Investment Rating - The report maintains a "Positive" investment rating for the defense and military industry [3]. Core Insights - The report emphasizes the innovation in new combat forces and the importance of system integration in the defense sector, highlighting the growth potential in various sub-sectors such as aerospace electronics, unmanned systems, underwater defense, and data link technologies [8][10][37]. Summary by Sections Aerospace Electronics - The company, Aerospace Electric, is backed by the Aerospace Jiangnan Group and focuses on high-tech products in the aerospace and defense electronics sector. It has become a significant player in the industry, with over 70% of its products sold to high-end clients in aerospace and military sectors [12][21]. - The company has established a cross-regional, group-based structure to enhance its R&D, production, and sales capabilities, ensuring high-quality development [16][21]. Unmanned Systems - Unmanned systems have transitioned from the periphery to the center of modern warfare, with drones playing a crucial role in military operations. The report outlines the evolution of drones and their increasing complexity and autonomy [40][41]. - The modern drone ecosystem includes various types, from consumer drones to advanced stealth combat drones, reflecting significant technological advancements [42][43]. Underwater Defense - Unmanned Underwater Vehicles (UUVs) are highlighted as a new class of equipment with diverse applications and high autonomy. The report notes that the U.S. military's UUV market could exceed $50 billion over the next decade [74][81]. - UUVs are characterized by their stealth, cost-effectiveness, and support for distributed operations, making them a vital component of modern naval strategies [81][86]. Data Link Technologies - The report discusses the importance of data link technologies in enhancing operational connectivity and efficiency in military operations, emphasizing the need for continuous technological upgrades [8][37]. Market Potential - The report estimates that the Chinese military drone market could exceed 40 billion yuan by 2028, driven by increasing demand for various types of drones, including medium and large military drones [64][66].