Investment Rating - The report maintains an "Overweight" rating for the defense materials sector [3]. Core Insights - The defense materials sector has shown significant performance, with the AVIC Securities Defense Materials Index rising by 21.41% year-to-date, outperforming the defense industry index by 3.12 percentage points [2][41]. - Geopolitical tensions, such as conflicts between India and Pakistan and Israel and Palestine, have increased market attention on the defense industry, stimulating the performance of defense materials and related companies [2][41]. - The upcoming commemorative events for the 80th anniversary of the victory in the Anti-Japanese War are expected to further enhance market expectations for the defense industry's performance recovery [2][41]. Summary by Sections 1. Defense Materials Industry Analysis - The defense materials sector is anticipated to gradually recover in 2025, benefiting from the concentrated release of demand as the "14th Five-Year Plan" concludes [8]. - The combination of high-performance materials and 3D printing technology is creating new possibilities for manufacturing [6][33]. - The demand for composite materials is expected to increase due to their multifunctionality in weapon systems [11]. 2. Capital Market Status of the Defense Materials Industry - The AVIC Securities Defense Materials Index has increased by 21.41% since the beginning of the year, significantly outperforming the broader market indices [41]. - The index's price-to-earnings ratio (TTM) has risen by 10.20% since the start of the year, indicating improved investor sentiment [2][41]. - Several defense materials companies have announced major contracts and expansion plans, reflecting a potential turnaround in performance [6][42]. 3. Important Investment Logic - The demand for military materials is expected to remain strong, driven by national defense goals and the need for increased production capacity [48]. - The report highlights the importance of new materials in enhancing weapon performance, with predictions indicating significant growth in the market for high-end titanium alloys, carbon fibers, and high-temperature alloys by 2028 [49][50]. - The report suggests that the integration of advanced manufacturing techniques, such as additive manufacturing, will play a crucial role in the future development of the defense materials sector [12][13].