Market review: as of December 17, 2021, Shenwan defense industry fell 0.58% this week, outperforming the Shanghai and Shenzhen 300 index by 1.40 percentage points, ranking 16th among Shenwan 31 industries; Shenwan’s defense and military industry fell 3.82% this month, 6.36 percentage points lower than the Shanghai and Shenzhen 300 index, ranking 29th among Shenwan’s 31 industries; Shenwan defense and military industry sector has risen 8.01% year to date, outperforming the Shanghai and Shenzhen 300 index by 12.93 percentage points and ranking 14th among Shenwan 31 industries.
As of December 17, 2021, the five sub sectors of Shenwan national defense industry had different performances. From the performance of the recent week, the navigation equipment sector increased the most, at 1.84%. Other sectors showed as follows: aerospace equipment sector fell 2.55%, aviation equipment sector fell 0.58%, ground military equipment sector fell 3.60%, and military electronics sector rose 0.33%.
Zhou’s view of the national defense industry: Recently, the military industry sector has made a major correction under the influence of the China Securities Regulatory Commission’s public solicitation of opinions on the revision of Several Provisions on the trading interconnection mechanism between the mainland and Hong Kong stock markets, the reduction of shareholders’ holdings, the list of U.S. entities and other events, and the amplitude adjustment is expected to be far less than that from September to October; Reason 1: the foreign capital participation in the military industry sector is less than that in other sectors; Reason 2: according to the recent announcement of reduction of holdings, the reduction of holdings of most military enterprises has been more than half, and the reduction of holdings of some leading enterprises has ended; Reason 3: as early as June 3, the United States has restricted Chinese military related enterprises, and the impact of funds on this aspect has long been reflected. Expanding the list of entities may accelerate the domestic substitution process of military enterprises, which may be more affected by short-term emotions.
In the long run, geopolitical events are becoming more and more complicated, and the number of global military exercises is becoming more and more frequent. Only by improving our military strength can we better deal with the increasingly complex world situation; The new variant virus has increased global uncertainty. As a key counter cyclical plate, the military industry plate is less affected by global economic events, and the industry as a whole is better and more certain. Optimistic about the high prosperity of the industry under the demand for equipment upgrading during the “14th five year plan” period, as well as the expectation of capital return under the acceleration of domestic substitution, optimistic about the aviation industry chain; On the other hand, we are optimistic about the development of Beidou industrial chain under the Internet of things and the development of special chips under the new round of digital currency reform. Suggestions on the subject: Aecc Aviation Power Co Ltd(600893) (600893), Avic Shenyang Aircraft Company Limited(600760) (600760), Unigroup Guoxin Microelectronics Co.Ltd(002049) (002049), Fushun Special Steel Co.Ltd(600399) (600399), Western Superconducting Technologies Co.Ltd(688122) (688122), Avic Electromechanical Systems Co.Ltd(002013) (002013), Avic Heavy Machinery Co.Ltd(600765) (600765), etc.
Risk warning: the number of new orders in the main engine plant is less than expected; Enterprise reform is not as expected; The epidemic worsened more than expected.
