Investment Rating - The report maintains an investment rating of "Leading the Market-A" for the defense and military industry, indicating an expected return that will exceed the CSI 300 index by 10% or more over the next six months [7]. Core Viewpoints - The defense and military industry index has shown signs of recovery, with the Shenyin Wanguo defense and military index rising by 2.85% during the week from November 21 to November 28, 2025, outperforming major indices such as the Shanghai Composite Index and the CSI 300 [2][15]. - The report highlights significant individual stock performances, with top gainers including Changguang Huaxin (+59.33%) and Aerospace Huan Yu (+53.33%), indicating strong market interest and potential investment opportunities within the sector [3][19]. - The report suggests focusing on specific segments within the industry, such as the aviation engine and fuel market, aerospace stronghold areas, carrier-based aircraft supply chains, and unmanned equipment sectors, which are expected to present investment opportunities [12]. Summary by Sections 1. Defense and Military Market Review - The Shenyin Wanguo defense and military index increased to 1,689.66 points, marking a 2.85% rise, while the Shanghai Composite Index rose by 1.4% during the same period [2][15]. - The defense and military sector ranked 14th out of 31 in terms of performance among primary industries, with a relative return of -0.2% over one month and an absolute return of -3.7% [5][18]. 2. Key Company Announcements - Baotai Co. plans to establish a joint venture with Suzhou Zhongke Ruilong Technology Co., with a registered capital of 20 million yuan, where Baotai will contribute 9.8 million yuan for a 49% stake [20]. - Lijun Co. signed a contract with GRANDWAY for the procurement of high-pressure roller mills and related equipment, totaling approximately 40.78 million yuan, which represents 52.53% of the company's audited revenue for 2024 [20]. 3. Key Industry News - Recent geopolitical developments, including negotiations between Ukraine and the U.S. and military activities by the Chinese military, may impact the defense sector's dynamics and investment landscape [12][21].