The growth rate of military expenditure has exceeded 7% for the first time in recent years, and the industry is spreading from local prosperity to overall prosperity
[Securities Times] according to the draft government budget report submitted by China’s Ministry of finance at the National People’s Congress, China’s military budget in 2022 was 1.45 trillion yuan, a year-on-year increase of 7.1%, an increase of 0.3 percentage points over 2021, the first increase of more than 7% since 2019. In recent years, the growth of China’s military spending has basically kept pace with the growth of GDP, which is at a reasonable level. China’s GDP in 2021 was 114.4 trillion yuan. According to the GDP growth target of about 5.5% in 2022, China’s GDP in 2022 currently reached 120 trillion yuan, and military spending was 1.45 trillion yuan. The proportion of military spending in GDP was about 1.2%, which was still far from the world mainstream level of 2.4%.
Comments: the sustained and stable increase in the national defense budget is in line with the growth of national defense demand. Looking forward to the 14th five year plan, it is expected that the growth rate of national defense expenditure will continue to maintain a stable growth of about 7% compound growth rate. The upgrading of the new generation of equipment + comprehensively strengthened practical training pavilion has greatly increased the procurement and maintenance needs of military plain equipment. It is expected that the growth rate of equipment Cao during the “14th five year plan” period will be higher than the overall growth rate, reaching a compound growth rate of 10% – 15%. At present, the military industrial bank is spreading from local prosperity to comprehensive problem gas. The “14th five year plan” is expected to experience two rounds of capacity expansion. It is optimistic about the whole military industrial chain in 2022.
Qinhuangdao Tianqin Equipment Manufacturing Co.Ltd(300922) ( Qinhuangdao Tianqin Equipment Manufacturing Co.Ltd(300922) ): the company focuses on the R & D and production of equipment protection products, and undertakes the R & D and production tasks of a number of national key models of ammunition protection devices. With profound technical accumulation and rich application experience in the field of equipment protection, the company is one of the most competitive enterprises in the field of defense equipment protection in China.
Jiangxi Huawu Brake Co.Ltd(300095) ( Jiangxi Huawu Brake Co.Ltd(300095) ): ande technology, a subsidiary of the company, is mainly engaged in the R & D and manufacturing of components and parts such as process equipment, aeroengine gearbox and thrust reverser. It has a good reputation and solid R & D strength in the field of military aviation parts manufacturing. It is an important supplier to Chengdu airlines, Aecc Aero Science And Technology Co.Ltd(600391) and other well-known enterprises.
