Core ideas of this week
1) the Ministry of national defense interprets the new year’s training mobilization order and comprehensively promotes the transformation and upgrading of military training. On January 27, the Ministry of national defense held a monthly regular press conference, at which the reporter put forward the specific measures for the whole army to implement the Xi Jinping training mobilization order and the prospect of military training in the new year. Senior Colonel Wu Qian, spokesman of the Ministry of national defense, said: this year, the people’s army will usher in the 95th anniversary of its founding, and the military training of the whole army will focus on implementing the spirit of the military training conference of the Military Commission, We will strengthen military training, tackle tough tasks in the 14th five year plan, and comprehensively promote the transformation and upgrading of military training. First, vigorously promote the in-depth coupling of combat and training, highlight case-based testing, strengthen the training of taking the enemy on the front line of military struggle, strengthen the training under extreme and severe conditions, maintain full-time readiness and ready to fight at any time, and accelerate the integration of training and actual combat. Second, vigorously promote system training, innovate the formation training of typical combat operations, increase the training of joint combat command adaptability, and comprehensively improve the joint combat capability and whole domain combat capability based on network information system. Third, vigorously promote military training through science and technology, accelerate the integration and transformation of advanced science and technology into combat effectiveness, strengthen the integration and innovation of science and technology, vigorously develop simulation training and network training, strive to improve the scientific and technological literacy of officers and soldiers, and constantly innovate asymmetric winning tactics. The commanders and fighters of the whole army will adhere to hard training, scientific training and safety training, and greet the victory of the 20th CPC National Congress with a more high spirited outlook and first-class military training results. At present, the state attaches great importance to military construction and emphasizes the continuous improvement of military combat literacy through practical training. In the process of strengthening the military, the demand for the assembly and consumption of weapons and equipment is expected to effectively support the sustained high prosperity of the military industry.
2) the State Council issued the white paper “China’s aerospace in 2021” to outline the road map of a powerful Aerospace country.
The Information Office of the State Council released the white paper “China’s aerospace in 2021” on January 28. The book mainly summarizes the development of China’s aerospace field from 2016 to 2021 and looks forward to the future. The book, with a total of about 12500 words, expounds China’s pursuit of the aerospace dream from six aspects, including “developing space technology and systems”, “promoting the modernization of aerospace governance” and “building a new pattern of aerospace international cooperation”. In terms of space transportation system, China has completed 207 launch missions in the past five years, including 183 launches of long march series launch vehicles, with a total number of launches exceeding 400. In terms of manned spaceflight, the successful launch of the “Tianhe” core module marks the full implementation stage of the construction of China’s space station. Six astronauts successively entered the China space station to carry out tasks such as out of cabin activities, extravehicular operation, on orbit maintenance and scientific experiments. In terms of space infrastructure, the beidou-3 global satellite navigation system has been fully completed and put into operation, and the launch network of 30 satellites has been completed. The “three-step” strategy of Beidou system has been successfully completed, officially entering a new era of serving the world, and its service performance has reached the world’s advanced level. The white paper expounds the specific measures and arrangements of China’s aerospace in international cooperation and translates them into multilingual texts. It emphasizes that the purpose of China’s aerospace development is to make peaceful use of space and serve the common well-being of mankind, and expounds China’s intention and ability to carry out international cooperation. With the increasingly full tasks in the aerospace field, it is expected that the landscape of relevant industrial chains will continue to improve.
Focus on aviation, aerospace, informatization and new materials:
1) aviation equipment: both the surrounding situation and the construction of Navy and air force have put forward new requirements for military aircraft. At present, there is a large room for improvement in the number and structure of Chinese military aircraft. It is expected that with the national defense budget inclined to weapons and equipment, especially the air force and Navy, it is expected to accelerate the upgrading of military aircraft. The disclosure of large contract liabilities by many companies in the early stage may further improve the cash flow of the industrial chain and promote the production and delivery of products. We believe that aviation equipment will show a high boom during the 14th Five Year Plan period, driving the improvement of industrial chain performance. In addition, the reform of military pricing mechanism and the increase of equity incentive scheme will also promote the improvement of industry profit level. It is suggested to pay attention to: [ Avic Shenyang Aircraft Company Limited(600760) ], [ Avic Xi’An Aircraft Industry Group Company Ltd(000768) ], [ Jiangxi Hongdu Aviation Industry Co.Ltd(600316) ], [ Aecc Aviation Power Co Ltd(600893) ], [ Avic Electromechanical Systems Co.Ltd(002013) ], [ Hefei Jianghang Aircraft Equipment Co.Ltd(688586) ], [ Avic Jonhon Optronic Technology Co.Ltd(002179) ], [ Avic Heavy Machinery Co.Ltd(600765) ], [ Wuxi Paike New Materials Technology Co.Ltd(605123) ], [ Guizhou Aviation Technical Development Co.Ltd(688239) ], [ Chengdu Ald Aviation Manufacturing Corporation(300696) ], [ Jiangsu Maixinlin Aviation Science And Technology Corp(688685) ].
2) aerospace equipment: in terms of missile weapons and equipment, the main driving factors of the missile industry mainly come from: the first is the iterative period, the second is the increase in the demand for strategic reserves, and the third is driven by practical training. The missile sector may be the most flexible segment during the 14th Five Year Plan period, which will bring rapid performance thickening of relevant listed companies. Pay attention to the overall opportunities of the missile sector, and give priority to the targets with high performance flexibility and high proportion of missile business. It is suggested to pay attention to: [ Guizhou Space Appliance Co.Ltd(002025) ] and [ Beijing Relpow Technology Co.Ltd(300593) ]. In terms of Satellite Internet, Beidou navigation: the year-on-year growth rate of Beidou satellite navigation industrial chain began to increase in 2021, and it is expected to maintain a high growth rate in 2022 and 2023. In Beidou navigation industrial chain, the demand for Beidou navigation chips and Beidou navigation terminals increased rapidly; Satellite internet field: China Spacesat Co.Ltd(600118) network group is expected to become the main force of China Spacesat Co.Ltd(600118) Internet. At present, although China Spacesat Co.Ltd(600118) Internet is still in the early stage of development, Satellite Internet will still become an important development direction of 6G mobile communication. It is suggested to pay attention to: [ Chengdu Corpro Technology Co.Ltd(300101) ] and [ Chengdu M&S Electronics Technology Co.Ltd(688311) ].
4) informatization sector: due to factors such as the localization process, military modernization and accelerated renewal of new models, it has continued to exceed the growth of the industry since 2018, focusing on military semiconductors, upstream electronic components, radar and electronic countermeasures, communication, navigation and remote sensing and other directions. The performance of some companies has taken the lead in entering the high-speed growth stage and is expected to continue in 2022. It is suggested to pay attention to: [ China Zhenhua (Group) Science & Technology Co.Ltd(000733) ], [ Unigroup Guoxin Microelectronics Co.Ltd(002049) ], [ Chengdu Zhimingda Electronics Co.Ltd(688636) ].
5) new materials: it is suggested to focus on the direction of superalloys, titanium alloys and carbon fiber composites. Military new material technology has basically achieved self-control and represents China’s leading level, and the dual / multi flow system of model certification makes suppliers limited, and the competition pattern at the supply side is good. At the demand side, due to the large volume of main battle models and supporting engines, the proportion of new material application continues to increase, the outsourcing proportion of main engine manufacturers, domestic substitution and other factors, It is expected that the future growth of the industry is highly deterministic, and the scale effect will continue to appear after the demand increases, driving the continuous decline of unit cost. Therefore, the gross profit margin of the industry may still have room to improve and gradually realize to profit, and has the possibility of urgent development to the civil market, with good long-term growth. It is suggested to pay attention to: [ Baoji Titanium Industry Co.Ltd(600456) ], [ Gaona Aero Material Co.Ltd(300034) ], [ Western Superconducting Technologies Co.Ltd(688122) ], [ Avic Aviation High-Technology Co.Ltd(600862) ].
Risk warning: the replacement of weapons and equipment is not as expected; The development of a new missile model was not as expected.
