Core Viewpoint - The military industry sector is experiencing a significant surge, with key stocks showing strong performance, driven by a combination of increased order certainty and structural shifts towards high-end capabilities [1] Group 1: Industry Outlook - The military industry is expected to undergo a critical transformation by 2026, characterized by rigid demand, high-end structural changes, and improved financial health [1] - Five core judgments include enhanced order certainty due to the delivery of "14th Five-Year Plan" tail orders and the initiation of the "15th Five-Year Plan" [1] - Demand structure is shifting towards new combat capabilities and consumable operational capabilities [1] - Military trade is emerging as a second growth curve, opening high-end market ceilings through systematic exports [1] - Deepening military-civilian integration is expected to enable dual-use technologies in areas such as commercial aerospace and low-altitude economy [1] - Financial quality is improving, with cash flow and profitability entering an upward trajectory, shifting valuation logic from thematic speculation to fundamental pricing [1] Group 2: Investment Focus - Investment in the military sector is centered around four high-certainty directions: 1. The main battle equipment industry chain from a military trade perspective, focusing on core enterprises with assembly capabilities and overseas delivery experience [2] 2. Advanced combat fields accelerating the formation of new combat capabilities, including underwater offense and defense, unmanned clusters, network electromagnetic countermeasures, and intelligent command [2] 3. Technology-driven sectors under military-civilian integration, such as commercial aerospace and controllable nuclear fusion components, which possess both defense support and emerging industry attributes [2] 4. Reform and asset securitization, involving local state-owned enterprises acquiring quality military-related assets and central military enterprises accelerating the securitization of unlisted assets [2]

Market Performance - The A-share market has shown poor profitability this week, with only 11% of respondents reporting profits, while 89% reported losses [7] - Major indices such as the Shanghai Composite Index and the Shenzhen Component Index experienced declines, with the Shanghai Composite Index down 3.90% this week [2] - The overall market sentiment indicates a bearish outlook, with 38% of respondents expecting the market to trade sideways and unable to reach 4000 points [8] Sector Performance - All major industry indices saw declines, with the power equipment sector leading the losses at 10.54%, followed by comprehensive and basic chemical sectors [3] - The banking sector experienced the smallest decline at 0.89%, indicating relative stability compared to other sectors [3] Fund Flow - A total of 249.32 billion yuan in net outflow was recorded from A-share main funds this week, with all 31 major industry sectors experiencing net outflows [3] - The power equipment, electronics, and pharmaceutical sectors saw the highest net outflows, amounting to 50.52 billion yuan, 38.39 billion yuan, and 25.76 billion yuan respectively [3] Investor Sentiment - A survey indicated that 26% of investors increased their positions, while 18% reduced their holdings, reflecting a cautious approach to market conditions [4] - The proportion of investors holding less than 50% of their positions increased, indicating a shift towards more conservative investment strategies [4] Future Outlook - Respondents remain optimistic about the long-term trend of the A-share market, with 50% believing the Shanghai Composite Index could reach 4000 points [10] - The military industry sector has seen a significant increase in positive sentiment, rising by 9 percentage points to 12%, indicating growing interest in this area [12] Industry Trends - The military industry is expected to experience significant growth driven by domestic and international demand, with key factors including the "14th Five-Year Plan" and military trade developments [13] - Analysts predict a shift towards high-end demand and improved financial health within the military sector, with a focus on new combat capabilities and military-civilian integration [13]

（文章来源：每日经济新闻） 申万宏源表示，军贸有望开启供需共振大格局：随着全球地缘政治不确定性增加，全球军贸需求不断扩 大，国际军贸市场发生新的格局变化。而随着产品迭代加快且体系能力强化，我国产品性能和供给能力 获得高度认可，中国潜在需求明显扩大，中东、亚洲等市场订单催化不断，所以预计我国军贸的需求与 供给将会持续强烈共振，从而造就中国军贸未来大格局。 军工ETF（512660）跟踪的是中证军工指数（399967），该指数从沪深市场中选取涉及航空、航天、船 舶、兵器及军事电子等领域的上市公司证券作为指数样本，以反映中国军工行业上市公司证券的整体表 现。指数成分股呈现中小盘风格，主要聚焦于航空装备与军工电子行业。 ...

Core Viewpoint - The defense and military industry sector is experiencing a significant pullback, with the popular defense ETF (512810) declining over 1% and hitting a six-month low, while major military stocks are also seeing declines [1][2]. Group 1: Market Performance - The defense military ETF (512810) has seen a decline of 1.60%, trading at 0.676, with a drop of 0.011 [2]. - Major military stocks such as AVIC Shenyang Aircraft Corporation and China Shipbuilding Industry Corporation have dropped nearly 3% and over 1% respectively [1]. Group 2: Investment Opportunities - The ETF has attracted over 100 million yuan in net subscriptions over the past six trading days, indicating active interest from investors [1]. - Analysts suggest that the fourth quarter may see the gradual realization of "14th Five-Year Plan" related orders, coupled with military trade catalysts, which could lead to a resurgence in the defense and military market [1]. - The defense industry is expected to benefit from geopolitical risks, technological advancements, and policy support, with potential for high-end weapon exports and a revaluation of core asset values [1]. Group 3: Strategic Insights - CITIC Securities' report indicates a shift in China's defense industry from "cyclical growth" to "comprehensive growth," driven by domestic demand, foreign trade expansion, and civilian contributions [3]. - The defense ETF (512810) is highlighted as an efficient tool for investing in core defense assets, covering various hot themes such as commercial aerospace, low-altitude economy, and military AI [3].

Core Insights - The report highlights a significant turning point for the defense and military industry in 2025, with a strong recovery in both fundamentals and market performance, indicating a shift from policy expectations to actual performance realization [4][9][11] - The industry is entering a new phase characterized by rigid demand, structural upgrades, and improved financial health, with five core judgments outlined for 2026 [4][6][24] Industry Trends - The defense and military sector saw a cumulative increase of 16.39% in the Shenwan Defense Index by October 31, 2025, closely aligning with the performance of the CSI 300 index but lagging behind the growth-driven ChiNext index [9] - The market experienced a "Q1 bottoming, Q2 recovery, Q3 acceleration, and Q4 consolidation" rhythm, with the driving force shifting from policy expectations to performance realization [9][10] Financial Performance - The industry ended the "increasing revenue without increasing profit" dilemma, with significant improvements in operating cash flow and profitability quality, marking a transition to a new phase of high-quality development [4][24][26] - By November 10, 2025, the PE-TTM (excluding negative values) for the defense sector was approximately 70 times, indicating a structural revaluation rather than a systemic bubble [20][24] Revenue and Profitability - The report indicates a recovery in revenue and profit growth in 2025, with a notable increase in operating cash flow, signaling a turnaround from previous years of negative cash flow [24][31] - The industry experienced a significant rebound in profitability, with a 17.29% year-on-year increase in net profit attributable to shareholders in Q3 2025, reflecting effective cost control and improved operational efficiency [26][31] Investment Focus - The investment strategy focuses on four main lines: the main battle equipment supply chain from a military trade perspective, advanced combat capabilities, military-civilian integration sectors, and reform and asset securitization [4][6][26] - Key companies to watch include AVIC Shenyang Aircraft Corporation, China Aerospace Science and Technology Corporation, and others involved in military trade and advanced combat technologies [4][6][26]

室 坑车工 2025 年 11 月 17 日 时代小说书 证券分析师 韩强 A0230518060003 hanqiang@swsresearch.com 武雨桐 A0230520090001 wuyt@swsresearch.com 穆少阳 A0230524070009 musy@swsresearch.com 册 分歧污 达邵炜 A0230124030001 dasw@swsresearch.com 联系人 达邵炜 A0230124030001 dasw@swsresearch.com 申万宏源研究微信服务号 关注军贸及消耗类武器, 配置周期 国防军工行业周报（2025年第 47 周） 本期投资提示: 上周申万国防军工指数下跌 2.15%，中证军工龙头指数下跌 1.53%，同期上证综指下 ● 跌 0.18%, 沪深 300 下跌 1.08%, 创业板指下跌 3.01%, 申万国防军工指数跑赢创业 板指、跑输沪深 300、跑输上证综指、跑输军工龙头指数。1、从细分板块来看，上周 国防军工板块 2.15%的跌幅在 31 个申万一级行业涨跌幅排名第 27 位。2、从我们构建 的军工集团指数变化来看，上周中证民参 ...

Investment Rating - The report maintains a positive outlook on the defense and military industry, indicating an "Overweight" rating for the sector, suggesting it will outperform the overall market [23]. Core Insights - The military industry is entering an upward cycle as per the "14th Five-Year Plan" recommendations, with expectations of performance recovery in Q4 2025, driven by increased military trade and order fulfillment [3][4]. - The report highlights that the military trade landscape is evolving due to rising global geopolitical uncertainties, leading to increased demand for military products, particularly in the Middle East and Asia [3]. - Key investment opportunities are identified in next-generation equipment, unmanned/anti-unmanned weapons, and information/intelligent systems, with a focus on companies that are expected to benefit from these trends [3]. Market Review - Last week, the Shenwan Defense and Military Index fell by 2.15%, while the CSI Military Leaders Index decreased by 1.53%. In comparison, the Shanghai Composite Index dropped by 0.18% and the CSI 300 by 1.08% [4][11]. - The report notes that the defense and military sector's performance ranked 27th among 31 Shenwan primary industries, indicating a relatively poor performance compared to other sectors [4]. - The report lists the top five gainers in the defense sector: Tian'ao Electronics (up 12.63%), Aerospace Development (up 8.54%), *ST Dali (up 7.1%), Aerospace Intelligence Equipment (up 5.72%), and 712 (up 4.21%) [11][12]. Valuation Changes - The current PE-TTM for the Shenwan military sector is 76.94, placing it in the upper range historically, with a valuation percentile of 65.32% since January 2014 and 91.95% since January 2019 [12][13]. - The report indicates a slight differentiation in valuations among sub-sectors, with aerospace and aviation equipment showing relatively high PE valuations since 2020 [12][13].

Group 1 - The global situation is changing significantly, with the prediction of a Federal Reserve rate cut in December dropping below 50%, indicating a bearish market outlook and potential impacts on financial markets [1] - The A-share market has shown signs of institutional reduction in positions, suggesting caution as funds may react to negative news this week [1] - The military industry is entering an upward cycle, with Q3 performance showing a narrowing year-on-year decline, and Q4 expected to see positive growth driven by "14th Five-Year Plan" orders and military trade catalysts [1] Group 2 - The military sector continues to perform strongly, with stocks like Aerospace Development and Changcheng Military Industry seeing significant gains, indicating a trend of improving quarterly results [3] - Retail concepts have surged, with notable increases in stocks like Dazhongfang and Dongbai Group, supported by a 2.9% year-on-year growth in social retail sales in October, totaling 46,291 billion yuan [3] - The storage chip sector has regained strength, with companies like Baiwei Storage and Puran Shares seeing over 10% increases, driven by Samsung's price hikes of 30% to 60% for server chips [3]

Investment Rating - The report maintains a "Positive" outlook on the defense and military industry, indicating a turning point in profitability and growth potential [6][4]. Core Insights - The military industry is expected to enter a new growth cycle driven by the initiation of the "14th Five-Year Plan" equipment construction, military trade, and commercial aerospace advancements [2][3]. - The overall revenue for the military sector increased by 3.07% year-on-year in the first three quarters of 2025, while net profit attributable to shareholders decreased by 9.89%, showing a narrowing decline compared to the previous year [6][11]. - Key segments such as components, sub-systems, and assembly levels have shown signs of recovery, with revenue growth turning positive for the first time since 2021 [18][25]. Summary by Sections 1. Performance Analysis - In Q3 2025, revenue growth rates for components, sub-systems, and assembly levels were 8.30%, 3.37%, and 1.16% respectively, marking a positive shift from negative growth in 2024 [18][19]. - The net profit for the components level increased by 6.94% year-on-year, while sub-systems and assembly levels saw declines of 28.98% and 19.48% respectively [18][23]. 2. Cash Flow Improvement - The cash flow from operations for sub-systems and assembly levels improved, while components faced temporary pressure [40][42]. - The sales collection ratio for assembly levels rose significantly by 23.23 percentage points to 92.50% in Q3 2025, indicating better cash flow management [40][41]. 3. Prepayments and Inventory - Prepayments (including contract liabilities) across all levels showed an upward trend, with assembly levels increasing by 21.85% to 63.345 billion yuan [48][49]. - Inventory levels for components, sub-systems, and assembly increased by 12.57%, 8.81%, and 19.82% respectively, suggesting a positive outlook for future performance [53][54]. 4. Segment Performance - The weaponry segment led revenue growth with a remarkable 27.52% increase, while the aerospace segment grew by 6.17% and the information technology segment by 5.37% [35][36]. - The information technology segment achieved a net profit growth rate of 136.38%, indicating strong performance and future growth potential [36][39].

Core Insights - The defense and military industry index experienced a decline of -0.47% over the past week, ranking 25th out of 31 in the Shenwan first-level industry classification [3][7] - Over the past month, the index fell by -2.45%, ranking 24th out of 31 [3][10] - In the past year, the index increased by 4.99%, ranking 21st out of 31 [3][14] - The current PE-TTM for the defense and military industry is 78.66, which is at the 73.66 percentile of the past ten years, indicating a relatively high valuation level [3][14][41] Industry and Stock Performance Review Industry Performance Review - The defense and military industry index has shown a performance of -0.47% in the last week, -2.45% in the last month, and +4.99% in the last year [3][7][14] - The PE-TTM of the aerospace equipment sub-industry is 80.71, while the aerospace equipment sub-industry has a PE-TTM of 304.62, indicating significant valuation differences among sub-sectors [3][14] Stock Performance Review - The top-performing stocks in the defense and military industry over the past week include Triangle Defense (+25.28%), Guorui Technology (+14.59%), and Hangfa Technology (+7.27%) [3][18] - The worst-performing stocks include Jiangxin Technology (-17.20%), Guorui Technology (-4.41%), and Hailanxin (-4.77%) [3][18] Funding Situation - The total transaction volume for the defense and military industry was 257.1 billion yuan, a year-on-year decrease of -43.71% and a week-on-week decrease of -28.70% [3][32] - The military ETF fund shares decreased by -1.41% compared to the previous week, but increased by +70.89% year-on-year [3][34] Industry News - The successful launch of the Starcloud-1 satellite equipped with H100 GPU marks a significant step in space data center construction [3][40] - The first electromagnetic catapult aircraft carrier, Fujian, has been officially commissioned, representing a new era in China's naval capabilities [3][42] Investment Recommendations - It is suggested to focus on investment themes such as commercial aerospace, military trade, unmanned equipment, military AI, and low-altitude economy [3]