Investment advice
[core combination] Avic Shenyang Aircraft Company Limited(600760) , Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Aecc Aviation Power Co Ltd(600893) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , Avicopter Plc(600038) , Inner Mongolia First Machinery Group Corporation Co.Ltd(600967) , Avic Electromechanical Systems Co.Ltd(002013) , Avic Jonhon Optronic Technology Co.Ltd(002179) , Gaona Aero Material Co.Ltd(300034) , Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) , Western Superconducting Technologies Co.Ltd(688122) , Chengdu Zhimingda Electronics Co.Ltd(688636)
[Key stock pool] Avic Heavy Machinery Co.Ltd(600765) , Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) , Zhuzhou Hongda Electronics Corp.Ltd(300726) , Fujian Torch Electron Technology Co.Ltd(603678) , Gaona Aero Material Co.Ltd(300034) , Wuhan Guide Infrared Co.Ltd(002414) , Raytron Technology Co.Ltd(688002) , Aecc Aero-Engine Control Co.Ltd(000738) , Weihai Guangwei Composites Co.Ltd(300699) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Baoji Titanium Industry Co.Ltd(600456) , Xi’An Triangle Defense Co.Ltd(300775) , China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Changsha Jingjia Microelectronics Co.Ltd(300474) , Mengsheng electronics, Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) , Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) , Wuxi Hyatech Co.Ltd(688510) , Weihai Guangtai Airport Equipment Co.Ltd(002111)
[last week’s report] [ Unigroup Guoxin Microelectronics Co.Ltd(002049) ] in depth report: leading in special integrated circuits, 5g development of large nuclear cores; [defense industry] Aviation Industry issued a new version of the “guidance on mixed reform” to encourage the implementation of core employee stock ownership
[view of this week] (1) several OEMs completed the annual batch production test flight task ahead of schedule: according to the report of aviation industry on December 24, Avic Shenyang Aircraft Company Limited(600760) / Changfei / Xichang / Hafei completed the final batch production test flight task ahead of schedule on December 15 / 15 / 22 / 24 respectively, and the annual production and delivery quantity of many OEMs reached a record high. 2021, as the opening year of the 14th five year plan, will be fully implemented by the aviation industry With the development strategy of “one mind, two integration, three forces and five modernizations”, under the situation of increasing model development and production tasks, adhere to the plan traction and process drive, promote balanced production in depth, and continue to complete risk control. In the new year, we will make persistent efforts to make new contributions to the construction of national defense weapons and equipment;
(2) People’s Daily publishes a signed article of China Aviation Development Group: on December 23, people’s Daily published a signed article of the Party group of China Aviation Development “strive to write a new chapter in the development of aviation engine industry”. Since its establishment five years ago, the group has resolutely implemented Xi Jinping The spirit of the general secretary’s important instructions on the cause of aeroengines, adhere to focusing on the main responsibility and main business, adhere to self-reliance in science and technology, strive to escape the acceleration of the era of independent development of aeroengines, and effectively support national defense construction and economic and social development.
(3) At present, national defense equipment is pushing the main engine plant: (a) “revenue growth + profit margin improvement”. The main engine performance is flexible: scale effect / large amount prepayment / pricing reform / SASAC encourages equity incentive / the supporting cost decreases in the process of industrial chain maturity, and multiple factors boost the profitability of the main engine plant. (b) The main engine plant has high certainty, and it is suggested to be “forward-looking” to grasp the rhythm of the main engine: the product volume has high certainty / planning; the link where the main engine plant is located has high certainty / monopoly, and the rhythm of the main engine plant is expected to be deduced in advance under high certainty.
[core view] (1) the medium-term logic of national defense equipment is solid: the Central Committee emphasizes “comprehensively focusing on war preparation”; it clearly puts forward “ensuring the Centennial goal of military construction in 2027” and “basically realizing the modernization of national defense and the army in 2035”, which requires efforts to build a strong national defense equivalent to the second largest economy. (2) Sustained high growth is guaranteed: the gap in quantity and quality between China and the United States in key areas such as military aircraft and missiles is still large, and the possibility of making up for it in the short term is low. It is expected that the sustained high growth of national defense equipment in the 14th five year plan will be guaranteed. (3) the profits of materials, parts, systems and complete machines will be transmitted in turn. At present, complete machines are the first! We are optimistic about high-quality tracks such as missiles, air launch, military aircraft and informatization.
Risk statement
1) The development progress of advanced models is less than expected; 2) Equipment procurement volume or delivery confirmation rhythm is lower than expected
