Core Insights - The recent use of the Chinese J-10CE fighter jets by the Pakistan Air Force in border conflicts has demonstrated their combat effectiveness, successfully downing multiple Indian aircraft and gaining an advantage over French Rafale jets [1] - The development of the J-10 fighter jet has significantly narrowed the gap between China and leading aviation powers, marking China's emergence as one of the few countries capable of developing fourth-generation fighter jets [1] - The export of the J-10CE represents a shift in China's military equipment export strategy from single product output to a comprehensive support system [1] Industry Overview - The fighter jet industry involves thousands of upstream and downstream enterprises across various sectors, including aviation equipment, new materials, and precision processing, with leading A-share companies such as AVIC Chengfei (302132), Hongdu Aviation (600316), AVIC Heavy Machinery (600765), and others benefiting from this growth [1] - The J-10CE's combat capabilities are attributed to three main systems: its aerodynamic design, advanced avionics, and enhanced weapon load capacity, which collectively improve its operational effectiveness [2][3][5] - The J-10CE features a duck-billed aerodynamic layout and is powered by the domestically produced WS-10B "Taihang" engine, achieving a maximum thrust of over 14 tons and a top speed of 1.8 Mach, showcasing significant advancements over previous models [3] - The integration of an active electronically scanned array (AESA) radar allows the J-10CE to track multiple aerial targets simultaneously, enhancing its combat capabilities in medium-range air combat [4] Market Dynamics - The military trade sector is transitioning from single equipment exports to comprehensive combat system exports, with a significant order backlog exceeding 10 billion yuan, indicating an acceleration in military export performance [7] - Companies like Hongdu Aviation have reported a 547.8% year-on-year increase in export sales, validating their strategic focus on diversified platforms [7] - The A-share military sector has shown strong performance, with defense stocks leading the market, driven by improved quarterly results and expectations of a clearer performance inflection point in the second quarter [8] - The aircraft industry chain is relatively stable, while the missile industry is experiencing significant revenue growth, indicating a potential new high prosperity cycle for the industry [8]