Core Viewpoint - The company has entered into a memorandum of understanding to establish a joint venture in Hong Kong focused on advanced security and anti-riot products, leveraging the growing global demand for such technologies [1][2]. Group 1: Joint Venture Details - The joint venture will be primarily owned by the company's subsidiary, Lihui Investment Limited, and will collaborate with Mr. Zhu Mapao, a major shareholder and director of Beijing Zhong'an Hangxin Technology Co., Ltd [1]. - The joint venture aims to promote and sell security and anti-riot products globally, provide technical support and solutions to overseas clients, and enhance product functionality and quality to meet international market demands [1]. Group 2: Market Potential and Strategic Alignment - The products have diverse applications, including perimeter security, unmanned operations, summit security, and emergency management, indicating a broad market potential as global demand for security and smart management continues to grow [2]. - The establishment of the joint venture aligns with national development strategies, including the promotion of high-tech industries and international cooperation, and aims to leverage Hong Kong's position as a global financial and trade center for the expansion of high-tech products [2]. - The company is also exploring other high-tech projects and emerging industry opportunities, marking a strategic extension into the high-tech and security sectors [2].

Group 1 - The core viewpoint is that U.S. small and mid-sized defense stocks have significantly outperformed large competitors due to increased demand for cost-effective and adaptable military systems driven by global conflicts and Pentagon priorities [1] - The NYSE Arca Defense Index rose by 34% in 2025, compared to a 12% increase in the S&P 500, highlighting the strong performance of companies like Kratos Defense & Security Solutions (KTOS.US), AeroVironment (AVAV.US), Astronics (ATRO.US), and Mercury Systems (MRCY.US) [1] - The Pentagon's proposed budget of $892.6 billion for fiscal year 2026 allocates nearly $6 billion for drone and counter-drone systems, nearly double the amount from the previous year, indicating a shift away from traditional projects like warships and fighter jets [1] Group 2 - Mergers and venture capital are increasingly flowing into the aerospace and defense sector, with U.S. startups in this field raising over $14 billion in 2025, the highest amount in at least a decade, as investors are optimistic about companies providing next-generation systems for modern battlefields [2]