The performance forecast verifies the prosperity of the industry, and the growth rate of aviation equipment supporting enterprises is high: 61 companies in Shenwan national defense and military industry have issued performance forecasts for 2021, of which 38 companies achieved growth and 23 companies decreased year-on-year. Among the 25 companies in the aviation equipment sector that have issued performance forecasts, 16 companies have achieved growth and 9 companies have declined. The growth rate of supporting enterprises in the middle and upper reaches is relatively high, Avic Heavy Machinery Co.Ltd(600765) , Xi’An Triangle Defense Co.Ltd(300775) , Western Superconducting Technologies Co.Ltd(688122) , Chengdu Ald Aviation Manufacturing Corporation(300696) , Guizhou Aviation Technical Development Co.Ltd(688239) , Wuxi Paike New Materials Technology Co.Ltd(605123) is expected to increase by more than 80%, which verifies the high prospect of the aviation industry chain.
The chairman signed an order to issue the “provisions on military equipment test and appraisal”: on February 12, Xinhua reported that the chairman of the Central Military Commission Xi Jinping recently signed an order to issue the “provisions on military equipment test and appraisal”, which will come into force on February 10, 2022. Under the new system and equipment appraisal mechanism, the work is oriented to the actual combat and in accordance with the provisions of the new military equipment appraisal mechanism; Focusing on the actual combat assessment requirements of equipment, the test and appraisal workflow is adjusted, and the working links of performance test, state appraisal, combat test, train and equipment finalization and in-service assessment are constructed in the whole life cycle of equipment; Based on the development trend of equipment informatization and intelligence, the working mode of test and appraisal has been improved, and the working system close to actual combat, flexible strategy, agility and efficiency has been improved.
The boom expansion of the industrial chain is conducted in an orderly manner, and the value of stabilizing and configuring the sector is prominent: since the beginning of the year, the military industry sector has experienced a sharp correction under the influence of market sentiment and other factors, and the logic of long-term boom expansion remains unchanged. The verification of advances received by downstream enterprises and the landing of large orders will be conducted in an orderly manner to the upstream and midstream along the industrial chain. During the “14th five year plan” period, the demand of supporting enterprises is large-scale and uncertain, and the performance of private leaders will be more flexible. The CSI military industry index is valued at 61 times, which is at the 21% quantile value of historical PE. It is optimistic about the value of sector allocation under the current position.
Grasp the main line of aviation equipment investment, and the independent and controllable growth of military electronics is high: 1) the contract liabilities of main engine factory + verification of advance payment, and the growth of aviation industry chain will continue to be realized. The performance transmission is effective. From the main engine plant and engine system, to the body system and parts, and then to the upstream raw material sector, the whole industry chain has strong momentum and certainty. The main engine manufacturer pays attention to Avic Shenyang Aircraft Company Limited(600760) , Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , Avicopter Plc(600038) , Aecc Aviation Power Co Ltd(600893) ; Body system concerns Avic Electromechanical Systems Co.Ltd(002013) , China Avionics Systems Co.Ltd(600372) , Aecc Aero-Engine Control Co.Ltd(000738) , Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) ; Aviation parts focus on 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) ; Metal materials focus on Western Superconducting Technologies Co.Ltd(688122) , Baoji Titanium Industry Co.Ltd(600456) , Gaona Aero Material Co.Ltd(300034) , Jiangsu Toland Alloy Co.Ltd(300855) , etc. 2) The certainty of missile weapons and equipment benefits from practical military training. The independent control of military electronics in the field of high-end equipment brings high growth. We pay attention to Chengdu Tianjian Technology Co.Ltd(002977) , Chengdu Rml Technology Co.Ltd(301050) , Avic Jonhon Optronic Technology Co.Ltd(002179) , Guizhou Space Appliance Co.Ltd(002025) , China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) , Beijing Fjr Optoelectronic Technology Co.Ltd(688272) .
Risk warning: military spending is less than expected; Equipment R & D progress and procurement progress are less than expected; Military procurement prices fell; Industry competition intensifies.
