Core Viewpoint - The low-altitude economy is emerging as a strategic new industry in Shandong, with the province actively implementing policies to foster its development and create a new industrial landscape by 2027 [2][3]. Group 1: Policy and Development Plans - Shandong has released the "Three-Year Action Plan for High-Quality Development of Low-Altitude Economy (2025-2027)", outlining a detailed blueprint for the sector [2]. - The plan aims to establish a new development pattern led by Jinan and Qingdao, supported by multiple cities including Dongying, Yantai, and others by 2027 [2]. - Key actions include service support, technological innovation, application expansion, and industrial capacity enhancement to promote high-quality development [2][4]. Group 2: Applications and Innovations - The "Jinan Low-Altitude" app, the first digital platform for low-altitude economy in China, integrates various services such as drone delivery and medical emergency response [5][7]. - In Qingdao, drones are revolutionizing building maintenance with high-efficiency cleaning services, achieving a cleaning rate of approximately 800 square meters per hour, which is 5-8 times faster than traditional methods [8][10]. - In Weihai, drones are utilized for law enforcement, significantly improving efficiency in identifying illegal crops, reducing inspection time from 2 hours to 30-40 minutes [11][13]. Group 3: Agricultural and Tourism Integration - In Heze, agricultural drones are enhancing crop management by efficiently spraying pesticides over large areas, completing over 2000 acres in half a day [14][16]. - The city of Rizhao is integrating low-altitude economy into its tourism sector, launching helicopter tours to enhance visitor experiences along its coastline [17][19]. Group 4: Law Enforcement and Traffic Management - The "Air Intelligence Police" drone system in Liaocheng is enhancing traffic management by providing real-time monitoring and data analysis, improving response times to traffic violations [20][23]. - The drone system can cover a 3-kilometer radius and monitor multiple roadways, creating an integrated traffic management system [20][23]. Group 5: Future Outlook - Shandong's low-altitude economy is positioned to break through existing limitations, contributing significantly to the national development of this sector with innovative solutions and robust infrastructure [23].

Investment Rating - The industry investment rating is "Outperform the Market" [1] Core Views - As of April 20, 2024, among the 120 tracked defense industry listed companies, 60 have disclosed their 2024 annual reports, with 29 companies showing year-on-year growth in performance, and 12 companies reporting a net profit growth rate exceeding 20%. Notable companies with strong performance include China Shipbuilding Defense, Tianyin Electromechanical, and Aerospace Intelligent Manufacturing [4][12] - For the first quarter of 2025, 9 defense industry companies have released performance forecasts, with companies like China Shipbuilding Defense and China Heavy Industry expected to see year-on-year growth rates exceeding 300% [4][15] - Looking ahead to 2025, the defense industry is expected to experience a turning point in orders, driven by new technologies and products aimed at enhancing equipment performance and reducing costs. Two main investment themes are suggested: the aerospace theme and new technologies/products with greater elasticity [5][16] Summary by Sections Industry Overview - The closing index for the defense industry is 1413.55, with a 52-week high of 1712.48 and a low of 1113.62 [1] Performance Analysis - The defense sector index has seen a decline of 2.79% this week, ranking last among 31 sectors [18] - The top-performing stocks in the defense sector this week include Beimo Gaoke (+11.94%) and Hangya Technology (+9.70%) [20] Company Performance - Key companies and their 2024 revenue and profit growth rates include: - China Shipbuilding Defense: Revenue of 194.02 billion, profit growth of 684.86% - Aerospace Intelligent Manufacturing: Revenue of 77.81 billion, profit growth of 87.02% [14] - For Q1 2025 forecasts, China Shipbuilding Defense is expected to report a profit growth rate of 1103% [15] Valuation Levels - As of April 18, 2025, the defense sector's PE-TTM valuation is 72.84, and the PB valuation is 3.26, both at historical mid-levels [23] Investment Recommendations - Suggested investment themes include: 1. Aerospace and "gap-filling" technologies, with companies like Feiliwa and YF Electronics 2. New technologies and markets with greater elasticity, including Aerospace Intelligent Manufacturing and Guorui Technology [5][16]