Core Insights - The report highlights the strong performance of the gaming industry, with the game "Escape from Duckkov" selling over 1 million copies within a week, indicating sustained high demand in the sector [5] - The aerospace industry is expected to experience significant growth opportunities following the announcement of "Aerospace Power" in the Fourth Plenary Session, with related stocks such as China Satellite Communications and China Satellite being highlighted [5] - The storage chip sector in the US has seen a substantial increase, with a continued upward trend in storage prices expected in Q4, pointing to potential investment opportunities in related companies like Purun Technology and Yake Technology [5] Industry Dynamics - The macroeconomic environment is being shaped by the 18th meeting of the 14th National People's Congress, which is reviewing significant legislative changes, including the revision of maritime laws and the establishment of Taiwan Recovery Day [4] - The State Council is planning major policies and reforms aimed at stimulating economic growth, which could positively impact various sectors [4] - The central bank is focused on maintaining stability in financial markets, including stock, bond, and foreign exchange markets, by carefully managing monetary policy [4] Company Focus - Guoxuan High-Tech reported a net profit of 2.533 billion yuan for the first three quarters, marking a remarkable year-on-year growth of 514.35% [6] - Taihe Intelligent's net profit for the same period reached 28.7793 million yuan, reflecting a year-on-year increase of 46.28% [6] - Longjing Environmental Protection plans to raise no more than 2 billion yuan through a private placement, aimed entirely at replenishing working capital [6] - AVIC Optoelectronics is actively pursuing research and development needs in the controllable nuclear fusion industry chain, particularly in valve systems and complete machine research [6] Market Review and Outlook - On October 24, the market experienced a rebound, with the Shanghai Composite Index reaching a new high for the year, and the ChiNext Index leading the gains [7] - The total trading volume in the Shanghai and Shenzhen markets was 1.97 trillion yuan, an increase of 330.3 billion yuan from the previous trading day [7] - The report suggests that the A-share market may continue to exhibit a pattern of steady fluctuations, supported by rising policy expectations and the verification of Q3 earnings [7] - Investors are advised to maintain strategic focus and actively seek quality assets during this volatile market phase, with technology growth remaining a long-term market theme [7]

Investment Rating - The report provides a strong recommendation for several companies in the military industry, indicating a positive outlook for their stock performance [9]. Core Insights - The recent Fourth Plenary Session of the 20th Central Committee emphasized new goals for national defense capabilities, including the enhancement of "national defense strength" and "international influence" [21]. - The report highlights the aerospace sector as a key focus area for military investment, particularly in the context of the newly stated goal of becoming a "space power" [21]. - Upcoming quarterly reports are expected to show a turning point in industry performance, with several companies already reporting significant year-on-year revenue and profit growth [24]. Industry Overview - The military industry consists of 118 listed companies with a total market capitalization of 2,092.9 billion and a circulating market value of 1,736.7 billion [4]. - The SW National Defense and Military Industry Index has shown a performance increase of 16.47% year-to-date, although it has underperformed compared to the CSI 300 Index by 1.97% [12][20]. - The industry is currently valued at a PE (TTM) of 85.77 times, with a five-year percentile of 78.63% [20]. Key Events - The Fourth Plenary Session concluded with new national defense goals, including a focus on high-quality military modernization and the integration of advanced combat capabilities [21]. - The report notes that the aerospace equipment sector has been particularly responsive to the recent policy announcements, showing strong performance [16][21]. Performance Summary - The report identifies several companies with notable performance, including North Navigation with a revenue increase of 210% and a net profit increase of 268.8% [25]. - The top-performing stocks in the military sector include North Shares (+25.20%) and Feili Hua (+17.92%) [19].

Core Viewpoint - China's space industry has officially entered a new era characterized by a dual-driven model of "state-led + commercial empowerment," marking the beginning of a golden age for commercial space [4][5]. Group 1: Policy and Market Dynamics - The 20th National Congress of the Communist Party of China elevated the "space power" strategy to a national strategic level, indicating a significant policy shift that is expected to catalyze the commercial space sector [4]. - A surge in A-share space-related stocks has been observed, with expectations of a valuation reconstruction during the 14th Five-Year Plan period [4]. - Multiple regions are planning billion-level satellite constellations and launch bases, with projections for record-high launch frequencies by 2025 [4]. Group 2: Industry Developments - The upcoming maiden flight of reusable rockets like Zhuque-3 is anticipated to reduce launch costs to approximately 30,000 yuan per kilogram [4]. - The primary market is seeing active financing, with eight companies, including Tianbing Technology and Xinghe Power, initiating IPO processes, indicating a shift from technology validation to scaling and capitalization [4][7]. Group 3: IPO Trends and Challenges - A wave of IPOs is emerging in China's commercial space sector, with five rocket companies and three satellite-related firms starting the listing process [7]. - The regulatory environment has adapted to allow unprofitable hard-tech companies to list, but with stringent conditions such as clear contracts and safety compliance [7][9]. - The focus is shifting from merely securing funding to achieving a comprehensive business model that includes technological independence and governance clarity [9]. Group 4: Global Competition and Strategic Implications - The competition in the space sector is not just about technology but also about national power dynamics, as seen in the context of the U.S. and China's space ambitions [12][13]. - The rise of private entities like SpaceX controlling a significant portion of global satellites raises concerns about the privatization of public goods and the governance challenges it presents [20][21].

Investment Rating - The report maintains an "Overweight" rating for the defense and military industry [6] Core Insights - The 20th Central Committee's Fourth Plenary Session emphasizes the importance of a strong military strategy and the significance of becoming a space power, aiming for high-quality advancement in national defense and military modernization by 2035 [9][19] - The "15th Five-Year Plan" is expected to build on the achievements of the "14th Five-Year Plan," focusing on the 2027 military centenary goal and supporting the modernization of national defense and military capabilities [9][19] - The report highlights the need for advancements in mechanization, information technology, and intelligence integration to enhance combat capabilities and national strategic systems [10][19] Market Overview - The defense and military index rose by 2.81% this week, ranking 12th among 31 primary industries [8][35] - The current PE(TTM) for the defense and military sector is 74.6 times, with sub-sectors showing varying PE ratios, such as aerospace equipment at 73.9 times and aerospace equipment at 182.2 times [8][41] Key Sector Dynamics - **Controlled Nuclear Fusion**: New Hope Group showcased advancements in hydrogen-boron fusion at the FEC2025 conference, achieving significant milestones in plasma current and magnetic field strength [12][24] - **Low-altitude Economy**: The Tianjin International Helicopter Expo highlighted the growth potential of the low-altitude economy, with projections estimating a market size of 1.5 trillion yuan by 2025 and over 3.5 trillion yuan by 2035 [13][29] - **Aerospace Engines and Turbines**: Shanghai Electric successfully completed the assembly and ignition of a heavy-duty industrial gas turbine, indicating progress in domestic manufacturing capabilities [14][30] - **Satellite Internet**: The China Aerospace Science and Technology Corporation successfully launched a communication technology test satellite, marking a significant achievement in satellite deployment [15][31] Suggested Focus Areas - **Missile and Military Electronics**: Companies to watch include Zhenhua Technology, Hongyuan Electronics, and Torch Electronics [16][23] - **Aerospace Engines**: Key players include Aero Engine Corporation of China and related suppliers [16][21] - **Military Trade**: Focus on companies like AVIC Chengfei and AVIC Shenyang [16][21] - **New Domains and Quality Construction**: Companies in commercial aerospace and low-altitude economy sectors are recommended for attention [16][22]

Core Viewpoint - The announcement of "a strong aerospace nation" during a significant meeting has catalyzed a surge in the commercial aerospace sector, leading to a rapid rise in the defense and military industry segment [1][3]. Group 1: Market Performance - The defense and military ETF (512810) saw an intraday increase of 2.8%, closing up 2.36%, recovering both the 5-day and 10-day moving averages, indicating a potential turning point [1]. - Out of the 79 constituent stocks in the defense and military ETF, 75 stocks experienced gains, with Aerospace Intelligence and other key players like Hongda Electronics and China Satellite hitting the 10% daily limit [3]. Group 2: Policy and Industry Outlook - The top-level decision to establish a "strong aerospace nation" is expected to lead to increased policy support and resource allocation for the aerospace industry, particularly in missiles, rockets, and satellites [3]. - The meeting also emphasized the goal of achieving high-quality modernization of national defense and military by the centenary of the armed forces [3]. Group 3: Investment Insights - Analysts from Dongfang Securities noted that the defense and military sector has stabilized in stock prices over the past month, with the upcoming "14th Five-Year Plan" expected to clarify new equipment construction plans, enhancing the sector's investment appeal [3]. - Huafu Securities highlighted the strong demand recovery expected in the defense and military industry from 2025 to 2026, suggesting a high significance for investment in this sector at the current time [3]. - The defense and military ETF (512810) is positioned as an efficient investment tool for core assets in the sector, covering various hot topics such as commercial aerospace, low-altitude economy, controlled nuclear fusion, large aircraft, deep-sea technology, and military AI [3].

Core Viewpoint - The recent release of the "15th Five-Year Plan" has significantly boosted market sentiment, leading to a notable increase in A-shares, particularly in technology and defense sectors, as the government emphasizes the importance of technological self-reliance and national security [1][9][14]. Market Performance - On October 24, the Shanghai Composite Index rose by 0.71% to 3950.31 points, marking a ten-year high, while the ChiNext Index surged by 3.57% [1]. - The total trading volume reached 1.99 trillion yuan, indicating a rapid increase in market activity [1]. - Key ETFs such as the "Entrepreneurship Board AI ETF" (159363) and "Dual Innovation Leading ETF" (588330) saw significant gains of 5.49% and 4.9%, respectively [2][10]. Sector Highlights - The AI sector experienced a resurgence, with major players in optical modules, such as Zhongji Xuchuang, seeing stock prices increase by over 12% [1][5]. - The defense and aerospace sectors were highlighted in the new plan, with commercial aerospace stocks experiencing a surge, including a 20% limit-up for Aerospace Intelligent Equipment [1][18]. Investment Themes - The "15th Five-Year Plan" suggests a focus on new productive forces, with technology companies that possess genuine technological barriers being a key investment theme in A-shares [3][14]. - The consumption sector is also emphasized as crucial for stabilizing the economy, alongside infrastructure projects related to local strategic initiatives [4][14]. - The real estate sector is expected to transition towards quality improvement and institutional innovation, driven by high-quality development frameworks [4][14]. ETF and Stock Performance - The "Entrepreneurship Board AI ETF" (159363) has shown a weekly increase of nearly 14%, with a strong upward trend indicated by technical analysis [5][8]. - The "Dual Innovation Leading ETF" (588330) has gained traction, reflecting the broader market's focus on hard technology and innovation [10][12]. - The defense sector ETF (512810) also performed well, with 75 out of 79 constituent stocks rising, driven by the government's focus on becoming a "space power" [18][19]. Future Outlook - Analysts suggest that the AI sector, as a key driver of the current technological revolution, is poised for continued growth, supported by government policies and increasing demand for computing power [9][10]. - The focus on optical modules and related technologies is expected to yield strong performance from leading companies in the sector, such as Zhongji Xuchuang and Xinyi Communication [9][10].

Investment Rating - The investment rating for the defense and military industry is "Positive" [2] Core Viewpoints - The report emphasizes a "dual-cycle resonance" in 2025, indicating a significant turning point for the industry and a year of substantial military investment [5][48] - It highlights a recovery in industry prosperity, value reassessment, and event-driven catalysts as key factors for growth [5][48] - The report suggests that the military industry is expected to see improved performance starting from Q2 2025, driven by an increase in orders and a favorable geopolitical environment [5][49] Summary by Sections Industry Performance - The Shanghai Composite Index rose by 2.88%, while the defense and military index increased by 2.60%, underperforming the market by 0.28 percentage points, ranking 12th out of 29 sectors [3][22] - Year-to-date, the defense and military index has increased by 17.98%, slightly outperforming the market [25] Key Developments - The Fourth Plenary Session of the 20th Central Committee proposed the development of a "Space Power," marking a strategic focus on aerospace as a new emerging industry [4][12] - The report notes rapid advancements in satellite internet deployment and the aerospace industry, with multiple satellite launches occurring in October [15][16] Investment Focus - The report recommends focusing on "new quality combat capabilities" and low-valuation stocks within the military sector [5][48] - Key investment targets include next-generation combat systems, unmanned equipment, satellite internet, and missile & ammunition sectors [5][48] Stock Performance - Notable stock performances include China Nuclear Engineering leading with a 23.40% increase, followed by Filihua and Aerospace Technology with significant gains [31][34] - The report identifies several companies as core beneficiaries of the anticipated industry growth, including AVIC Shenyang Aircraft, Huazhong Technology, and others [5][48]

Group 1 - The report highlights the emphasis on building a strong aerospace nation as proposed in the recent Central Committee meeting, with a focus on scarce aerospace targets listed on the Beijing Stock Exchange [1][12][17] - As of October 24, 2025, there are 20 companies in the aerospace and military sectors on the Beijing Stock Exchange, with a total market capitalization of 76.032 billion yuan [1][17] - Key companies to watch include Xingtum Control (920116.BJ), Fujida (835640.BJ), and Chuangyuan Xinke, which have shown significant growth and technological advancements in their respective fields [1][22][24] Group 2 - The five major industries on the Beijing Stock Exchange reported average weekly gains, with high-end equipment, information technology, chemical new materials, consumer services, and pharmaceutical biology showing increases of +4.29%, +4.36%, +3.85%, +2.43%, and +3.28% respectively [2][29] - The median P/E ratios for these industries have also risen, with high-end equipment at 41.9X, information technology at 71.0X, and chemical new materials at 41.5X [2][30][36] Group 3 - In the technology new industries, 143 out of 156 companies saw an increase, with a median growth of +4.42% during the reporting period [3][45] - The median P/E ratio for technology new industries increased from 45.8X to 46.9X, and total market capitalization rose from 471.131 billion yuan to 492.000 billion yuan [3][46][47] Group 4 - The report emphasizes the acceleration of quarterly report disclosures, highlighting companies with high growth and scarce quality targets [4][67] - Notable companies include Guangxin Technology, which reported a 41.35% increase in total revenue and a 91.95% increase in net profit for the first three quarters of 2025 [4][68] - Other companies like Changhong Energy and Kexin New Materials also reported significant revenue and profit growth during the same period [4][69]

Market Overview - The Shanghai Composite Index experienced a fluctuating upward trend this week, reaching a ten-year high on Friday, with daily trading volume hitting a near two-month low [2] - The ChiNext Index showed a similar pattern, also closing the week with a positive candlestick [2] - Key sectors that performed well included components, Apple supply chain, CPO, storage chips, and shale gas, while precious metals, kitchen appliances, and liquor saw declines [2] - The A-share market lacks a clear "main line," with ongoing differentiation and many hotspots being short-lived [2] Operational Strategy - The Shanghai Composite Index has reached a ten-year high, with short-term signals indicating potential new tops, although these may be minor [4] - The Shenzhen Component and ChiNext Index have not shown new top signals, suggesting a phase of rebound rather than a new trend [4] - The inconsistent performance of these indices contributes to the need for a cautious market approach [4] Key Insights from the Fourth Plenary Session - The Fourth Plenary Session emphasized "technological self-reliance" as a primary goal for the 14th Five-Year Plan, indicating a significant focus on technology in future planning [7] - The session highlighted the importance of building a modern industrial system with an emphasis on "intelligent and green" development, including a new focus on becoming a "space power" [8] - The session's goals align with historical planning phases, indicating a shift towards hard technology and self-sufficiency in the face of external pressures [10] Investment Opportunities - The emphasis on "space power" presents investment opportunities in the aerospace industry, which can drive growth in related sectors such as telecommunications and energy [11] - The AI computing sector is highlighted as a key area for investment, particularly in hardware related to liquid cooling and other advanced technologies [12] - The coal sector is experiencing favorable supply and demand dynamics, with rising prices indicating a potential for profitability and dividend stability [13] - The "three oil giants" (China National Petroleum, Sinopec, and CNOOC) are expected to maintain resilience in earnings despite fluctuating oil prices, showcasing long-term investment potential [14]

Core Viewpoint - The discussion focuses on China's high-quality development and high-level opening-up post the 20th Central Committee's Fourth Plenary Session, emphasizing confidence and strategic determination for future growth [1] Group 1: Economic Development - By 2035, China aims for its per capita GDP to reach the level of moderately developed countries, reflecting its confidence in future development [1] - The 14th Five-Year Plan will see China positively impacting global development through trade, investment, technology cooperation, and green development [1] Group 2: Trade and Investment - China plans to innovate in trade, focusing on digital and green trade to enhance trade quality [1] - The scale advantages of China's green industries, particularly in photovoltaic, wind power, and power batteries, will significantly reduce global green transition costs [1] Group 3: Technology and Finance - The discussion included topics on the intersection of technology and finance, China's aspirations in aerospace, and the country's economic growth rate [1]