Investment advice
[core combination] Aecc Aviation Power Co Ltd(600893) , Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Avic Shenyang Aircraft Company Limited(600760) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , Avicopter Plc(600038) , Inner Mongolia First Machinery Group Corporation Co.Ltd(600967) , China Marine Information Electronics Company Limited(600764) , Unigroup Guoxin Microelectronics Co.Ltd(002049) , Western Superconducting Technologies Co.Ltd(688122) , China Cssc Holdings Limited(600150) , Beijing Aerospace Changfeng Co.Ltd(600855) , Aecc Aero-Engine Control Co.Ltd(000738)
[Key stock pool] Avic Heavy Machinery Co.Ltd(600765) , Avic Electromechanical Systems Co.Ltd(002013) , Avic Aviation High-Technology Co.Ltd(600862) , Sinofibers Technology Co.Ltd(300777) , China Avionics Systems Co.Ltd(600372) , Fushun Special Steel Co.Ltd(600399) , Gaona Aero Material Co.Ltd(300034) , Jiangsu Toland Alloy Co.Ltd(300855) , Western Superconducting Technologies Co.Ltd(688122) , Baoji Titanium Industry Co.Ltd(600456) , Weihai Guangwei Composites Co.Ltd(300699) , Xi’An Triangle Defense Co.Ltd(300775) , Chengdu Leejun Industrial Co.Ltd(002651) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Wuxi Paike New Materials Technology Co.Ltd(605123) , Guizhou Aviation Technical Development Co.Ltd(688239) , Wuxi Hyatech Co.Ltd(688510) , Wuhan Guide Infrared Co.Ltd(002414) , Zhejiang Dali Technology Co.Ltd(002214) , Xi’An Bright Laser Technologies Co.Ltd(688333) , China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Fujian Torch Electron Technology Co.Ltd(603678) , Chengdu Zhimingda Electronics Co.Ltd(688636) , Raytron Technology Co.Ltd(688002) , Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) , Asian Star Anchor Chain Co.Ltd.Jiangsu(601890)
[last week’s report] [ Avic Aviation High-Technology Co.Ltd(600862) ] depth: in the middle reaches of the core of the aviation composite industry chain, the military and civilian market drives high growth; [ Raytron Technology Co.Ltd(688002) ] depth: uncooled infrared faucet, special product volume + civil product expansion dual drive; [ Asian Star Anchor Chain Co.Ltd.Jiangsu(601890) ] depth: Global anchor chain leader, marine engineering, floating offshore wind power and mining chain.
[this week’s view] (1) the high outlook and medium and long-term investment logic of the military industry have not changed. After this round of adjustment, the investment value is highlighted, and the sector valuation has entered the high cost performance allocation area. Since the beginning of the year, the Shenwan national defense military industry index has fallen by 16.8%, mainly due to the influence of market liquidity and growth track preference. At present, the overall PE is 60 times, which is in the 24% quantile of the historical high, and the military industry index is 1645.30 points, which is in the 50% quantile of the historical high, with prominent allocation value; Considering the multi-dimensional high prosperity in the upstream and downstream of the 14th five year plan industrial chain, as well as the promotion factors such as capacity expansion, performance release and equity incentive of many enterprises in 2022, the medium and long-term investment logic of the industry has not changed, and many leading companies are facing rebound after oversold; (2) Endogenous epitaxial two wheel drive: firmly optimistic about the military industry from 2022 to 2023, and the index has great room for rise; In 2022, as the last year of the “three-year action plan” of state-owned enterprises, the mixed reform / incentive / asset securitization will be promoted in an all-round way, the epitaxial growth will exceed expectations, and the military industry will be driven by endogenous + epitaxial growth.
[core view] the deterministic growth of national defense is high. In 2022, it will enter the two wheel drive of “business cycle + asset integration”, “endogenous + extension”, “domestic demand + foreign trade” and “military products + civilian products”. The military industry index is expected to replicate the performance of the wind power index in the second half of 2021 in 2022, and the latter ranks first: (1) under the “century change”, the deterministic growth of national defense industry is high, “Preparing for war / 2027 / building a strong national defense commensurate with the second largest economy” is the established direction. Large contract liabilities in 2021 highlight the high boom of the 14th five year plan. (2) In the next few years, the securitization of national defense and military assets and the reorganization and listing of core military products are expected to set off a new round of climax. We will pay attention to the reorganization process of China Shipbuilding Group / Aerospace Hi-Tech Holding Group Co.Ltd(000901) / CETC / AVIC / Aerospace Science and industry / ordnance industry and other groups. (3) China’s tanks / UAVs / trainers / fighters are globally competitive, and the demand for foreign trade is gradually rising. Domestic large aircraft / civil aviation engine and other industrial chains are also gradually growing.
1. National defense and military industry: scale effect + refined management, “small core and large cooperation”, and the performance flexibility of the main engine factory in the next five years; The “three-year action of state-owned enterprise reform” is over, and equity incentive is expected to boost the release of performance: Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Avicopter Plc(600038) , Aecc Aviation Power Co Ltd(600893) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , Avic Shenyang Aircraft Company Limited(600760) , Inner Mongolia First Machinery Group Corporation Co.Ltd(600967) , China Cssc Holdings Limited(600150) .
2. Continue to be optimistic about high-tech barriers, high scarcity and competitive high-temperature alloy / composite materials / midstream component level supporting enterprises / engine forging and casting / information core midstream and other midstream and upstream sub circuits: Avic Heavy Machinery Co.Ltd(600765) , Fushun Special Steel Co.Ltd(600399) , Gaona Aero Material Co.Ltd(300034) , Western Superconducting Technologies Co.Ltd(688122) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Chengdu Leejun Industrial Co.Ltd(002651) , Wuxi Paike New Materials Technology Co.Ltd(605123) , Guizhou Aviation Technical Development Co.Ltd(688239) , Xi’An Triangle Defense Co.Ltd(300775) , Wuxi Hyatech Co.Ltd(688510) , Avic Electromechanical Systems Co.Ltd(002013) , China Avionics Systems Co.Ltd(600372) , Xi’An Bright Laser Technologies Co.Ltd(688333) , Jiangsu Toland Alloy Co.Ltd(300855) .
3. Missile and informatization: Unigroup Guoxin Microelectronics Co.Ltd(002049) , Fujian Torch Electron Technology Co.Ltd(603678) , China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Chengdu Zhimingda Electronics Co.Ltd(688636) , Wuhan Guide Infrared Co.Ltd(002414) , Zhejiang Dali Technology Co.Ltd(002214) .
The focus of defense Hong Kong stocks is optimistic: AVIC.
Risk warning: the rhythm of equity incentive and asset securitization is lower than expected, and the product delivery progress is lower than expected
