NEO(SH:600184)2025-08-12 15:05Summary of Military Industry Conference Call Industry Overview - The military industry in China has seen significant interest following military parades, with a notable 17% increase in the index after the announcement of the 2025 parade on June 24, 2025 [1][4] - The focus for the next five years will be on the development of new-generation traditional weapons and new combat forces, including unmanned intelligence, underwater operations, cyber-electronic warfare, and hypersonic technologies [1][4] Key Trends and Developments - The military industry is expected to enter a gradual upward development phase starting in 2025, influenced by significant events such as the India-Pakistan conflict and the 15th Five-Year Plan [2][19] - The military trade market is projected to have substantial growth potential during the 14th Five-Year Plan, with a focus on radar, aerospace, and military technology companies [3][14] Market Sentiment and Investment Opportunities - In Q2 2025, there was a rebound in holdings of military-focused public funds, indicating improved market confidence in the military sector [3][11] - Investment opportunities are concentrated in new-generation traditional equipment and guided weaponry, with specific companies highlighted such as Inner Mongolia First Machinery Group and Optics Valley [3][13] Historical Context and Valuation Changes - Historical military parades have consistently led to increased market activity, with significant trading volumes and price increases observed in the months leading up to these events [6][7] - The military industry's valuation has fluctuated over the years, peaking in 2015-2016 due to state-owned enterprise restructuring, followed by a decline until 2020, when demand expectations began to rise again [9][10] Future Projections - The military industry is expected to continue its upward trajectory from 2025 to 2027, with key events such as the 93rd military parade and the 15th Five-Year Plan serving as critical milestones [19][20] - New combat forces, including unmanned systems and hypersonic technologies, will be prioritized in future developments [20] Recommended Companies and Sectors - Companies to watch in the military trade sector include Radar, Nanhua, Guorui Technology, AVIC Shenyang Aircraft Corporation, and AVIC High-Tech [15][21] - In the new combat forces sector, companies involved in unmanned systems and underwater operations, such as Aerospace Electronics and Jintai Technology, are recommended for investment [16][17][18] Conclusion - The military industry is poised for growth, driven by technological advancements and strategic geopolitical events, making it a compelling area for investment in the coming years [2][19]