Group 1 - Canadian Prime Minister Carney announced details of military aid to Ukraine during his visit, which includes an additional CAD 2 billion (approximately USD 1.44 billion) committed at the G7 summit in June [1] - Approximately CAD 830 million will be allocated for the procurement of critical equipment for Ukraine, including armored vehicles, medical supplies, weapons, ammunition, and drones [1] - About CAD 680 million will be used to procure U.S. weaponry to assist Ukraine, including air defense systems [1] Group 2 - During the visit, Carney met with Ukrainian President Zelensky, who expressed gratitude for the Canadian aid on social media [2]

Group 1 - The military industry is experiencing renewed activity due to procurement plans from Southeast and South Asian countries for Chinese military aircraft and air defense equipment, alongside ongoing global geopolitical conflicts that continuously catalyze sentiment in the military sector [1] - The military industry is expected to benefit from both domestic and international demand in 2023, with increased military spending globally and heightened attention on Chinese military equipment leading to a potential surge in military trade orders [1] - The "14th Five-Year Plan" is approaching its conclusion in 2025, which is expected to enhance order release expectations and boost market sentiment towards the military sector, while the "15th Five-Year Plan" is anticipated to further strengthen national defense and technology upgrades [1] Group 2 - The new quality productivity direction with high military content, particularly the low-altitude economy, is gaining attention due to its broad market prospects and policy support [2] - The strategic value of drones has been widely recognized during the Russia-Ukraine conflict, positioning them as a significant growth area in the military sector [2] - The low-altitude economy market in China is projected to reach 1.5 trillion yuan by 2025 and 3.5 trillion yuan by 2035, with eVTOLs expected to enter large-scale production soon [2]

Investment Rating - The report maintains a "Positive" investment rating for the defense and military industry [5]. Core Insights - The demand for military equipment is expected to expand due to ongoing international turmoil, with a focus on military trade and upstream sectors [1]. - The military electronics market is anticipated to grow significantly as modernized weapon systems require advanced electronic components [7][28]. - The recent escalation of conflicts, particularly between Israel and Iran, is likely to sustain the demand for military equipment [31]. Summary by Sections Industry Performance - The defense and military industry index increased by 1.03%, outperforming the Shanghai Composite Index, which decreased by 0.25% [10][13]. - The relative return of the defense and military index compared to the CSI 300 was +1.29% [10]. Key News and Developments - Russia is focusing on developing modernized weapon systems, emphasizing the need for advanced electronic components [28][30]. - The ongoing Israel-Iran conflict has led to increased military equipment demands, with Israel conducting extensive airstrikes [31]. Investment Recommendations - The report suggests focusing on specific sectors within the military industry, including military electronics and key materials [7]. - Recommended stocks include: - Military Electronics: Zhenhua Technology, Aerospace Electrical, and others [7]. - Key Materials: Western Superconducting, Chujian New Materials, and others [7].