Summary of Defense Industry Conference Call Industry Overview - The defense industry experienced a revenue growth slowdown to 0.02% in the first three quarters of 2025, with profit growth lagging behind revenue growth, primarily due to military product order recovery, price adjustments, fixed cost allocation, and accounts receivable impairment [1][2][12] - The industry achieved a revenue of 450.8 billion yuan, ranking 25th among 31 primary industries, with a revenue growth rate of 6.74%, ranking 6th [2] Subsector Performance - **Aerospace Equipment**: Revenue declined by 1.8%, and profit decreased by 16% [3] - **Marine Equipment**: Revenue increased by 16.2%, with net profit rising by 87% [3] - **Military Electronics**: Revenue grew by 11%, but profit fell by 7% [3] - **Ground Armaments**: Revenue increased by 21%, and profit grew by 39% [3] - **Aerospace Equipment**: Revenue increased by 7%, but net profit dropped by 44% [3] - Overall, except for aerospace equipment, other subsectors showed varying degrees of order recovery and improved inventory turnover efficiency [3][8] Profitability and Cost Management - Military electronics had the highest gross margin, which fell from 36.8% in 2024 to 23.8% in 2025 [5] - All subsectors, except marine equipment, experienced a decline in gross margins, indicating a need to monitor the impact of declining margins on profitability [1][5] - Significant reductions in expense ratios across all subsectors demonstrate effective cost control [5] Contract Liabilities and Prepayments - As of Q3 2025, contract liabilities and prepayments increased in all subsectors except aerospace equipment, which saw a decline due to its cyclical nature [6] - Ground armaments saw a 19% increase, marine equipment 7%, aerospace equipment 8%, and military electronics 18% [6] Inventory Turnover - Average inventory turnover days decreased in all subsectors except aerospace equipment, which increased to 341 days from 323 days year-on-year [7] Future Outlook - The defense industry is expected to benefit from increased domestic military demand driven by national security needs and the implementation of the "15th Five-Year Plan" [12] - China's share in international military trade is anticipated to expand, potentially enhancing corporate revenues and profitability [12] - Key areas for investment include military trade, commercial aerospace, unmanned systems, and low-altitude economy-related enterprises [12]

指数 名称 收盘 涨跌（％） （点） 1 日 5 日 1 月 上证指数 4008 0.97 3.22 0.52 深证综指 2527 1.16 0.3 0.36 风格指数 昨日 近 1 个月 近 6 个月 | (％) | | | | | --- | --- | --- | --- | | 大盘指数 | 1.51 | 1.15 | 23.66 | | 中盘指数 | 1.67 | -1.37 | 29.75 | | 小盘指数 | 1.31 | -0.19 | 24.48 | | 涨幅居前 行业(％) | 昨日 | 近 1 个月 | 近 6 个月 | | 跌幅居前 行业(％) | 昨日 | 近 1 个月 | 近 6 个月 | 今日重点推荐 2025 年 11 月 07 日 国防军工行业深度报告：国防军工行业 2025 三季报总结—— 基本面压力释放，确收和利润兑现将提速 ◼ 我们从业绩表现、盈利能力、营运指标等方面对军工行业 2025 年三季报进 行了分析总结，考虑了如中航成飞等个股报表回溯调整的影响，并通过横 向、纵向、静态和动态等视角阐明了军工行业在边际上仍在发生重要的变 化。 申万宏源晨会报告 ◼ 从收入利润表 ...

Core Viewpoint - The successful sea trials of the Fujian aircraft carrier mark a significant milestone in China's naval development, showcasing its capabilities in electromagnetic catapult and recovery systems, which are crucial for modern naval operations [1][3]. Group 1: Aircraft Carrier Development - The Fujian aircraft carrier has successfully completed its first trials with the J-15T, J-35, and KJ-600 carrier-based aircraft, demonstrating its ability to conduct catapult launches and landings [1][3]. - The successful integration of the domestically developed electromagnetic catapult and arrestor system with multiple types of carrier-based aircraft indicates a strong adaptability and operational readiness of the Fujian carrier [3]. Group 2: Naval Aviation Progress - The Chinese Navy has made significant advancements in its carrier aviation capabilities, transitioning from single aircraft operations to a comprehensive system, and from land-based to carrier-based operations [3]. - The Navy's progress includes a shift from ski-jump takeoffs to catapult launches, enhancing its operational effectiveness and combat readiness [3]. Group 3: Future Prospects - The Fujian carrier is on track to conduct a series of planned sea trials and equipment tests, contributing to the overall stability and functionality of its systems [3]. - The ongoing development of the Chinese Navy aims to establish it as a world-class naval force, reflecting a commitment to modernization and strategic capabilities [3].

Core Viewpoint - The article highlights the significant advancements in China's naval aviation capabilities, particularly focusing on the successful trials of the Fujian aircraft carrier and its integration with various carrier-based aircraft [1]. Group 1: Aircraft Carrier Development - The Fujian aircraft carrier has successfully completed its first trials with the J-15T, J-35, and KJ-600 carrier-based aircraft, marking a milestone in China's naval development [1]. - The successful launch and recovery of these aircraft demonstrate the effective integration of China's independently developed electromagnetic catapult and arrestor system [1]. Group 2: Naval Aviation Progress - The Chinese Navy has made substantial progress in its carrier aviation sector, transitioning from single aircraft operations to a comprehensive system, and from land-based to carrier-based operations [1]. - The Navy is advancing towards becoming a world-class naval force, achieving significant milestones in operational capabilities [1]. Group 3: Future Prospects - The Fujian carrier is set to continue its sea trials and equipment testing, which are crucial for ensuring operational stability and readiness for future missions [1].

Core Viewpoint - The article highlights the significant advancements in China's naval capabilities, particularly focusing on the successful trials of the Fujian aircraft carrier and its integration with various carrier-based aircraft, marking a milestone in the development of the Chinese Navy [3][5]. Group 1: Fujian Aircraft Carrier Developments - The Fujian aircraft carrier has successfully completed its first trials with carrier-based aircraft, including the J-15T, J-35, and KJ-600, demonstrating its electromagnetic catapult and recovery capabilities [3][5]. - The successful trials signify a breakthrough in China's aircraft carrier development, enhancing the Navy's operational capabilities and marking a significant step towards a world-class navy [5]. Group 2: Naval Aviation Advancements - The Chinese Navy has accelerated its carrier-based aviation development, achieving a transition from single aircraft operations to a comprehensive system, and from land-based to carrier-based operations [5]. - The Navy has successfully validated the compatibility of its independently developed electromagnetic launch and recovery systems with multiple types of carrier-based aircraft, laying a solid foundation for future integration into carrier strike groups [5]. Group 3: Ongoing Testing and Future Plans - Since the first sea trial in May 2024, the Fujian carrier has been systematically conducting various sea tests, focusing on equipment debugging and overall operational stability [6].

Core Viewpoint - The company is actively promoting its military trade business and enhancing product visibility through participation in international airshows and defense exhibitions [1] Group 1: Military Trade Activities - The company has been continuously advancing its military trade business throughout the year [1] - The company’s military products, including large strategic transport aircraft and fighter-bomber export models, have participated in various international exhibitions such as Zhuhai, Paris, and Abu Dhabi [1] - The company has hosted multiple visits from international clients to discuss specific products and projects [1] Group 2: Information Disclosure - The company commits to timely information disclosure in accordance with relevant laws and regulations if there are any significant updates [1]

Core Viewpoint - The company emphasizes the importance of market value management as a core link between its operations and shareholder interests, aiming for a strong market performance that benefits all shareholders [1] Group 1 - The company acknowledges that stock prices are influenced by various factors and expresses a collective desire for good market performance [1] - The company prioritizes its responsibility to enhance national defense by promoting technological innovation and upgrades in aviation equipment [1] - The company is committed to deepening reforms and focusing on its main responsibilities to achieve annual research and production goals, thereby continuously improving its core competitiveness [1] Group 2 - The company plans to enhance investor relations through multiple channels, platforms, and methods to provide better services to various investors [1] - The company aims to strengthen communication with investors to create greater value for them [1]

Core Viewpoint - The company focuses on the development of large and medium-sized aviation equipment, including transport aircraft, bombers, and special-purpose aircraft, while actively responding to the trends in equipment technology development [1] Group 1 - The company is leveraging its technological reserves in aviation equipment development to expand into the emerging defense equipment industry [1] - The company aims to integrate military application scenarios into its product offerings, continuously expanding the application fields and technological boundaries of its products [1]

Core Insights - A significant block trade occurred for AVIC Chengfei on November 6, with a volume of 240,000 shares and a transaction value of 21.984 million yuan, at a price of 91.60 yuan, representing an 8.69% premium over the closing price of the day [2][3] Trading Activity - The block trade was executed by Ping An Securities Co., Ltd., with the buying department located in Beijing and the selling department in Shanghai [2] - Over the past three months, AVIC Chengfei has recorded three block trades, totaling 56.8424 million yuan [2] Stock Performance - The closing price of AVIC Chengfei on the day of the block trade was 84.28 yuan, reflecting a 1.12% increase, with a turnover rate of 1.23% and a total trading volume of 608 million yuan [2] - The stock experienced a net inflow of 35.7421 million yuan in main funds for the day, but has seen a cumulative decline of 1.89% over the past five days, with a total net outflow of 346 million yuan [2] Margin Financing - The latest margin financing balance for AVIC Chengfei stands at 1.481 billion yuan, having decreased by 342 million yuan over the past five days, marking an 18.78% decline [3] Company Background - AVIC Chengfei was established on December 25, 2002, with a registered capital of 2.672091376 billion yuan [3]

Core Insights - The aviation equipment sector experienced a significant increase of 2.12% on November 6, with Triangular Defense leading the gains [1] - The Shanghai Composite Index closed at 4007.76, up 0.97%, while the Shenzhen Component Index closed at 13452.42, up 1.73% [1] Stock Performance - Triangular Defense (300775) saw a closing price of 30.59, with a remarkable increase of 20.01% and a trading volume of 728,800 shares, amounting to 2.218 billion yuan [1] - Aviation Power Technology (600391) closed at 29.24, up 10.01%, with a trading volume of 258,600 shares and a transaction value of 738 million yuan [1] - Other notable performers included: - Parker New Materials (605123): closed at 75.43, up 10.00% [1] - Aerospace Technology (688239): closed at 59.55, up 8.17% [1] - Aviation Technology (688510): closed at 25.64, up 8.05% [1] Capital Flow - The aviation equipment sector saw a net inflow of 1.534 billion yuan from institutional investors, while retail investors experienced a net outflow of 884 million yuan [2][3] - Triangular Defense had a net inflow of 556 million yuan from institutional investors, representing 25.04% of its trading volume [3] - Other stocks with significant institutional inflows included: - Western Superconductor (688122): net inflow of 225 million yuan [3] - Feilihua (300395): net inflow of 217 million yuan [3]