Core Viewpoint - The 2025 Air Force Aviation Open Day and Changchun Air Show commenced on September 19, marking the largest and most content-rich event since 2019, showcasing the capabilities of the H-6K bomber family and its strategic significance for national defense [1]. Group 1: Event Overview - The Changchun Air Show is the fourth aviation exhibition held in Changchun since 2019 and features the largest scale and most diverse content to date [1]. - The flying display of bombers, particularly the H-6K, left a significant impression on attendees, symbolizing national strength and the commitment of the People's Air Force to protect national airspace [1]. Group 2: H-6K Bomber Capabilities - The H-6K bomber has transitioned from "platform operations" to "system operations," indicating a strategic shift from coastal defense to far-reaching deterrence capabilities [1]. - The H-6K has been involved in various large-scale missions, including regular training and patrols in the Western Pacific and East China Sea, enhancing its role in maintaining national sovereignty [1]. Group 3: Technical Aspects of Bomber Operations - The low-altitude formation flying of the H-6K is technically challenging due to its size and power, requiring high precision from the crew [6]. - This capability has practical combat value, as low-altitude flying can help evade radar detection during missions, allowing for surprise attacks [8]. Group 4: Armament and Variants - The H-6K is equipped with multiple hardpoints for carrying large missiles, including cruise missiles and hypersonic missiles, enhancing its long-range strike capabilities [9][11]. - Variants of the H-6, such as the H-6H, are designed for specific roles, including anti-ship operations, with modifications to their radar and sensor systems [14][16].

Group 1 - The article highlights the military parade showcasing various advanced weaponry and defense capabilities [6][7][9] - The presence of hypersonic missiles and nuclear missile units indicates a focus on modern warfare technologies [6][11] - The inclusion of unmanned combat units reflects the growing trend towards automation in military operations [9][17] Group 2 - The air defense and naval capabilities are emphasized through the display of carrier-based defense systems and aerial refueling units [8][21] - Ground assault units are also featured, showcasing a comprehensive approach to land, air, and sea defense [19][21] - The overall presentation aims to demonstrate national defense strength and technological advancements in military hardware [6][19]

Core Viewpoint - The military parade held on September 3 in Beijing showcased the strength and capabilities of the Chinese military, emphasizing its commitment to peace and defense, while commemorating the 80th anniversary of the victory in the Anti-Japanese War [1][3][8]. Group 1: Military Structure and Capabilities - The parade featured over ten thousand personnel, hundreds of aircraft, and numerous ground equipment, highlighting the advancements made by the Chinese military on its path to modernization [1][3]. - The introduction of new military branches, including the military aerospace, cyber space, and information support forces, reflects a strategic shift towards high-quality development and modern warfare readiness [3][4]. - The display included advanced domestic weaponry such as the 99B tank, J-35A fighter jet, and J-15DH carrier-based aircraft, showcasing the military's operational capabilities and readiness for modern combat [6][8]. Group 2: Peaceful Intentions and Global Role - The parade served as a platform for China to communicate its defensive military policy and commitment to peaceful development, distinguishing itself as a major power that does not seek hegemony or engage in arms races [8]. - China's participation in UN peacekeeping missions and humanitarian efforts was highlighted, reinforcing its role as a stabilizing force in global affairs [8]. - The presence of peacekeeping troops during the parade symbolized China's dedication to international justice and its responsibility as a major power in maintaining global peace [8].

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [2] Core Viewpoints - A military parade will be held on September 3, showcasing both traditional main battle forces and new domain capabilities, reflecting the modernization of the military [12][13] - The military industry is expected to see a turning point in orders in 2025, driven by new technologies and products aimed at enhancing equipment performance and reducing costs [20] - Investment recommendations focus on two main lines: aerospace and "gap-filling" new focuses, and new technologies, products, and markets with greater elasticity [20] Summary by Sections Industry Overview - The closing index for the military industry is 1596.82, with a 52-week high of 1712.48 and a low of 1113.62 [2] Market Performance - The military sector index increased by 6.23%, outperforming the Shanghai Composite Index, which rose by 1.91% [22] - The top ten performing stocks in the military sector this week include Changcheng Military Industry (+43.85%) and Zhongke Haixun (+34.89%) [24] Valuation Levels - As of June 27, 2025, the military sector's PE-TTM valuation is 110.98, with 81.19% of the time since January 1, 2014, the PE-TTM valuation has been lower than the current level [26][29] Investment Suggestions - Suggested stocks for the aerospace main line include Feilihua, Fenghuo Electronics, and AVIC Shenyang Aircraft [20] - New technology and market opportunities include companies like Aerospace Zhizao and Guangdong Hongda [20]

Summary of Military Industry Conference Call Industry Overview - The military industry is experiencing significant investment opportunities due to global geopolitical tensions and an arms race, particularly highlighted by China's military equipment performance in the India-Pakistan air conflict, which has increased international recognition of Chinese military products [1][2]. Key Points and Arguments - **Investment Opportunities**: The military sector is expected to benefit from increased order delivery tolerance from institutions, driven by geopolitical tensions and high-end equipment exports [1][2]. - **Market Events**: The upcoming 93rd anniversary military parade is anticipated to boost market activity, alongside the conclusion of the 14th Five-Year Plan and the initiation of the 15th plan, which may lead to expedited orders [3][5]. - **Performance Metrics**: In the first half of 2025, the defense industry index outperformed the broader market, driven by a reversal in industry sentiment and concentrated order issuance [1][10]. - **Valuation Trends**: The military industry's valuation has risen to the 75th percentile, indicating potential for further growth, shifting from EPS-driven to PE-driven factors due to increased global asset allocation demand [8][21]. - **Contract Liabilities**: A 12.7% increase in contract liabilities in Q1 2025 suggests a pre-order phenomenon, indicating future performance improvements [11][9]. Important but Overlooked Content - **Geopolitical Context**: The ongoing geopolitical tensions, including conflicts in Ukraine and the Middle East, are expected to sustain demand for military equipment, with countries like South Korea and Japan increasing their defense budgets [19][16]. - **Technological Advancements**: The military sector is focusing on new combat capabilities, including unmanned systems and high-speed weapons, which are crucial for future military strategies [7][29]. - **Investment Recommendations**: Key investment areas include military trade exports, military electronics, and ammunition, with specific companies highlighted for their potential [5][30][31]. Future Outlook - The military industry is poised for continued growth, driven by strategic security asset allocation and the global expansion of Chinese military assets, particularly in the arms trade [21][22]. - The upcoming 15th Five-Year Plan is expected to clarify future directions for the military sector, enhancing market confidence and potentially leading to increased order flows [15][13]. This summary encapsulates the critical insights from the military industry conference call, highlighting the current landscape, investment opportunities, and future trends.