Investment Rating - The report indicates a positive outlook for the military industry, suggesting that the industry is nearing a bottom and is expected to recover in 2025 [1][2]. Core Insights - The military sector reported a total revenue of 764.903 billion yuan in 2024, reflecting a year-on-year increase of 1.16%. Key segments such as shipbuilding, aerospace engines, and aviation maintained positive revenue growth [1][2][11]. - The net profit attributable to shareholders in the military sector decreased to 26.655 billion yuan in 2024, a decline of 38.01% year-on-year, primarily due to lower downstream demand and price reductions for certain products [11][12]. - In Q1 2025, the military sector's revenue reached 153.894 billion yuan, up 2.35% year-on-year, with segments like ground equipment and aerospace showing signs of recovery [28][31]. Summary by Sections 1. 2024 Annual Report and 2025 Q1 Review - The military sector's revenue structure shows significant characteristics, with a focus on the recovery of order fundamentals. The shipbuilding sector saw a revenue increase of 10.87%, while ground equipment and aerospace segments are expected to stabilize [11][28]. - The military sector's net profit for 2024 was 26.655 billion yuan, down 38.01% year-on-year, with only the shipbuilding sector showing positive growth [11][12]. 2. Key Target Profit Forecasts and Valuations - Investment strategies suggest focusing on traditional military sectors with expected order recovery, including aerospace engines, shipbuilding, and aviation [3]. - New domains and new qualities are recommended, emphasizing low-cost, intelligent, and systematic characteristics in industries like precision-guided munitions and unmanned systems [3]. 3. Investment Strategy - The report recommends three main investment lines: traditional military sectors, new domains with significant growth potential, and companies with expected asset integration and competitive military trade markets [3]. - Specific recommended stocks include aerospace engine manufacturers, shipbuilding companies, and firms involved in commercial aerospace and low-altitude economies [3]. 4. Market Performance - The military sector's performance is closely monitored, with various companies announcing contracts and showing signs of recovery in the fundamentals of the military sector [46][47].

Investment Rating - The report suggests a positive outlook for the military industry, indicating a potential recovery in performance by 2025, with a focus on companies with order recovery expectations and performance support [2][10][44]. Core Insights - The military sector reported a total revenue of 764.903 billion yuan in 2024, a year-on-year increase of 1.16%. Key segments showing positive growth include shipbuilding, aerospace engines, and aviation [2][10]. - The net profit for the military sector decreased to 26.655 billion yuan in 2024, down 38.01% year-on-year, primarily due to lower downstream demand and price reductions for certain products [12][10]. - The first quarter of 2025 is expected to show signs of recovery, particularly in ground equipment and aerospace segments, with a projected increase in associated transaction amounts [2][29]. Summary by Sections 1. Industry Overview - The military sector's revenue growth was driven by shipbuilding (10.87% increase), aerospace engines (4.46% increase), and aviation (2.75% increase), while ground equipment and commercial aerospace saw significant declines [10][12]. - The report highlights a structural recovery in the military sector, with positive signals emerging from major companies regarding contract announcements and performance stabilization [2][38]. 2. Investment Strategy - The report recommends focusing on three main investment lines: 1. Traditional military sectors with expected order recovery, particularly in aerospace engines, shipbuilding, and aviation [2][44]. 2. New domains characterized by low-cost, intelligent, and systematic features, including precision-guided munitions and unmanned systems [2][44]. 3. Companies with asset integration expectations and competitive positions in military trade markets [2][44]. 3. Recommended Stocks - Traditional military direction: Recommended stocks include Aerospace Power, Aerospace Control, and Huayin Technology [3][45]. - New domain and new quality direction: Recommended stocks include High De Infrared, North Navigation, and Aerospace Rainbow [3][45]. - Reform and overseas direction: Recommended stocks include Guorui Technology and Construction Industry [3][45].