Investment Rating - The industry investment rating is "Outperform the Market" [1] Core Viewpoints - Chinese equipment has shown outstanding performance in the recent India-Pakistan conflict, with prime manufacturers benefiting more from military trade growth than upstream companies [12][14] - The military trade market is expected to grow significantly as China's global presence increases, with military equipment exports to Pakistan accounting for 63% of China's total military trade exports from 2020 to 2024 [14][17] - The report suggests focusing on two main investment themes: 1) Aerospace and "gap-filling" new focuses, including companies like Feilihua, Fenghuo Electronics, and others [18] 2) New technologies, products, and markets with greater elasticity, including companies like Aerospace Intelligent Manufacturing and others [18] Summary by Sections Industry Overview - The closing index for the defense industry is 1502.54, with a 52-week high of 1712.48 and a low of 1113.62 [1] Market Performance - The military industry index increased by 5.17%, outperforming the broader market indices [19] - The top ten performing stocks in the military sector this week include Chengxi Aviation (+59.26%) and others [22] Valuation Levels - As of May 9, 2025, the military industry index stands at 10729.21, with a PE-TTM valuation of 103.42 and a PB valuation of 3.48, indicating that both valuations are at historical mid-levels [24][25]