Core Viewpoint - The military industry stocks have experienced a significant surge, driven by both internal and external factors, with a notable increase in investment and market interest [7][39]. Group 1: Market Performance - On the last day of June, military stocks saw a broad rally, with various military concepts such as military informationization and aircraft carriers rising significantly [2][3]. - The Aerospace ETF (159227) rose by 5.2%, achieving a six-day winning streak and over 12.6% increase in the past six trading days, reaching a new high since its listing [3]. - The military sector has entered the top three in the A-share industry index performance rankings for the first half of the year [5]. Group 2: Capital Inflow - There has been a substantial inflow of capital into the national defense and military sector, with net purchases exceeding 9.2 billion yuan, leading the market [4]. Group 3: Internal Factors - Internal catalysts include the upcoming "9.3 Military Parade" and the conclusion of the "14th Five-Year Plan," which are expected to boost military spending and interest [8][10]. - The "9.3 Military Parade" will showcase domestically produced main battle equipment, including new-generation weapons and technologies [9]. Group 4: External Factors - Ongoing geopolitical tensions, such as the recent ceasefire between Israel and Palestine and the renewed conflict in Ukraine, have heightened the demand for military capabilities [11][12][13]. - The global military expenditure is expected to rise, with NATO members agreeing to increase military spending as a percentage of GDP [21][22]. Group 5: Long-term Trends - China's defense budget is projected to grow, with a target of 2.2% of GDP by 2035, indicating a clear growth trajectory for the military industry [18][19]. - The global military expenditure is anticipated to increase significantly, with NATO countries expected to add approximately 2.7 trillion USD in military spending by 2035 [21]. Group 6: Military Trade Opportunities - China's military trade currently accounts for only 2.88% of the global market, but there is potential for growth as domestic military technology gains international recognition [25]. - The military industry is expected to benefit from new growth drivers, including low-altitude economy, commercial aerospace, and military AI [40]. Group 7: Financial Indicators - The military industry has shown positive financial indicators, with prepayments exceeding 72 billion yuan in Q1, a year-on-year increase of 8.31% [26]. - Institutions are optimistic about the upcoming mid-year reports, predicting a net profit growth rate exceeding 25% for the military sector in the first half of 2025 [27]. Group 8: Investment Sentiment - Long-term funds are increasingly allocating to the military sector, with public fund holdings in military stocks rising to 3.82% in Q1 2025, a historical high [28]. - The Aerospace ETF (159227) has shown strong performance, with a year-to-date increase of 36.6%, outperforming major market indices [34][37].