Core Insights - The high-end equipment sector is experiencing significant growth, with the CSI High-End Equipment Sub-Index rising by 1.70% as of October 28, 2025, and notable increases in individual stocks such as Aerospace Development and Aerospace Intelligent Equipment [1][2] - The High-End Equipment ETF (159638) has shown a strong performance, achieving a 21.30% increase in net value over the past six months and a total fund size of 1.01 billion [1][2] - The strategic emphasis on national defense capabilities has been highlighted in the 14th and 15th Five-Year Plans, indicating a substantial leap in defense strength by 2035 [2] Market Performance - As of October 27, 2025, the High-End Equipment ETF has an average daily trading volume of 57.94 million over the past year, with a turnover rate of 4.25% on the trading day [1] - The ETF has recorded a maximum monthly return of 19.30% since its inception, with an average monthly return of 6.43% during rising months [1] Key Stocks - The top ten weighted stocks in the CSI High-End Equipment Sub-Index account for 46.85% of the index, with notable performers including AVIC Shenyang Aircraft, Aero Engine Corporation, and AVIC Electromechanical [2][4] - Specific stock performances include AVIC Shenyang Aircraft up by 3.05% and Aerospace Intelligent Equipment up by 8.09% [4]

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].