Core ideas of this week
1) The construction and upgrading of our army’s training base and simulated blue army is expected to bring new growth to relevant supporting links. According to the PLA Daily, recently, a seminar on the construction of the whole army training base and the simulated blue army was held at a base. The seminar thoroughly implemented the thought of Xi Jinping strengthening the army, implemented the military strategic policy of the new era, focused on building a high-level training support system, focused on the construction and application of advanced means of “science and technology +”, “network +” and “intelligence +”, promoted the improvement of training conditions, the construction of scientific and technological content and cost-effectiveness ratio, and comprehensively promoted the in-depth coupling of war training and the transformation and upgrading of training. The training base and simulated blue army are the basic support for the army to carry out various types of training activities at all levels and are the hub and key to the generation of combat effectiveness. The discussion on the construction of the training base and the simulated blue army has lasted for four years. It has become an important platform for exchanges and mutual learning in the military training field of the whole army, gathering intelligence to solve problems. One direction and one theme a year. By building an exchange platform, it introduces training experience, solves construction problems, promotes characteristic achievements and gathers intelligence to plan development. The discussion focused on the contradictions in the construction of training conditions, the construction of professional blue army means, the arrangement of training tasks next year, the construction of legal system and so on. The state continues to strengthen the relevant investment in military training and simulated blue army, technological iteration and upgrading and system reform and optimization, which will jointly help the development of relevant enterprises in this field to continue to improve in the future.
2) For the first time, the new generation of carrier rockets carried out the mission of double main stars, and the Long March 7 was changed to a remote three rocket to realize “one arrow and two stars”. According to Xinhua news agency, on December 23, the Long March 7 to remote 3 rocket developed by the first Academy of China Aerospace Hi-Tech Holding Group Co.Ltd(000901) group ignited and launched at the Wenchang space launch site in China. The “one arrow and two stars” was successfully launched, which also marked a successful sentence for the annual space launch mission of Wenchang space launch site. The Long March 7 modified rocket, which just joined the long march rocket family in March this year, is a new generation of medium-sized high orbit liquid launch vehicle in China. The geosynchronous transfer orbit carrying capacity is no less than 7 tons, filling the gap in the high orbit carrying capacity of China’s launch vehicles from 5.5 tons to 7 tons. Due to the needs of the “double star” mission, the length of the Long March 7 to yao-3 rocket is 60.7 meters, which is 0.6 meters higher than the Long March 7 to yao-2 rocket launched at the beginning of the year. It is the highest rocket flying in China. The diameter of the first and second core stages is 3.35 meters, the diameter of the third core stage is 3 meters, and the diameter of the booster is 2.25 meters. It is also the largest rocket with the largest slenderness ratio in China. 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 the 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) ], [ Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) ], [ 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 industry chain began to increase in 2020, and it is expected to maintain a high growth rate in 2021 and 2022. In Beidou navigation industry 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 localization process, military modernization and accelerated update 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, etc. the performance of some companies has taken the lead in entering the high-speed growth stage and is expected to continue in the next 21 years. 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. The military new material technology has basically realized self-control and represents China’s leading level, and the dual / multi flow system of model certification makes the suppliers limited, the competition pattern at the supply end is good, the demand end is due to the large volume of main battle models and supporting engines, the proportion of new material application is increasing, the outsourcing proportion of main engine manufacturers is increasing, domestic substitution and other factors, It is expected that the future growth of the industry is highly uncertain, 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 it is possible to urgently explore 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.
