on emerging opportunities [11][12].

Investment Rating - The report maintains a "Positive" investment rating for the defense and military industry [3] Core Insights - The industry is experiencing a bottoming out phase due to multiple factors, but signs of improvement were observed in Q1 2025, particularly in upstream components and new directions [11][13] - Profitability has slightly fluctuated due to various influences, with ROE constrained by asset efficiency and net profit margin needing improvement [53][56] - Traditional main tracks show clear signs of recovery, while new directions are in the early stages of industrialization but exhibit initial growth potential [90][91] Summary by Sections Industry Overview - The military industry faced a decline in revenue and profit growth in 2024, but Q1 2025 showed a narrowing of profit decline to -24.6% [19][20] - The main track's revenue growth was affected by contract signing and delivery schedules, with a notable profit drop in Q4 2024, followed by a recovery in Q1 2025 [20][21] Main Track Performance - Upstream components are showing early signs of recovery, with revenue growth rates for upstream, midstream, and downstream segments varying significantly [25][29] - Downstream manufacturers experienced short-term performance pressure due to contract signing delays, but some companies like Hongdu Aviation showed strong growth [29][30] Profitability Analysis - The overall profitability of the military sector slightly decreased in 2024, with a marginal improvement in Q1 2025 [56][58] - The main track's profitability was impacted by price adjustments and demand fluctuations, with a slight recovery noted in Q1 2025 [58][61] New Directions - New directions in the industry, such as military trade and new equipment, are showing upward trends in Q1 2025, indicating potential for growth [101][110] - Specific segments like infrared and ammunition within new equipment are experiencing significant revenue growth, reflecting high market demand [104][110] Future Outlook - The report emphasizes the importance of selecting companies with enhanced product capabilities, increased penetration rates, and higher average transaction values as the industry approaches the end of the 14th Five-Year Plan [117][118] - Key investment opportunities are identified in companies like Aerospace Electric and Feiliwa, which are expected to benefit from the upcoming military spending and technological advancements [117][118]

Core Viewpoint - China's J-36 fighter jet has successfully completed five test flights, while the U.S. sixth-generation fighter jet program appears to be stalled, potentially remaining at the conceptual stage indefinitely [1] Group 1: U.S.-China Trade and Rare Earths - The U.S. trade war initiated by Trump has significantly impacted the U.S. aerospace industry, revealing a critical dependency on China's control over rare earth elements [3] - In response to the trade war, China's Ministry of Commerce implemented export license controls on seven heavy rare earth elements, effectively targeting U.S. military contractors like Lockheed Martin and Boeing [3][4] - China's strong countermeasures are attributed to the contributions of Xu Guangxian, known as the "Father of Rare Earths," who developed a method to significantly improve the extraction and purification of rare earth elements [4][5] Group 2: China's Rare Earth Dominance - China holds approximately 44 million tons of rare earth oxide reserves, accounting for 34% of global reserves, with approved mining quotas reaching 240,000 tons in 2023 [5] - The global rare earth industry is heavily reliant on China, which produces about 70% of rare earth minerals and possesses 85% of deep processing capabilities [5] - From 1950 to 2019, China submitted over 26,000 patents in the rare earth field, far surpassing Japan and the U.S., indicating a strong technological and industrial advantage [5] Group 3: Impact on U.S. Military Technology - Rare earth elements are essential for modern high-tech equipment, including the F-35 fighter jet, which requires 408 kg of rare earth materials for optimal performance [7] - The U.S. sixth-generation fighter jet program is hindered by its reliance on rare earths, making progress toward operational aircraft unlikely without access to these materials [9] Group 4: U.S. Response and Challenges - The U.S. is attempting to revive the Mountain Pass mine and form a "rare earth alliance" with Australia and Canada, but these efforts have not yielded significant results [9][11] - Despite investing billions, the U.S. lacks the deep processing capacity to independently establish a rare earth supply chain, relying instead on Chinese partners for purification [11] - Companies like Tesla are reducing rare earth usage in their electric motors, but this compromises performance, while military firms are exploring alternative materials, which may also reduce efficiency [11]

Investment Rating - The report maintains a "Positive" investment rating for the military industry [2] Core Insights - The military sector is experiencing a bottoming out and marginal recovery, with new directions showing superior performance [9][15] - The J-35 supply chain is entering a phase of prosperity, with increased production capacity supporting the launch of new models [52][73] - The report highlights the importance of contract liabilities and inventory stability as indicators of demand recovery in the industry [27][95] Summary by Sections Military Sector Overview - The military sector's revenue growth from 2021 to Q1 2025 shows a decline, with a notable drop in net profit in 2024, but a recovery trend is observed in Q1 2025 [18][19] - The main track of the military sector includes traditional aircraft, engines, and missiles, with revenue growth rates declining but showing signs of recovery in Q1 2025 [19][23] J-35 Supply Chain - The J-35, China's second stealth fighter, is expected to have a strong export potential due to its competitive pricing and fully domestic production [55][61] - The company plans to invest 11 billion yuan in local relocation and production capacity expansion to support new model production [73][81] New Directions in the Industry - New directions such as military trade and new equipment are showing upward trends in revenue and profit growth, indicating a recovery in demand [38][48] - Companies like Tunan Co. are focusing on advanced metal materials and innovative business models to capture growth opportunities in the defense sector [99][102] Financial Performance - The report indicates that major manufacturers like AVIC Shenyang Aircraft Corporation have seen significant increases in contract liabilities, suggesting a positive outlook for future demand [27][95] - The financial metrics for the military sector show a narrowing of profit declines in Q1 2025, with a focus on maintaining stable inventory levels [19][28]

联合研究丨组合推荐 [Table_Title] 金融制造行业 5 月投资观点及金股推荐 research.95579.com 1 丨证券研究报告丨 报告要点 [Table_Summary] 长江金融行业（地产、非银、银行）和制造行业（电新、机械、军工、轻工、环保）2025 年 5 月投资观点及金股推荐。 分析师及联系人 [Table_Author] 邬博华 于博 赵智勇 SAC：S0490514040001 SAC：S0490520090001 SAC：S0490517110001 SFC：BQK482 SFC：BUX667 SFC：BRP550 王贺嘉 蔡方羿 徐科 SAC：S0490520110004 SAC：S0490516060001 SAC：S0490517090001 SFC：BUX462 SFC：BUV463 SFC：BUV415 刘义 吴一凡 马祥云 SAC：S0490520040001 SAC：S0490519080007 SAC：S0490521120002 SFC：BUV416 SFC：BUV596 SFC：BUT916 请阅读最后评级说明和重要声明 2 / 13 %% %% %% %% ...

Market Analysis - Historical reference to the market performance post-2018 tariffs indicates that industries focused on self-sufficiency, domestic demand expansion, and stable dividends performed well[4] - Future market risk appetite is expected to rise, contingent on policy changes, including potential liquidity releases from the Federal Reserve due to U.S. bond and stock market liquidity issues[4] Recommended Industries - Key industries recommended for investment include metals, chemicals, electricity, military, non-banking financials, banking, retail, social services, automotive, and computing[4] - The report emphasizes the importance of focusing on industries with self-sufficiency, domestic demand expansion, and stable dividends amid macroeconomic disturbances[4] Stock Recommendations - **Metals**: Chifeng Jilong Gold Mining Co., Ltd. (EPS forecast: 1.92 in 2025, PE: 13.8) shows strong performance potential[22] - **Chemicals**: Yara International ASA (EPS forecast: 2.42 in 2025, PE: 12.2) is positioned for significant growth due to its overseas potassium mining operations[22] - **Electricity**: Zhongmin Energy (EPS forecast: 0.36 in 2025, PE: 15.7) benefits from favorable wind resources in Fujian Province[22] - **Military**: AVIC Shenyang Aircraft Corporation (EPS forecast: 1.44 in 2025, PE: 29.7) is expected to see steady growth driven by new aircraft models[22] - **Non-Banking Financials**: New China Life Insurance Co., Ltd. (EPS forecast: 7.36 in 2025, PE: 6.5) has a strong leverage position in the market[22] - **Banking**: Jiangsu Bank (EPS forecast: 1.74 in 2025, PE: 6.0) offers high dividend yield and stable growth prospects[22] - **Retail**: Yiwu Small Commodity City (EPS forecast: 0.75 in 2025, PE: 20.7) is set to benefit from international trade reforms[22] - **Social Services**: Core International (EPS forecast: 1.46 in 2025, PE: 22.5) is leveraging AI for enhanced operational efficiency[22] - **Automotive**: Xiaomi Group (EPS forecast: 1.37 in 2025, PE: 34.7) is expected to see significant sales growth in electric vehicles[22] - **Computing**: Cambricon Technologies (EPS forecast: 2.74 in 2025, PE: 257.5) is positioned to benefit from the growing AI chip market[22]

Core Viewpoint - The China Aircraft Strength Research Institute, established 60 years ago, has significantly contributed to the development of key national aircraft such as the J-20, Y-20, C919, and AG600, supporting the innovation and advancement of aviation weaponry [1][2]. Group 1: Historical Development - The Strength Research Institute, created in 1965, is the only center in China for aircraft strength research, verification, and certification, responsible for ground strength validation tests for new and modified aircraft [2]. - The completion of the H-6 aircraft destruction test in 1968 marked China's capability to conduct large aircraft strength verification, ushering in a new era for the country's aviation strength sector [2]. - Over the past 60 years, the institute has developed a comprehensive testing capability system covering various types of military and civilian aircraft [2]. Group 2: Innovations and Achievements - The institute has focused on meeting equipment development needs and has achieved several "firsts" in both domestic and international contexts, including the establishment of a large-scale climate environment laboratory for weapon systems [3]. - The climate environment laboratory is the largest and most complex of its kind globally, enabling the simulation of various environmental factors, thus enhancing the efficiency of equipment development [3]. - The laboratory has been instrumental in supporting the development of both military and civilian aircraft, including accelerating the airworthiness certification process for domestic large passenger aircraft [4]. Group 3: Specific Projects - The AG600 amphibious aircraft, the largest of its kind globally, successfully passed rigorous testing and verification, with the Strength Research Institute playing a crucial role throughout its development cycle [5]. - The C919 aircraft project has seen significant contributions from the institute, including overcoming technical challenges and conducting high-altitude tests in its climate environment laboratory [6]. - The institute pioneered the indoor testing of engine performance under snow conditions, marking a significant advancement in aircraft testing methodologies [6].